Monday, 3 March 2014

Sometimes I wonder.

This blog is probably not going to make much sense as I started writing it weeks ago and now it is the beginning of another month and it is still not finished.  Apologies if it is not up to scratch but I do have much more exciting news to tell in my next post.

I sometimes wonder because I haven't got anything better to do.  Sometimes I wonder when I read or hear something that sets me off.  Wondering is strange and fascinating in equal measure. I wonder if I am sane. Would one wonder if one was insane?  I wonder if things would be different if done in another way. I wonder how planes fly (and even then when I am told how, I still do not understand). I wonder if flowers know when it is spring.  I guess that wondering is a little like the two year old who constantly asks "why?".

The other day I wondered about diversification in industry.  I know it is a bit deep, but I think that I must have heard something on the radio that triggered it off. All these places (whether large multi nationals or small individual companies/shops/home industries) seem to either have to diversify or want to do so.  Now, let's take for an example the banking industry (something that I know a little about as I have spent most of my career working in finance). In the good old days when banks were banks and building societies were building societies, they all got along with each other. One "sold " one thing and the other sold another and never the twain would meet.  The banks had current and savings accounts, foreign currency and they lodged huge sums of money (for the corporate customers) overnight and made lots more money for them.  Building societies gave us savings accounts and mortgages.  Suddenly everyone wanted a piece of the others pie and diversification became the name of the game.  Why did they do this?  I bet if I asked an economist I would be told that it was for healthy competition and to drive prices down.  Although that is the sensible answer, I am not entirely convinced it is the correct one.  I wonder about greed, not only in the actual industry but in the shareholders who want a bigger slice of the pie for their investment.  Investment is great and managing stock markets is a bit of a risky business and we have to speculate to accumulate as the saying goes.  But what happened to sheer hard work and determination?

Something I saw on the television the other day really showed how diversification (or in my opinion, how companies want to make as much money as possible) is working. A big frozen food company is now into the gambling business with on line bingo. Just what is going on?

Diversification is fine and I am not totally against it, but just sometimes I wonder where we have all gone wrong....

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