You may be asking yourself “What does a pencil have to do with managing my 401k better?”  The greater part of doing, is knowing.  If you want to make money in the capital markets, you have to understand “Capital-ism”.  Here’s a simple lesson from Milton Friedman about how capitalism brings about voluntary cooperation.  Intuitively we already know this and many perhaps cannot imagine any other type of cooperation that isn’t voluntary.  Trust me, it exists and you wouldn’t like it.

The short essay written by Leonard Read can be found here.  In your own investing, understanding production requirements can also help understand how specific sectors benefit while others lose through technological or economic changes.