the Wall Street way
asset allocation
portfolio diversification
peer benchmarking
buying at one price, in hopes of selling at a better price
we see this old way delivering
- erratic earnings
- inadequate earnings
- misalignments of incentives
- miscreant market manipulations
- social and environmental depredations
- rapidly accelerating cycles of financialized asset pricing booms that go bust with increasing frequency, and increasingly catastrophic consequences for enterprise, for finance, for the economy and for society
There are two risks: price and liquidity.
Both are derived from cash flowing through enterprise.
A system purpose-built for individuals, who do not have the size, the purpose or the time to negotiate. For us, as individuals, it’s better just to speculate.
the Main Street way
investing in enterprise cash flows, directly
to generate adequate fiduciary cash flows, forever
we see this new way delivering
- income security in retirement
- social responsibility in enterprise
- climate stability in energy
- society strengthened through engaged learning by teaching
- broad public participation in finance as how society chooses which technologies for making a future history of prosperous adaptations to life’s constant changes can, should and will be evolved through enterprise
The only risk is technology risk.
Because technology is what drives cash flow through enterprise
A system purpose-built for pensions and other institutions that are also super fiduciaries. They can negotiate. They do not have to speculate.
In many ways, the Main Street way is a return to the way enterprise was financed before we invented the Wall Street way. But with this difference.
In pre-industrial times, free enterprise operated at a scale that made it practical for a few wealthy merchants to form a joint venture sufficient to fund the sea voyages that were the primary form of large scale enterprise in the Golden Age of Free Enterprise.
In our post-Industrial times, industry has changed the scale of enterprise, irreversibly. Having invented the mass market economy, with all the benefits of “bigger, better, faster, cheaper”, it feels unlikely that we will ever return to a smaller scale with fewer choices, more cost from less efficiency.
However, in addition to scaling choice, we have also scaled our superfunds for social benefit, mostly through the invention of pensions as an evolutionary adaption to the new industrial reality of retirement.
These superfunds have this power that we as individuals do not. They have the power to negotiate with post-industrial enterprise operating at mass market scale.
Like the merchant adventurers of old, the stewards of our pensions and other superfunds can sit down around a table with enterprise leaders, and work out the terms of an investment, including agreement on strategies for generating cash flows, equities for underwriting agreed strategies and priorities for sharing in cash flows generated by successful execution of the agreed strategy.
Unlike merchant adventurers, who were negotiating with their own money, for their own proper purpose, our superfund superfiduciaries are negotiating with other people’s money – our money – for a social benefit: to generate adequate fiduciary cash flows, indefinitely, so they can successfully achieve their fiduciary purpose, forever.