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The Conundrum of Unintended Consequences

Written By: Tiang Chuan on April 6, 2010 No Comment

In Singapore, we are used to the practice of adding new rules and regulations whenever we encounter problems. This would seem logical, new problems, new solutions right?

By applying new rulings, we would probably be adding complexity. The problem may be solved, but new issues can be created a well.

The authorities have come up with expensive non-stick paint in the effort to solve the issue of people pasting unsightly advertisements all over the pillars of covered walkways. This seems brilliant at first thought. What cutting age technology could have gone into the development of the new paint! But what have the advertisers done to overcome the this? They have simply solve their problem by tying the flyers using strings instead of using glue.

When HDB/Singpost installed letter boxes with adjustable latches to lock the letter opening in the name of preventing junk mail, I too thought the problem would be solved. Now you would find junk mail stuck between your doors. The problem have not been solved, it had just moved from the letter boxes right to the your doorstep. And you still find junk mail in your letter boxes because the advertisers paid Singpost to have access to your letter boxes.

Here’s a joke – The American astronauts were having problem writing with their pens as there is no gravity in space. To solve the issue, NASA went to work and developed expensive pen that can used upright, upside down, with or without gravity.

What did the Russians do? They changed to using pencil.

What can we learn from this simple logic? Can we apply this to to investments?

Many a times, we would find friends and ‘experts’ touting different ways and strategies that they claim would generate superior returns. Assuming they are not scams, would these methods really work as claimed or would they just generate new problems?

The best way to solve a problem is usually the simplest. So keep you portfolio simple.

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