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Investing in Human Capital

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Add 1 - Human Capital - Priorities (August 26, 2011)


Going back to a working definition of Human Capital from Charles Hugh Smith's ebook, "An Unconventional Guide to Investing in Troubled Times":

"Human capital can be defined by what it is not: human capital generates all income which isn’t generated by purely financial investments such as stocks, rental property, savings and bonds. In essence, human capital is expressed as productive work: the combination of skills, knowledge and experience that generates income and value from providing services and making goods. ...

Trust is an integral component of human capital; an untrustworthy person with high skills has much lower human capital than a trustworthy person with the same skills. ...

Not all human capital investments serve the goal of generating income. For example, learning how to prepare healthy, tasty meals from real food is a skill that potentially pays enormous health benefits, even though it might never generate a dollar of income".

Last Updated on Saturday, 27 August 2011 10:54 Read more...
 

Money Comments - August 18, 2011

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Financial, Human and Social Capital

Global financial markets and institutions appear increasingly unstable. The temptation is to expound on that, endlessly rehashing the problem. To do so is to avoid thinking about possible solutions. It is a logical extension of denying there is a problem to solve.

Rehashing the problem could be an attempt on my part to recruit a multitude of followers to my point of view before I act. Wasting time convincing others is a way to postpone and evade dealing with the problem itself. My best interest is served by getting out of a burning building, not convincing others it is on fire.

Truthfully, I do not know for certain that the financial markets and institutions are indeed increasingly unstable. I may be misinformed or I may be misinterpreting the information I have. Or maybe I am just  another grumpy old man living comfortably while lamenting the state of world affairs. Then again maybe I am crazy, obsessing on problems that exist only in my fevered mind. While recognizing these and other possibilities, I choose to explore investment opportunities outside the financial capital markets. You are free to take it or leave it as you choose.

Last Updated on Thursday, 25 August 2011 08:19 Read more...
 

Money Comments - August 2, 2011

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Add 1 - Make Haste Slowly 8/3/2011

Add 2 - Bring It Home 8/7/2011

Money Comments was once a weekly feature at Sense & Nonsense. Now, you see five articles in sixteen months. If you want to know why, re-read the March 31, 2010 comments.

To summarize,  everything I know about money and investing became obsolete and useless. Observation since then simply confirms that depressing conclusion. To use Stephen King's phrase, the world has moved on. And so must you and I.

Last Updated on Sunday, 07 August 2011 09:42 Read more...
 

Money Comments - December 14, 2010

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unpredictable - adj 1: impossible to foretell [ant: predictable] 2: unknown in advance; "an unpredictable (or indeterminable) future" 3: not occurring at expected times [syn: irregular]

Who will take the losses?
As Yogi Berra said, "When you come to a fork in the road, take it". That is exactly what we are going to do. It might be wise to just turn around and go back to where we came from but we can't - we burned all the bridges behind us.
We passed the point of no return when we amassed more debt than can be repaid (as individuals, localities, states, and nations). If it can't be repaid, it won't be repaid. Period. So which fork in the road we take is actually just deciding who will take the loss and how. Nobody wants it (the losses), so expect lots of conflict and turmoil with unpredictable outcome.
Last Updated on Tuesday, 02 August 2011 11:04 Read more...
 

Money Comments - November 21, 2010

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Over a year ago I concluded that everything I know about investing is obsolete and useless. I had solid statistical proof that that was the case several years before, but could not bring myself to admit it is different this time. Things will never be like they used to be. Times have changed and what worked well for the past 30 years does not work at all any more.

I spent the past 18 months reading and studying thousands of papers, reports and analyst recommendations. I read wordy books, engaged in thousands of online and in-person conversations with smart people I respect and admire and spent agonizing days and nights trying to figure out how to invest my lifetime savings.

My conclusions are tentative, unsupported by any particular school of economic thought and uniquely mine. Act on them at your own risk. They are more far reaching than just how to invest. They are the basis for a new mindset and way of viewing wealth in general. Wealth and power go hand in hand, so it has social, political and and personal implications far beyond and removed from the world of investing.

Last Updated on Sunday, 21 November 2010 21:07 Read more...
 
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