The Nature of True Wealth Management — Moneyball!
Aristotle’s Law of Identity tells us that everything is defined by its attributes, meaning its nature. Whether something is an object, action, or concept, it has an identity. It exists, a rose petal cannot be a silicon wafer, though both are delicate and complex. Because contradictions do not exist in nature, things behave as they are.
Moreover, existence is identity, and human cognition makes the identification. The attributes of True Wealth Management (truth, wealth, and management) are worthy examples. Not only does each concept have an identity; their relationship to each other defines a new concept. For instance, truth recognizes the nature of that which exists, and it can only be discovered and proven with logic.
The ability of the human mind to think is also how wealth is produced, and wealth comes in many forms. Tangible property like real estate and equipment, intangible property like patents and copyrights, and financial assets like cash and securities are stored wealth. Management is the action of organizing these objects and ideas, in the most efficient manner possible, for a long-term purpose.
When wealth is liquid, as in the capacity of money, it becomes a medium of exchange and unit of account. For this reason, restaurants do not price their menus in gemstones that are not interchangable. As a store of value for future consumption, money also transcends time and space, and is the essential lubricant for a morally just economy.
For True Wealth Management to have universal meaning, we have reduced the concepts of wealth and management to their essential facts. Yet, putting these simple ideas into practice in a complex world is rare. Doing this is what separates Poetic Justice Capital Management from the contradictions of traditional industry “best practices.”
Our purpose is our client’s purpose — for us to live the one life we have with confidence. To accomplish this, we identify our client’s aspirations with them. Lives with meaning are lives of motion and purpose. Life is not a bench and our clients are not spectators looking backward. They are active participants who take ownership of their futures.
The implications of all this are radical - dollars of future wealth replace historical percent returns as the performance benchmark. At Poetic Justice Capital we call it Moneyball.
You may know Moneyball from the 2011 Brad Pitt movie about the 2002 Oakland Athletics baseball club. For the owner of the A’s, dollars of future wealth meant selling more tickets by winning more games. With a small-market budget for payroll, this meant the lowest cost per win.
While trying to solve this challenge, GM Billy Beane discovered the social contradictions of baseball industry “best practices.” The interests of the entrenched bureaucracy had replaced those of fans and sponsors. His scouts were avoiding the reality of maximizing wins at minimal cost.
At Poetic Justice Capital, we manage our team the way Billy Beane won the AL West division with the lowest payroll in baseball. The difference is that our currency is more than our client’s spending capacity - it is the unique integration of their risk capacity with our Facts and Values Matrix.
Like Moneyball, we’ve identified the attributes for maximizing future wealth, taking risks that have a high probability of achieving personal rewards, and living the one life we have with confidence.