Pricing Power : The phenomenon where the value of money falls below the price of goods is called inflation , and it is said we are currently in an era of inflation. However, it’s not that simple. Inflation is realistically characterized by prices not rising all at once during an inflationary period but rather increasing rapidly for some items and slowly for others over several years. This phenomenon is known as the ‘ Cantillon Effect .’ In other words, inflation is neither uniform nor regular. Conversely, when prices fall below the value of money, it is referred to as deflation . To survive deflation, companies must innovate, often by reducing costs and expenses. During inflation, rising costs must be passed on to other economic agents through increased prices, a concept known as Pricing Power. Since companies cannot pass on all the rising costs, many go bankrupt during periods of inflation. - Joseph’s “just my thoughts”
Entrepreneurship involves starting to invest in the stocks of my own company. However, unlike open-market stock investments , here you invest in your own business, not someone else’s. My company’s performance directly affects my shares. To excel at investing in your own company’s stock, focusing on one key area can significantly boost your chances of success. Conversely, to be good at investing in others’ stocks , it’s better to understand multiple business sectors rather than just one. Since investing in stocks focuses more on minimizing risk than maximizing returns , diversifying resources across several areas makes risk management more effortless. If you master risk aversion , you can reduce losses and increase your chances of surviving in a volatile market . If you are knowledgeable and well-informed, I recommend investing in others’ stocks rather than pursuing entrepreneurship. - Joseph’s “just my thoughts”