39: Personal Capital Accumulation; Buffett On Macroeconomics; Year-End Promotion

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Personal Capital

The Christmas holiday got me thinking about how much of your 20s and 30s is spent accumulating a personal capital stock. I’m not talking about financial assets but rather the stuff in our homes that many of us probably now take for granted.

A few years ago we received a roasting pan as a gift. It looks like the one in the image below (ours is a Paderno). Ours probably cost $60. Previously we used the disposable aluminum ones that cost $4-$5 each. Even if we’d bought it ourselves, after about a decade the thing would have paid for itself and probably continue to look good and serve us well for many more years.

There are loads of examples like this around my home. High-quality stainless steel pans, cast iron pans, miscellaneous sockets, wrenches, and other tools in my garage, my all-leather Allen Edmonds dress shoes, etc. Most of these things I’ll only have to buy once, or at most twice in a lifetime.

It’s no different than a country accumulating a capital stock of businesses, factories, intellectual capital, building wealth for its citizens through its productive capacity.

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Buffett On Macroeconomics

Warren Buffett talks so much about individual companies and microeconomics that it’s easy to forget he’s well-versed in macroeconomics.

Here’s Buffett dispelling a myth that a foreign holder of US Treasuries could dump them and cause immediate harm to the United States. Buffett asks and then answers his very useful question “And then what? to show the true reality of the situation.

The “And then what?” question works well in many other areas too. I use it all the time in thinking about everyday problems, as well as in business situations.

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Stay rational! —Adam

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