3-1a4b4a Financial cycles ≠ Product cycles

See Warren Buffett and Ludwig Lachmann

In Lachmann’s parlance, the Portfolio Structure ≠ the Plan Structure. But this doesn’t mean they operate independently.

Related:

• 7-1a4a1 Wealth created ≠ the P&L of a business. Remember - you get what you measure.

• 2-1a7a2 Assets with actual substance or weight have the best prospects over the long term

• 2-1a7a3 Ben Graham - ‘Markets are a voting machine in the short term and a weighing machine in the long term’

• On the triad

  • 10-2g3d1 Humans do stupid things because we can guess and create meanings. Our ability comes with a great cost of potentially doing very (infinitely) stupid things.
  • 12-1a2a1 Free markets and free speech, by definition, transcend the concepts of nation-states

• 3-1a4b2 Price can only convey so much

• 3-1a4b2a A great business at a fair price is superior to a fair business at a great price

• 12-1f 言葉と物事の関係性が一対である必要性はない (e.g., 二項同体)

• 5-1b4a Amara’s law - we expect too much in the short-run, but too little in the long-run

  • 5-1b4a0 We overestimate the technological impact in the next 10 years, but underestimate the next 20 (and often right about 15 years later)

• 6-3b2.3a Credit is not money

• 6-3b2.3c When the money is printed, financial assets appreciate

• You have to understand that the Portfolio Structure doesn’t reflect the Plan Structure in real time, and your time projection of their converge (if at all) is always subject to error:

  • 5-2a Check your growth rate of expectations vs circumstances. The former is hard to measure. But remember - you get what you measure.
  • 5-1b4 Be prepared to deal with short-term nonsenses, but know what you’re focused on in the long-run and stay optimistic