The I Ching and the Corporate elements
The I CHING recognizes various basic elements, which are part of all corporations:
1) The human element, or the human side, represented by the CEO and how he relates to the employees and to the other executives. The leader or CEO, will be successful only if he is virtuous and if he rewards good and punishes evil. This is the human element, or in the case of a corporation, its management. This includes all the aspects involving man as manager of goods and services and as the only one who can produce wealth or add value to the goods and services. The I CHING would agree, “Man is the measure of all things”
2) The attitude of the CEO and of the employees of the corporation, whether it is aggressive, humble, enthusiastic, contemplative, or modest.
3) The Duration, time element, or the time frame in which we find the company, whether it be when the company is born, when it is in a young or a mature stage and when it is reaching its end. The Duration or the time element, meaning how long it will take for the change to take place and the success or failure to become visible. This means that whenever we invest under the advice of the I CHING and obtain a positive verdict, we should be willing to wait until we see the positive results. We cannot expect immediate results, but must be patient. This also means that, even if the verdict were extremely positive, we must look for financial instruments, which are at least 40 months into the future. Short-term instruments such as options should not be considered, and LEAPS should be considered very carefully. In essence it would be almost impossible to foretell the exact date of a given outcome.
Time is one of the key elements of the I CHING. It is not wise to ask the I CHING about something intangible in which there are no human or time elements, such as the case of options. I have seen many people lose money on options and I have always obtained nonsensical answers when I have asked about options. I think it would have been much more profitable had they invested the same sum in small high growth stocks even with a high degree of risk. With a little patience they would have obtained excellent results as time and human effort turned these small companies into large profitable ones.
“For if the first fruit be holy, the lump is also holy; and if the root be holy, so are the branches”. Romans, Chapter 11, 16.
If the investment originally is good and the idea is brilliant, even if the corporation is passing through a difficult time, it will turn around. Why? It is because the human element, both the CEO and the employees, and the time element will take effect in improving the corporation.
Whenever you make an investment you must do it under three time horizons:
a) Short term (1 to 2 years) if the company looks like an excellent investment.
b) Medium term (3 to 5 years) if the company looks like a very good investment.
c) Long term (6 to 10 years) if the company looks like a good investment.
4) The seasonality, cycles or waves to which all corporations are subject to and against which no one can fight, even the best CEOs. Whenever the cycles take effect, it is good to keep in mind the Greek proverb that all the ships (or stocks) raise and fall with the tides. A bad CEO can survive an expanding economy (YANG side of the cycle), but only the best CEOs can survive a recession (YIN side of the cycle). The ideal investment happens when the two conditions take place, when the CEO is good and the economic conditions are also good. An example would be The Taming of the Great Hexagram.
5) The “Mandate of Heaven” or good fortune or divine element creates the conditions for even the poor CEOs to turn around the company and fix its errors even under the worst circumstances, as in the Creative Hexagram.
6) The environment or the external conditions influencing the corporation, whether they are legal or economic, as in the case of the Retreat Hexagram.
7) The relationship of the company with other members of the industry, as in the case of the Family Hexagram.
8) The function the corporation is performing such as expanding, as in the case of those Hexagrams representing eating or taking nourishment.
