The list of new technology companies once valued at hundreds of million pounds and that eventually folded is lengthy and includes online dog food retailers, and the much hyped Boo.com an online designer clothes retailer, with the fundamental problem that people would not part with designer size money over the internet for clothes that they could not touch and feel or try on. Nevertheless J.P.Morgan, Goldman Sachs and Benetton financed the venture to the sum of $185 million dollars, which was lavishly squandered by the businesses founders Kajsa Leander and Ernst Malmsten, photogenic Swedes in their twenties who managed to generate only $1 million worth of sales and whose website took over a year to launch and even then was flawed and difficult to use. Lastminute.com, essentially just a travel agent soared in value on its floatation day to £733 million on a turnover of just £490,000; yet within three days the share price had halved.
Are we epistemologically reliable?What do we know? What can we know? How do we know? Sponsored by JP Morgan
Historicism The “Best” ideas flourish & spread “Best” is always being redefined according to O the geopolitical as well as socio economic r landscape of the time. g a n i s Can these “best” ideas e d sometimes lead us to disaster? KNOWNPUBLICALLY Sponsored by JP Morgan
Case of Easter Island 200 BC Polynesian‟s begin to settle 300 AD Island completely settled 600 AD Ahus constructed 1000 AD Massive deforestation occurs 1500 AD Resources become scarce Intense warfare begins 1600 AD Resources depleted Cannibalism begins 1722 AD Spanish arrive Sponsored by JP Morgan
Psychological viewpoint “Modern skulls house stone age minds.”Are we hard wired to be capitalists1. We are conditional – we are trained by hunter gatherer minds to be competitive, group orientated and power driven.2. We are hierarchical – which allows us to divide labour and distribute resources “reverse dominance hierarchies” Productive hierarchies (businesses) vs. Allocative hierarchies (dictatorships or aristocracies) State should be productive but can be hijacked easily by Allocative types3. Envious zero-sum thinkers www.cato.org4. We are traders by nature Sponsored by JP Morgan
Limitations of the economy Money is property. Property is a bundle of rights to exclude others from what I haveWhat is Money? through the use of government force.Concentration of wealthInterest perpetuates wealth disparity “Consumption beyond one‟s means is good for the growth of the economy, but bad for the individual who is pilling up debt” Milton Friedman Sponsored by JP Morgan
OPECCrisis Winter of Sell of public discontent assets Sponsored by Sponsored by JP Morgan JP Morgan
I990‟s Coming of theInformation Age• CNN News 24• Sky News 24• Growth of the Internet mid 1990‟s• Growth in optimism – “Things Can Only Get Better” Sponsored by JP Morgan
Technology Boom – Experts View„We have one general response to the word “valuation” these days:“Bull market”. The internet has introduced a brave new world forvaluation methodologies and it is a time of especially high risk/reward,in our view. When you overlay the high valuation of many start-upswith the relatively high valuation of the general market, well, we arewhere we are just trying to do our jobs and find some early stagegreat companies. If they execute, the valuations will take care ofthemselves. Again it‟s about monster markets, great managementteams and good products.‟ Mary Meeker, stock analyst, Morgan Stanley. Sponsored by JP Morgan
Challenges facing usRising unemployment Rising inflation Decline in manufacturingRising sovereign debt Rising householdRising oil prices debt Historical low interest rates Rise of India and JP Morgan China Sponsored by
What does it all mean?Human Social characterconditionHerd mentality ConsumerEnvious zero-sum thinkers CompetitiveTraders Materialism (our relationship to nature)Driven by greed and fear “Greed is good”Short sighted Individualism Can we keep going like this? If not, where do we go? What attributes do you need to succeed? Sponsored by JP Morgan
Where now? To avert the next great calamity, what weneed is not better hindsight, but wisdom tobetter navigate through a deeply troubling future. We need "good" capitalists. Sponsored by JP Morgan
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