I better label this post as "Humour" just in case...
Its a continuation of this blog post long ago:
Let's imagine you are a landowner.
You got two servants.
One servant managed to grow 10,000 bushels of wheat into 100,000 bushels of wheat from the previous year.
A 10 fold increase in yield!
The other servant manage to increase 950,000 bushels of wheat to 1,000,000 bushels of wheat this year.
Its a new milestone! This is the first time your farms have ever crossed the million bushel mark!
How?
Who would you praise more?
And how would you reward and incentivize your servants going forward?
P.S. If you don't have real life experience as a landowner or shepherd, you can turn the question into:
If you got $10K and $950K to invest as separate positions, which asset class or vehicle would you choose for each?
And why?
Smol,
ReplyDeleteCleavage & thighs are means to an end. Landowners more interested in results than means. ;)
Ok in a proper world, we would be at least as interested in the process as the end results. The difficult thing to accept is that good processes don't always produce good results.
But who are we kidding? We are more interested in the millions & billions than what it takes to get them.
Regarding the servants, I'm more interested in who gave that guy 950,000 bushels in the first place to play with?!?
Oh I see ... he's a senior director overseeing AsiaPac. And the other guy is a hard-charging salesman?
What's the time-tested salary/ bonus/ commission structure to incentivise top mgmt versus sales guys? ;)
Haha turning this into an asset allocation & knowing what shoes fit your feet question?
Ok, boomer -- $950K diversified across assets, sectors, countries, yadda yadda ..... and $10K in crypto/ forex/ structured notes/Toto, whatever.
Yolo -- $950K in crypto/NFT/ meme stocks ..... and $10K cash for maggie mee in case things blow up.
Spur,
DeleteEh?
I though cleavage and thighs are the end goals!
Why do men seek money/wealth/FIRE if not for wine, women, and song?
LOL!
As landowner, I would fund the upstart talent (unproven no track record) with $10K. I would incentivize him/her with 2/20 like hedge funds.
I mean its hard to survive on 2% of $10K annually... This would "force" him/her to take risks and shoot for the moon!
I mean if he/she can make $100K for me, I don't mind "tipping" $20K as a reward.
TIP (To Insure Performance) is a great tool to leverage on Other People's Talent!
And if my servant lost every cent trying, the MAX risk to me is a "mere" $10K ;)
For my $950K portion, the last thing I want is to encourage a rogue trader like Nick Leeson handling it!
I would rather pay him/her an adequate and comfortable fee with a performance bonus structure as below:
a) No performance bonus if the year ended in a loss.
b) Only when returns EXCEED the average inflation rate for the year, will there be a bonus.
c) Bonus will increase incrementally on a tiered basis like 5%, 10%, 15% above inflation rate, etc.
The focus is wealth preservation and to beat inflation ;)
Hence I'll prefer to leave this $950K with someone with PROVEN track record.
Smol,
DeleteCleavage & thighs are the means for the lady & she may end up with the better end of the bargain ;)
Yup, you can also see similarity in the pay structure & incentives for higher executives compared to salespeople too.
Your asset delegation follows the boomer route. :P
Only those of us with 20+ yrs and scars in the markets prefer not to be hero.
Those with < 7 yrs in the markets on the other hand ....
Spur,
DeleteLOL!
Shh.... Don't speak it out loud!
Lucky you use a nick; if wifey or your girlfriends found out, you'll be sleeping on the sofa tonight...
Yup. I'm that snake oil salesperson. For someone who left school at 16, I cannot depend on Save More ;)
Do not underestimate youths. Their strength is they don't know what cannot be done!
Boomer and old fogeys?
Wars are fought by young men, while the spoils of war are decided by old men.
A new All time high! Show cleverage or show thigh. Why no show year on year capital injection. Not sexy to show?
ReplyDeleteCW,
DeleteLOL! You know my "bawu"!
If I put $50K under my mattress every year, I can or-yi-or my "mattress" portfolio has grown to new highs each and every year too!
My Sharpe Ratio will beat anyone and everyone too ;)