Caveat-Emptor.net

a Technology Service of ARNAN, llc - buyer beware

Everyone has the opportunity to take responsibility for their actions - whether they want to or not.

Would you buy a house if you knew it would lose half its value within a year? ... Maybe...

Decisions that seem good or bad at first glance are contextual. A good idea in one situation is a bad idea in another situation. You cannot know if a decision is right or wrong without knowing the context that the decision is being made within. Those constraining factors establish the parameters of the decision.

At first glance, many answer that no one would ever buy a house that was going to loose so much value so quickly. But the real answer is you really cannot answer the question without more information. Think more deeply about the assumptions you make for every decision. For buying that house you assume things about your survival not depending on owning that house, your money retaining value at a rate greater then the change in house value, and that the value in a year is a predictor of values in two years. Any of those assumptions may be wrong.

Anyone who bought Coca Cola stock when it was first issued became a millionaire, if you held the stock long enough. Coca Cola stock lost a majority of its value shortly after it was originally issued. What was a good decision and what was a bad decision depended on when you sold. It depended on the price of sugar (the factor depressing the stock price) and on the demographic shifts in the market. Was not buying and holding Coca Cola stock any more a mistake than cashing out too soon? The answer: that depends.

Unfortunately, we are asked to make decisions every day without adequate information. Fortunately, those decisions are not very important. If we order the wrong lunch, we won't lose our jobs and the world won't end; probably. How do we know what the important decisions are? Experience. We've learned over time what tends to be an important decision. If it involves a lot of money or commitment, it is an important decision.

But no decision is a decision too. We choose not to evaluate. Our experience tells us what we do not need to look at. But what if the situation changes? Then our experience can be wrong. We make a decision based on mistaken factors. We make mistakes of commission and omission.

When do we know the situation has changed. Pilots help captains navigate their vessels through waters where the channels change quickly. The pilot is a specialist in these specific waters and the captain relies on his the pilot's knowledge and experience of the changes in these waters to help guide the vessel through safely. The captain has to know when to call a pilot aboard. A captain must know dangerous waters. Dangerous waters do not mean the vessel is in peril; just that it must proceed with expertise and with caution. A vessel brings a pilot aboard to help the captain navigate the shoals, where the vessel might get hung up.

How does the captain know dangerous waters? Experience. Today technology is in a state of hyper deflation. This is a double edged sword. Increased productivity and efficiency are combined with raised expectations and changing demands; dangerous waters for sure.

Missing the boat is a phrase to express the danger of opportunity cost; not doing what you should have done. Risk factors weigh the reward. Decisions can be made, or not made, for opportunity or unacceptable risk. New technologies change the geography.

Because a pilot knows one harbor, doesn't make him an expert on all harbors. From another perspective, a person with a hammer sees all problems as nails; but what if the problem isn'treally a nail?

Help is available, whether or not you have technology and regardless of the amount you are currently spending on it. Information can be analyzed by looking at the five market factors: suppliers, customers, entrants, rivals and departures. The strengths, weaknesses, opportunities and threats exist. You can make decisions blindly or with illumination. The choice is yours.