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What Airlines Can Teach The Energy Sector About Adversity

What Airlines Can Teach The Energy Sector About Adversity by Frank Holmes

Airlines Energy Sector

If you’ve studied psychology, and specifically behavioral finance, you might be familiar with the concept of adversity quotient (AQ), which measures how well someone is able to face and cope with, well, adversity. It looks at how we use the tools given to us in order to survive and recover from setbacks.

To get a better idea of AQ, picture two soldiers who have recently returned home from war. Both are jaded, shaken and physically and emotionally scarred. And yet only one of them truly manages to cope with what he did and saw on the field of battle. He attends school, obtains a degree, gets married and becomes a loving husband and father. Maybe he even starts his own business.

Keeping in mind that there are numerous factors outside our control, both internal and external, it’s constructive to consider what steps could be taken in this hypothetical scenario to confront adversity and not only survive but thrive. Why was one soldier more successful than the other?

The same question can be applied to companies facing adversity. Right now, many companies have to deal with one of the worst commodities bear markets in recent memory and an overbearing U.S. dollar, among other challenges.

When the greenback gains in strength, it squeezes the value of overseas sales and hurts exports. The dollar is up 20 percent for the one-year period, compared to the S&P 500 Index, up around 9 percent.

Like the soldier with the higher adversity quotient, some companies and industries are more nimble and better able at thriving in different climates, even one...


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