Hot Capital

I am an Anti-Apartheid Activist. I grew up in the regime that gave Separateness legal form. That makes defending and encouraging the four freedoms of movement (Capital, Goods, Services and Labour) close to my heart. But Spidey, with freedom comes responsibility too. A criticism of “Hot Capital” is that money just flows in and out without commitment. Real wealth creation takes time, so if you are making “investment decisions” based on less than a 5-10 year period, you aren’t investing, you are speculating or trading. The “Investment Behaviour Penalty” is the difference between what investment funds return, and the return achieved by underlying investors. Usually investors chase returns, switching between funds and in and out of cash as if they can guess short term market movements. Imagine if a real business owner did that? A stock is a slice of ownership in an underlying business. It isn’t an abstract idea. Imagine if every time something went wrong, an owner sold the business? Real creativity comes from the ability to endure through challenges, and respond with the resources available. It’s not a game. You don’t play the market. You commit to something and you build.

Responsibility