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Cake day: July 3rd, 2023

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  • Not really. Now, please remember, im not a Japanese or American tax lawyer. A write-off is just a bookkeeping manouver that means: we are never going to make a profit on this investment so we will take the remaining cost right now instead of in installment over the bookkeeping calculated time frame we intended. It might have a time-vslue of money effect on the total value of the cost, but it’s not very significant. The tax write-off was always going to come; it was a cost after all. It’s just a matter of timing.

    Let me give you an example. I’m developing a game console and it takes me 10 dollars and a year to do it. In a naïve bookkeeping world, I’d have a cost of 10 dollars the first year and for the next ten years, I’d have the COGS (cost of goods sold) as the cost and the money people pay as the income. This is not how modern bookkeeping works. The cost of year one will be split on the (for example) first 10 years of the game console life as this more realistically reflects what is going on. Cashflow is a very different thing.

    I’m sure I’ve used the wrong terms for cost and income, I always do. But no one that didn’t already know what I said will notice…









  • I’m not sure quite how it relates to what I said. Maybe we are looking at the word risk differently. Let me give an easy example that shows what I think normally is hidden because of complexity.

    Five CEOs are faced with the same opportunity to invest heavily in a make or break deal. They either succeed or they go bus, iif they do it. This investment, for one reason or another, only have one winner (because we are simplifying a complex real world problem). All five CEOs invest, four go bust and one wins big. In this simplified example, the one winning CEO would be seen as a great CEO. After all, he did great. The reasonable decision would have been to not invest, but that doesn’t make you a great CEO that can move on to better, greener jobs or cash out huge bonuses. No-one remembers the reasonable CEO that made expected gains without unneeded risks.


  • Sadly don’t think this is going to happen. A good CEO doesn’t make calculated decisions based on facts and judge risk against profit. If he did, he would, at best, be a normal CEO. Who wants that? No, a truly great CEO does exactly what a truly bad CEO does; he takes risks that aren’t proportional to the reward (and gets lucky)!

    This is the only way to beat the game, just like with investments or roulette. There are no rich great roulette players going by the odds. Only lucky.

    Sure, with CEOs, this is on the aggregate. I’m sure there is a genius here and a Renaissance man there… But on the whole, best advice is “get risky and get lucky”. Try it out. I highly recommend it. No one remembers a loser. And the story continues.