More interesting still...When it comes to coveting...

2008-06-19T12:25:00.000-07:00

More interesting still...

When it comes to coveting I took that word to be analogous to desire. The way to explained it implies the willingness of the "coveter" to employ means contrary to the rule of law in order to attain his desires. That I can agree with.

You example of Warren Buffet I find to be very apposite and well made, he is the perfect example of the careful planning and adherence to economic principles that you are pointing out. But he operates in a different realm of the business world. The parts of the business world that suffers from bubbles are the innovative and booming ones. Buffet himself says he doesn't like investing in tech companies because he doesn't understand them as well as more established business sectors. Innovation is the key to progress. Every time a new innovation reaches the market we have a little turmoil; some companies become outmoded and go bankrupt, and mistakes are made that cause harm to the system. But that is the nature of life, economists are just as oblivious to changes in the market as regular people are. To treat economics as a science is a very dangerous thing. There can only be one Warren Buffet, he is famous and wealthy today because he started doing what he is doing before anyone else and was able to make a name for himself that has taken him the rest of the way to his current success (whenever it hits the news that his company is investing in another company or sector that company or sector usually sees an increase in investment from all sorts of other investors, becoming a self fulfilling prophecy almost).

Now Goldman Sacks is a different story, it was 2 traders that saw the coming fall and persuaded their colleagues to allow them to short some subprime mortgages. They still were hurt by the mortgages crash, but due to the innovative spirit of some of their employees they were able to recover it and post a small profit with a bet against the market (at a time where the house of cards were already looking weak). Goldman was actually criticized because they used these short sells to cover their own losses while they allowed their hedge funds (their customers money) to lose 37% during the crisis. Goldman was a fluke, while Buffet is an isolated incident.

The volatility of the market isn't a side point, but the foundation of all human economic activity. Now when it comes to clinging to magical thinking, there is no better teacher of the facts of life than the market, the only way companies can survive is if they are the quickest learners of the changing reality, there I can agree with you that is the reason most businesses fail. But that is why the market works, because we compete and the "best" wins, I don't see how else it can be.

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More interesting still...When it comes to coveting...