If you have been on the road looking for cheap food 24 hours a day in the South, you have likely been to Waffle House. It is not the best breakfast, but this is a good place if you need a quick meal. You usually will not see a money manager or a Wall Street banker at a Waffle House counter, which may be an added appeal.

It has gotten a reputation as a place that will stay open no matter the disaster or available first after a hurricane. Some have talked about the Waffle House hurricane index. The worst damage is where the Waffle Houses are closed. Civilization begins where Waffle House is serving.

So, what can a money manager learn from Waffle House? Emergency preparedness. To be able to deliver on staying open and opening quickly after a hurricane, Waffle House spends a lot of time planning. It is a logistical and supply problem, but the critical issue is that they plan for the worst every year.

Hurricane season lasts from June until the end of October, yet no one knows where or how many hurricanes may hit in the US. Some years, there is nothing; other years, there can be multiple hurricanes. Waffle House does not accept these are random acts but plans for the worst every year. There are emergency preparedness manuals and training for every store. There is staging before a hurricane. There are contingency plans for supply. This is all for a simple restaurant to ensure victims and relief workers have a place to eat. No frills, but the assurance that if you want eggs, hash browns, and coffee, you can get it.

Is there the same level of planning by hedge funds and money managers? They know there will be sell-offs, bubbles, crises, liquidity events, and failures. However, how many managers can show investors their contingency plans or what they will do under different emergency scenarios? Firms are good with operational procedures, but the actual planning is with the investment portfolio. The identification of risks has been much improved in real-time, but the actions to be taken under different risk scenarios are less clear. If the next financial crisis hits, there will be a lot of talk about it being an event that hurt everyone and could not be avoided. Yet, it is the core job of the portfolio manager to protect principles during these events. Every situation is not unique and different. Planning can be done.

Waffle House would not accept a market event standard that things sometimes happen. It works to a higher standard based on the needs of its customers, even if it is just serving breakfast. The same high standard should apply to money managers.