I’ve
been learning from James
Altucher, the entrepreneur-blogger-author for a few months, and
following his advice on investment to manage our family fund.
Immediately the performance of the fund has been multiplying.
This
got me into thinking how did it happen?
Well…
the answer is simple at the outlook: because James is a very
experienced investor / businessman / entrepreneur, so naturally his
experiences on what to do, what not to do, and how to do, is more
correct than what I’ve used to be doing, possibly for a very long
time.
However,
digging a bit deeper, what really separates James and I, at
the levels of.. say how atoms and molecules work, so that vastly
different results are achieved?
I
recall that Elon
Musk once remarked how Internet companies operate at the levels
of bits, and now other companies that operate at the levels of atoms
will also be seeing Internet-style innovations now (his Tesla
Inc. is one example).
So
I start to wonder, what’s really happening, eventually happens at
the atomic levels of the material / physical world, but before that,
it occurs in the binary worlds of bits (info processing on financial
IT systems). And before that, it happens at the levels of human ideas
and thoughts.
Ideas
and thoughts are really abstract and intangible things that are hard
to evaluate. You cannot see nor touch an idea or thought (before it’s
realized through actions), yet it’s the most powerful “pusher and
mover” of the physical world that’s eventually affected by these
ideas and thoughts.
What
determines the actual effects of these thoughts/ideas then? I think
both “correctness” and “leverage” are into play.
“Correctness”
refers to whether the particular ideas captures properly some “truth”
about the universe or how the world operates. With the correct idea,
predication that flows from the idea would then correctly describe
the states of affairs in the world, and possibly impact it as well.
This is like whether we’ve formed the “right model” in Science
about some phenomenon.
“Leverage”
relates to the environment in which the idea is being executed. For
example, an idea to build a spaceship launching people onto Mars,
would likely find considerable less support in terms of manpower,
experiences, funding in a country like Malaysia (or Taiwan) than in
the U.S.
Part
of the reason for the change in performance of my investment is that
not only I’ve started to follow James “correct ideas” about how
to view and execute investment strategies, but I’ve also switched
gears from investing in Taiwanese stock only previously to now
investing in U.S. stock.
This
“leverage” effect becomes very interesting in the age of
globalization and Internet though, as you can now pretty much tap
into any talent via outsourcing sites such as Freelancer.com
or Upwork, or perform global
transactions with much less regulations using Bitcoin.
When
access to both manpower talents and capital becomes democratize via
remote work and global currency (say a VC that invests companies via
cryptocurrency),
the “leverage” part may become much more powerful and interesting
than what currently is.
