What is Real Value? From “Real Value” by Dan Ariely.
Are all profits created equal?
What is Real Value? From “Real Value” by Dan Ariely.
Are all profits created equal?
At Conscious.Capital, the blending conservation and sustainable ecotourism is one of our favorite new models in impact business.
Finca Gualiva is a 12.5 acre farm located roughly 1.5 hours out of Bogota, Colombia. By simultaneously being operated as a vacation rental and small-scale, high quality cocoa and coffee growing operation, Finca Gualiva showcases a new model of sustainable agriculture, in which los campesinos, or those who work the land, participate in both the ownership of and profits from the property.
As Colombia is effectively shut out from direct access to global capital markets (all foreign funds must arrive in Colombian Pesos or US Dollars), there is a massive opportunity in Colombia to promote sustainable tourism and larger sustainable farming operations – while at the same time, helping to protect some of the most biodiverse parts of Colombia from encroaching oil and mining multinationals.
New press release from our favorite cannabis company, Cannex Capital Group. I would go so far as to say Cannex’s $48.2m initial public capitalization represents the largest, most transparent and democratized public offerings of a cannabis company we have yet seen since the massive shift towards legalization and regulation of recreational cannabis.
What does this really mean? Specifically, that investors in the pre-RTO (reverse-takeover) listing, got shares at $1.00 apiece. When Cannex listed, because the listing was not an initial public offering (IPO), the shares traded freely. While they initially reached nearly $2, regular individual investors have been able to buy Cannex over the last few moths for as low as $0.80.
Cannex’s valuation also puts in levels above its peers in terms of operational ability and proven financial results. With $26 million in 2017 revenue, Cannex still has $19 million on its balance sheet for strategic acquisitions / new projects and partnerships on an exciting global stage in which the most sophisticated, well-run international governments are starting to effectively work with first-mover participants with the desired track records.
We have a lot of good people in the world, with access to vast financial and social resources; yet there are very few financial institutions whose business models reflect such values as ethical and moral integrity, empathy, concern for environment. Assuming she can afford it, a conscious consumer buy groceries at the local farmer’s market, not at some soulless corporation like Wal-Mart. They know that, like any other good that is produced, the quality of food is generally proportional to the amount of care and respect put into cultivating it; and that, from a broader perspective, the way you spend your money demonstrates your values and supports the cause of the seller. Do you want locally-grown, organic produce, the sale of which benefits those who produced it directly (excluding unnecessary middlemen)? Or would you prefer produce from abroad, shipped over via oil tanker, injected full of pesticides and preservatives, brought to you by an army of slave-wage laborers earning minimum wage, transported via supply chains that perpetuate dependence upon fossil fuels, corporate lobbying and other unsustainable practices?
Capitalism, in its current form, naturally perpetuates inequality of wealth, as r > g. (r, the rate of return on capital, is greater than g, the growth rate of the overall economy). All are free to disagree, but the facts speak for themselves:
By separating the financial returns from the social and ecological impacts of investments, our system effectively incentivizes ignoring the social and ecological impacts of our behaviors and investments – or worse, encourages the most socially- and ecologically-harmful corporations to spend billions on lobbying the governments of the world to amend or remove regulations in their favor.
This creates enormous value for the 1% of people with $10 million or more, reinforcing the incompatible dual narratives that the rich (“the economy is doing well”) and the rest (“taxation and immigration are to blame for systemic, structural economic inequality”) tell themselves.
The average American, who is struggling under the weight of 30% interest rates on credit cards or 8% student loans, is not only not participating in this upside; they are funding it themselves, as the consumer
In the U.S., the “investor” or “shareholder” has come to mean, “the top 1%”, the individual who receives the profits; the “customer” is the person who pays those profits, usually in the form of a premium, or other externality (such as environmental).
Our economic system currently values seniority over skill and ability; nepotism and cronyism over meritocracy; selfishness over moral and ethical integrity; shortcuts over doing the right thing.
Evidence: Over $3.15 billion was spent on lobbying in the US in 2016. The same year, only $73 billion was invested in pure impact investments.
The world’s top-paid athlete, Cristiano Ronaldo, currently earns more annual income ($151 million) than all of the United States’ 535 congressmen combined *($134 million). As a society, what does that say about our priorities?
The following are excerpts from The Clean Money Revolution, by Joel Solomon. Truly a groundbreaking work that could not be more pressing.
The mainstream mindset that money and investments are somehow value neutral is the root of the problem. – The Clean Money Revolution
Why do so many good-hearted, ethical people ignore the true impact of what their wealth is doing?
One reason is that, given the choice, people would rather not deal with their money at all. To say that people are money averse is a gross understatement. So, A) People don’t want to deal with it, because there are lots of more fun things they could do with their time, and, B) The system is set up to reinforce that inertia. The approach of the banking and financial services industries is to create inertia and intimidation.
The inertia is that these industries actually make it relatively hard for you to switch out of something once you’ve put your money it it. On the intimidation side, you get the army of guys in blue blazers who pat you on the head and say, “Honey, we’ll take care of this for you. Just chill out.” And while you’re there they give you a whole bunch of glossy reports that have seven thousand words on them that you’ve never seen before, and your takeaway will be, “God, I thought I didn’t want to deal with my money before, now I want to deal with it even less!” And you’ll want to say, “Yeah, Joe, yeah, why don’t you just take it from here. Let me know how it goes next quarter and I’ll just wait for my statements.”
If people feel their portfolio managers are working against their values, what do they do?
There are viable alternatives. For starters, you can bring your money to a community bank instead of Wells Fargo. You just have to get over the inertia and do it. Sure, the online bill pay system may not be as snazzy as your big bank. Deal with it. At least you’re voting with your dollars and standing up for something. And, there are way more options than there were even ten years ago to construct a portfolio, even as a small investor, that ensures your investments are at least closer to not directly conflicting with your values. The very first thing to start with is clarifying what you’re absolutely the most passionate about in life. What is the world you’d like to see? Start investing in those things.
If you’re looking for the next big crypto opportunity, it has arrived. RedPulse, a China markets intelligence provider, recently launched its own token, RPX. The white paper, upon which the company completed a $15 million ICO (initial coin offering) of RPX on the NEO platform, is unprecedented and brilliant (and at only 31 pages, it is impressively readable). It is quintessentially Conscious Capitalism at its core; an ecosystem driven by rewarding performance, honesty, transparency, and clever collaboration.
The world of banking and investment is all about trust and stewardship. Yet, judging by the history of the last few decades, you might question that statement. The world’s major fiat currencies have no inflation limits; and the big global banks responsible for the financial crises are still in power and accountable to no one. Here in the US, inflation is the name of the game; it’s hard to imagine how our government could fund itself without the money printer.
Now enter a cryptocurrency purpose-built to democratize content creation and access to information; completely inflation-free; and intentionally designed to remove dependence upon untrusted middlemen banks. Which do you expect to keep its value over the next twenty years?
Of course, nothing is ever guaranteed. Cryptos are still Wild West territory (more like Wild East, as US is a no-mans land thanks to regulatory intensity). That said, I can attest to the fact that RedPulse is a legitimate company run by good people I trust. In other words, more than I can say for any other cryptocurrency.
From the white paper:
Red Pulse intends to employ RPX as a mechanism to fairly and directly incentivize research producers for their works, while providing research consumers with a mechanism to guide research coverage and provide fair compensation.
Solution: Sharing Economy for Research
Red Pulse solves these issues by creating a groundbreaking research content platform that simplifies incentives and directly compensates research producers for their valuable insights, while ensuring research consumers can access the research that is most relevant to them. Independent analysts and market commentators can now contribute their ideas and insights on an ad-hoc basis, and be compensated accordingly. RPX is the underlying mechanism used to facilitate this ecosystem, and provides RPX holders with direct participation in the rise of China’s economy.
What Red Pulse Does
Red Pulse is a market intelligence platform covering China’s economy and capital markets. By creating a global community around a common interest, incentivizing participants to produce truly relevant research, and providing technology-enabled analysis tools, Red Pulse seeks to solve the problem that all of us face today: Information Overload.
Disclosure: I am long RPX, along with other crypto currencies.
Pesky facts have a way of piercing through our conventional scientific thought. They also have an unusual way of disappearing or being destroyed after being discovered.
Notice on the Wikipedia page dedicated to this phenomenon tries to explain this 1970’s discovery by French nuclear scientists/miners not in terms of modern science; but in terms of speculative assumptions from a 1950’s nuclear physicist.
Turns out, we are all mushrooms. And, mushrooms will most likely save the world.
Looking back over 2017 in review, this 2+ hour conversation between Joe Rogan and mycologist extraordinaire Paul Stamets is easily one of the most fascinating video podcasts of the year. Topics of discussion include:
We all know that there is a quintessentially superficial aspect of money. “Money can’t buy happiness,” we know. On the whole, it feels like our collective consciousness is starting to wake up from a bad dream, the consumptive modeling dream, in which we are participating in an economic system rooted in militarism, the extraction of the planet’s natural resources and the use of force to take control of lands inhabited by others. It seems it is becoming harder to ignore these inconvenient truths, as our daily actions, thoughts and attitudes are amplified. Honesty and transparency are finally shedding light upon industries that have protected (and been protected by) patriarchs and predators for centuries. People across the world are demanding change, unsatisfied with and questioning a global financial system that rewards the top 1% at the expense of the public, while positing that “the economy is booming” while median wages have stagnated or declined.
Yet there is also a fundamentally attractive, even magical, aspect of capital. It is a placeholder for our time, energy and attention; it is our unit of commerce; it is an instrument of power. Each dollar, each bar of gold, each Ethereum token it has its own unique (hi)story and origin story. We know that capitalism can bring – as well as preempt, commoditize or destroy – social and environmental value. Even if we are to accept that it is a deeply flawed system, it is still the status quo from which we must proceed.
In a way, money is not the root of our problems; it is simply a rope with which we have bound ourselves, unaware that we were purpose-built to be self-sufficient in partnership with Earth.
The mainstream media continues to define celebrity as someone making, or “worth”, an inordinate amount of money. It’s as if the media would like to keep this narrative going: “Don’t forget that money is the most important thing in the world! You can’t survive in this cold and harsh world without it! Lot’s of bad s**t happening! Don’t forget to max out your 401(k) contributions this year!” It is truly disappointing to pick up the latest issue of The Week, and see the type of content, themes, and ideas that we are being served as “couture” these days.
Distinctions matter. I understand the notion of associating celebrity with entrepreneurs, athletes, artists, and anyone else who is has “melded” their individual and professional pursuits. These passionate, inventive, driven and courageous individuals are not celebrities because they have money. They are celebrities because of their commitment to being a part of something bigger, in which genuine passion is both the individual’s competitive edge, and contribution to the collective (or) group.
Regardless of a person‘s feelings about our contemporary capitalist system, it’s impossible to deny that fiat currency has become a universal system for getting things done on our planet. For most of us, it is the “unit of power” that comes to mind when we are constructing plans for materializing things in the world. From this perspective, it seems inescapable; a given.
What we are witnessing now is a massive decentralization of control, as blockchain technology introduces integrated currencies and payment processing networks that preclude the necessity of a middleman (traditional banking institution). Simultaneously, and consequently, we are seeing a desperate attempt by the traditional power centers to centralize control, via authoritarian and monetary means.
The current system of capitalism exercises its “soft” control over us by instilling fear and rewarding greed. Thus, as we each become aware of this, we inevitably wander into the territory of, “so what does life look like in a society that isn’t based upon fear and greed?” Assuming the richest governments decided to make sure everyone was taken care of, and scaled to zero the insane waste that is the military-industrial complex, what would the mechanics of the system look like?
At its core, the value of money is intrinsically defined by our collective perception, and acceptance of money as humanity’s collective defined unit of power. If we begin to see that money is indeed just another construct, another paradigm reaching its expiration date, then we begin freeing up the space that will support that which may follow.
As a finance professional, it has been inspiring to see the rise of genuine impact investing. Impact investing (aka social impact investing, sustainable investing) is a strategy that deploys capital with the anticipation with generating a positive finance return and the intention to create social or environmental value.
One of my favorite impact investors is Matthew Weatherley-White of CAPROCK Group. In this podcast, he clearly articulates the challenges facing the investment world, as well as the general resistance from the largest and most powerful players to move from traditional, amoral capitalism to the ethical, impact investing sort.
“The capacity for truly independent thought is first of all rare, and second of all lonely. And so to pursue that as an investor is critically important, yet really, really difficult.” – Matthew Weatherly-White
Impact investing means understanding (and caring about) the non-financial outcomes of investment. Until recently, it has been technically illegal to create a company in the United States for the purpose of creating societal value and pursuing non-financial returns. As such, there remain many substantial questions of impact investing for which there are not concrete answers; but in asking the questions (rather than ignoring them), we are taking steps in the right direction.
So what would happen if, instead of traditional currency, we sought to design, create and accumulate a new unit of value that was innately connected to improving the conditions of our global community, that we will be passing on to generations to come? Rather than the amoral (i.e. dispassionate, emotionless) nature of money today, what if we created capital that was imbued with consciousness?
As more and more people choose to invest with genuine impact investment firms – and impact investment firms continue to outperform their non-impact counterparts – the concept of conscious capital will emerge into the collective human consciousness, as a mechanism for folding our intentions into that which we choose to define, and use, as capital.
Conscious Capital means capital that is designed and deployed upon a foundation of transparency and accountability. Money with karma; with maturity; with memory; with wisdom.
In my college Psychology 101 seminar at Claremont McKenna College, one of the more interesting topics emerged when our teacher found out that one of our students, Eric, had a twin brother.
“You are shitting me. I can’t believe it. This takes precedence. New lesson plan for the month: Twin Studies!”
In short, we would learn that study after study has proven that biological twins are “connected” in a way that cannot be explained by traditional (Newtonian / non-quantum) physics. For instance: when twins are separated geographically, and one is hurt, the other can often sense that something has happened. When twins are separated at birth, and monitored into their adult lives, studies have shown uncanny similarities between these two individuals who have never met beyond the womb.
Skeptical? I was too. But as I’ve delved deeper, I’ve learned that this “out-there” idea is not only plausible; it is a scientifically-acknowledged phenomenon known as “quantum entanglement.”
In addition to sounding like the name of the next James Bond movie, quantum entanglement flies in the face of everything we were indoctrinated with in school. The following article provides evidence that, as many of us have always suspected, the “Newtonian Laws” of physics we learned in high school are childlike, incorrect hypotheses at best. Specifically, the mainstream scientific community (i.e. same people who have shamelessly peddled Newtonian physics) has observed the following weirdness that, in many ways, contradicts the Newtonian Laws, or at least suggests that they are missing perhaps the largest part of the picture:
Allow me to cite an article from the March 2017 “Technology Quarterly” issue, which focused on all things quantum:
What makes the idea of quantum computers so attractive is not so much that they will work faster than traditional computers—they may for some applications but not for others—but that they will work fundamentally differently. Three intuition-defying concepts play a role. The first is superposition. Today’s computers depend on bits taking one of two values, 0 or 1. Qubits, their quantum analogues, can be arranged in “states” that are best thought of as some mixture of both 0 and 1. To carry out a computation using one of these strange beasts is to act on both the 0 and the 1, in a sense to create within the calculation the potential outcome of either at the same time.
The power of this indeterminate state is unleashed through the second quantum-mechanical effect, entanglement. A standard computer depends on the complete isolation of one bit from the next to prevent a computation from going awry or a document from getting corrupted. For a quantum computer, the entangling of multiple qubits is paramount; in the best case, all of a given device’s bits are entangled with one another. Again, to operate on one qubit is to operate, to varying degrees, on all the entangled ones. It is therefore impossible to describe such a machine in strict terms of its constituent parts. There is a need to consider how one qubit is connected to its neighbour, and to the next-but-one, and so on through all the cross-correlations. To describe all the states of a 50-bit standard computer requires 50 bits of digital memory; a description of a 50-qubit computer would require a quadrillion.
It gets weirder. Whereas it is easy to imagine an equation that predicts a low or even zero probability of a given event, it is much harder to reckon with what are called probability amplitudes in quantum mechanics, which can actually be negative. In the course of a quantum computer’s crunching, these amplitudes can (again like waves) interfere, positive with positive and negative with negative—in essence, to reduce the probability of the wrong answer and boost that of the right one.
From “Cue bits: Why all eyes are on quantum computers”, March 2017, The Economist.
Everything in the natural world can be described by quantum mechanics. Born a century ago, this theory is the rule book for what happens at atomic scales, providing explanations for everything from the layout of the periodic table to the zoo of particles spraying out of atom-smashers. It has guided the development of everyday technologies from lasers to MRI machines and put a solid foundation under astrophysicists’ musings about unknowables such as the interiors of black holes and the dawn of the universe. Revealed by a few surprising discoveries, such as that atoms absorb and emit energy only in packets of discrete sizes (quanta), and that light and matter can act as both waves and particles, it is modern physics’ greatest triumph.
It has a weird side, though, and it is this that has captured interest in what is now being called the second quantum revolution. The first one was about physics: about understanding how the world worked at the tiny scales where quantum mechanics rules. Not only can particles be in two states at once, as with the atoms in an atomic clock; sometimes two of them, separated by a great distance, seemingly sense something about each other’s condition, a situation called entanglement. A particle’s exact position or state is never certain until a measurement is made; there are only higher or lower likelihoods of a given outcome, and the measurement changes the situation irrevocably. All this has been clear from the mathematics since the mid-1920s but was made manifest in laboratory experiments only later in the 20th century. As the theory’s more straightforward predictions were put to use, for instance in electronics, quantum mechanics gained a reputation for being counterintuitive, even downright spooky.
So, for all of you sapiosexuals, allow this to be your crash course in quantum theory.
Why should you care? Because it affects you. Conversely, you affect it. In other words, the odds are good; but the goods are odd. It’s this sort of thing.
From the Home of Quantum Consciousness aka the new planetary navel, One Love, La Sierra Nevada de Santa Marta, Colombia.
By George Washington, 1777 (recorded at US Library of Congress):
“This afternoon, as I was sitting at this table engaged in preparing a dispatch, something seemed to disturb me. Looking up, I beheld standing opposite me a singularly beautiful female. So astonished was I, for I had given strict orders not to be disturbed, that it was some moments before I found language to inquire the cause of her presence. A second, a third and even a fourth time did I repeat my question, but received no answer from my mysterious visitor except a slight raising of her eyes…
Read the rest here.