Foggy Window

The relationship between price and value is a signal. It is a powerful signal that allows us to communicate with each other. Personal value cannot be expressed in a number. We express it anyway... through decisions and price. 

Our values change. Our bodies change. Our bodies regenerate every 7-10 years with new cells replacing old ones. We learn based on what we experience. Our value set changes based on the evolving relationships and the connections we have to the world. Our interactions evolve with the environment around us. 

The way we communicate is complex. We grapple with issues. We reflect on our past. Heroes rise. Heroes fall. New perspectives raise uncomfortable questions and interpretations of our stories. The relationship between price and personal value becomes a tool in value creation. 

The problem is we set up that communication in a hand-to-mouth way. We, as living evolving stories and bodies, become productive assets tied to blunt price tools. Our egos, sense of respect, and self-worth get tied to “what we will be when we grow up”. Society used to create blunt roles, castes, and classes, providing repugnant clarity. When you were confused about a situation, authority would instruct you. 

Now it is more complicated. We are unpacking, and figuring things out. 

Another blunt tool for self-definition is money. We never earn enough. We want more. Valuable actions that don’t make money, get lost in our ability to communicate if we live very different lives... with money the foggy window between world views.

Unclear Price

Space to Value Time

Tim Urban (waitbutwhy.com) talks of time optimism. It is a euphemism/kind way of referring to being late. Busyness is a form of laziness. If you are time pessimistic, you leave space. You don’t start new tasks if you don’t have the time to give them the necessary container (focused attention). You allow space, to be on time. On time *for* people. As a matter of respect. If you are constantly making people wait for you, you are not going to get many chances. But that does mean, as the time pessimist, you are regularly going to be the one waiting. Because you have created space. That space is partly an acknowledgment that other people’s time is as important as yours. We all get 24 hours a day, rich and poor, powerful and powerless. Busyness is often used as a conspicuous signal of importance. We can’t know what people are doing that matters, but being late implies that thing is more important than the person you keep waiting. When you're doing a presentation, “sorry, I put this presentation together at the last moment” is not good enough. It means in a room full of 10-100 people, that you think that your time is worth more than all their time combined. Because it is the one true point of equality, we should not waste other people's time. 

"Why I am always late", by Tim Urban

On the Menu

I am chatting to a few companies in my job hunt. Like dating, if you do that while employed, it feels dirty. The company I work for has one employee. Me. And currently no clients, other than people reading my free writing. My 2,800 blog posts over 6 years earned me $23.59 (and you need to reach $60 to get paid). So, it is okay. The context shift of coming back to South Africa after 12 years, means it provides an opportunity to get to understand what is going on here on the ground. My head and heart never left, because of Social Media and working for/with companies with South African links while away. My feet did, and it does feel different. Like buying cupboard items when shopping, rather than hand-to-mouth eating. The gaping hole in my “build capital” mantra is that I am not an entrepreneur. I did not make jobs. I took on-the-menu jobs, and reinvested the gap between my pay and my needs. I studied a degree knowing the salary and demand for the jobs that required that. Old Mutual paid for my studies. The most prominent emotion I have is gratitude. You cannot build capital without a job, and South Africa does not have enough jobs. But I am confident it will have one for me. Not all good ideas are good business ideas. Not all people willing to work can find work.

Savoy Hotel Menu

Cairo 1900

Social Capital

One part of the job search process I do not enjoy is CV writing. As someone who includes “Price is not Value. Salary is not Worth. You are not your Job” as one of his mantras, a CV feels very much like a boastful autobiography. Public Speaking is the best example of where everything works more smoothly when the focus is the content, not the person. When you speak passionately about something you care about, to people who care about it too. Magic. When it is a school oral in front of a class of bored 14-year-old ingrate inmates, no wonder people are scarred for life when they have to present. LinkedIn and Facebook partly solve this, with my tendency to think aloud and befriend strangers. Ideally, as you grow in your career, you are not starting from scratch. You are part of a community. Ex-colleagues, “competitors”, suppliers, clients, classmates and others in my (privileged) network turn it into a team effort. Like the compound interest of investing. Always worth remembering in whatever role you are currently playing.

Tough Crowd

Soutie Begins

When I moved to London in 2008, there were two main obstacles to overcome. (1) Get a Visa, and (2) Get a Job. For the Visa, I used a company called Voyage Relocations. It is possible to navigate the legalities without support. I had friends who did, but I prefer the comfort of someone telling me I have filled in all the forms correctly. As my British wife and I head back in 2020, we are again using support for her Spousal visa process. It was/is nerve wracking sending original documents (degree certificates, passports, driver’s licences). The container for the opportunity to move was Age, Education, Previous Earnings, and English. For the job, I used a company called Acumen Resources. They arranged some interviews, and gave me some support in “How to do interviews”. Like exam technique and time management are the key to Conspicuous Knowledge (education as a signal), getting a job requires performing well in the lottery of CV sorting. I got interviews at McKinsey and Orbis. McKinsey said no, I wasn’t a creative enough thinker. Orbis gave it a lot of thought, but said yes. When I say McKinsey and Orbis, I mean individuals at those companies. Although we talk of the containers we call Companies as if they are people, it normally comes down to single decision makers.

One Foot in the UK, One Foot in SA

The Robots

Price isn’t Value. Without insurmountable barriers, price is supposed to act as a traffic light. A competitive advantage isn’t what you are good at. It is the reason other people can’t do what you do. The obstacle. The privilege. The difficulty. The law of supply is that for a fixed cost of doing something, a higher price will attract a larger supply of people willing to solve that problem. You don’t get paid more for doing something more valuable. Price is a signal of scarcity. Not value. You have to determine how you value things, and then look at the traffic lights (given your values and intended destination) of the things that will help you get where you are going.

Creating Calm

“Past performance is used as a guide only. It is no guarantee of future returns. Your investment can go up and down and you may not get back the full amount invested.” This is the standard disclaimer that all asset managers are obliged to make part of the conversation. Investments can, and do, double, triple, quadruple, or go to zero. There is so much noise, and difference between daily, monthly, and annual returns that it bears little resemblance to a salary. Even though your money is working. A salary is more analogous to a dividend. A dividend gets declared. Management aim to smoothly pay for the use of Capital. Aim to increase it each year. To pay it sustainably. They consider the strength of the capital to endure, and the ability of the business to adjust. The challenge is looking for the signal in the noise. Creating the ability to cope with the noise. Creating calm in a continuous storm.

Signals to Come and Go

Money is made in Containers. We normally focus on the type of problem when speaking of money making. The “how”. But problems, can and do, change. More important are the Capital and Container that support and give form to the process of money making. Capital stills the waves creating space and time for dynamic problems. Capacity for research and development of the skills and knowledge necessary. It creates the ability to listen to the signals been given about what problems are paying enough to focus on. Containers are given shape by Barriers to Entry, and Barriers to Exit. Price responds to Supply and Demand. How many people can solve the problem? How many people want the problem solved? Barriers to Entry stop you from being the one who solves the problem for an attractive price. Barriers to Exit force you to solve the problem when the price is too low to make it worth your while. Real financial autonomy lies in having the strength, flexibility, and control to navigate your way through the noise with grace and beauty. To move with purpose. To make empowered decisions.

Sending Signals

 

Listening to Signals

In an ideal world the market would scream signals at us unambiguously. If we were brave, we would all focus on being able to clearly and transparently articulate our problems. A good business idea is where there is agreement on a product at a price that is attractive to both the buyer and the seller. The cost is less than the price, so the seller is happy. The value is more than the price, so the buyer is happy. The signal to, and from, the market is profit. Super profits will mean more supply of that product (with limited barriers to entry). Insufficient profit will mean less supply (with limited barriers to exit). The problem is, we define ourselves by a product (job or business), aren’t willing to openly express our problems (privacy), or listen to the market signals (enter or exit). Supply adjustment takes time and investment. We want an answer for life. By implication, that stops us listening. If there was a clear path to skills and knowledge development, with a reasonably certain pay off, perhaps people would be brave enough to adapt, adjust, and accommodate.

East German Ampelmännchen

Deafened by Price

Price is not value. Salary is not worth. You are not your job. All markets do is shift things. Supply is the total amount of something that is available. Demand is the total amount of something that is wanted. A higher price attracts more people to make the thing, but also makes it less attractive. All price is, is a signal of what is being produced. Value is something else. Value is the reason we want to be here. The time we want to spend. The contribution we want to make. To do what we personally value, we need to dip into the supply and demand of resources. We need to learn to talk price. But not be defined by it. Building Capital allows you to do that. First, building a buffer means you have the resources for your value creation to not be distracted by the noise of changing prices (job loss, emergencies, lockdowns). Secondly, building an engine allows you to pay the costs of living without those costs making all your decisions for you. If you live hand-to-mouth in a pass-the-parcel economy, the volume of price can be deafening.

"Funeral of the Anarchist" Carlo Carrà

Wiggle Room

You are not your job. Your income doesn’t determine your quality of life. Your success is not signaled by how much you consume. We are not cogs to fill specific and managed roles defined by a path we set out on as kids. You can love languages as an adult when you hated Afrikaans as a kid. You can discover a passion for Music late in life. Coding. Investing. Running. Whatever. You can unlearn. You can relearn. You can reflect on who you are, and who you want to be. Free Will exists. It’s just hard. Detaching from your circumstances starts with wiggle room. If you live hand-to-mouth then there is no breathing space for change. We have the most control over our mouths. Our consumption. If you can let go of signaling to others your place in society, you can gain control over your choices. Slowly. Over time. With work. Emergencies often make our choices for us. Build an Emergency Fund. Space between your hand and mouth. 3-6 months of spending requirements. Then look up. Look properly. And make a choice.

Space to Wiggle

Professions

In South Africa, those lucky enough to go to university tend to make a pretty vocational choice. Most are thinking about 'what they want to be'. How they are going to put money on the table. The idea of a university as a place to go to widen your mind is the pudding, not the pie. You are buying a signal that will get you to the top of the CV pile, that leaves almost half rotting in the bin. Possibly in a profession that you have a vague 18-year-old's idea of. Medieval times recognised only three professions - divinity, medicine and law. The idea of providing disinterested advice, for direct/definite compensation, without business interest. Like countries, currencies, and religions... all a profession needs to be a profession is recognition. They are because people believe they are. Recognition Milestones include being 'full-time', training schools, universities, associations, professional ethics and licensing laws. A signal that helps you pre-judge... hopefully accurately.

Losing Signal

How efficient a signal do physical books send anyway? If the point is to let people know what you read or that you know about a concept, does possessing lots of books do that all that well?

I argued that once people know that you are only keeping physical books as a signal of how interesting a person you are, the signal will change to one that you are pretentious. Since, if you were genuinely interested in books, ebooks are more efficient.

Stuart says we read Harry Potter in public because we want people to see that, and so start a conversation. Books do have a habit of starting conversation. Last year, when I was reading 'The History of Western Philosophy' by Bertrand Russel, I definitely got a few looks and a number of people sitting next to on the plane used to comment. Admittedly, it travelled with me on a number of occasions because it is not the shortest book in the world. I would argue strongly that I wasn't reading it as a signal, but some people might.

Thing is, ebooks provide a more efficient way to read, but there are also more efficient ways to signal. If signalling is about finding people with similar interests, then there are lots of ways to do that with social media and the internet.

You can set up a virtual library to share what you are reading, what you want to read, and what you thought of the things you did read. You can write a blog. You can (though I know nothing about it) tweet what you are reading.

Admittedly, that doesn't work at a coffee shop when you are hoping the attractive girl across from you shares and interest in random books like 'The Red Queen', '1984' or 'The Power of One', and you sit in such a way that curious girl that she is... she can't help but notice, one thing leads to another and after furious online chatting you fall in love.

So yes, maybe ebooks will have to have covers that change depending on what you are reading? Why not?

But if the signal you want to send out is not about what you are reading, but how big your library is. Sorry, your time is up when everyone's library includes every books ever written.