The market closed positively today. At the close, the benchmark S&P/ASX200 index was 32.2 points, or 0.66 per cent, higher at 5,036.9 while the broader All Ordinaries index was up 32.7 points, or 0.65 per cent, at 5,057.2.
On the ASX 24, the March share price index futures contract
was 39 points higher at 4,995 with 25,967 contracts traded. Translated into plain English...nothing to get excited about.
Cash Converters Profits Rise - This makes me concerned, not excited when second hand stores business increase whether through sales or through lending.
"Cash Converters' half year profits have soared nearly 40 per
cent, thanks to a boost in revenue from its personal loans business.
The second-hand goods retailer and supplier of personal
finance on Thursday posted a net profit of $18.4 million for the six months to
December 31, up from"continue reading...
Real Estate
Property Investors unlikely to profit from surge of Asian buyers
We are, by many accounts, living in the Asian century; a
time when the nations of the world’s largest continent, led by China, will
dominate the global economic, social and cultural landscape. In light of the
enormous strides since just the turn of the millennium by the likes of China,
South Korea and India, and the rise of brands like Samsung and Lenovo, it’s not
a forecast I wish to contest (although forgive me if I don’t extrapolate too
much from the success of Gangnam Style!) continue reading...
The history of Australian property prices...Are we in a bubble? A masters student's perspective...read here
SME
What drives the best entrepreneurs? - Original article on Forbes.com
The EXIT…that elusive pot of gold at the end of the
entrepreneurial rainbow. Whether by acquisition or IPO, the exit ranks as
priority number one for investors and, with the increasing trendiness of
running a “startup”, many aspiring entrepreneurs. The phenomenal
success and 'celebritization' of Silicon Valley tech entrepreneurs like
Zuckerberg, Dorsey, Page, Brin, and others has created a wave of would-be
startup billionaires dreaming of Gulfstreams and Maybachs. The allure of
fame and fortune has attracted many to the world of entrepreneurship, but for
as attractive as the siren of fortune may be, its sole pursuit can sow the
seeds of destruction for any new venture.
It is said that the love of money is the root of all evil.
While this point is certainly debatable, current academic research is
becoming increasingly clear that such a love, if not evil, is certainly
isolating—a fate equivalent to death for ambitious entrepreneurs.
In his book Thinking Fast and Slow, Nobel Prize
winning economist Daniel Kahneman cites compelling research done in the lab of
Dr. Kathleen Vohs at the University of Minnesota on the psychological
effects of money on human behaviour In her work, Dr. Vohs focuses on the
effects of psychological “priming”—the near subconscious influence of
environmental cues—on human interactions. Her work on the effects of
monetary priming prods subjects with subtle cues like words and images
associated with money. She then measures various metrics such as
persistence at difficult tasks, self-reliance, and selfish inclinations.
The results are compelling.
Test subjects that received monetary “priming” cues were
statistically differentiated from those receiving neutral cues on a number of
metrics. Major differences were seen in specific characteristics of
individualism and included:
- A two-fold increase in the persistence time to solve a difficult task
- A significantly reduced willingness to help a fellow student with a task
- A significantly reduced willingness to volunteer assistance to a stranger
- A significantly greater physical separation when seated across from a person during an introductory conversation.
For sure, a strong sense of individualism and persistence
are essential attributes of successful entrepreneurs. Yet other
characteristics identified by Dr. Vohs as associated with a monetary focus such
as a reluctance to be involved with or dependent on others, or to accept
direction from outside parties are almost certainly detrimental. The myth
of the solo entrepreneur has been debunked in a number of forums and it has
become a point of general agreement that great ventures require successful
teams to execute.
Given this research, if great ventures result from great
teams, it can be concluded that financial gain is not the primary driver of
great entrepreneurs. Unless we assume that entrepreneurs are crazy, the
fact that the probability of windfall profits is vanishingly small for the vast
majority of ventures only adds to this argument.
But then we must ask ourselves: why do entrepreneurs do what
they do and take such great risks? It seems clear that financial gain is
not a sufficient explanation.
It is both too rare and, according to the
research, actually impedes an entrepreneur’s ability to build a team that would
produce great returns. From a classical risk-reward perspective, it is
simply not worth it.
But the fact that entrepreneurs continue to take
extraordinary risks for a small expected return (from a probabilistic
standpoint) indicates that something else is balancing the scales.
The answer lies in what are becoming known as extra-rational
motivations. Such motivations lie mainly in the psychological rewards of
being an entrepreneur and include benefits derived from:
- the thrill of competition
- the desire for adventure
- the joy of creation
- the satisfaction of team building
- the desire to achieve meaning in life
- and a host of others that have not been traditionally considered as drivers of economic growth.
The recognition that behavioural psychology plays a central
role in economic development is profound and flies directly in the face of
traditional theories of prosperity that focus solely on optimal resource
allocation. So the next time you see an entrepreneur and think they must
be crazy for taking such risks, or dream of quitting your job to pursue a
startup and become fabulously rich, make sure you check your assumptions,
ponder your motivations, and reflect on the true drivers of great
entrepreneurship (hint: it’s not the money).
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