In this video I will share with you some practical applications for Growth, and share with you my own personal story on Growth. Watch now!
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We have been talking about growth. I have been talking about a new math formula called the Theory of Credit Markets. I want to tell you the story of where all of this came from. Because it is much more than just a theory. There are very practical implications you can use today to forecast growth.
We have listed out five characteristics of growth.
- Growth exists
- Growth continues forever
- Growth is exponential
- Growth rates decrease over time
- Growth occurs with constant acceleration
When you look at this list, the first three are well accepted ideas in the financial world. The last two are highly controversial. So much so, that if you were to tell this to a finance professor, they would think you were a crazy person, because it contradicts every academic financial paper written in the last 50 years. But I really do not think these are too big of a logical leap. They make sense and there are a lot of benefits from looking at Growth in this way. Let me tell you how this all came about.
I started using the formula for the Theory of Credit Markets on Christmas Eve of 2013. Let me explain how you spend Christmas Eve if you are single and a Finance nerd. I spent Christmas Eve alone in my home rebalancing my international stock portfolio. And I was having a blast. This is something I do for fun.
I had been working with finance formulas and stock valuations for years. I had all the financial tools. And I know all the different approaches everyone uses. And yet, I kept running into issues. One of the tricky things in modern finance is balancing US stocks with international stocks. If you have ever dealt with portfolio management, you know what I am talking about. The US economy is growing at 4% and other economies are growing at double digits. That is a huge discrepancy. So you are managing a portfolio of investments with a huge range of different growth profiles. In that scenario, financial equations start breaking down and producing nonsense results. So you have to make decisions on whether to buy or sell, and the finance equations cannot tell you the answer.
So I am sitting on my floor looking at this. I had all my financial papers spread around me. And I had a moment of clarity. I had this thought, “What if there is a different way to do growth projections? What if there was one equation that could unify the growth projections of the entire world?” In that one moment, everything came together. I saw the equation. I knew how it worked, and why it made sense. It is a different way to draw growth curves and it solves so many different business problems, including the international portfolio management problem.
For the next five days, I barely slept or ate. I sat down and wrote out math equations. I ran through the economic data. I compared it against other financial equations. At the end of those five days I was convinced I was right. This one equation explains market movements no matter the growth profile of the economy.
Ever since that moment, I have been obsessed with the Theory of Credit Markets. I wrote my book. I started my website. I started this YouTube channel. All of it is for the purpose of telling you there is a better way to do Finance, using the Theory of Credit Markets. For me personally, it has been so useful for career decisions, investment decisions, and business decisions. Here is what I have found. Success in life is about spotting opportunities. When you understand growth curves, here is what happens. You start spotting them when you look around. You can look at an industry and spot the growth curve. You understand where they are at in the curve, and where they will be in the future. I know this is a new approach in Finance, but if you take a look at it, I am confident you will find it as useful as I have.
Leave a comment down below letting me know what you think!
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Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.