Capital allocation: Difference between revisions

When considering whether [[this time is different]], it is well to look beyond [[substance]] and [[form]] to see whether the age old business of capital allocation is really changing. Financial services is, substantially, a very basic thing. That basic thing happens to be intrinsically very risky. All of the colossal complication that we know, love, and we rent-seeking agents secrete ourselves into the loving satin folds of, arises by way of ''mitigation'' of that fundamental risk. If you give existing [[pure value]] — abstract, disembodied worth, most commonly articulated in the form of [[money]] — to someone else in the hope they will generate ''more'' [[pure value]], and thereby return some extra [[pure value]] to you, if things go wrong, ''you might not get your money back''.call this the one law of finance:

{{Quote|Whenever you stand to make money, you may lose money.}}  

The JC’s proposition is that ''no such invention is possible''. That contavenes the known laws of physics.  Any such invention would be a perpetual motion machine.

From time to time new paradigms will emerge, and people who should know better will believe this principle has been broken. Internet commerce. Renewable energy. [[AI]]. [[Cryptocurrency]].

But none of these falsifies the one law.