Saturday, December 09, 2006

Rambles (after reading this I realised I didnt' make any sense)

I am no more knowledgeable in the fields of economics than a worm in water. In fact, all through my little years I have downsized the dollar sign to shopping and meager earnings that the idea of investment is just mind blowing. However. After becoming a member at Border's and therefore to the resulting mass email advertisement to the newly released Donald Trump and Robert Kiyosaki's Why We Want You to be Rich , I find myself downloading information about the tremendous effects of the oil depletion crisis on the bleak world financial situation into my head....yet, not solely based on so much the 'methods' of becoming rich, the anecdotal inscriptions within provide a motivational and inspirational approach to life.

Which comes to my main point today. One day after DJ class, I was lightly entertained by my headmaster and our guest of honour (remember the face, can't remember name). We eventually dwelled onto the topic of the very much discussed, and very much debated on...life, and its meaning, upon which our guest directly said "...life, it's all about moderation. You can't have too much of anything; nor too little. Have food in moderation. Have water in moderation. Have fun in moderation. Have sex in moderation. Never too much -never too little."

Makes sense, yes?

Well, up to a point. I have been a believer of that quote up until I read the book referred above. The problem is, if life is all about moderation, where does the risk factor come into? We all know, variety makes life interesting, it is the spice in our dish, the icing on the cake. To have variety, evolution jumped ahead of its gene line and mutated, i.e., took a risk to be different. There are the 50% who are afraid to lose; then there are the 50% who are there, to win. Risk factor: the edge that pushes you to be different from someone who was once in the same league as you.

Investment is, but not all, about risk taking. I remember, my uncle was once really into investment in the stock market. I overheard my mother complaining about that to my dad: she was not a believer of risk taking actions, of any kind. Also a believer that investment is a gambling act, and being the saintly non-alcoholic, non-card playing, non-sinning role model of the family, she subsequently embedded the negative connotations of investment into my small brain.

But...that, in my opinion, and yes I am biased after reading such economically based books, is the mindset of a middle class orientation. In essence, I find myself a fussy picker of jobs, as I require a certain amount of freedom and expression of 'power' along with my work. Needless to say, it has greatly narrowed my job options. However, working is not only about the money...it's part of the reason. You have to grow with whatever job is offered to you, just as the job will grow with you. Ok I'm side-tracking...the main point is, it's all about the mindset. If you choose wisely with what surroundings you put yourself in, both you and your environment will inter-flourish and, subsequently, so will the money.

2 comments:

Anonymous said...

Economics: it's the macrocosmic version of cellular exchange, dynamic equilibrium sustains life. Investment of money / effort / labour / thought / time / love etc drives the dynamic motion. Stagnation equals death. Economics is just this, only with a physical token for representation and relative standardisation of what is being exchanged.

Enoch Ko said...

Investments is actually not about taking risks... investors are supposed to minimize risks and maximize profits. If you buy a business with an intrinsic value of $1.00 for the price of $0.50, what is there to lose?

Warren Buffett's done it, so has many other value investors like Marty Whitman, Whitney Tilson, etc. over several decades, and they've certainly done well. Generally, few (or even no) down years!

Good thing that most "investors" aren't rational and that the market is inefficient, so value investors can take advantage of the inefficiencies.