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Entrepreneur's Corner

Dear Entrepreneur, Here Are Investment Lessons From The Art Of War

BY Getrude Mathayo · March 1, 2022 01:03 pm

KEY POINTS

Business, for the most part, is a zero-sum game. It is war. Companies battle for market share, customers, and sales. You must keep your competition unaware of your actions

KEY TAKEAWAYS

Every company, no matter its size, is weak in one area or another. Even well-established, multi-billion-dollar corporations have their weaknesses.

Sun Tzu wrote The Art of War over 2,500 years ago during one of the most turbulent times in Chinese history, the Warring State period.

It is one of the world’s most widely-read works on military strategy and has evolved into a rite of passage for military officers, politicians, and business people alike

Most people instinctually manage both people and time. Like programmed machines, we have learned these instincts from family, friends, culture, and society.

These instincts can range from dysfunctional and self-sabotaging to extraordinary and well-functioning, but honing our approach to people and time management is crucial if we want to achieve our goals.

  1. Know the fundamentals and master them

Business, for the most part, is a zero-sum game. It is war. Companies battle for market share, customers, and sales. You must keep your competition unaware of your actions

  1. Settle on the best plan, exploit the dynamics within

There are the five dangerous faults of a leader. Being too brave can lead to recklessness, but not being brave at all can lead to cowardice. A leader must be logical and not be provoked by insults from the enemy

  1. Know the expected returns beforehand

It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.

  1. Know how much you need for the game of life

If a company doesn’t know what you’ll do next, they can’t plan to defend themselves. They are forced to prepare by distributing resources among various areas.

  1. The ultimate excellence lies in not winning every investment opportunity but attaining your personal goals

Winning every battle is excellent. But, winning every battle without having to fight is supreme excellence. You don’t always have to fight in business to win. One can sell their company, agree to a merge with a competitor or acquire a competitor.

  1. Understand the most profitable way of achieving results

The field, in this analogy, is the marketplace. It is important to get your product into the marketplace before your rivals. You want to be aware of trends and shifts in the market and get new products to market ahead of your competitors.

  1. Know when to act and when not to

Every company, no matter its size, is weak in one area or another. Even well-established, multi-billion-dollar corporations have their weaknesses.

  1. Scale your team to a manageable size

A high-functioning team should limit its number of people in order to agilely scale. When the common soldiers are too strong and their officers too weak, the result is insubordination. When the officers are too strong and the common soldiers too weak, the result is collapse.

  1. Know yourself and adopt an investment style that works for you

Given recent market events, you may be wondering whether you should make changes to your investment portfolio.  Before you make any investing decision, sit down and take an honest look at your entire financial situation

  1. Understand the financial markets and how they work

If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle

  1. The importance of the toolset pillar and doing

If a company doesn’t know what you’ll do next, they can’t plan to defend themselves. They are forced to prepare by distributing resources among various areas.

  1. On playing defensive and offensive strategies

When you have little, play defensive first and use the proceeds from the investments to build an offensive portfolio. At all-time always protect the downside of your portfolio. You can use money markets or fixed income securities such as government securities for this. Good Saccos too could come in handy.

  1. Prepare for the next steps

In chapter 12, Sun Tzu suggests preparing for your next steps after destruction, including the destruction of your “enemies” So get out of your comfort zone. Go explore. Apply for jobs above your level. Do things that would make your ancestors squirm and your descendants proud.

Read More: Dear Entrepreneur, Here Are 10 Principles To Wealth Creation

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