Friday, March 24, 2006

Comparison of job skills values to real estate and stock values

The value of one’s skills in the information technology job market is volatile. On an open free market, the ability to earn a living though work sometimes seems a bit like the ability to increase wealth in equity markets or even in a house.

There’s a personal parable here. In the mid 1980s I bought a condo in a moderate income section of Dallas, with a new home price of about $40000. In the late 1980s I decided to leave for the DC area, partly because of a threat to my job from hostile takeovers. I rented it but I eventually sold it for $30000, for almost a $10000 loss. During the severe Texas real estate recession of the time, the value actually dipped into the teens. I don’t know what it is worth today, probably much more than I paid for it.

The saying is you buy low and sell high. I’m afraid that with this the opposite happened. I have never bought a house again. Today, of course, housing prices are at record levels in most of the country (I’m not sure about Dallas specifically today). The point is, sways in any market can cause people to have to drop out. Then the market comes back with newer players. It’s brutal, it sound cruel, but it’s just plain capitalism.

One needs to understand the same observation with respect to jobs.

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