Tag Archives: capitalism

Commerce in the 21st Century

Posted on January 11, 2001 | Leave a comment

The weight of value in the goods and services that make up commerce will shift toward the intangible. This includes media, communications, rights, and information services, primarily.

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Posted in Economics, Investment, The Future

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Human Responsibility

Posted on January 10, 2001 | Leave a comment

The Human Rights movements of the 20th century will evolve into the Human Responsibility movements of the 21st. Just as the moral masses rose to fight battles of freedom, representation, protection, and equality, new moral questions of responsibility will arise as paramount. We will be forced to confront and socially decide upon subjective and highly contested issues in the use of technologies, preservation of environments, and rules of trade and labor. Harold T. Shapiro *64 is an early hero in this movement, speaking to thousands:

In the 21st Century, scientists and engineers will continue to inform us regarding what we can do with our ever-expanding knowledge base, but it is our shared responsibility to decide what we should do. And deciding what we should do is the greatest responsibility we all bear as we move forward together.

It will be a moral call to arms. Factions will grow in much the same ways that they have around abortion questions. Large numbers of issues will arise, and be grouped by medical, moral, philosophical, religious, technical, and other similarities. Specialized factions will fight for ultimate personal freedom to act, at least upon themselves, without restraint. While others will fight for the protection of others, even to the great restraint of personal freedoms. And there will be a majority in between.

Communities will form, and governments will be organized around the constituents’ answers to these questions. Those countries that embrace the most freedoms, particularly for businesses, will have financial advantages over those that embrace the most protections of others. This imbalance will allow particular countries to benefit for decades at the detriment of the whole, as their own incentives are not aligned with the benefit of the whole, but instead with their own short term economic benefit.

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Posted in Just for fun, Law, Personal, Psychology, Public Policy, Rights, Taxes, The Future

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Financial Markets Evolve

Posted on March 27, 2000 | Leave a comment

Arbitrages – even of very small marginal size – will be eliminated based on a large number of artificially intelligent program trading systems that will mine the historical and currently released information identifying and exploiting trends. The process of the elimination of arbitrage opportunities will create vast concentrations of wealth within the companies that embrace the tools that automate this process. As new information sources become available for analysis, new arbitrages may be identified with increasing complexity. The abstraction of trading systems to automaically test and integrate new data sources will mark the last decades of financially advantageous investment in hedge funds. After that time, return will be a stochastic function of expected risk.

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Posted in Bonds, Commodities, Economics, Investment, Public Policy, Science, Stocks, Tech, The Future

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Innovation in the 21st Century

Posted on March 11, 2000 | Leave a comment

The rate of innovation will continue to increase as communications and transportation help us to conquer time and space. The value of innovation will become quantifiable and attributable – leading to a renaissance in most fields, and a new breed of professional innovators currently being born as a new sector in the consulting industry.

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Posted in Early Stage, Economics, Investment, Public Policy, Science, Tech, The Future

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Falling Profit Margins

Posted on October 20, 1999 | Leave a comment

More availability of information leads to more competition. More Competition leads to lower profit margins.

Higher profit margins will only be possible in businesses with limited competition. The dominant way to legally limit competition is through innovation and protecting intellectual property rights.

Innovators will be rewarded more and more over time.

Over time, information becomes more and more available and interpretable. In this environment, people are able to demand fair compensation with a better and better understanding of what fair is. People will have to be compensated more and more closely to the value of their work. As this happens, profit margins will fall toward the pure value of synergy, however it is defined, and equity valuations will reflect these changes. Whenever employers refuse to meet the demanded minimum compensation for employees, the employee suddenly becomes competition. The economy will transition toward a large number of smaller economic players rather than the small number of large currently dominant players. Existing job roles become commoditized over time as large numbers of players compete profit margins away. The only way to substantially and positively differentiate your profit margins is to do something that is not yet commoditized; in other words, to innovate. The only way to maintain your differentiated position is to protect your existing innovations through patents and secrecy and continue to innovate.

Implications:

  1. In valuing your stock positions in companies, consider how easy it may be to enter their market in the future. Also consider their profit margins with the knowledge that there tends to be a profit squeeze as competition increases.
  2. Record your thoughts if you think that they may be unique and potentially valuable. Nobody else can patent something if you thought of it and recorded it properly first.

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Posted in Early Stage, Economics, Investment, Stocks, The Future

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