No.0120:Invisible Hand - Adapting to Change

November 29,2023

Interest rates have been abnormally high in the U.S. for a long time, and although they have been called a brake on the economy that slows the flow of money, the situation has been maintained at a moderate level. However, recently we have seen some weak employment figures. In such a situation, the possibility that the economy has finally passed the peak and is going down is increasing, and the person in charge of managing interest rates must carry out policy while accepting the "invisible hand" with sincerity! The newspapers were expressing something like this.
 
When things are about to change, what is happening underneath? It is essential to calmly and correctly grasp the situation and then take appropriate action accordingly. Giving a patient with influenza a dose of Corona medicine is not expected to have much effect. Spending more time on application without basic skills in studying for a test is not going to improve scores significantly. Men who seek motherhood from women who want to be inclusive are unfortunate.
 
Not "doing it right" but "doing the right thing."
 
It is said that three eyes are important as perspectives on work and life. The three eyes are the eye of the worm, the eye of the bird, and the eye of the fish. The eye of the worm is to pay attention to details. It is a point of view that eliminates carelessness and places emphasis on accuracy. On the other hand, the eye of a bird is to leave details aside and look at the whole picture. Reports to management often do not require too much detailed information. Management is required to make quick decisions based on an overall grasp of the situation. In such a position, for example, the atmosphere in the workplace is disturbed due to infidelity among employees! If such a small piece of information is reported and a decision is required, the management's head will be punctured.
 
The last eye of fish is to envision future trends.In other words, it is to maximize the company's (and our own) profits by envisioning future developments with a sense of the "invisible hand". However, it is difficult for the fish eye to completely see the future in most cases, and furthermore, the "invisible hand" changes with time. Therefore, it is essential to fine-tune or modify policies, and if we are completely wrong, we need to stop as soon as possible. It is really uncool to continue to linger without admitting a mistake because it is uncool.
 
In addition, there is a diversified investment approach that ensures long-term asset building without being influenced by the "invisible hand" as much as possible. It is called dollar cost averaging. This is a method in which one periodically buys a fixed amount of a commodity whose price fluctuates according to the "invisible hand. When the price is low, we can buy a large amount, and when the price is high, we can buy only a small amount, thereby preventing a large amount of overpricing. By following these rules, investors can earn a steady profit on a commodity that fluctuates up and down in the short term, but rises steadily in the long term, without being influenced by luck ("invisible hand"). Diversifying the commodities to be purchased by region, currency, and even sector (industry) can further increase the certainty.
 
Expressions such as " an era of upheaval," changing due to the "invisible hand," have been used throughout the years. Recently, especially with the development of information technology, these expressions are being used more and more frequently. In such a situation, I have a fear that my value will be blown away when I hear that new things should be done by young people. When I was young, I used to be able to vent my frustration down below by saying, " I can't play baseball because the bench is stupid" but now I've reached the age where I'm being pushed up opposite direction. So I want to try as much as I can with my own hands to do things that I find interesting, and I want to spend a lot of time on the things that impress me the most and keep striving to make them my own, no less than the younger generation.
 
Whoever does not advance must retreat, and whoever does not retreat must advance.
Yukichi Fukuzawa
Forever young