Cash without Benefits

There is more cash sitting on balance sheets or hiding in mattresses than ever before. What is it waiting for? Not to get screwed out of it again is one answer. Another is what is there worth investing in that can’t get screwed up? As to getting screwed, that’s always part of the risk premium we pay on cash and being careful with who we deal with. But I’d like to suggest one investment that will be hard to screw up and capable of making a very secure return. That investment is intellectual property or IP for short.

We don’t buy or invest in IP today for three reasons. First is, most investors, though they have heard of IP, don’t know what it is, where it comes from or how it is made. The second reason is that we don’t value IP when we make it and we don’t record it on our balance sheets. So even if you do have IP, you treat it as if it were worth nothing. The third reason is that even for those few who know what IP is and what it’s worth, they don’t have any notion of how to turn into an investment without getting screwed.

Capitalism is wonderful for cash in that it can finance the means of supply and the price of demand. Modern capitalism has been particularly good at chasing down price differentials in the cost of supply amongst developing economies to supply the demand of developed countries. But it does involve screwing the wage base of developed economies out of jobs to pay less to workers in the LDC’s. And that’s OK if developed countries keep developing. That is what IP does. It makes IP a unique feature of first world economies.

Unfortunately, the financial sector has been too busy out-placing the current supply side of the current first world economies to learn how to invest in new development. To do that you need to understand investing in IP. As a result not understanding IP as an investment asset, financiers have artificially down sized the pool of credible investments available to investors. When the pool of available investments is limited, then speculation in a perceived finite asset pool is the only way to make money out of assets. This is how financial depressions start. And we are still there.

For those of you yearning to become first world investors here are three things to know. First- IP is patents, trademarks, copyrights and secrets. Concentrate on the first three and you will become rich. Second- you can value IP in use today to know its price. Third- you need to know that Carthage intellectual Capital Management has the people, experience and IP to make your IP a real and ‘screw-proof’ investment that is the future. Learn more at info@carthageic.com.