Tuesday, September 7, 2010

Forbes on the "Cheap Revolution"

I'm a big fan of Rich Karlgaard, publisher of Forbes magazine. In the September 13 issue, Karlgaard's editorial is called "Ten Rules of the Cheap Revolution". It is a fascinating look at how economic revolutions have happened throughout history, yet have had only small impacts on the standard of living. He goes into how innovations have created huge changes for some people for brief periods. Fascinating stuff. He maintains that some discoveries are more influential and economically disruptive than others; for example, the discoveries of DNA and the integrated circuit last century really made huge changes in the world's standard of living.

He says whenever a new invention, discovery or innovation makes things suddenly cheaper, it is an accelerant of change, creating all sorts of economic upheaval for various classes of workers. He calls this the "Cheap Revolution". And he goes on to talk about how you can make the latest Cheap Revolution work for you, rather than against you. If you follow his rules, you can invest in companies that will be winners in the latest Cheap Revolution. He lists 10 rules. My favorite one is:
"Self-discipline rules. We are on our own. The most important software of all is our internal operating system."

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