I recently read Mark Spitznagel’s ‘The Dao of Capital’.
Mark Spitznagel is one the world’s most successful investors. More interestingly, he is openly an “Austrian economist”.
You can read his 10 chapters to understand he became a self made billionaire. You may be tempted to skip to the last two for him to reveal the secret of his success.
But, he’s also produced one of the best-written and clear books on Austrian economics and investing – Henry Hazlitt’s Economics in One Lesson being the best.
Forests and Fish
Martin Faustmann wrote about the Economics of Forestry in 1849.
Martin Faustmann wrote a guide on the best term to harvest trees so as to get the best economic return. His work stressed the importance of a long – term perspective, which in forestry is important as the best growth in some trees only kicks in at 25 years old.
Growing capital and value takes time, often a long time. Spitznagel’s explains that we humans have a big weakness. We like to take immediate benefits, rather that wait longer when we would get greater rewards. We are too impatient!
Impatience is not a virtue
Some entrepreneur’s have learned to have a long term “time preference”. There are not many. Mark Spit angel and Henry Ford are two examples that managed to deal with their urges to take short-term profits, and instead waited and played the long game, and harvested great profits.
Could Fisheries Conservation Learn from the Austrians
I have just read a good report “Towards Investment in Sustainable Fisheries: A Framework for Financing the Transition” from EDF, 50in10, and the Prince of Wales’s International Sustainability Unit.
UNEP have guestimated that $240 billion is needed to rebuild fisheries. This would lead to an annual gain of $50 billion. That’s a bit return on a very big investment.
With numbers like this, you wonder why people are not investing their funds to make some great returns.
The price of fish is likely to keep going up. With around 2 billion more people to feed in the near future, this healthy and delicious form of protein will be in demand. And, if supply does not grow, and it’s been in gradual decline for a long time, the price is going to keep going up.
Great Returns
The report notes three cases were sustainable fisheries has been practiced, it has led to increased revenues. The pacific halibut industry saw revenues rise from 1995 to 2008 by 222%; the Ben Tre clam fisheries increase their revenues from 2006-2009 by 49%; and New Zealand’s fisheries grow by 103% from 1986.
Investors Needed
A lot of money is bine g spent by NGOs, governments and fishermen in fisheries. But, they have not got access to the skills or the money needed to meet the $240 billion challenge.
Investors could help with the large sums of money needed.
Some investors are stepping in and are financing the transition, like:
http://www.californiafisheriesfund.org
http://www.seachangemanagement.com/fund/
Why So Few
With returns so huge, why are entrepreneurs and investors holding back.
As Spitznagel points out successful investors wait. They wait for certain conditions to be there, and they only move when those conditions occur. A key sticking point for any investors to put their own money in the game is the lack of
Secure tenure; monitoring and enforcement; sustainable harvests (long term thinking) by the regulators on setting quotas.
With those conditions, investors will provide much needed capital. But, if the industry is dominated by people with short term thinking, the industry will become stunted, fragile, and suffer low or no profits.
Maybe the best thing for the global fisheries industry is for someone to write Martin Faustian blueprint for fishing.