Tuesday, January 20, 2015

Talks must eventually convert into transactions

Talks don't bring profits. Transactions bring.

Many people around us talk "big" things. The condition of the economy, emerging markets, the "potential" in China or India, the fall/rise of commodities, employment, the government, profits/losses of conglomerates such as Reliance Industries or Google, rise/fall of the US dollar, and so on.

But at the end of the day, none of these broad-level talks lead to any transactions - more specifically, financial transactions [buy or sell, trade, brokerage, rent, barter, etc.]. And unless there are financial transactions, there aren't any profits. These broad-level discussions/talks aren't easily convertible into business - they're interesting for gossip, but not much more.

Lesson: We must remember that while such superficial talks are good for general gossip and entertainment, real money will be made by fulfilling narrow and specific customer needs.

Exceptions: There are certain cases where broad-level talks can directly lead to business transactions and income/profits. For example, a vague statement such as "China has huge potential" can be converted into a transaction by investing into a China-focused mutual fund. Similarly, if you're in the consulting profession, you can make real money by giving these broad-level lectures/presentations to your client [assuming he is satisfied with broad-level talks].

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