In the midst of the constant headlines concerning government ‘bailout’ initiatives that have resulted from a credit crisis in the financial sector, one must stop to wonder whether the government is acting responsibly and what the likely results of these actions will be. (In truth, one doesn’t have to wonder that much … the government is acting with an almost complete lack of anything resembling financial responsibility.)
The core driver of this problem is that public agencies making market decisions will tend to make them based on political expediency instead of …

There is a famous statement that an optimist will see a glass half that is full, while a pessimist will see a glass that is half empty.  The basis behind these distinctions is that people who possess a more optimistic worldview tend to focus on what is there, what is present, what is available.  Conversely, people who possess a more pessimistic worldview tend to focus on what is missing, what is gone, what cannot be attained.
To many people, the color of reality is closer to the view of the pessimist …

There is a disturbing trend among both people and politicians to find somebody to blame for each setback, difficulty, or annoyance they experience.  This phenomenon frequently provides a convenient alibi for failure, as some opaque persona such as ‘big business’ or ‘the man’ is blamed for our problems.  The most critical danger of focus on these ghosts of failure is that they give us a subconscious excuse to avoid doing what is necessary for success.  However, the realization of our goals, dreams, and aspirations will require many of us to …

One of the things that we have been conditioned to believe in both business and in life is that mistakes and errors need to be avoided.  This idea pervades our education system, our mindset as employees, and our behavior as business owners.  It is important to understand that mistakes cannot be completely avoided.  Thus, an attempt to “eliminate” mistakes generally results in hiding them until they are so large that they become devastating.
This is what precipitated the financial crisis of 2008.  A long history of regulations that consolidated power in …

Contemporary business theory places great amounts of emphasis on strategy and long-term thinking. A These concepts are most definitely of great importance, but there is one critical aspect of successful long-term strategy that many theories and systems fail to comprehend. A That critical insight is how all strategies, regardless of how large or small ultimately distill down to steps that must be acted upon in the present tense. A Furthermore, these action steps frequently break down into smaller steps.
Thus, it becomes true that the largest, most grand, and most complex strategies all come …

One of the ideas that has become quite pervasive within the minds of investors is the notion of a “good stock” or a “good property” to own. A This notion stems from a general desire on the part of most people to own things of quality. A In our personal life, this frequently manifests itself as a desire to own a comfortable home, and a reliable automobile. A Quality gives us a feeling of safety and security. A Thus, it seems completely natural to want our investments to be the stock of a high …

The financial planning profession has a long history of demonstrating the power of compounded growth to clients who are looking to invest for the future.  Typically, a chart will be shown that shows the difference between investing $100 per month at 1%, 5%, 8%, and 10% rates of return for 20, 30, and 40 years.  As expected, the results are typically astounding.  The extended impact of compounding for a longer period of time at a higher rate of return creates a tremendous difference in the amount of compounded returns after …

In the midst of persistent economic turmoil, there is a growing sentiment that somebody should do something about all of these problems.  This is a natural reaction to what feels like an opaque and impersonal market.  The actions of Washington and Wall Street show no semblance of connection with that of the regular people who drive the economy forward.  In light of this clear lack of interest to do anything that is not oriented toward special interests, there is a persistent feeling that ‘somebody’ should do something.  Unfortunately, nobody seems …

One of the ideas that is most common in business literature is the notion of solutions.  Namely that leaders should seek to find solutions to problems.  Instead of selling a product, sell a solution.  Instead of doing a job, solve the problems of your group manager.  Creative problem solving has become its own genre of business writing.
Unfortunately, there is one critical insight that this genre frequently leaves out of the analysis.  This learning is that perfect solutions do not exist.  Every choice requires that we forgo other alternatives.  Every problem …

There is an old proverb that states you should be careful what we ask for, because you just might get it.  The wisdom of this insight lies in the fact that most things we want are accompanied by undesirable consequences.  Children and adolescents frequently desire things that carry unwanted consequences with them, but generally lack the foresight to see the future impact.  Part of the responsibility implicit in becoming an adult is to anticipate when ‘getting what we asked for’ will result in something very unpleasant.
Unfortunately, this principal seems to …