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Title: Future Wealth by Stanley M. Davis, Christopher Meyer, Alan Sklar ISBN: 1-56511-394-2 Publisher: HighBridge Company Pub. Date: 21 August, 2000 Format: Audio Cassette Volumes: 2 List Price(USD): $18.95 |
Average Customer Rating: 3.17 (12 reviews)
Rating: 5
Summary: New Perspectives on Risk and Reward Beyond Blur
Comment: Future Wealth is the second book in a trilogy that began with Blur, by Stan Davis and Chris Meyer. The book builds a full argument on a small theme in Blur concerning the issue of Bowie Bonds by the rock composer and performer David Bowie. Seldom will you find a book with such a valuable insight into the likely future of capitalism.
Unlike most business books which just describe something that has been going on for some time, Future Wealth clearly goes beyond today into tomorrow. For those who are unfamiliar with scenario-based thinking, this book will seem strange. Experience shows that such thinking is extremely valuable for helping each of us prepare for things that may well happen.
Although some see nothing new in this book beyond Blur, that is clearly not the case. Blur ends with the Bowie Bonds example and Future Wealth begins there, but that is not the end.
The biggest idea in Future Wealth is that individuals need not have the volatility exposure to risk that makes each of us take a conservative financial course. The solution to volatility is to pool risk with a statistically significant number of others. This is the solution that makes insurance and mutual funds work better. David and Meyer have the insight to see that combining all aspects of our future, including our net worth, into such pools can allow us to take greater risk that will permit the potential for much greater reward. As a result, risk is our friend if we handle it properly.
They also see the systems potential of getting the present value of our economic potential available to us. We can use the funds to both expand our future income and net worth, while diversifying our risk. That is a fundamental insight that we should each pay attention to. Instead of being limited to the resources at hand, we can have virtually unlimited potential by investing in our futures using all of the potential resources that might be available to us. A public company is like a government, in that it can issue more stock to create more resources. Now, Davis and Meyer extend that perspective to the individual.
Turning around the current company-centered economic culture, they argue that companies should invest in their employees by helping them go public and taking a position alongside of them.
One of the great strengths of this book is that it suggests a fundamental new paradigm for growth and wealth. There is a set of public policy suggestions that emphasize greater social safety nets that permit each person to take on more risk that can expand wealth for the individual, the company and the society. They point out that the connected economy favors the potential for each of us to so much more.
In the future, thoughtful readers will remember this book as The Wealth of Nations for individuals. Good luck with developing your Future Wealth!
Rating: 3
Summary: interesting to watch in post-bull market
Comment: Davis and Meyer believe that "control of wealth is tilting from institutions to individuals." Evidence of this is that individually managed retirement plans have taken the place of company managed pensions, a marked shift from a corporte-culture past. What's happened as a result is that "middle-class wealth is no longer an oxymoron," write the authors, so people now "see their work lives not as jobs, but as a series of risk management choices." But they go on: "Of course, the bull market's end will affect these attitudes -- at least temporarily." What we don't know from the book is what will happen to this middle-class wealth in a market downturn. Granted, the authors see the book, however, as part of an ongoing discussion with readers, and it is a provocative one. Still, don't look here for any solutions to the issues of those who aren't beneficiaries of this newfound wealth. The authors argue that the super-rich are irrelevant and they write: "The disparity between the top and the bottom 10% may distract you from the 80% in the middle," they write. Well, that might be true, but for some those at the bottom of the bottom 10% who are living below the poverty line cry out for attention, at least in the minds of some. That though is beyond the scope of this book.
Rating: 1
Summary: Flawed Underlying Themes Behind Old But Reworded Concepts...
Comment: First of all, when you look at the "Advance praise" section, you will see that one of the sources is Kenneth Lay, former chairman/CEO of the now-defunct Enron. If that doesn't scare you off, I don't know what will. In a book chock full of the bygone-Internet-era business terms, I did NOT find anything particularly novel or ground-breaking with this work. The concept of "human capital" is not a new idea; certainly Bill Gates has already put this concept to good use for nearly two decades. Also, the concept of marketing one's talents, while a sound idea, has major consequences which I'm surprised the authors did not place much emphasis on: Given the constant emphasis on training in school to improve your job skills, there has been and always will be growing intensity and competition in the job market -- this can already be seen in the market for engineers, where more versatile candidates get a better shot than specialists; the disastrous result would be a glut of engineers and techs, most whom will be unemployed (or underemployed). The same thing happened to lawyers in the 60's and 70's, MBA's in the 80's, and most recently, to doctors. Add to this the fact that a direct correlation between deteriorating skills and age has been established. So the whole "human intellect" as capital, while noble, is practically unsound. The sad reality is that we as human cogs in the wheel of work (skilled or not) are still depreciable assets. I am also surprised that the authors placed some emphasis on the efficient market as a basis for companies, etc. EMT is a theory whose soundness has been invalidated time and time again. Even more so recently, with all the "creative accounting" that has caused the market to crash just recently. Assuming that the book was written during the wave of post-Internet wealth euphoria, it must be only natural that there was no expectation that the markets would ever get into a downturn once the plain, good-ol' economics set in, and the poorly-managed, overvalued companies imploded unto themselves. I would strongly suggest that business owners NOT try their hand at doing any human capital accounting just yet, until they prove themselves competent at doing conventional (and legal) accounting practices. I would also strongly advise against running your business to market standards. I know that's a loaded statement, as businesses indeed do have to watch the market to stay competetive and retain their assets (especially employees), but to keep on changing just for the market's sake is just pure nonsense. As with a lot of the ideas here, most of it is speculative and defies common sense. Theoretical, yes; just not sensible. In general, economic theories should never, ever be taught unless proven experimentally, i.e., the battlefield of business, with a reasonable degree of success... this coming from an experimental physicist who knows damn well what he's talking about. The book lacks clear organization, and therefore does a poor job of relating their points, much less arguing the validity of such. As I said before, the main idea of treating human capital as assets is not a new idea. There are indeed sound ideas that could be manipulated in harnessing this vast pool of knowledge for the benefit of the greater good, but they aren't here in this book. I flatly recommend against ever buying this book -- just check it out at your local library, if a copy is available.
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Title: It's Alive : The Coming Convergence of Information, Biology, and Business by Christopher Meyer, Stan Davis ISBN: 1400046416 Publisher: Crown Business Pub. Date: 13 May, 2003 List Price(USD): $27.50 |
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Title: The Lexus and the Olive Tree: Understanding Globalization by Thomas L. Friedman ISBN: 0385499345 Publisher: Anchor Pub. Date: 02 May, 2000 List Price(USD): $15.95 |
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