Self-preservation?
Inequality of wealth and income has become a popular subject for bankers and economists. Mark Carney, governor of the Bank of England, said earlier this year, ‘a relative equality of outcomes’ is necessary for capitalism to function properly. Janet Yellen, chair of America’s Federal Reserve, told an influential audience, ‘The extent and continuing increase in inequality in the United States greatly concern me’. The chief executive of Goldman Sachs said on TV, ‘If you grow the pie but too few people enjoy the benefits of it … you’ll have an unstable society’. What’s going on? It is likely they have realised that capitalism does not work in a modern democracy if prospective consumers feel unable to spend on goods and services.
Ukippers.
The elite of the UK’s two major political parties has started to accept reluctantly that the UK Independence Party is a force to be reckoned with. The economic establishment will have to do the same thing. Matthew Lynn has pointed out that investors might have to adjust their portfolios. Regardless of the number of constituencies Ukip wins at the general election, the other political parties are responding to its agenda. The impact on our economy is likely to be substantial. Both the Conservative and Labour parties have started to adjust their pledges on immigration and membership of the European Union. These are pivotal issues for businesses.
The best advice.
www.fool.com/investing gives advice gathered from experience by Morgan Housel.
(1) Changing your mind is one of the most difficult things to do. It is far easier to fool yourself into believing a falsehood; (2) strong political beliefs limit your ability to make rational decisions more than almost anything else; (3) debt can cause more social problems than some drugs, yet drugs are illegal and debt is tax-deductible; (4) finance is simple, but it’s made to look complicated to justify fees; (5) ‘unsustainable’ can last years, even decades; (6) ‘do nothing’ is the best advice for almost everyone almost all the time.
New plan, structure, idea or product.
(a) Focus is vital. Do not try to do too many things at once. You might lose time and money; (b) realise when you need to give up on an idea or change direction and make the move. Do not delay; (c) be cautious about being a pioneer. You not only have to market/sell that new product but the overall concept as well; (d) never fall in love with the technology or the final product. It will skew your focus; (e) launching a new product or business will always cost more than you think. When you do your business plan, add 10% to 20% for contingency. Make sure you set aside an even larger budget for marketing.
Motivation.* ‘I don’t want any yes-men around me. I want everyone to tell me the truth, even if it costs them their jobs.’ *Sam Goldwyn (1879-1974), film maker.
Cold light.
‘Your assumptions are your windows on the world. Scrub them off every once in a while, or the light won’t come in.’ Isaac Asimov (1920-92), author and biochemist.