Joseph's "Just My Thoughts"

Effects of Ownership. It refers to valuing what one owns from one’s own perspective. The competition to buy tickets for the Duke University basketball game was very fierce, so the university decided to distribute tickets through a lottery. Some students applied for the same ticket, and among them, the winning students and dropout students were asked about their valuations: the winners were asked how much they would sell the ticket for, while the dropout students were asked how much they would buy it for. The lowest selling price from the winners was $2,410, whereas the highest buying price from the dropout students was $170. The difference was substantial. When asked why they thought so, ticket holders considered the value of giving up the ticket, while ticket buyers considered the value of exchanging cash for it. In other words, possession represented the benefit of sacrificing something else. Value judgments depend on what we own. - Joseph’s “just my thoughts”

Free Effect. A new ice cream company in India has set up free ice cream vending machines on the streets to promote its brand. Result? People lined up at a very long distance in front of the vending machine. It was raining then, and the people in line went to a convenience store to buy umbrellas, then lined up again. Umbrellas cost much more than ice cream. However, people kept lining up. Cheap and free are two completely different concepts. When the price is low, sales increase slightly, but when it is free, an extraordinary dimension of the problem arises. It’s a privilege, so consumers are willing to pay a higher price to get something for free. Free is not a matter of reason; it is a matter of emotion. - Joseph’s “just my thoughts”

Time Preference Rate. “The Marshmallow Tale” by Joachim de Posada and Ellen Singer describes the “Marshmallow Experiment” at Stanford University. The experimenter left the child alone in the room and gave the child a marshmallow, instructing the child to eat it immediately. However, if the child did not eat it within 15 minutes, the experimenter would give the child another marshmallow. Some children waited the full 15 minutes, while others stopped waiting early. These two groups were followed for 14 years, and as a result, the more patient children showed better social and mental abilities. Those who cannot tolerate waiting are said to have a high time preference rate, while those who are patient are described as having a low time preference rate. In investment, high and low time preference ratios are not necessarily good or bad because many investments depend on luck. The key is to find and stick to methods and principles that match one’s own tendencies. - Joseph’s “just my thoughts”

Time Preference. It is a phenomenon where the more distant a result is from the present, the more rational decisions seem, while closer results tend to lead to more emotional choices. When thinking about the distant future, we usually approach it rationally. However, when making decisions right now, we often act emotionally instead of rationally. This time preference significantly impacts areas such as finances, health, work, sleep, procrastination, and texting. For example, dieting is hard when delicious food is right in front of you; people often say it starts tomorrow, not today, because weight loss doesn’t happen overnight but over weeks or months. - Joseph’s “just my thoughts”

One common myth about money is falling into the fairness trap with value relativity. When the quality of work is hard to judge, we tend to value those who work longer and harder more highly. This is a fairness trap. A novice locksmith might take a long time to open a locked door, while an experienced one can do it instantly. People often pay higher wages to novice locksmiths who have spent more time working. Even if the lock is damaged due to clumsy work and they are charged for replacement, people might still tip because the locksmith worked hard and did his best for a long time. When paying for something that’s difficult to evaluate, people care about fairness. But the real reason to call a locksmith is to avoid the embarrassing situation of being unable to enter the house quickly. I don’t know if this is true, but a woman once asked Picasso to draw her portrait, and he did it in 30 seconds. When she asked how much she should pay, Picasso said her $500. She complained that this was o...

The relativity of values causes us to use money irrationally. I go to the supermarket to buy a $15 pen, and the clerk smiles and says, “You can buy this pen for $7 if you walk 5 minutes from here.” Then, most people walk five minutes and buy a $15 pen for $7. But if you want to buy a $1,000 jacket and the clerk smiles and says, “You can get a $992 jacket in five minutes from here,” most people simply buy the $1,000 jacket. Reasonably, walking for 5 minutes equals the effort, and the profit of $8 is the same. However, people might go to a store that sells pens cheaper, but not for the jacket, because the discount rate is too low. In other words, the relativity of comparing values makes us act irrationally. The pen’s discount rate is 55%, and the jacket’s is only 0.8%. Yet, the total amount is the same for all $8, and the effort to gain that profit is identical. Attitudes and misconceptions about consumption influence how we build wealth. - Joseph’s “just my thoughts”

One of the key principles of money is ‘opportunity cost.’ It means that when I buy something, I have to give up something else in return. We think we buy because we need something, but we often forget that we could buy something else instead. We rarely consider ‘opportunity cost’ when making a purchase. We do not compare other values against our needs. Buying something means giving up something else, but we often don’t realize it. When we spend money, we should also consider the ‘opportunity cost’; yet, in reality, we aren’t trained to do so. By making a purchase, we bypass the value comparison that may not offer any additional benefits. Maybe it’s because we lack knowledge, or perhaps the idea isn’t appealing. - Joseph’s “just my thoughts”

When we exchange what we need, we use money as a medium instead of trading ‘goods for goods.’ In this context, money acts as a means of exchange. When we exchange what we need, we also build wealth by passing on added value to each other. In other words, money functions as both a medium of exchange and a measure of value, as well as a tool for accumulating wealth. But isn’t this a bit strange? Although exchange value comes from goods and surplus is generated from this exchange value, the object used to measure and accumulate wealth is money, not goods. This is because money alone has the privilege called ‘compulsory circulation power.’ In other words, even if value is created, added value cannot be realized unless it’s exchanged. The ability to enable such exchanges is what we call ‘compulsory circulation power.’ - Joseph’s “just my thoughts”

Israeli Kindergarten. Dual-income couples often arrived late to pick up their children. As a result, the kindergarten implemented a rule that parents would face a fine if they were late; however, even though this introduced a penalty system, it also led to more delays in pickup times. By replacing feelings of guilt with money, paying a fee for being late became the new norm. After recognizing the mistake and removing the fine system, what happened? More parents started arriving late. When money becomes involved, the exchange of value fundamentally changes the nature of the relationship. And once that change occurs, it doesn’t revert. - Joseph’s “just my thoughts”

Meeting someone intentionally requires planning a specific time and place, and because it is a three-dimensional event, it can be seen as a cosmic occurrence. We can’t meet simply by setting a time, nor can we meet just by choosing a place. So, how much more astonishing is it to meet someone by chance without an appointment? Meeting and breaking up with someone are by no means easy. We create cosmic events every day, fulfilling vast mathematical probabilities and physical conditions. - Joseph’s “just my thoughts”

Reading many books is important, but how you interpret what you read matters more. The ability to interpret affects how knowledge is applied in real life, making a big difference. Experiences and circumstances heavily influence interpretation, but imagination is fundamentally crucial. Even if you see the same thing in an imagined experience, the interpretations can vary greatly, and what drives action in reality also differs. The skill to connect what we know with new ideas is called creativity, but the way we make these connections comes from imagined experiences. Imagine in your own way! - Joseph’s “just my thoughts”

Making money with money is called finance. Simply put, it’s a money trade. However, the most crucial asset in a business that earns money is ‘time.’ Over time, money can grow into more money, whether through a return on investment or interest. So, what does time do? Time causes changes in value, shifting from low to high, and then back from high to low. Time is not equally valuable to everyone. It provides different returns for those who accurately estimate its worth and take action. The value of time varies from person to person, as each individual perceives it differently. - Joseph’s “just my thoughts”

A Tiny Crevice. In other words, it is also called an affordance, permissiveness, or tolerance. A 5mm hole and a 5mm rod don’t fit perfectly together. If you hit it with a hammer, the rod might go into the hole, but only by forcing it. If they are the same size, they don’t really fit. There needs to be a slight gap to ensure a proper fit, which is known as ‘engineering tolerance.’ In this world, 5mm exists only as a concept and doesn’t truly confirm its existence. For some, ‘tolerance’ might be seen as a mistake or imperfection, but for others, it’s a principle of life that drives the world and should be natural. - Joseph’s “just my thoughts”

Rejection Cost. From the perspective that my profit is someone else’s loss, and someone else’s profit is my loss, the fact that I have to reject an opportunity to make money for my circumstances is a loss for me and an act of giving someone else a profit. In other words, my added value is not determined solely by productivity but also by the marginal utility generated by the law of supply and demand. Therefore, my labor price should reflect the value that I have given up—the profit I could have gained. If the rejection cost is not included in my profit, I will be at a loss to that extent. Failing to account for rejection costs in production expenses is not wise, but foolish, because it risks my survival. There is no absolute value in this world. All economic values are relative. - Joseph’s “just my thoughts”

‘Virtual’ means that it does not exist, but it is assumed to exist. So, ‘virtual currency’ is regarded as a non-existent entity, and the act of trading virtual currency is considered a bubble. However, virtual currency exists as an electromagnetic combination, that is, ‘bits (bytes)’ among the constituent elements of matter, and this bit exists on an atom. It exists in a different form, not non-existent. Therefore, it is real, not virtual. Most of the legendary investors have overlooked this point. Ultimately, the bit depends on the atom. As long as the atom doesn’t die, the bits just exist together. - Joseph’s “just my thoughts”

The value must exist when both universality and scarcity coexist. Universality is a property that anyone can recognize, whereas scarcity refers to limited possession. In other words, recognition should be universal so everyone can understand it, but the rights to possess or use the object should be restricted. The universality of perception has been influenced by viral promotion, such as word of mouth and media messages, and now digital networking is taking over. Limiting physical possession and use causes scarcity. Before the digital age, this was protected by spatial limitations; however, with the widespread adoption of digital networking, encryption technology now enforces these limits. The restriction of possession and use means that a master sets the physical boundaries of the scarce object. All businesses must satisfy these two contradictions simultaneously to achieve economic benefits. - Joseph’s “just my thoughts”

In markets that trade natural products, such as agricultural, fishery, energy, and commodities markets, oversupply or at least excess supply causes problems. When supply is high, prices plummet, causing significant damage to producers; conversely, when supply is low, prices rise, and consumer sentiment diminishes. As a result, both suppliers and consumers suffer. The challenge is that it is difficult to intentionally set the level of production. Because of this, a futures market develops in situations where we have to accept what nature provides. Futures trading is a method in which a producer and a distributor agree in advance to trade the price of an item to be produced in the future, without knowing the exact quantity yet. In other words, in futures trading, the focus is on price rather than quantity. Since it is challenging to stock items that require freshness, futures trading offers advantages by allowing transactions to be made in advance. However, if supply fluctuates too much,...

Life only changes when we have great ideas and take action. If we work hard without great ideas, our days will likely feel meaningless. Conversely, if we only think about great ideas without taking action, nothing will actually change. Great ideas aren’t just big thoughts; often, they are small and trivial ones that are easier to implement. No matter how many doors there are, if we don’t open them, they’re just walls. - Joseph’s “just my thoughts”

Did you know that modern space rockets are influenced by Roman heritage? In other words, the size of current rockets still reflects standards set during the Roman era. Rocket components were transported by rail to launch sites and had to pass through an intermediate tunnel. It was more practical to limit the size of the rocket rather than build a new tunnel. The track width was determined by the steam locomotive, which was adapted to match the width of British wagons pulled by two horses. The width of the track is based on the hips of the two horses, which in turn are derived from the size of a Roman chariot. This phenomenon is called Path Dependency. Humans tend to stick with the past. - Joseph’s “just my thoughts”

Will you hire a representative or an assistant to help you? There are two key factors to consider when hiring employees for a company. Hiring a representative involves selecting someone to act on behalf of the president, giving that person a certain level of discretion, and emphasizing support for tasks they cannot handle or are difficult to decide. Hiring an assistant involves choosing someone to help the boss with their work. The main goal of HR management is to develop internal agents; without this, the company can’t grow. That’s why we focus on hiring individuals with good character and a strong foundation from the start, seeking someone who can potentially replace the boss. So, why does the boss exist? To delegate authority and take responsibility for those they assign. - Joseph’s “just my thoughts”