“New Learning”

Barnard’s Inn HallHolbornLondon EC1N 2HH

Tel: +44 (0)20 7831-0575Fax: +44 (0)20 7831-5208Email : michael_mainelli@zyen.com

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© Gresham College2008

Mercers’ School Memorial Professor of CommerceMichael Mainelli

How To Get Ahead In CommerceThe Sure-Fire Ways To Make Money

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© Gresham College2008

Outline

“Get a detailed grip on the big picture.”Chao Kli Ning

Wise guys

A rich taxonomy

Fortune favours the lucky

Getting rich through failure

Front-running bubble style

Money machines

Owning the casino

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How To Get Ahead In Commerce

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© Gresham College2008

Sincerity Personified

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© Gresham College2008

Sincerity Certified

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© Gresham College2008

Ponzi Numbers Game

1

10

100

1,000

10,000

1,000,000

10,000,000

100,000,000

1,000,000,000

10,000,000,000

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Do You Sincerely Want To Be Rich?

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Get Rich Taxonomy

Go!

Criminal

• frauds• swindles• Ponzi schemes• pyramid schemes• forgery & counterfeiting• tax evasion• embezzlement• robbery & theft• corruption• price-fixing

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What You Know or Who You Know?

Go!

Criminal

Hard Work Smart Work

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Successful Habits

£780,043£155,832£49,960£24,769Mean value for group

£351,137£99,727£35,345£5,093Entry level for group

42,000421,0004.21 Million

29.5 Million

Number

Top 0.1 % (or the

"very,very rich)

Top 1 % to 0.1%

(adults)

Top 10% to 1%

(adults)

All Taxpayers

 

[Source: “Racing Away? Income Inequality And The Evolution Of High Incomes”, Institute for Fiscal Studies, IFS Briefing Note Number 76 (January 2008)

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Sunday Times 2007 UK Rich List

1 Lakshmi Mittal and family £19,250m - Steel 2 Roman Abramovich £10,800m - Oil and industry 3 The Duke of Westminster £7,000m - Property 4 Sri and Gopi Hinduja £6,200m - Industry and finance 5 David Khalili £5,800m - Art and property 6 Hans Rausing and family £5,400m - Packaging 7 Sir Philip and Lady Green £4,900m - Retailing 8 John Fredriksen £3,500m - Shipping 9 David and Simon Reuben £3,490m - Metals and property 10 Jim Ratcliffe £3,300m - Chemicals 11 Sir Richard Branson £3,100m - Transport and mobile phones 12= Charlene & Michel de Carvalho £3,050m – Inheritance12= Sean Quinn and family £3,050m - Quarrying, property and insurance 14 Simon Halabi £3,000m - Property, health clubs 15 Kirsten and Jorn Rausing £2,825m - Inheritance and investments 16 Joe Lewis £2,800m - Foreign exchange, investments 17 Earl Cadogan and family £2,610m - Property 18 Nadhmi Auchi £2,575m - Finance, property and hotels 19 Vladimir Kim £2,261m - Mining 20 Bernie and Slavica Ecclestone £2,250m - Motor racing

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Fortune Favours The Lucky

Go!

Criminal Luck

• inheritance• sex• lotteries• gambling

Hard Work Smart Work

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© Gresham College2008

Getting Rich Through Failure

Go!

Criminal Luck

Hard Work Smart Work

Scarcity & Competition

Information Asymmetries

Externalities Agency Problems

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© Gresham College2008

Barking Up The Right Tree

“It’s a dogwood tree. I can tell from the bark.”

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Getting Rich Through Bubbles

Go!

Criminal Luck

Hard Work Smart Work

Scarcity & Competition

Information Asymmetries

Externalities Agency Problems

Front-Running

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© Gresham College2008

Front-Running Bubble Style

[William Hogarth, The South Sea Scheme, 1721]

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© Gresham College2008

Getting Rich Through Magic

Go!

Criminal Luck

Hard Work Smart Work

Scarcity & Competition

Information Asymmetries

Externalities Agency Problems

Front-Running

Money Machines

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© Gresham College2008

Black Box Machines

www.saltofthevalley.comMark Bump

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© Gresham College2008

Money Machines

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© Gresham College2008

Get Rich Taxonomy

Go!

Criminal Luck

Hard Work Smart Work

Scarcity & Competition

Information Asymmetries

Externalities Agency Problems

Front-Running

Money Machines

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© Gresham College2008

Greed, Fear, and a Little Gas

[Source: http://www.fortunewatch.com/handling-greed-and-fear-in-investing/]

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Discussion

1. When should we let third parties invest our money, ignoring tax advantages?

2. Do regulatory and professional safety costs genuinely offset caveat emptor, or just take our money?

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© Gresham College2008

How To Get Ahead In Commerce:The Sure-Fire Ways To Make Money

Thank you!

“Get a big picture grip on the details.”Chao Kli Ning