Wednesday, August 7, 2013

Pooh-style business

Many issues / struggles of society could be solved by following the example of the AA Milne characters in Winnie-the –Pooh. Take business for example: the contraction of the economy was inevitable because some basic Pooh wisdom was ignored for years.

Basic Pooh wisdom found through the actions and dialogue between Winnie-the-Pooh and his friends in the original The House at Pooh Corner and When We Were Very Young offer points of reference to build character and to ease social situations. In the 100 acre wood, Gopher gives the formula for a successful business. This same formula works for real life if the business owner is interested in an honest, in-the-black, business.

For the business owner who really is interested in making a profit rather than the in-vogue business men who are into shenanigans of derivative accounting, insider trading and other unscrupulous meanings of extracting money from red ink, gopher offers a capitalistic formula for simple profit.
The set-up: Pooh has stayed too long at Rabbit’s house. Pooh has eaten himself into a new size. The size is too large to get through the rabbit’s doorway. He gets stuck. Rabbit tries to push Pooh out. The friends try to pull Pooh out. Finally, Owl calls in a professional, Gopher.

Gopher’s estimate to remove the bear gives the formula to a modest income for a professional business.

Cost of Materials + Labor + Overhead + 10%

The reader might say, ‘That’s easy enough,’ then wonder what’s up with the stock market and business take-overs, buy-outs and outright skullduggery. Well, somewhere along the way true accountants were shoved over to make room for algebraic financial collapse. When two negatives make a positive on a spread sheet, losses are recorded as profits; it’s the makings of a mess.
The sad part is when the new accountants move on the scene, they play with the numbers   to make pluses out of minuses. But in real life they’re keeping a failing business open creating a vacuuming money pit.

Since the financial collapse of the 1880-90s (yes, 19th century), financial business men, bankers and politicians have all known the cost to real lives that the monkey business in the money business causes. Standard accounting practice, utilizing addition & subtraction, absolutely no algebra, produces correct balances sheets.

If a financial portfolio includes companies using derivative accounting or penny stocks, dump them. Ethical economists declare the under $1 stock as a breeding ground for fraud. Penny stocks are removed from the stock exchange because there is nothing but fraudulent intent, if not action in the plans of the participants. There can't be anything else or they'd have closed shop a long time ago. Unsound financing is bad for business as a whole and if you’re not the manipulator, you will lose your money and maybe your shirt too. 

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