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Thursday, February 28, 2013

New Paradigm

I'm going to present my thoughts that may be considered way out there...

Complexity theory took hold in economics in the 90s, especially the theory about increasing marginal value or utility(IMV), which turned conventional wisdom of decreasing marginal value upside down. In short, dominate (info, money, power, influence,etc) and set the standards and one could reap ever greater rewards.

This paradigm shift (IMV) and its ultra competitive underpinnings spread to every thread of the fabric of society at the micro level, which in turn set the unintended norm for the macro level--a vicious cycle not only acceptance of, but reverence for those that reaped the highest rewards without questioning whether or if any real value was created and/or how much of the social fabric was destroyed in the process. Societies' value (hence valuation) systems broke down.  In fact, this outcome is exactly what complexity theory models also predicted.

Since the near catastrophic end-game that was the financial/economic crisis of 2008-09, I believe another paradigm has been gaining traction in both the micro and macro levels--that is the theory of a holographic universe. Basically, everything is connected and everything is part of a greater whole. I'm not just pushing some new age, spiritual nonsense. I see it in every scientific discipline and research, in global economic and political policies, in the corporate world, in entertainment, etc.

I do not know what would be the end results of this new paradigm shift, but I have to believe it would be more positive and constructive then IMV.  I'm talking about 10-20 year bull market here... Yes, my outlook is far-fetched, but why not have a vision?

How does one monetize this vista?

Sell assets that have risen due to fear. That would be gold, long-term bonds, anytime VIX spikes. Buy portfolio of assets that are in the business of strengthening connections (human, corporate), perhaps GOOG(YouTube), FB, IACI(match.com), EBAY, media & content firms, crowd funding, etc.  Avoid firms that have traditionally try to profit from transferring costs to society, just to name a few off the top of my head... 

As a side note...ever wonder why "Gangnam Style", song and music video by PSY, a mid-30s, out-of-shape Korean rapper, shattered the record for the most watched You Tube video (over 1.3 BILLION+ views) and became a global phenomenon?  PSY said it himself.  His music, dance, and video focuses on participation and not exhibition.  They allow people to laugh and connect and be in the moment as the actors themselves.  This is completely different than entertainment from just a few years ago when people felt disconnected and perhaps even empty admiring or being envious of the so called "stars".

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