Essential Lessons In High Finance.

I was driving home and saw an add for Bay Alarm and it said, "Burglar Schmurglar" and underneath, was the line, "What have you got to lose?"

There are many new tag lines which are complex plays on cultural colloquialisms that tie in words that are key to the core business, in oblique ways.

But the phrase, "What have you got to lose?" seems like something that everyone in high finance should at the very least, consider fully when developing core financial products and investments.

It's as if there is a bed of raw diamonds directly under a precariously placed, wavering mountain of death, which WILL fall.. and yet, those who watch from the sidelines are dismayed that some individuals, despite repeated trips into this "kill zone" are able able to emerge with vast sums of riches, which allows them in turn, to richly reward their investors, especially themselves, as well as to have the financial reserves to capture your target business audience and threaten your very existence.

And so, you jump into the fray.

In the face of such a situation, the question isn't if you will jump into the fray, rather, when. and when you also factor in the fact that it's always someone else's riches, and someone else who is ultimately risking their financial lives in the death defying dash... then it makes sense that resources are thrown into the dark oblivion.

the fact that the money is not theirs, should result in a more cautious approach, but it doesn't.

but let's examine the flip side. A few years back, in the previous incarnation of "the bubble" there was a run up in the share price of Internet businesses. Warren Buffet, despite the allure of seeming teeming riches to be had at pennies on the dollar (and the face that domiciles were not at risk) stayed squarely on the sidelines and did not enter the fray.

Of course he was proved right, despite the fact that millions of millionaires and thousands of billionaires were made in the interim. He wanted no part of it because in consideration of the finance zen koan, "what have you got to lose?" the answer, with reflection upon the principles that drive share price, was "everything". It simply did not make financial sense to invest. the fundamentals were whacked. the amount of profit to be made, was not a part of his equasion, because the equasion itself showed there was no profit to be made.

the second principle of high finance which is routinely ignored is, "do you have the money to pay for it?" all to often the answer is "no" and yet the action is "yes". It's a case where a willing spirit sadistically compels weak flesh to dance all too gleefully and long. once again, with someone else's shoes, tutu, music, band, floor and audience.

I would propose that for the first semester of any business education, what should be done, is that the students should sit in a gym while over the loudspeaker plays, "Can you pay for it? if not, then you can't have it." followed by, "What have you got to lose? Too much? then don't do it."

This would do much to solve all future financial crises.