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Total Money Magnetism

Total Money Magnetism is developed by Dr. Steve G. Jones who is a clinical Hypnotherapist and Neuro-Linguistic Programming (NLP) Master Practitioner since 1980s. He was a financially weak person struggling to pay his debts, somehow perceived an unusual guidance from a friend after which he became a self-made multi-millionaire, featured in Forbes magazine, People magazine and a lot of articles and radio interviews, and his clients include Hollywood celebrities, directors, CEOs, executives, and sports athletes. That guidance was 6 step secret method to develop a millionaire's brain which he explains in detail on this online interface. Actually, a poor person's brain is stuck in the same scratch while rich man's brain is well mapped and has the neural strength to always develop money making ideas. So Total Money Magnetism uses scientifically proven methods to effortlessly transform the programming of the brain to remove mental blocks, develop wealth pathways and build connections. This platform offers The Skill of Money Magnetism e-book, a valuable and inspirational audio track by Steve G. Jones himself, The Millionaire Mindset, which is an exclusive interview with many self-made millionaires, Mark Ling's 3 fastest ways to make millions online, and Platinum Millionaire Mind Makers, which are three proven and tested audio tracks to steadily and unconsciously reset your mind to become attractive to wealth. Read more...

Total Money Magnetism Summary


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Estimated Values in Financial Statements

The values in financial statements appear to be authoritative. However, many of the values in financial statements are estimates based on the cost principle of accounting. The cost principle of accounting states that assets are to be valued on the basis of their cost as opposed to market or other values. For example, the S500 000 given as the value of the land held bv Major Electric is what Major Electric paid for the land. The market value of the land may now be greater or less than 500 000. In summary, when examining financial statement data, it is important to remember that manv reported values are estimates. Most firms include their accounting methods and assumptions within their periodic reports to assist in the interpretation of the statements.

Financial Statements

Some basic knowledge of accounting and financial statements is necessary for a chemical professional to be able to analyze a firm's operations, discover whether the firm is making a profit and whether a company will continue to make a profit. It is also essential to know how a firm's operation is reported to determine its role in a particular industry or in the national economy. Financial reports of a company are important sources of data used by management, owners, creditors, investment bankers, and financial analysts. Also, local and state governments and the federal government are interested in the information for tax purposes. There are differences of opinion concerning how much information about the bookkeeping process an engineer should know to understand accounting reports and financial statements which would greatly enhance his or her knowledge of the company. He or she interfaces with the accounting department in the budgeting and control function, in the operation of a...

Monumental Book Appears

The Wealth of Nations was the intellectual shot heard around the world. Adam Smith, a leader in the Scottish Enlightenment, had put on paper a universal formula for prosperity and financial independence that would, over the course of the next century, revolutionize the way citizens and leaders thought about and practiced economics and trade. Its publication promised a new world a world of abundant wealth, riches beyond the mere accumulation of gold and silver. Smith promised that new world to everyone not just the rich and the rulers, but the common man, too. The Wealth of Nations offered a formula for emancipating

Sources Of Return And Risk

For an equity mutual fund, return is determined largely by three factors the performance of the market that the manager invests in the performance of the manager's strategy (sometimes referred to as investment style) and the level of skill that the manager brings to bear. The most important single factor is the performance of the market. When stocks, in general, are down, most equity managers have a tough time making money. But investment outcomes may still vary according to the various styles and strategies used by different managers. For example, 2001 was a difficult year for U.S. stocks The S& P 500 was down 11.9 percent. But the Nasdaq Composite, which had For a hedge fund manager, the market drops out as a source of return, leaving just two factors strategy and skill. The market drops out largely because the hedge fund manager has the ability to take either long positions or short positions. Long positions are positions that make money when the price of the security goes up,...

Football and the BRICs

If population is the key, the World Cup of 2050 could have a very different flavour from that of 2006. Perhaps Turkey will be challenging Germany as the automatic top European football country. US, Russian and other billionaires might be trying to buy Turkish clubs instead of British and Italian ones Can you imagine what would happen if India were to discover a taste for football, and if the trends emerging in China and the US were sustained Just as in economics today, Europe collectively wouldn't get a look in

Liquidity And Marketing

The hedge fund manager makes a deal that is exactly opposite to the mutual fund deal. The hedge fund manager wants maximum freedom in investing the assets of the fund, in exchange for which he accepts very substantial limitations on marketing and liquidity. As for liquidity, some hedge funds allow money to come in and go out only annually. Indeed, some very successful funds require that capital be committed for two or three years or more. Other funds are geared to a quarterly or monthly cycle. Daily liquidity does not exist in the hedge fund universe. As for marketing, the basic objective of the hedge fund manager is to attract a small number of large investors rather than a large number of small investors. The investors will be wealthy individuals, or institutions, that satisfy specific net worth requirements.

Mortgage Backed Securities

State and local bonds, also called municipal bonds, are long-term debt instruments issued by state and local governments to finance expenditures on schools, roads, and other large programs. An important feature of these bonds is that their interest payments are exempt from federal income tax and generally from state taxes in the issuing state. Commercial banks, with their high income tax rate, are the biggest buyers of these securities, owning over half the total amount outstanding. The next biggest group of holders consists of wealthy individuals in high income brackets, followed by insurance companies.

Delusions of Value The Myths and Misconceptions of Junk Bonds in the 1980s

After graduating from the Wharton School, Milken took a job at Drexel Firestone, where he traded the bonds of fallen angels, companies that had deteriorated in credit quality to below investment grade. According to legend, Milken commuted from his home outside Philadelphia to his Wall Street office by bus, spending the hours en route reading corporate financial statements by the dim light of a miner's headlamp that he wore. He soon became one of the most knowledgeable and visible people on Wall Street in the high-yield market.

The Great Bull Market

The stock market found a bottom on September 21 and performed well into early 2002. Then the Enron Arthur Andersen scandal, and a string of similar corporate scandals, created a crisis of confidence. Many investors think that making money in a conventional stock portfolio will be harder for the next several years than it was during the great bull market. Over the full period from 1926 to 2001, stocks returned about 11 percent annually before inflation, about 7 percent after inflation. These figures include the two major disinflationary periods, 1948 to 1965 and 1981 to 2001, when returns (both nominal and real) were much higher than the long-term averages. Many observers think that returns will revert to the mean, or go even lower. Hence the current interest in hedge funds, which offer

Debut Des Travaux Starting Date I 19970102


Take it then that you disagree with the premise that more diversification is better

Concentration is critical to superior performance. The greater the number of stocks you hold, the more marketlike your performance becomes, and the less value you add as a money manager. Those who preach diversification as a risk control measure are essentially hedging their fundamental ignorance of their own holdings. Also, one of my objectives is to be able to make money in any market climate, which means that I have to decouple my performance

Rationales for Public Programs

But if government officials are going to address these problems, they will need to be able to overcome the many information asymmetries and identify the most promising firms. Otherwise, as de Meza (2002) argues, these efforts are likely to be counter-productive. Is it reasonable to assume that government officials can overcome these problems while private sector financiers cannot Certainly, this possibility is not implausible. For instance, specialists at the National Institutes of Health or the Department of Defense may have considerable insight into which biotechnology or advanced materials companies are the most promising, while the traditional financial statement analysis undertaken by bankers would be of little value. In general, the certification hypothesis suggests that these signals provided by government awards are likely to be particularly valuable in technology-intensive industries where traditional financial measures are of little use.9

The birth of economic thought in Italy Antonio Serra79

Let us first of all consider the structure and content of the book. After the dedication and the preface, the Breve trattato is divided into three parts. The first, and for us the most interesting, discusses 'the causes for which kingdoms may abound with gold and silver', as the title of chapter 1 went that is, in substance, the causes - even if not the nature - of the economic prosperity of nations in the broadest sense of the term, also through comparison of conditions prevailing in the Kingdom of Naples with those prevailing in other parts of Italy, particularly Venice. The second part is substantially concerned with refuting the proposals advanced a few years earlier by Marco Antonio De Santis (1605a, 1605b) with the aim of reducing the exchange rate to attract money into the kingdom from outside. The third part presented systematic discussion of the different policy measures adopted or proposed 'in order to make money abundant within the Kingdom'.

Hedge Funds And The Bull Market

Making money in the bull market was easy, so vast portions of the U.S. population got hooked on the stock market. Some of this new interest in stocks was part of a healthy and growing equity culture, in which more and more people invested in diversified stock portfolios through their individual retirement accounts (IRAs), 401(k) plans, and other investment accounts. But some of this interest was not healthy. Some people became obsessed with the stock market, even giving up their more conventional jobs to become day traders. The United States became a market-obsessed culture, in which people watched financial news on television and spent time at parties swapping stories about stocks, mutual funds, star portfolio managers, and so forth. Newspapers advertised mutual funds run by investment wizards who had compiled dazzling performance records. The financial pages became an extension of the sports pages as investors pored over the statistics, and the paychecks, of celebrated financial...

Brief History Of Hedge Funds

The decade of the 1970s saw high inflation, rising interest rates, falling bond prices, and falling stock prices. But commodities performed well. Oil, gold, and other hard assets went into a bull market of their own as stocks and bonds languished. During this period, many wealthy individuals began to trade futures in brokerage accounts located either at the major brokerage firms or at specialized futures brokerage firms. Sometimes the account holder made his own trades, based on his own ideas or on trading recommendations generated by the research department of the brokerage firm. In those days, major brokerage firms retained a staff of in-house research analysts to cover precious metals (gold, silver, platinum, palladium), industrial metals (copper, nickel, zinc), agricultural commodities (corn, wheat, soybeans), and the energy complex (oil, natural

Hedge Fund Managers and Clients

A hedge fund brings together three very different types of individuals and organizations. First, there are the individuals and organizations who invest in the fund. These are the owners of the assets. This category covers a wide range, including high-net-worth individuals, large pension funds and endowments, and others. Second, there is the manager of the fund, who buys and sells securities on behalf of the owners of the asse ts. This category also covers a wide range, all the way from small firms managing a few million dollars to large organizations managing billions of dollars. Third, there is a category of financial intermediaries, which includes small and specialized firms, as well as financial powerhouses like Goldman Sachs, Morgan Stanley, Merrill Lynch, and others. These firms deliver a broad range of financial services, many of which are indispensable for the hedge fund manage r. And the hedge fund manager has become an increasingly important client of these firms.

Classical Moments And The Industrial Revolution

Even so, only a special social environment would allow James Watt to come together with Matthew Boulton, already a wealthy manufacturer of simply made buttons and buckles, to form a company for manufacturing steam engines. The British were greatly concerned with property rights so that patents protected the works of the British inventors like Watt, and, for the Boulton's, property was made relatively secure by laws favoring its accumulation. This environment allowed Richard Arkwright (who employed 150 to 600 workers in many factories) and other industrialists of modest beginnings to retire as landed millionaires. This capital accumulation so highly prized

Interest and Interest Rates

Use it to make money from their initial investment. Or they may want to buy a consumer good like a new home theatre system and start enjo ing it immediately. What this means is that one dollar today is worth more than one dollar in the future. This is because a dollar today can be invested for productive use, while that opportunity is lost or diminished if the dollar is not available until some time in the future.

Individual Versus Institutional Investors

Individual investors are real people. In the case of hedge funds, these people will generally be wealthy individuals who comprise the so-called high-net-worth market. The assets that they own fall into two categories taxable assets and tax-exempt assets. The tax-exempt category has become increasingly important over the years as individual investors have taken advantage of individual retirement accounts (IRAs), 401(k) plans, 403(b) plans, and other forms of tax-advantaged investing. Newspapers routinely describe hedge funds as secretive and unregulated investment vehicles for very wealthy individuals. It is true that the high-net-worth community has been an important source of assets for hedge fund investments. But the level of participation on the part of U.S. institutional investors has increased dramatically, and this interest has translated into a large volume of dollars flowing into hedge funds.

What is the final element in your selection process

All five of the factors we discussed so far are defensive in nature, focused on capital preservation. They are designed to diminish risk but do not automatically translate into a significant money-making opportunity. All five could be in place and the stock may still fail to move. The key question is What is going to make the stock go up It is our task to identify and time that catalyst. Based on experience, the more severely depressed the valuation and the more pessimism that surrounds the stock, the less it actually takes to reverse the market's perception and trigger a price recovery. V

The Rise and Fall of Businesses

We tend to think of businesses as simply money-making enterprises, but that can be very misleading, in at least two ways. First of all, most businesses go out of business within a very few years after getting started, so it is likely that at least as many businesses are losing money as are making money. More important, from the standpoint of economics, is not what money the business owner hopes to make or whether he succeeds, but how all this affects the use of scarce resources which have alternative uses and therefore how it affects the economic well-being of millions of other people in the society at large.

You were an analyst before you were a money manager Is there an inherent sense of conflict being an analyst for a stock

There is an inherent conflict between you and your client. Your client wants to make money, and you want to generate maximum commissions that is the sell-side brokerage firm analyst's number one priority. Hence there is a bias for recommendations that are easily saleable by the sales force stocks that enjoy positive market perceptions and are ultraliquid so that firms can transact a maximum number of shares. Any exceptional money-making potential of the idea, or risk to capital if market perceptions turn negative, is strictly an afterthought. Recommending stocks that are deemed as

Monetary Policy And The Procedural Rationality Of Firms

The second inference is that some institutional set-ups dominate others. 'Making money' dominates the pursuit of real profits. This is why firms shifted from manufacturing to finance, even though it precluded their technological upgrading and long-term real competitiveness.

Who Manages Hedge Funds

The problem gets more complicated for firms that are involved not just in money management but also in other businesses. Consider the financial powerhouse that combines institutional investment management, money management for wealthy individuals, stock brokerage, lending, trading, and so forth. Suppose, for example, that the firm decides t o build a multimanager hedge fund for its wealthy private banking clients. The firm is trying to decide whether to include hedge fund X in the portfolio, and then it turns out that fund X is an important client of some other part of the bank. So there is some pressure to include fund X in the multimanager fund even though fund X might not be the best candidate for the job.

What about brokerage research Is that also something you never use

Another aspect is that sell-side research tends to be biased it is driven by investment banking relationships. If a brokerage firm earns several million dollars doing an underwriting for a stock, it is very difficult for an analyst of that firm to issue anything other than a buy rating, even if he believes the company has significant problems. Some of my research analysts have good friends who are sell-side analysts and have seen them pressured to recommend stocks they didn't like.

Trading And Liquidity

Some observers believe that hedge funds have replaced the major Wall Street firms as a source of liquidity in the markets. This idea is often advanced as a reason for investing in hedge funds and a reason that hedge funds should make money. After all, liquidity is valuable, so if hedge funds can provide it, they should get paid.

Application Effects of the Bush Tax Cut on Bond Interest Rates

Our supply and demand analysis provides the answer. A decreased income tax rate for rich people means that the after-tax expected return on tax-free municipal bonds relative to that on Treasury bonds is lower, because the interest on Treasury bonds is now taxed at a lower rate. Because municipal bonds now become less desirable, their demand decreases, shifting the demand curve to the left, which lowers their price and raises their interest rate. Conversely, the lower income tax rate makes Treasury bonds more desirable this change shifts their demand curve to the right, raises their price, and lowers their interest rates.

Justification For

However, if we justify KH and KHZ on the grounds that they do the best job of ensuring that everybody is better off at the end of the day, it is necessary to ensure that no group is consistently on the losing side of KH efficient projects. The way to achieve this outcome is to include considerations of just compensation into the KH tests and to recognize value in distributional effects, as KHZ does. Otherwise there is a potential for a sort of cyclical downgrading of poorer groups so that they would have a tendency to fall into the loser group. Consider a project to place an undesirable public project such as a jail into a neighborhood. The most efficient location, if we ignore distributional effects and the regard for others, is likely to be in the poorest neighborhood - the land is cheaper and the WTA of its residents is likely to be less than that of other neighborhoods. However, if we place the undesirable project into the poorest neighborhood without compensating its residents we...

Practical advice sold to business

In a market setting, anyone may discover a veritable rule to make it rich. Some may go the next step and exploit their rule to their personal advantage (Mises 1949). Such discoveries are usually the province of entrepreneurs, and it is not likely that standard statistical research can produce any information about where economic profits can be found. Statistical categorization necessarily strips economic information of its distinctive or local aspects and therefore of much of its relevance to making money. In addition, by the time the statistical series have been published, individual actors in the chain of production will have had an opportunity to exploit these patterns and thereby destroy whatever market value the information might originally have had.

Business Accounting

Summarizing, we see that adopting a correct statistical view of the true, limited nature of information produced by financial statements has profound operational significance. It must be realized that at present combinations of financial statements yield far less information than is implied by the nature and extent of the numerical operations carried out with these figures. For example, if the stated value of an asset depends on non-disturbance of the market by a sale of this asset, then the figures for all or many firms, showing such assets, are clearly non-additive (if the assets are at all estimated in close agreement with their market prices ). Yet additions are made for different firms and finally larger and larger aggregates are constructed when, for example, the capital invested in an industry is described, or when its total assets, inventories, etc., are discussed. Such figures give a very inadequate picture of physical or economic reality, even when a business balance is...

Conflicts Of Interest Again

We also looked at the example of a firm that has both a prime brokerage business and a private banking business. The prime brokerage business serves hedge funds as customers. The private banking business serves wealthy individuals as customers. The private banking clients may want hedge fund investments, and the private bankers may feel some corporate pressure to favor the hedge funds that are important prime brokerage clients. But the funds that are best for the prime brokerage business may not be the funds that are best for the private clients.

Death the crisis of 2008

The unregulated status of hedge funds had been justified on the basis that the investors were sophisticated and wealthy individuals, and that only their own money was at risk. But it soon turned out that the leveraged investments made by LTCM had been financed by huge loans from major Wall Street and international banks, and that a failure by LTCM ran the risk of generating a systemic collapse.

Further Uses of Consumers Surplus Middlemen and Other Exchanges

A The middleperson is a mere transporter of coffee. Coffee in 1987 will be more expensive than in 1986 if the middleperson, Teresa Baker, does not transport coffee. She can therefore make money doing so. In other words, true. In trying to make money out of buying low and selling high, to put it another way, the speculator plays the same role as someone trying to make money out of a difference in automobile prices between That middlemen are sometimes wrong, however, is not an argument for outlawing them. Unless someone else God, the Department of Agriculture, or whoever can do better, and supposing that the predictions are not usually wrong, a case can be made for leaving the middlemen alone to put their money where their mouths are. Unlike their critics, after all, they back their predictions with their money. If they make money, their predictions were on average right, and society is on average better off. If they lose money, their predictions were on average wrong, and society is on...

The aim neutrality of the market order

It being a given that people pursue - and can pursue - their own goals through actions of their own choice, it necessarily follows that there cannot exist a superordinate 'societal' evaluation of such aims and actions in the sense of a hierarchical ranking. Thus an individual who is starving and whose goal is that of finding his next meal is not superior in aim to a billionaire whose goal is that of building yet another mansion, simply because there is no authority within the market order that dictates particular aims to individuals or the actions conducive to achieving such aims.4 Granted, on the personal level one may morally reproach the billionaire for building yet another palace instead of feeding the hungry. But when such moral precepts are imposed upon the individual by a sovereign authority, then that individual's economic freedom of choice is eliminated, at least to a degree, and the market order is transformed, to that degree, into a planned entity, i.e. an organization. The...

Practical Guide to Investing in the Stock Market

The efficient market hypothesis has numerous applications to the real world. It is especially valuable because it can be applied directly to an issue that concerns many of us how to get rich (or at least not get poor) in the stock market. (The Following the Financial News box shows how stock prices are reported daily.) A practical guide to investing in the stock market, which we develop here, provides a better understanding of the use and implications of the efficient market hypothesis.

Reanimation chicago revives the dead

Argument is one that has already been discussed if it is possible to diagnose the existence of a bubble, then it should be possible to make arbitrarily large profits betting against it. And if someone like Warren Buffett has in fact done this, that can be put down to luck. Only if everybody can make money betting against the market can the EMH be wrong. But, of course, it's impossible for everyone to bet against the market the market is just the aggregate of bets.

Government and Private Bureaucrats

To the stockholders only if that result pays off for him or her. In neither case is the institutional structure such that perfect reward and punishment systems will drive bureaucrats into maximizing the well-being of their superiors. It happens to be true, however, that the combination of the comparative simplicity of the objective aimed at by stockholders (that they want to make money) and the reasonably accurate methods of measuring the contribution of highlevel managers to that end, in the form of the bookkeeping system, makes control better in the private sector than it is in the public sector.2 The United States maintains an embassy in London and McDonald's has stores that sell its hamburgers. It is immensely easier for the management of McDonald's to find out whether its London branches are pursuing profit maximization than it is for the Department of State to determine whether the U.S. embassy in London is performing efficiently.

Issues In The News

The NHL says it's going to save up to 400 million dollars. Twice as many teams are going to be in the black. Fans are returning to the rinks, but there's still some operating issues for teams in smaller markets. They're sort of facing a choice, do we lose five or 10 million or do we spend up to the salary cap and compete

The Cost of Production

We begin by explaining how cost is defined and measured, distinguishing between the concept of cost used by economists, who are concerned about the firm's performance, and by accountants, who focus on the firm's financial statements. We then examine how the characteristics of the firm's production technology affect costs, both in the short run when the firm can do little to change its capital stock, and in the long run when the firm can change all its factor inputs.

Marginal Cost Why the Firm Produces What It Produces

Moneymaking, then, is the economist's first, best explanation of buying, hiring, manufacturing, transporting, stocking, advertising, and selling by the business firm. This is part of the answer to the question posed by the theory of the firm A firm does these things because it wants to make money. The rest of the answer tells why it does them in the amounts it does, why exactly Fred

Economic Cost versus Accounting Cost

An economist thinks of cost differently from an accountant, who is concerned with the firm's financial statements. Accountants tend to take a retrospective look at a firm's finances because they have to keep track of assets and liabilities and evaluate past performance. Accounting cost includes depreciation expenses for capital equipment, which are determined on the basis of the allowable tax treatment by the Internal Revenue Service.

Cynicism And Acceptance Of The Status

It is said that two English noblemen were once riding along a road when they met a man whose horse had run away with him and who, being in danger of falling off, shouted for help. One of the Englishmen turned to the other and said, 'A hundred guineas he falls off'. 'Taken,' said the other. With that they spurred their horses to a gallop and hurried on ahead to open the tollgates and to prevent anything from getting in the way of the runaway horse. In the same way, though without that heroic and millionaire-like spleen, our own reflective and sensible age is like a curious, critical and worldly-wise person who, at the most, has vitality enough to lay a wager. (Kierkegaard 1978, p. 15)

Did you also feel that this selfimposed servitude was just punishment 1 really did How did your wife respond to this

When I started digging myself out of it, she said, I've never seen anyone who can make money like you can when you're backed into a corner. She's right. Even now, whenever I have a losing month, I just claw like a tiger to make it back. That's when I work my hardest. When I work fifteen-hour days, my wife knows that my trading is not going well. Conversely, when I'm home early, she'll say, Your trading must really be floating along.

But arent you afraid that you will aggravate your losses by doing that

I increase my activity, not my exposure. In fact, the first thing I do when I'm losing is to stop the bleeding. That's why I have this sign on my computer. He points to a sheet that reads GET SMALLER. I don't get out of the trade that is hurting me completely I just reduce the position size. Then the next trade that I do, I feel compelled to make money. It doesn't matter how much. The point is to rebuild my confidence. Even if I only make a few hundred dollars on that trade, it shows that I can still make money. Once I have a winning trade, I'm ready to go again.

Case Study The Laffer Curve And Supplyside Economics

Reagan had once been on the Laffer curve himself. I came into the Big Money making pictures during World War II, he would always say. At that time the wartime income surtax hit 90 percent. You could only make four pictures and then you were in the top bracket, he would continue. So we all quit working after four pictures and went off to the country. High tax rates caused less work. Low tax rates caused more. His experience proved it.

Were you profitable when you resumed trading

The tick became very negative, the market would tend to snap back on the upside. Conversely, strongly positive tick readings seemed to be followed by sell-offs. I asked a broker who had been in the business for thirty years what it meant when the tick got very positive or negative. He said, A negative tick means the stock market is going down, and a positive tick means it is going up. Yeah, I know that, I said, but what do I do when the tick is very positive or negative Well, if it's a high plus, you buy, and if it's a high minus, you sell, he answered. I asked a number of other brokers the same question, and they gave me the same advice. Since this advice contradicted my observations, I did just the opposite When the tick went above plus 400, I would sell, and when it went below minus 400, I would buy. I recorded the results in my diary and confirmed that this strategy was making money. I noticed, however, that the more minus the tick became, the more the market would snap back, and...

The Rise Of The Robber Barons

Whether in England or the United States, there is a sharp contrast between those entrepreneurs focused on the honest production of more and cheaper products and those fascinated with making money for unscrupulous ends by unscrupulous means. Men like Henry Ford and Thomas Edison were thought to characterize the former. We next turn attention to the most notorious of the latter, who bequeathed an age with their name. Andrew Carnegie was somewhere in-between.

Market Versus Nonmarket Economies

Although economics is often thought of as dealing with how individuals and businesses make money, in reality it is the study of how a whole society uses scarce resources that have alternative uses. Economics is about how a society economizes and how individuals share, without even being aware of sharing. However important money may be to individuals, to society as a whole money is just green pieces of paper printed by the government and used to enable markets to allocate resources through prices.

Growth in Electronic Advertising

Expenditure in the U.S. in 1995, for example, exceeded 100 billion (see table 6.1). Although figures for individual companies are not available, many spend a large sum of money. Proctor & Gamble, for example, spent 1.4 billion in 1986. Although firms are spending more of their dollars on the Internet, it still accounts for a tiny share of the overall advertising market. In 1995, advertising revenues on the Internet were estimated to be about 43 million (Business Week, September 23, 1996). Estimates for 1996 vary from 140 to 350 million dollars, hedging toward higher figures if advertising values of barters, reciprocal ads, and others are included. Even the largest estimate, however, is still less than 1 percent of the total advertising revenues in the U.S. In comparison, non-U.S. online advertising revenues in 1996 were estimated at 6.1 million, according to Jupiter Communications (http, with Japan, the United Kingdom, and Germany each with over 1 million. The biggest...

Wait a minute I thought you held positions only for a maximum of three days

Indicator is still providing a signal, I will only trade in the same direction. If it's oversold, I will only buy calls, and if it's overbought, I will only buy puts. Puts are option positions that give the buyer the right to sell the stock or index at the strike price and will therefore make money in a declining market. I still traded in and out of the market, but I kept a core position of long calls. This core position was down about 25 percent. Since for this account I used a money management plan that limited my total investment to one-third of the equity, I was down about 8 percent in terms of total equity.

Learning As The Reconfiguring Of Mental Connections

If absolutely everything is taken as open to question, entrepreneurial activity becomes impossible. If one cannot have some degree of trust in others with whom one forms business connections, or some confidence that one has a better insight into what counts in a particular market or manufacturing process, there is no firm spot on which to build an enterprise of any particular form. To make decisions, the entrepreneur takes some things for granted and uses a particular set of core do and don't rules (Earl, 1984 Harper & Earl, 1996) whose efficacy is taken for granted. When anomalies are encountered, these core elements in the entrepreneur's world-view determine how they will be construed, in other words, which of the more peripheral elements will be adjusted and the form the adjustment takes. Sometimes, the entrepreneur may sever a particular connection whilst maintaining core constructs - for example, I no longer believe it is going to be possible to make money from selling...

Pricing And Hedging Of Derivative Securities

By arbitrage we mean making money out of nothing without risk. For example, suppose that for a given exchange rate say, U.S. dollars versus Japanese yen we get two different quotes by two different traders, simultaneously, so that we can buy yen in the cheaper market and sell them in the more expensive. Even though there might be short time periods in a financial market when there is an arbitrage opportunity, such opportunities tend to disappear quickly. As other market participants observe the mismatch, the demand for the cheap yen will increase and the supply of the expensive yen will decrease, and that process will drive the quoted exchange rates to the no-arbitrage level at which they are identical. The assumption of absence of arbitrage in market models is crucial for getting any kind of sensible general results. The right-hand-side inequality follows from expression (6.7). As for the left-hand side, suppose that it is not true, that is, S(t) + P (t) > C(t) + K. Then we could...

Chrematistics money or oikonomia life

Since modern economics seems to be focused on financial and material wealth management it is instructive to learn that Aristotle, the third-century-BC Greek philosopher, made an important distinction between oikonomia eco-nomics and chrematistics.35 Chrematistics is a word rarely heard in today's economic or business discourse yet it should be because it comes from the Greek meaning the art of money-making, with the root chrema meaning money, riches or something useful. Chrematistics (Greek) The art of money-making,the science of wealth the science, or a branch of the science,of political economy.35

Rebirth Of The Fisherine Approach

Once the initial bank debt is repaid and money is destroyed, the monetary circuit is closed. New money will be created when the banks grant new credits for a new production cycle. This can take place almost automatically if firms, instead of repaying their bank debt, make use of the revenue coming from the sale of commodities and from the placement of securities to start a new production cycle. This doesn't mean that the firms have become financially independent the very fact of making use, for a new production cycle, of liquidity granted by the banks for a preceding one, implies a renewal of credit on the part of the banks, which is tantamount to granting new finance.

The Long Run Supply Curve

The root definition of industry is all firms that can profitably supply goods some group of consumers view as close substitutes. Close substitutes is a feature of the utility functions of consumers. Can profitably supply, it will now be shown, is a feature of the cost curves of firms. The industry contains everyone who can make money at the going price. At a higher going price more will enter.

Were any of your courses at Harvard helpful in preparing you for the real world

In my senior year, I took a graduate-level course in financial engineering. I did my project on the options market and found it fascinating. tried to model what would happen if an option price was forced away from its theoretical value, say because someone placed a large buy or sell order that moved the market. My results convinced me that I had found a way to consistently capture profits in the options market. The idea that I could develop a model that would consistently make money in options, however, went against all the theory I had learned about the markets.

J2 The Uses of Entry and Exit

Function, the Rule of Rational Life, equilibrium, the production function, and the one competing among many. If Americans suddenly develop a taste for carbonated water the Perrier Company will suddenly become rich. But in the long run its riches will be dissipated by the entry of others, and the many new makers of carbonated water will earn only normal profits. If Chicagoans develop a distaste for living in the center of the city the owners of property there will become poor. But in the long run their poverty will be alleviated by exit, and the few surviving landlords will earn normal profits. The assertion is that in the long run profits are normal, and in many shorter runs they are on their way to becoming normal. Notice that the assertion is not that super-or subnormal profits never happen. They do. That in the long run the weather is summer and that from December 22 onward it is on its way to becoming summer does not mean that winter is a mirage. But the tendency is nonetheless...

Forbearance Instead these regulators adopted a stance of regulatory forbearance They refrained

Given the sequence of events we have discussed here, it should be no surprise that savings and loans began to take huge risks They built shopping centers in the desert, bought manufacturing plants to convert manure to methane, and purchased billions of dollars of high-risk, high-yield junk bonds. The S& L industry was no longer the staid industry that once operated on the so-called 3-6-3 rule You took in money at 3 , lent it at 6 , and played golf at 3 p.m. Although many savings and loans were making money, losses at other S& Ls were colossal.

Entrepreneurship And Design Standards

If entrepreneurship is about making connections, then competitive success may depend upon setting up systems within which it is more difficult for other entrepreneurs to make connections that one is capable of making. This process is obviously at work in some markets, where even though products take the form of modules that can be combined in different combinations, the interfaces between them are specific to the brand in question. The specifics of Canon and Minolta camera and lens relationships provide an example here, as do Apple Macintosh computers versus PCs. However, there are also many cases - the IBM PC being one of them - in which entrepreneurial insight takes the form of setting out to create a set of open standards to enable other entrepreneurs to make money by selling products that hook up with one's own and in the process generate demand for one's own product.

The Mystique Of Labor

If labor were in fact the crucial source of output and prosperity, then We should expect to see countries where great masses of people toil long hours richer than countries where most people work shorter hours, in a more leisurely fashion, and under more pleasant conditions, often including air conditioning, for example. In reality, we find just the opposite. Third World farmers may toil away under a hot sun and in difficult working conditions that were once common in Western nations that have long since gotten soft and prosperous under modern capitalism. If those who are not laborers derive their wealth from exploiting labor, then we should expect to see countries with many wealthy people having ordinary working people who are especially poor. The United States, for example, not only leads the world in the number of billionaires, but has nearly as many billionaires as the rest of the world combined, so ordinary Americans should be especially poor, if the exploitation theory is...

Allocation And Inequalities

This government-guaranteed subsidence for all at a poverty level was referred to as the iron rice bowl and it was egalitarian. When the new leader, Deng Xiaoping, announced a new policy of seeking to raise the economic level of the country as a whole, he said Let some people get rich first by allowing the kinds of incentives that exist in prosperous capitalist countries.

Income Distribution

Often there is a sense of amazement, or even resentment in some quarters, when the rich spend huge sums of money on such things as rare stamps or antique furniture. But often these are items of little or no use or interest to most people, even though their prices may be bid up to astronomical levels by a few rich people bidding against one another. The loss to the society .IS typically trivial. For example, a rare camera used by the Japanese navy 111 World War II was put on sale for 40,000, but better photographs can be taken with cameras on sale today for less than one percent of that. In such cases, the rich are paying for the distinction of having something rare, while others suffer no real loss in their standard of living. discussions, even though most people in the top and bottom income categories may be the same people at different stages of their lives, at least in Western countries, rather than fixed classes of people who remain at the top and bottom throughout their lives....

What prevents competitors from coming in and doing private equity funding deals similar to the ones you did with the US

In each of the strategies we have discussed, competition has increased and will continue to do so. That's the nature of the market. Our advantage is that we were there first. What is unique about our firm is that we never imitate someone else's strategy. Another advantage we enjoy is that we try to construct our deals so that they are fair to both the company and us. As a result of our approach, over time we have been able to evolve from doing deals with companies worth several hundred million dollars to companies

The Speculative Bubble

Questions of fairness aside, this financial imbalance presented problems of its own. Except for what is purchased as necessities, the large discretionary income of the rich is not dependably spent. It must go for mansions, yachts, Rolls-Royces, and Caribbean travel or else be saved and thus be subject to the even less predictable behavior of producers. It is one thing for producers to issue new equities and bonds to expand their facilities, it is quite another for rich people to buy and sell existing securities among themselves, changing only the prices and ownership of the pieces of engraved paper. The amount of unanchored cash chasing other pieces of paper probably had never been so high. When such great volumes of savings are held in so few hands, they must be parked somewhere or moved from lot to lot. Despite the obvious trouble that can be caused by cash on the loose, the average citizen threw caution to the restless winds He wanted nothing so much as getting rich quickly with a...

What is the whole story

This is our worst story by far. L E T The worst story is always more interesting than the best story. Yes, I always focus on this episode whenever I talk to new investors. The company, which was a marketer of prepaid phone cards, needed financing. Although the deal was marginal, we decided to do it. Two weeks after the deal was completed, the company announced that all their financial statements were wrong and would be revised for the past two years. The stock dropped over 70 percent overnight. It happened so quickly that we didn't have time to get our hedges fully in place. Although the company still had a viable business and assets, they declared bankruptcy to facilitate the sale of virtually all of their assets to another company.

Platos rightwing collectivist Utopia

The use of gold and silver as money greatly accelerated with the invention of coinage in Lydia in the early seventh century BC and coined money quickly spread to Greece. In keeping with his distaste for money-making, trade and private property, Plato was perhaps the first theorist to denounce the use of gold and silver as money. He also disliked gold and silver precisely because they served as international currencies accepted by all peoples. Since these precious metals are universally accepted and exist apart from the imprimatur of government, gold and silver constitute a potential threat to economic and moral regulation of the polis by the rulers. Plato called for a government fiat currency, heavy fines on the importation of gold from outside the city-state, and the exclusion from citizenship of all traders and workers who deal with money.

Foreign Trade Statistics

Considerations of this kind are of interest when the gold movements from the United States to Europe during the last few years are studied. The weekly published figures show that the United States has consistently seemed to lose gold in round numbers. One week the gold outflow would be reported as 100 million dollars, the next three weeks it would amount to exactly nothing in effect a monthly series accurate to one digit results.

Beginning the work in Canada

The final version of the document proposed developing a set of environment and sustainable development indicators for Canada that would be reported in parallel with other conventional economic indicators of progress. To my surprise, the Chair of the NRTEE Dr. Stuart Smith fully embraced this proposal and brought it forward to Finance Minister Martin, who subsequently announced a three-year, nine million dollar initiative in his spring Budget 2000. Martin's remarks as part of this budget presentation shocked even the most seasoned policy analysts when he stated

How did you first get involved in the stock market

I was always interested in finance and currencies. As a kid, I would read the sports page of the newspaper, just like my friends, but 1 also read the financial page. In 1986, they opened the Istanbul Stock Exchange. The newspapers didn't even have a stock market column until 1987. When they did start reporting stock prices, I noticed that the prices changed every day. It got my attention. I figured if you were smart, you could make money off of this because

Then are all the stocks you buy at or near recent lows

For example, I'm currently short some 10 puts on J. D. Edwards, which is trading near 13. I hope they put me the stock because I would love to own it at 10. If they do, I'll still have the premium, and if I buy the stock at 10, I know I will make money. Exactly. By selling puts, I am getting paid by the market while I'm waiting for the stock to come down to my price. Also, for some stocks, it may only be possible to make money by selling puts as opposed to buying the stock. For example, value stocks have been very much out of favor in recent years. There are stocks that are trading at only five to six times earnings. The earnings are growing, insiders are buying, and the stocks are just sitting there. At the same time, the S& P is going up like crazy. You can't make money by buying these stocks, but you can by selling the puts. If you sell put options, you don't have to be right about the stock going up all you need in order to make money is for the stock not to go down by much.

Problems For Chapter

In the stock market the right to the future profits of a firm is priced. If George Marr and Co., Inc., is expected to earn, say, 1000 for the next 15 years and then to go broke, the total value of the company's stock (ignoring the lower value of distant earnings) will be 15 X 1000, that is, 15,000. True or false If the stock market is functioning correctly, dividing income per year by the value of the stock of a firm will always give the competitive rate of return, even if Marr and Co. is a monopoly. 0 2. The Justice Department accused Citibank and some other big U.S. banks in October 1978 of conspiring to make money by forcing down the price of the dollar. What one number characterizing the market for dollars would you want to have as an economist deciding whether or not the alleged conspiracy could have been effective (Hint Look at the Inland Steel problem in the text.) And what value would you like the number to take as an attorney for Citibank attempting to rebut the Justice...

A The Ambiguity of the Concept

One school of thought attempts to find a justification for a progressive tax via an ability-to-pay principle. This is the faculty approach of E. R. A. Seligman. This doctrine holds that the more money a person has, the relatively easier it is for him to acquire more. His power of obtaining money is supposed to increase as he has more A rich man may be said to be subject to a law of increasing returns.68 Therefore, since his ability increases at a faster rate than his income, a progressive income tax is justified. This theory is simply invalid.69 Money does not make money if it did, then a few people would by now own all the world's wealth. To be earned money must continually be justifying itself in current service to consumers. Personal income, interest, profits, and rents are earned only in accordance with their current, not their past, services. The size of p. 146 accumulated fortune is immaterial, and fortunes can be and are dissipated when their owners fail to reinvest them wisely...

Investment Research The Challenge of Finding Attractive Investments

While knowing how to value businesses is essential for investment success, the first and perhaps most important step in the investment process is knowing where to look for opportunities. Investors are in the business of processing information, but while studying the current financial statements of the thousands of publicly held companies, the monthly, weekly, and even daily research reports of hundreds of Wall Street analysts, and the market behavior of scores of stocks and bonds, they will spend virtually all their time reviewing fairly priced securities that are of no special interest. information on such companies and their securities. Fundamental information on troubled companies can be gleaned from published financial statements and in the case of bankruptcies, from court documents. Price quotations may only be available from dealers since many of these securities are not listed on any exchange. Corporate recapitalizations and exchange offers can usually be identified from a...

Beckers time allocation model

Becker's model points out that the relevant measure of global production of an economy is far from being the one estimated by national accounting standards. This model has had applications in areas such as labor supply, the sexual division of labor, income taxation, household technology and the computation of income elasticities. The new consumption theory can explain a great number of everyday facts for example, why rich people tend to prefer goods low in time-intensity or why women, rather than men, tend to go to the supermarket. Thanks to Becker's work these and other ordinary aspects of households' behavior, attributed to exogenous factors in conventional theory (usually differences in tastes or shifts in preferences), can now be endogenized and related to differences in prices and incomes.

Childrens Genuine Wealth Stories

I found in Leduc a great sense of belonging to community, of trust in one's neighbors and the importance of family. I got a sense of the importance of relationships and the joy of being a small, cohesive community. Yet, I also found a community caught up in the economic storm of Alberta's booming oil economy. I found many adults caught up in whirlwind of capitalism, making money and satisfying an almost insatiable hunger for the services Leduc's many businesses provide to Alberta's oil-based economy. The Genuine Wealth survey revealed that in spite of high incomes and high GDP, most longed to slow down and enjoy more quality time with their families, proving that time is our most precious asset.

Costs As Opportunity Costs

The difference between economists and accountants is easy to see in the case of Hungry Helen's Cookie Factory. When Helen gives up the opportunity to earn money as a computer programmer, her accountant will not count this as a cost of her cookie business. Because no money flows out of the business to pay for this cost, it never shows up on the accountant's financial statements. An economist, however, will count the forgone income as a cost because it will affect the decisions that Helen makes in her cookie business. For example, if Helen's wage as a computer programmer rises from 100 to 500 per hour, she might decide that running her cookie business is too costly and choose to shut down the factory in order to become a full-time computer programmer.

Market Research and Competitive Intelligence

To thoroughly understand what is happening in the industry in which you operate, it is invaluable to know what the trends in the industry are as well as what the firm's competitors are doing to make money, to improve their businesses, and to improve their own market shares. Market research is necessary to make better firmwide decisions. With marketing being a philosophy where the resources and activities of the firm or company are focused on satisfying the wants and needs of the customer, marketing research is the way a firm with a marketing philosophy determines what those wants and needs may be, and further, how to communicate the associated benefits most effectively and efficiently. Additionally, market research is used to monitor and modify, if needed, the elements of the marketing strategy. Market research includes defining the problem and research objectives, developing a research plan, presenting the plan, implementing the plan (collecting

Variable Returns Versus Fixed Returns

Bonds differ from stocks because bonds are legal commitments to pay fixed amounts of money on a fixed date. Stocks are simply shares of the business that issues them, and there is no guarantee that the business will make a profit in the first place. Bond-holders have a legal right to be paid what they were promised, whether the business is making money or losing money. In that respect, they are like the business' employees, to whom fixed commitments have been made as to how much they would be paid per hour or per week or month. They are legally entitled to those amounts, regardless of whether the business is profitable or unprofitable. The owners of a business whether that is a single individual or millions of stockholders are not legally entitled to anything, except whatever happens to be left over after a business has paid its employees, bond-holders and other creditors. If you buy bonds, your chances are only 50-50 of getting your money back at all. And if this enterprise prospers,...

Why Market Niches Are Attractive

Entry into a perfectly competitive industry is not apt to result in long-lasting, above-normal rates of return under even the best of circumstances. For example, a grain producer located along a river or on exceptionally fertile soil would enjoy lower-than-average irrigation costs and fertilizer expenses, and higher profits could result. However, potential buyers would have to pay a price premium for such productive land, and subsequent investors would earn only a normal rate of return on their investment. No landowner is going to sell highly productive or well-situated land at a bargain-basement price. Similarly, purchase of a business that enjoys recognized monopoly power seldom leads to economic profits because anticipated abnormal returns on plant and equipment are reflected in purchase prices. Much like fertile land brings a price premium in the real estate market, monopoly franchises bring a premium price in the stock market. As a result, the purchase of a recognized monopoly...

How Much Research and Analysis Are Sufficient

Some investors insist on trying to obtain perfect knowledge about their impending investments, researching companies until they think they know everything there is to know about them. They study the industry and the competition, contact former employees, industry consultants, and analysts, and become personally acquainted with top management. They analyze financial statements for the past decade and stock price trends for even longer. This diligence is admirable, but it has two shortcomings. First, no matter how much research is performed, some information always remains elusive investors have to learn to live with less than complete information. Second, even if an investor could know all the facts about an investment, he or she would not necessarily profit.

Some Basic Strategies

Before we get into the nitty-gritty of futures and options, let's look at some simple strategies. Options and futures can be used either to hedge or to speculate. If you think that the S& P 500 Index is going to go up, then you can buy futures, or buy call options, to make money if you are right. If you think the market is headed down, you can sell Buyers of options acquire rights but not obligations. Sellers of options acquire obligations. Futures contracts involve obligations, whether the investor is buying or selling the contract. Later on we will uncover a simple linkage between futures and options. Buying a futures contract is equivalent to buying a call and selling a put, while selling a futures contract is equivalent to buying a put and selling a call. The buyer of the futures contract gets to make money from rising prices, but, since she has implicitly sold a put, she will lose real money from falling prices. Similarly, the seller of the futures contract will make money...

Agricultural Statistics

A measure of the importance of agricultural statistics is indicated by the government's expenditure on its statistical programs. Of the 44 million dollars the government spent in 1961 on current statistical programs (not including special programs, e.g., censuses), the largest share, approximately 13 million dollars, was appropriated to the Department of Agriculture.

Some Questions Of Distribution

Special exhibitions of sufficiently grand size, or blockbusters, are usually loan exhibitions dealing with the work of a major (and very popular) painter, such as Van Gogh, Degas, or Matisse, or that bring to the public works not readily accessible, such as the King Tut exhibit of Egyptian art or the exhibition of masterpieces from the Hermitage in St. Petersburg. Museums may sometimes charge a special admission fee for a blockbuster, and so may come out ahead financially on a particularly well-attended exhibit. In addition, when an exhibition goes on tour, the institution that organized it is entitled to collect participation fees from the museums it visits. The Whitney Museum of American Art in new York City reports that revenue from traveling exhibitions totaled 681,658 in 1989 and 232,893 in 1990. Related direct costs to the museum in the two years were 410,272 and 97,754. Although the Whitney does not make a point of it, the figures indicate that the museum earned a considerable...

The Sources and Appeal of Interwar Institutional Economics

On a more specific level, Veblen's framework, which stressed the role of new technology in bringing about institutional change (by changing the underlying ways of living and thinking) and the predominantly pecuniary character of the existing set of American institutions (that is, expressing the business values of pecuniary success and individual gain by money making), was widely influential among institutionalists. Within this framework Veblen developed his analyses of conspicuous consumption and consumption norms the effect of corporate finance on the ownership and control of firms business and financial strategies for profit-making, salesmanship, and advertising the emergence of a specialist managerial class business fluctuations and many other topics (Veblen, 1924 1899 , 1975 1904 ).

Doing Well Can Mean Doing Good

Even if there were no beneficial impact on your career, nevertheless, I would urge it on you It is likely that you will do more good for the world by concentrating on abolishing some wasteful government organization in your locality than the average person does - indeed, very much more. It is an unusual form of charity, but a form in which the payoff would be high. (Tullock, p. 102)

The Legend of George Soros

George Soros, a Hungarian refugee turned American entrepreneur, founded his Quantum Fund in 1969. By 1992 he was a billionaire, already famous as the world's greatest investor, and already celebrated for the generosity and creativity of his philanthropic activities. But Soros who is a man with intellectual as well as financial ambitions, who would like the world to take his philosophical pronouncements as seriously as it takes his business acumen wanted more. As he himself says, he went in search of a business coup that would not only make money but generate publicity for himself, publicity that he could use to promote his nonbusiness ventures.

How did you first get interested in the stock market

How do you go from chemistry to the sale of financial investments As a plug to BU, my degree in chemistry has been extremely helpful. I think that a physical science degree is as good as if not better than a financial degree because it trains you to be analytical. If there is anything I am really good at, it's being a researcher. I'm not a particularly good trader. When I got out of school, I was sick and tired of studying, and I just wanted to make money. I got a job in sales using my chemistry background.

What is the purpose of an enterprise or business

I have been discussing the purpose of business in society with Dan Rubenstein, a former senior auditor with the Auditor General's Office of Canada, for years. It's generally believed that business exists to make money, to maximize profits or create value for its shareholders. It could be said that a business takes risks in taking on new ventures, using resources from the community and nature to innovate, create and produce goods and services for the The key premise is that a business's primary obligation is to ensure maximum profits for its shareholders, also known as maximizing shareholder value. But are corporation or a business legally responsible for maximizing profits or is this mythology For example, the legal incorporation document for my own corporation (Anielski Management Inc.) includes not a single clause or phrase requiring our corporation to maximize profits to the corporations shareholders. I am not required to report such performance in the annual renewal of our...

The Road To Serfdom Debate

This disparagement of money making goes back to Keynes' student days. It was part of the intellectual atmosphere of his Cambridge and was dominant in the Bloomsbury group.68 It was characteristic, one might say, of a rentier bourgeoisie, which had already attained a standard of civilization it regarded as good. Keynes' subjectivism did not extend to ethical knowledge. As a follower of G. E. Moore, he believed, unlike Hayek, that certain states of mind were objectively good or bad and that this was intuitively known to those with educated perceptions, prior to experience. One's ethical duty was to maximize good states of mind, for oneself and (more doubtfully) for everyone. In principle, states of mind were independent of material conditions - a poor man could be ethically good, and a rich man ethically bad. In practice, it was easier to be ethically good when free from poverty and irksome toil. Getting to this condition, however, involved bad states of mind. It meant a social system...

The Accelerator Model Of Investment

As a result of the force of habit (inertia), people do not change their consumption habits immediately following a price decrease or an income increase perhaps because the process of change may involve some immediate disutility. Thus, those who become instant millionaires by winning lotteries may not change the lifestyles to which they were accustomed for a long time because they may not know how to react to such a windfall gain immediately. Of course, given reasonable time, they may learn to live with their newly acquired fortune. Also, people may not know whether a change is permanent or transitory. Thus, my reaction to an increase in my income will depend on whether or not the increase is permanent. If it is only a nonrecurring increase and in succeeding periods my income returns to its previous level, I may save the entire increase, whereas someone else in my position might decide to live it up.

Xenophon on household management

While Aristotle was critical of money-making, he still opposed any limitation - such as Plato had advocated - on an individual's accumulation of private property. Instead, education should teach people voluntarily to curb their rampant desires and thus lead them to limit their own accumulations of wealth. Aristotle, like Plato, was hostile to economic growth and favoured a static society, all of which fits with his opposition to money-making and the accumulation of wealth. The insight of old Hesiod into the economic problem as the allocation of scarce means for the satisfying of alternative wants was virtually ignored by both Plato and Aristotle, who instead counselled the virtue of scaling down one's desires to fit whatever means were available.

Measuring National Output

Just as national income does not refer to money or other paper assets, so national wealth does not consist of these pieces of paper either, but of the real goods and services that such things can buy. Otherwise, any country could get rich immediately just by printing more money.

The Significance Of Private Property

For Mises, the doctrine of consumer sovereignty offers an insight into the social role fulfilled by the institution of private property. There is, as a matter of scientific fact, no conflict of interest between the owners of productive resources (whether land or labor power), on the one hand, and the consuming public on the other. The owner of a productive resource can derive economic benefit from his resource only to the extent that he places it at the service of the consuming public. As we have already cited from Mises, a wealthy man can preserve his wealth only by continuing to serve consumers in the most efficient way. The doctrine of consumer sovereignty demonstrates the harmony of interests existing in a market economy between owners of resources and consumers. Recognizing this harmony of interests is merely another way of sharing Menger's vision. It is the circumstance that consumers dictate the allocation of resources, which in fact creates this harmony of interests. And of...

Applications In Economics

America's Millionaires1 The number of mi lionaires has been expanding rapidly. In 1975, there weri only 350,000 households with a net worth of 1million or more. By 1996, the figure had grown to 3.5 million. Only about one-third of the increase was due to inflation. The growth in the number of millionaires is expected to continue. Forecasts indicate that, by 2005, there will be 5.6 million millionaire households-5.2 percent of the total (lout of every 20). Who are these millionaires rms of age, millionaires are typically in their late . They tend to be older than the general population because t takes time to accumulate wealth of this magnitude. In addition, older workers have higher earnings, enabling them to increase wealth more rapidly. r ot surprisingly, millionaires tend to be well educated. bout 80 percent have a college degree. In fact, nearly two-fifths have a graduate degree. Those with more edu Millionaires are disproportionately self-employed entrepreneurs. While less than...

The politics of the polis

In the more strictly economic realm, the statism of the Greeks means the usual aristocratic exaltation of the alleged virtues of the military arts and of agriculture, as well as a pervasive contempt for labour and for trade, and consequently of money-making and the seeking and earning of profit. Thus Socrates, openly despising labour as unhealthy and vulgar, quotes the king of Persia to the effect that by far the noblest arts are agriculture and war. And Aristotle wrote that no good citizens 'should be permitted to exercise any low mechanical employment or traffic, as being ignoble and destructive to virtue.'

Trade Unions As Economic Actors

Elsewhere, he states that if monopolies cannot, at that point of time, be reproduced by others they do not give rise to the existence of coercion (von Hayek, 1960, pp. 264-266). These monopolies are unavoidable, and there is no reason here to blame firms for constituting such a monopoly. In this situation, however, elements of Hayek's definition of coercion appear A person or firm initiates a product innovation that constitutes a monopoly for a while, or a process innovation whose cost-reducing effects are not completely reflected in lower prices. The intention is to make money that others are willing to pay because of the artificially created scarcity of the product in the case of the product innovation and a price - artificially kept high - in the case of the process innovation.

Elements ot Financial Accounting

In the next few sections, we discuss two basic summary financial statements that give information about these matters the balance sheet and the income statement. These statements form the basis of a financial report, which is usually produced on a monthly, quarterly, semiannual, or yearly basis. Following the discussion of financial statements, we shall consider the use of information in these statements when making inferences about an enterprise's performance compared with industry standards and with its own performance over time.

Wicksteed And The Scope Of Economics

Wicksteed elaborated on this same insight in his insistence that the proposal to exclude 'benevolent' or 'altruistic' motives from consideration in the study of Economics is . . . wholly irrelevant and beside the mark. The common Austrian foundational tenet is the primacy of human purposefulness, seen far more broadly than as the expression of egoistic, selfish greed. As Robbins recognized,28 it is considerations such as the dependency of economic phenomena upon purposive action which enables us adequately to dismiss the oft-reiterated accusation that Economics assumes a world of economic men concerned only with money-making and self-interest. Clearly, what Wicksteed and the Aus-trians were doing was consistently and subjectivistically redirecting the focus of economic analysis away from the material objects of classical inquiry, to the implications of individual human choices and decisions.

Individual Corporate And Foundation Support

All of this costs a lot of money to carry out (mailing lists, direct mail solicitations, record keeping, paying for special events), but the motto is, You have to spend money to make money. In 1983 the Metropolitan Opera is reported to have employed a staff of fifty and spent 3.5 million on fund-raising. By so doing, they raised about 25 million from individuals, corporations, foundations, and government agencies.14 It is now taken for granted in the United States that fund-raising from the private sector is an important function within any nonprofit arts institution. Indeed, public agencies would probably be reluctant to make grants to a nonprofit organization that did not appear to be pulling its weight in private fund-raising.

Wieser On Competition As Social Conflict

The limits within which the formation of prices takes place, are frequently far apart in the case of scarcity commodities. A comparatively small number of wealthy individuals constitute the effective demand for costly antiques. The outcome of the price-war between these parties for an ardently desired work of art can hardly be anticipated. The prices here realized, vary in amount from sale to sale by considerable sums The prices which are realized may be called fortuitous prices.

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