Inflation

Recently, my friend JW had an opportunity to share his "humble" view on inflation with our students. I must say I missed the opportunity to be an audience. Fortunately, I found the content of that speech in the Facebook Notes of one of the students. (For technical reasons I do not include the hyperlink to that notes.)

Here you go:

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Today is the farewell party for the final year medical students. Quite a few of our distinguished professors including JW were asked to give a speech.

Being the Warren Buffett in our faculty, JW started by emphasizing the importance of making early investments. He stated that with proper investment strategies, by the age of 40, your capital should be able to generate more value than your income. This, of course, drew admiring and envious eyes.

By proper investment strategies he meant we should avoid assets that suffer from "inflation". Assets that are readily reproducible by a printing machine are bad investment options. "Poor quality currency" like US dollar, the shares of a you-know-who telecommunication company in Hong Kong, bonds from some irresponsible treasuries, are all on the list.

Here comes the highlight. He turned to the phenomenon called "diploma inflation". Nowadays diplomas and certificates are easier and easier to obtain. The toilet of MRCP and FRCS are rare and precious in the past, but now their holders are everywhere in the job market. These qualifications no longer guarantee a bright career prospect. And as if it is not convincing enough he reminded us of the story of the MPhil graduate who have to live on social security. We should not be distracted by the inflatable pieces of papers, but should invest in assets that persist.

I discussed about this with a number of friends. One interpretation is that we should not focus solely on exams, but should develop our knowledge and learn practical skills useful for our daily practice.

*Szeto's note added on 21 February 2011: the link of the original post is http://www.facebook.com/notes/rutherford-sin/inflation/10150091178867190