In the world of business, does a company get to make anything it wants? Or does it have to make things that the market wishes to buy?
“This is absurd, Malstrom. We all know companies have to make things that the market wishes to buy.”
You mean the CEO can’t define his job as ‘exploring himself’?
“That is insanity.”
And what about the investors, reader. Do the investors place their money in the context of ‘life journey’? Or do they place their money in ways where they play to the strengths of market demand?
“Life journey? That makes no sense for an investor.”
We accept market rule on business operation and investing, yet most young people do not observe this when it comes to being an employee. I know this because I am currently in college with many young people. These young people have never been in the outside world. They all THINK they have. Yet, they still haven’t had reality kick them in the teeth.
What determines the pay for a career? What determines the security of a job? All of these things are market demand. The young person does not realize this. They might THINK they know it, they might even mouth the words, but they don’t know it in their heart. How do I know this? It is when they define what is ‘smart’.
What is smart? What is intelligence? Today, the current fad is that the engineer is smart and intelligent. The engineer makes a ton of money, right? The young person automatically assumes that smart and intelligence is linked to making a ton of money. Hence, the engineer makes a ton of money because he is smart and intelligent.
This is untrue. The engineer only makes money when the market demand his skills. There is such a thing as unemployed engineers.
Let’s take the lawyer. Today, the lawyer does not make a ton of money. Therefore, people automatically assume the lawyer is stupid and dumb. It takes much reading, writing, and oral comprehension and skills to become a lawyer. The lawyer is not ‘dumb’, it is just that his skills are not currently in market demand.
Consider the Art History Major. Is she dumb? This is the wrong question. Her ‘skills’ are not in market demand.
There was an older electrical programmer who thought he was the shit. His wage was very high. Every company wanted to hire him. I told him it was not because he was ‘smart’ or ‘intelligent’ but his wage was entirely due to market demand. I point out how computer programmers once commanded high wages, but due to changes in market supply and demand, their wages have stagnated and even dropped. Their “intelligence” is just the same. Very naturally, he did not like this answer. He wanted to conflate high market demand for his skills as proof of his ‘intelligence’. I compared him to someone who bought a house in an area that received growth trends and had market demand for the real estate. The person watching his house increase in value is not an ‘investor’ or ‘super intelligent’. He is someone who got ‘lucky’.
I keep encouraging everyone to convert their life context to a financial context. This isn’t the 19th Century anymore. Intelligence and smarts are not determined by your academic background. Today, it is determined by your financial smarts.
“I don’t need financial smarts,” spits a young person. “I’m going to be an employee and work for a big corporation!”
Every company views an employee as an investment. They must spend money to train you. Then they must spend money on paying you. Companies are investing in you. This means you have to have financial demand for your services.
Education in those skills is a significant investment of money and time from you. Smart and intelligence should mean investing in skills that will have market demand today and in the future.
Young people may think they are doing this, but they have never actually made a true investment in their life. All they know is cliches.
Example A: I’m in a classroom full of petroleum engineer majors. Assuming they all pass with good grades, I ask them, “How many petroleum engineers do you think can be absorbed by the industry at this time?” They don’t think of that. All they know is that there is a high wage. But if everyone is going that path, will that high wage remain? And what does that high wage entail? Many people in the oil industry do not have high wages because they are paid much money but because they work ungodly long hours. Also, petroleum engineering is not a skill you can sell outside the oil industry. You’re very industry dependent. You won’t have options if there is a bust like in the 1980s when petroleum engineers were laid off left and right.
Example B: Computer Science people think their market demand will be like the early 1990s. The truth is that they seem to “like computers” and think they are futuristic super-cool people because they are working with “the future” (because people in other industries don’t work with ‘the future’). Computer Science is highly appealing today because it is an office job and is attracting many women because of that. What is the market demand for Computer Science in the future? While these geeks keep trying to say how good at math they are, they cannot comprehend supply and demand. If there is no demand for their services, they aren’t going to get a job or get a high wage. Will demand for computer skills grow at the same rate as before? Many of the current computer science workers are still middle age. They won’t be retiring anytime soon. Also, computer science can be taught anywhere in the world. Immigrants can easily steal their jobs. While these young kids think they are ‘super smart’ because they are taking Calculus classes (which they don’t even realize the abstract classes likely won’t pertain to real world skills), they don’t conceptualize supply and demand.
Example C: People look down at the electrical programmer. “That is the Industrial Era crap,” they spit. “We are in computers today, man!” But everything is governed by supply and demand. The supply of electrical programmers is very low because the technically minded young people go into computer science (which is super cool technologist fun) or engineering (because every engineer will get a high paying job, right?). The supply of electrical programmers is also low due to older workers retiring. The demand is not only consistent (because our civilization relies on electricity) but growing. The trend of automation means they need more people to tend these machines. It is such a perfect storm for this job that I am seeing young people get wages of $150,000 with barely two years of college. This is beyond the petroleum engineers and computer scientists after at least twice as much schooling (assuming they get a job in the first place). Are they ‘smarter’ than the engineer and computer scientist? No. It is just market supply and demand determining wages.
The smart and intelligent person is someone who can SEE the market supply and demand TODAY and INTO THE FUTURE. They will invest time and money in these in demand skills. The person who happened to have these skills because they thought the skills were ‘fun’ to take are not ‘smart’ or ‘intelligent’. They were LUCKY. They are that dumb home owner who found, surprise surprise, that their house increased in value because the area they live is a growth area. But it was no investment acumen that made that decision.
I remember the computer science guys before the computer revolution. How do you think they were? They were seen as geeks and social outcasts. No one saw this as ‘smart’ and certainly not ‘cool’. However, due to market demand, their skills became incredibly high demand. They could command high wages for their in-demand skills. Were they ‘smart’ or ‘intelligent’? No. They got lucky. Had they chosen those skills because they saw the investment future in them, they would be considered ‘smart’ and ‘intelligent’. Today’s computer science people are no less “brainy” than the ones of the late 1970s. Yet, they will not be commanding the same wages. It is all market supply and demand.
Once upon a time, the farmer was an in-demand skill. Today, most farming is automated so we don’t need farmers. Is the farmer stupid or smart? Today, we assume the farmer is ‘stupid’ because we confuse market demand for intelligence. Farmers aren’t ‘stupid’ as no one else is ‘stupid’. It is just market supply and demand.
Market supply and demand can vastly change based on geographical location. Is the English Major stupid and unintelligent? In a nation full of English speaking people, the English Major is not in high demand. However, in a nation where the people do not speak English, the English Major may be in high market demand.
The reality is that you can be incredibly good at what you do and find no career success because the market demand determines your career success. Young people should spend time researching market supply and demand of today and the future of various skill routes. Of the future skills that will be desired, only THEN pick the one that best suits you.