"It’s only when the tide goes out that you learn who’s been swimming naked"

When the tide recedes, it’s pretty revealing. The core idea here is that when things go wrong or the situation changes, the true nature of people or organizations comes to light. Think of it like this: when everything is going smoothly, people can hide their flaws or shortcomings. But when challenges arise, those who aren’t prepared or are hiding something are exposed.

This saying is often attributed to Warren Buffett, a legendary investor known for his wisdom in the financial world. He used this metaphor to explain how during economic downturns, businesses that seemed successful and stable can quickly show their vulnerabilities—just like swimmers without trunks when the water level drops.

Think about the 2008 financial crisis. Before it hit, many banks and financial institutions seemed rock-solid. They were making huge profits and everyone was getting loans easily. But when things went south, it became clear that many of these institutions had been taking on enormous risks. Companies like Lehman Brothers, which seemed untouchable, collapsed almost overnight. They were, in Buffett’s words, “swimming naked.”

So, how can you apply this wisdom? First, be prepared. Imagine you’re a student, and you’ve got an exam coming up. Some of your classmates might not study much because they think they can wing it. But if the exam turns out to be tougher than expected, those who didn’t prepare will struggle. On the other hand, if you’ve been consistently studying, you’ll be ready no matter what. It’s the same in life and business—consistently prepare and don’t take unnecessary risks hoping that everything will always go your way.

Let’s get into a relatable story to drive this home. Imagine you’re at a beach party. Everyone’s having a great time, swimming and playing in the water. The tide is high, so no one notices that a few people didn’t bother to wear swimsuits—they’re just relying on the water to cover them. But as the day goes on, the tide slowly goes out. Suddenly, it’s clear who came prepared and who didn’t. The ones without swimsuits scramble to cover up, embarrassed and exposed. The people who thought ahead and wore swimsuits continue to enjoy the party, no stress involved.

Take that image and apply it to your personal or professional life. Are you prepared for the unexpected? Are you investing in your skills, saving for a rainy day, and making sure you’re not overextending yourself? Or are you just hoping the tide never goes out?

In a nutshell, always be prepared and don’t rely on favorable conditions to cover your weaknesses. Because when the situation changes—and it always does eventually—you don’t want to be caught off guard. Instead, you want to be that person who’s ready for anything, enjoying the beach party no matter where the tide is.