C6 7

7KH8UJH7KHRU\RI
(PRWLRQDQG6RFLDO,QWHUDFWLRQ
>(QJOLVK9HUVLRQ@
&KDSWHU7KH+XPDQNLQGDV$FWLYH&RSHUV
&KDSWHU+XPDQ6RFLHWLHVDQG+XPDQ9DOXHV
0DVDQDR7RGD
7KLV UHSRUW FRQWDLQV PDQXVFULSWV IRU WKH ODVW WZR FKDSWHUV RI P\ ERRN DQG ZLOO EH WKH ODVW RI WKH VHULHV RI
7HFKQLFDO 5HSRUWV GLVWULEXWHG XQGHU WKH WLWOH 5HYLVHG YHUVLRQ RI HDFK FKDSWHU PD\ EH DFFHVVHG DW
¦KWWSXUJHFRJVFLVFFVFKXN\RXDFMS a WRGD§ ZKHUH LW ZLOO EH SRVWHG ZKHQ ILQLVKHG 7KH DSSHQGL[ DWWDFKHG
DW WKH HQG RI WKH WH[W VXPPDUL]HV VRPH EDVLF QRWLRQV RI WKH XUJH WKHRU\ LQWURGXFHG LQ HDUOLHU FKDSWHUV
&+$37(5 7$%/( 2) &217(176
$FWLYH DQG SDVVLYH FRSLQJ VW\OHV
7KH EHJLQQLQJ $FWLYH DQG SDVVLYH FRSLQJ VW\OHV 7KH UROH RI WRROV LQ LPSOHPHQWLQJ WKH DFWLYH FRSLQJ VW\OH
7KH FRQWURO RI ILUH DQG WKH FUHDWLRQ RI SRUWDEOH HQYLURQPHQW 7KH PDMRU XUJHV WKDW PDNH WKH KXPDQV DFWLYH
FRSHUV FXULRVLW\ DQG FKDOOHQJH $UWLILFLDO HYROXWLRQ DQG LWV DFFHOHUDWLRQ
7KLQNLQJ LPDJLQDWLRQ DQG ODQJXDJH
7KLQNLQJ ZLWKRXW ODQJXDJH &RQGLWLRQDO DQWLFLSDWLRQ '\QDPLF VFKHPDV 9DULRXV UROHV RI ODQJXDJH LQ
WKLQNLQJ DQG LPDJLQDWLRQ 7KH WZRZLQGRZ PRGHO RI G\QDPLF VFKHPD RSHUDWLRQV 7KH SRZHU RI ODQJXDJH
&KDSWHU 7+( +80$1.,1' $6 $&7,9( &23(56
$FWLYH DQG SDVVLYH FRSLQJ VW\OHV
%HOLHYLQJ ZRXOGQ
W PDNH LW KDSSHQ
EXW QRW EHOLHYLQJ ZRXOG PDNH LW QRW
KDSSHQ
(YHU\WKLQJ VWDUWV DV VRPH
ERG\
V GD\GUHDP
([FHUSW IURP D QRYHO E\ 1LYHQ
3RXUQHOOH )O\QQ
7KH EHJLQQLQJ
$ERXW IRXU PLOOLRQ \HDUV DJR QHZ SULPDWH VSHFLHV KDG HPHUJHG VRPHZKHUH LQ (DVW $IULFD ZKR ODWHU
HYROYHG LQWR WKH PRGHUQ KXPDQV 7KH HDUO\ KXPDQV ZHUH OLWWOH GLIIHUHQW IURP DQFHVWUDO DSH VSHFLHV DV WKHLU
FORVH NLQ H[FHSW WKDW WKH\ ZHUH IXOO WLPH ELSHGDO ZLWK D VOLJKWO\ ODUJHU EUDLQ DQG VOLJKWO\ PRUH GH[WHURXV
KDQGV WKDQ WKH ODWWHU 7KHLU RYHUDOO IHDWXUHV KRZHYHU ZHUH QRW PXFK LPSUHVVLYH ORRNHG DOPRVW OLNH
DQRWKHU VSHFLHV RI DSHV DQG EHKDYHG OLNH RQH %HVLGHV WKHLU SK\VLFDO IHDWXUHV WKHUH ZDV MXVW RQH WHOOLQJ
GLIIHUHQFH EHWZHHQ WKH HDUO\ KRPLQLG
$XVWUDORSLWKHFXV DIDUHQFLV
DQG WKH DSHV RI WKH WLPH DQG WKDW ZDV
DERXW ZKHUH WKH\ SUHIHUUHG WR OLYH 7KH HDUO\ KRPLQLG SUHYDOHQWO\ OLYHG DW WKH ERUGHU RI VDYDQQD DQG IRUHVW
RFFDVLRQDOO\ YHQWXULQJ LQWR SODLQV LQ FRQWUDVW WR WKH RWKHU DSH VSHFLHV ZKR XVXDOO\ VWXFN WR WKH WUDGLWLRQDO
IRUHVW KDELWDW RI WKHLUV 3HUKDSV LW ZDV QRW E\ DQ\ GHOLEHUDWH FKRLFH WKDW WKH HDUO\ KRPLQLG OLYHG QHDU WKH HGJH
RI IRUHVWV ,W LV K\SRWKHVL]HG WKDW D UDWKHU ORQJ ODVWLQJ FOLPDWLF FKDQJHV WRZDUG UHODWLYH GU\QHVV KDG WDNHQ
SODFH LQ WKHLU KRPHODQG FDXVLQJ IRUHVWV WR VKULQN DQG ZKLOH RWKHU DSH VSHFLHV PRYHG ZLWK WKH UHWUHDWLQJ
IRUHVWV WKH DQFHVWUDO KRPLQLG NHSW VWD\LQJ LQ WKHLU RULJLQDO KDELWDW LQ VSLWH RI WKH FRQWLQXDO GHJUDGDWLRQ RI
OLYLQJ FRQGLWLRQV WKHUH
7KH UHDVRQ IRU WKHLU FKRLFH RI VWD\LQJ LQ IRUHVWVDYDQQD ERUGHU PLJKW EH DVFULEHG WR WKHLU ELSHGDOLVP
ZKLFK VKRXOG KDYH EHHQ PRUH XVHIXO RQ WKH SODLQV UDWKHU WKDQ LQ WKH IRUHVWV 1RWH KRZHYHU WKDW WKLV UHODWLYH
EHQHILW RI KRPLQLG
ELSHGDOLVP RQ WKH SODLQV VKRXOG KDYH KDUGO\ MXVWLILHG WKHLU EROGO\ YHQWXULQJ LQWR WKH
SODLQV ZKLFK ZRXOG KDYH FRQWDLQHG TXLWH D IHZ IRUPLGDEOH SUHGDWRUV ZKR FRXOG HDVLO\ RXWUXQ WKH VORZ
KRPLQLG )HVWLQJHU PDNHV FRQYLQFLQJ DUJXPHQWV LQ KLV ERRN 7KH
+XPDQ /HJDF\
RQ KRZ WKH VORZ
KRPLQLG FRXOG KDYH RYHUFDPH WKLV KDQGLFDS E\ WKH EHQHILW DFFUXLQJ IURP WKH OLEHUDWLRQ RI WKHLU IRUHOLPEV RU
DUPV ZLWK WKHLU GH[WHURXV KDQGV IURP WKHLU IRUPHU ORFRPRWLYH GXWLHV 7KH IUHHG SDLU RI DUPV WXUQHG RXW ODWHU
WR EH D JUHDW DVVHW IRU FUHDWLQJ WKH KXPDQNLQG DV XVHUV RI WRROV EXW WKH\ FRXOG KDYH EHHQ PRUH DQ
HQFXPEUDQFH WKDQ D ERRQ IRU WKH VXUYLYDO RI WKH HDUO\ KRPLQLG 6WLOO WKHVH SHRSOH GLG VXUYLYH PRVW OLNHO\ DV
FXQQLQJ VFDYHQJHUV IRUDJLQJ LQ VDYDQQDV EXW NHHSLQJ FORVH WR WKH ERUGHU RI D IRUHVW VR WKDW WKH\ FRXOG FOLPE
WUHHV E\ XVLQJ DUPV ZKHQ FKDVHG E\ SUHGDWRUV 7KH\ ZRXOG DOVR KDYH RSHUDWHG LQ VPDOO JURXSV HDFK RI
ZKRP FRXOG LVVXH D ZDUQLQJ FDOO DQG GHIHQGHG WKHPVHOYHV FRRSHUDWLYHO\ ZKHQ QHFHVVDU\
(YHQ WKRXJK WKLV LV DOO D JXHVVZRUN WKH GLIIHUHQFH LV LQWHUHVWLQJ DQG VXJJHVWLYH LQ WKH ZD\V WKH
0XFK RI P\ IROORZLQJ DUJXPHQWV RZH WKLV H[FHOOHQW DQG SUREDEO\ WKH ODVW ZRUN RI )HVWLQJHU
V HVSHFLDOO\ EHFDXVH
)HVWLQJHU DV D ZHOONQRZQ VRFLDO SV\FKRORJLVW DQDO\]HG DQG LQWHUSUHWHG WKH HYLGHQFH RI HDUO\ KXPDQ DFWLYLWLHV IURP
WKH YLHZSRLQW RI ZK\ WKH\ GLG WKHVH WKLQJV XQGHU ZKDW FRQGLWLRQV
UHVSHFWLYH DQFHVWRUV RI WKH FXUUHQW KXPDQV DQG RI WKH FXUUHQW DSHV FRSHG ZLWK FKDQJLQJ HQYLURQPHQWDO
FRQGLWLRQV ,QVWHDG RI FKRRVLQJ WKH HDV\ FRSLQJ VWUDWHJ\ HPSOR\HG E\ DSHV RI UHWUHDWLQJ ZLWK WKH UHWUHDWLQJ
IRUHVWV WKH DQFHVWUDO KXPDQV DSSDUHQWO\ FKRVH WR VWD\ LQ WKH VDPH SODFH E\ DOWHULQJ WKHLU OLIH VW\OH WR VXLW WKH
FKDQJLQJ HQYLURQPHQWDO FRQGLWLRQV 7KLV VHHPV WR VXJJHVW WKDW WKHVH HDUO\ KRPLQLG VSHFLHV DOUHDG\
SRVVHVVHG VRPH RI WKH XQLTXH KXPDQ FKDUDFWHULVWLFV
LH
WKH SUHIHUHQFH RI PHHWLQJ HQYLURQPHQWDO
FKDOOHQJHV UDWKHU VTXDUHO\ WKDQ HYDGLQJ WKHP 1RWH WKDW WKLV DGYHQWXURXV FRSLQJ VWUDWHJ\ ZRXOG LQHYLWDEO\
LQFUHDVH WKH VHOHFWLRQ SUHVVXUH LPSRVHG E\ WKH HQYLURQPHQW LPSO\LQJ WKDW VSHFLDO HYROXWLRQDU\ IDYRUV ZRXOG
KDYH EHHQ JLYHQ WR DQ\ QHZ IHDWXUHV LQ ELRORJLFDO KDUGZDUH DQG VRIWZDUH WKDW LQFUHDVHG WKH VSHFLHV
VXUYLYDO
HGJH LQ WKH KDUVK HQYLURQPHQW 7KHUH ZHUH WKUHH VXFK IHDWXUHV ZKRVH IXQFWLRQV KDYH XQGHUJRQH VWHDG\
IRUWLILFDWLRQ GXULQJ WKH SHULRGV RI WKH VXFFHHGLQJ KRPLQLG HYROXWLRQ WKH\ ZHUH WKH EUDLQ WKH KDQGV DQG WKH
YRFDO FKRUGV
$IWHU $XVWUDORSLWKHFXV DIDUHQFLV FDPH D IHZ VSHFLHV RI $XVWUDORSLWKFLQHV IROORZHG E\
KDELOLV
+RPR
D VSHFLHV HPHUJHG DURXQG PLOOLRQ \HDUV DJR ZKR SURVSHUHG DQG H[SDQGHG LWV KDELWDWV WR LQFOXGH
HDVW $IULFD +RPR KDELOLV ZDV VXFFHHGHG E\
+RPR HUHFWXV
DERXW KXQGUHG WKRXVDQG \HDUV DJR
VDSLHQFH
UHSODFHG E\
+RPR VDSLHQFH VDSLHQFH
+RPR
DURXQG PLOOLRQ \HDUV DJR DQG WKHQ FDPH
QHDQGHUWKDOHQVLV
ZKR ZHUH DSSDUHQWO\ JUDGXDOO\
WKDW PHDQV XV ZKR HQWHUHG LQWR WKH JOREDO VFHQH DURXQG RQH KXQGUHG
WKRXVDQG \HDUV DJR
7KH GHYHORSPHQW RI PDQXDO GH[WHULW\ LV REYLRXVO\ WKH FDXVH WKDW WXUQHG KDYLQJ IUHH DUPV LQWR D UHDO
DGYDQWDJH PRUH WKDQ GHPRQVWUDWHG ODWHU E\ WKH IDEULFDWLRQ RI YDULHW\ RI WRROV 7R SRVVHVV D KLJK FDSDFLW\
YRFDO FKRUGV SURYLGHG WKH IRXQGDWLRQ IRU GHYHORSPHQW RI DGYDQFHG ODQJXDJHV ZKLFK QRW RQO\ HQRUPRXVO\
HQULFKHG WKH PRGHV RI FRDOLWLRQDO FRRSHUDWLRQ WKURXJK HIILFLHQW FRPPXQLFDWLRQ EXW DOVR VHUYHG DV HODERUDWH
WRROV IRU WKLQNLQJ $QG QHHGOHVV WR VD\ WKH HQODUJHG EUDLQ ZDV FUXFLDO IRU HYHU\WKLQJ WKH KXPDQV GLG DQG
DUH VWLOO GRLQJ 7KH EUDLQ VL]H KDG NHSW LQFUHDVLQJ IURP WKH HVWLPDWHG FF RI $XVWUDORSLWKHFXV DIDUHQFLV
RQO\ PDUJLQDOO\ ODUJHU WKDQ WKH FKLPSDQ]HH
V WR D GRXEOHG VL]H RI FF DW WKH WLPH RI +RPR HUHFWXV ,W ZDV
DJDLQ QHDUO\ GRXEOHG E\ +RPR VDSLHQFH VDSLHQFH ZKRVH DYHUDJH LV DERXW FF 1RWH WKDW ELSHGDOLVP
HYHQWXDOO\ SDLG RII LQ WKLV HQODUJHPHQW RI WKH KXPDQ EUDLQ DV WKH HUHFW SRVWXUH ZDV FHUWDLQO\ FRQYHQLHQW IRU
VXSSRUWLQJ D KHDYLHU EUDLQ
7KH SK\VLFDO IHDWXUHV RU WKH ELRORJLFDO KDUGZDUH DUH QRW DOO WKDW FRXQWV LQ WKH KRPLQLG HYROXWLRQ
$GYDQFHV LQ KDUGZDUH PHDQ OLWWOH LI WKH\ DUH QRW DFFRPSDQLHG E\ PDWFKLQJ DGYDQFHV LQ WKH ELRORJLFDO
VRIWZDUH $OWKRXJK ELRORJLFDO VRIWZDUH GRHV QRW OHDYH IRVVLOV EHKLQG WKH HYLGHQFH RQ WKH HYROXWLRQ RI
ELRORJLFDO KDUGZDUH LV HQRXJK WR PDNH XV UDLVH IXQGDPHQWDO TXHVWLRQV DERXW WKH QDWXUH RI WKH FRUUHVSRQGLQJ
HYROXWLRQ LQ WKH PDWFKLQJ ELRORJLFDO VRIWZDUH RQ HDFK VWDJH RI LWV GHYHORSPHQW
7DNH IRU LQVWDQFH WKH GHYHORSPHQW RI WKH PDQXDO GH[WHULW\ ,W KDG JLYHQ WKH KXPDQV D JUHDW
VXUYLYDO HGJH DV WRRO XVHUV ZKLFK HYHQWXDOO\ FXOPLQDWHG LQ WKH IRUP RI WKH WHFKQRORJLFDO FLYLOL]DWLRQ ZKLFK
RQO\ KXPDQNLQG DV DQ DQLPDO VSHFLHV FRXOG KDYH FUHDWHG 7KLV WKHQ JLYHV ULVH WR DW OHDVW WZR IXQGDPHQWDO
TXHVWLRQV )LUVW ZK\ DQ\ RWKHU VSHFLHV HVSHFLDOO\ RWKHU DSH VSHFLHV ZLWK PDQXDO GH[WHULW\ RI D IDLUO\ KLJK
OHYHO KDG QRW WDNHQ D VLPLODU HYROXWLRQDU\ FRXUVH LI PDQXDO GH[WHULW\ LV VXFK D JUHDW VRXUFH RI VXUYLYDO HGJH"
7KH VHFRQG TXHVWLRQ LV DERXW WKH QDWXUH RI WRROV
LQ JHQHUDO ([DFWO\ LQ ZKDW ZD\ GRHV XVLQJ WRROV FRQWULEXWH
WR WKH VXUYLYDO RI D VSHFLHV"
7KH VDPH W\SHV RI TXHVWLRQV PD\ EH UDLVHG ZLWK WKH GHYHORSPHQW RI DGYDQFHG YRFDO FKRUGV :K\
FKLPSDQ]HHV KDYH QRW HYROYHG LW DV WKH KRPLQLG GLG DQG SURILWHG IURP LWV RXWFRPHV ODQJXDJHV DQG DOO WKDW
7KHUH ZHUH QDWXUDOO\ RYHUODSV EHWZHHQ ROG DQG QHZ VSHFLHV DQG WKHUH DOZD\V LV D ZLGH PDUJLQ RI XQFHUWDLQW\ DERXW
DUFKHRORJLFDO GDWLQJV
QRWZLWKVWDQGLQJ WKHLU VKDULQJ RI DERXW RI WKH KXPDQ JHQHV" 7KH GLUHFWLRQ RI FDXVDOLW\ KRZHYHU LV
WDNHQ LQ UHYHUVH LQ WKLV NLQG RI DUJXPHQWV ,Q WKH ILUVW SODFH WKH\ KDG HIIHFWLYHO\ FKRVHQ
QRW
WR HYROYH
DGYDQFHG YRFDO FKRUGV EHFDXVH WKH\ KDG QR QHHG RI WKHP 7KHLU DQFHVWRUV FKRVHQ QRW WR H[SRVH WKHPVHOYHV
WR DV VWURQJ D VHOHFWLRQ SUHVVXUH DV WKH KRPLQLG DQFHVWRUV GLG PRVW OLNHO\ EHFDXVH WKH\ FKRVH DQ HDVLHU RU D
FOHYHUHU VROXWLRQ IRU FRSLQJ ZLWK WKH FKDQJLQJ FOLPDWH WKH\ VLPSO\ IROORZHG WKH UHWUHDWLQJ IRUHVWV ZKHUH
VDIHW\ DQG IRRG ZHUH ERWK DERXQG 1RW WKDW FKLPSDQ]HHV ZHUH H[FHSWLRQDO LQ PDNLQJ WKDW FKRLFH LW ZDV RXU
DQFHVWRUV ZKR EHKDYHG TXHHUO\ E\ VWLFNLQJ WR WKH FKDQJLQJ HQYLURQPHQW DQG H[SRVHG WKHPVHOYHV WR D
VWURQJHU VHOHFWLRQ SUHVVXUH ,I WKHVH FRQMHFWXUHV KDYH VRPH JURXQG WKHQ WKLV PLJKW EH WDNHQ DV D JRRG
H[DPSOH RI KRZ D VPDOO GLIIHUHQFH LQ WKH
RULJLQDO FKRLFH
FRXOG EULQJ DERXW D PRXQWDLQ RI GLIIHUHQFHV LQ ODWHU
RXWFRPHV 7R ORRN D OLWWOH PRUH GHHSO\ LQWR WKH LVVXH KRZHYHU WKH GLIIHUHQFH LV KDUGO\ D VPDOO RQH VLQFH WKH
FKRLFHV UHSUHVHQW D FRPSOHWHO\ RSSRVLWH SDLU RI
FRSLQJ
VWUDWHJLHV
KXPDQV DQG WKH RWKHU SUDFWLFDOO\ E\ DOO RWKHU DQLPDO VSHFLHV
RQH RI ZKLFK ZDV HPSOR\HG E\ WKH
&RPLQJ EDFN WR WKH LVVXH RI WKH YRFDO FKRUGV ZH FDQ LQIHU WKH UHDVRQ ZK\ WKH VHOHFWLRQ SUHVVXUH RQ
WKLV GLPHQVLRQ ZDV HVSHFLDOO\ VWURQJ ZLWK HDUO\ KXPDQV 7KH SK\VLFDOO\ ZHDN KXPDQV FRXOG KDYH
VXFFHVVIXOO\ FRQWHQGHG ZLWK PRUH SRZHUIXO SUHGDWRUV LQ WKH SODLQV RQO\ E\ PHDQV RI HIILFLHQW FRDOLWLRQDO
FRRSHUDWLRQ DQG WKH YRFDO FRPPXQLFDWLRQ ZDV LQGLVSHQVDEOH IRU HQVXULQJ IOH[LEOH FRDOLWLRQDO FRRSHUDWLRQ ,
KDYH DOUHDG\ GLVFXVVHG LQ SUHYLRXV FKDSWHUV KRZ VWURQJ LV WKH GHGLFDWLRQ RI WKH XUJH V\VWHP WR WKH FUHDWLRQ
DQG WKH PDLQWHQDQFH RI ZRUNDEOH QDWXUDO FRDOLWLRQV 7KHVH SUHYLRXV DUJXPHQWV RQ FRDOLWLRQDO FRRSHUDWLRQ
ZLOO EH IXUWKHU H[WHQGHG LQ WKLV FKDSWHU WR LQFOXGH DUWLILFLDO FRDOLWLRQV XVXDOO\ PXFK ODUJHU WKDQ QDWXUDO
FRDOLWLRQV ZLWK ZKLFK KXPDQ FRPPXQLWLHV DQG VRFLHWLHV RI ODWHU WLPHV DUH IRUPHG DQG UXQ
6LQFH WKHVH LVVXHV DQG RWKHU UHODWHG RQHV DUH FORVHO\ NQLW ZLWK HDFK RWKHU WKH UHVW RI WKLV FKDSWHU ZLOO
EH GHYRWHG WR SUHVHQWLQJ VRPH QHZ FRQFHSWV WKDW DUH XVHIXO LQ XQUDYHOLQJ WKH QDWXUH RI WKH KXPDQ PHQWDO
VRIWZDUH DV DQ RXWFRPH DQG VRPHWLPHV DV D FDXVH RI WKH YHU\ LGLRV\QFUDWLF HYROXWLRQ WKDW KDV FRPH WR
FUHDWH WKH PRGHUQ KXPDQV DQG WKHLU FLYLOL]DWLRQ
$FWLYH DQG SDVVLYH FRSLQJ VWUDWHJLHV
/HW
PH
QRZ
FODVVLI\
FRSLQJ
VWUDWHJLHV
HPSOR\HG
E\
DQLPDO
VSHFLHV
HVSHFLDOO\
ZKHQ
WKH
HQYLURQPHQWDO FRQGLWLRQV KDYH WXUQHG D OLWWOH VRXU LQWR WKH IROORZLQJ WZR FDWHJRULHV WKH VSHFLHV ZLWK WKH
DFWLYH FRSLQJ VWUDWHJ\
DQG WKH VSHFLHV ZLWK WKH
SDVVLYH FRSLQJ VWUDWHJ\
7KH VSHFLHV RI WKH DFWLYH FRSLQJ
VWUDWHJ\ RI ZKLFK WKH KRPLQLG VSHFLHV DUH SHUKDSV WKH RQO\ PHPEHUV DUH WKRVH ZKRVH PHPEHUV ZLOO WU\ WR
DFWLYHO\ LPSURYH WKH XQIDYRUDEOH FRQGLWLRQV E\ DOWHULQJ WKH UHODWLRQV EHWZHHQ WKHPVHOYHV DQG WKH
HQYLURQPHQW E\ GRLQJ VRPHWKLQJ QHZ DQG XQWULHG RU HYHQ
FRQWUROOLQJ
WKH XQIDYRUDEOH HQYLURQPHQW LI WKDW
LV GHHPHG SRVVLEOH %HIRUH GLVFXVVLQJ WKH DFWLYH FRSLQJ VWUDWHJ\ LQ PRUH GHWDLO ILUVW OHW PH FRQVLGHU ZKDW
WKH SDVVLYH FRSLQJ VWUDWHJ\ LV OLNH
)RU D VSHFLHV WR HPSOR\ D SDVVLYH FRSLQJ VWUDWHJ\ EDVLFDOO\ LPSOLHV WKDW HDFK PHPEHU RI VXFK D
VSHFLHV KHUHDIWHU EH UHIHUUHG WR DV D
SDVVLYH FRSHU
ZLOO WDNH ERWK WKH HQYLURQPHQWDO FRQGLWLRQV DQG LWV
UHVSRQVH WR WKHP DV JLYHQ DQG XQDOWHUDEOH 7KHUHIRUH SDVVLYH FRSHUV ZLOO SUDFWLFDOO\ GR QRWKLQJ RXW RI WKH
VSHFLHVVSHFLILF UHSHUWRLUH RI DFWLRQV DV ORQJ DV WKH HQYLURQPHQW FRQGLWLRQV UHPDLQ VWDEOH DQG JHQHUDOO\
IDYRUDEOH WR WKHLU PRGH RI OLYLQJ :KHQ WKH HQYLURQPHQWDO FRQGLWLRQV EHJLQ WR ZRUVHQ WKH ILUVW WKLQJ WKH\
ZLOO GR LV WR WU\ WR PLJUDWH WR D QHZ KDELWDW ZLWK EHWWHU FRQGLWLRQV DQG LI QR VXFK SODFHV DUH IRXQG WKH\ ZLOO
, DP QRW ZDJHULQJ WKH YDOLGLW\ RI P\ IROORZLQJ DUJXPHQWV RQ FRSLQJ VWUDWHJLHV RQ WKLV UDWKHU IOLPV\ VSHFXODWLYH
HYLGHQFH RI WKH RULJLQDO FKRLFH (YHQ VR WKLV LV WRR SDW DQ H[DPSOH IRU P\ DUJXPHQWV WR PLVV HQWLUHO\
MXVW HQGXUH WKH EDG FRQGLWLRQV DV ORQJ DV WKH\ FDQ
:KDW FRQVWLWXWH WKH HQYLURQPHQWDO FRQGLWLRQV RI D KDELWDW IRU D VSHFLHV DUH QRW MXVW FOLPDWLF DQG
RWKHU VXFK QDWXUDO YDULDEOHV WKDW FKDUDFWHUL]H WKH KDELWDW /DUJH FRQWULEXWLRQV WR WKH FRQGLWLRQV ZLOO DOVR EH
PDGH E\ RWKHU FRKDELWDQWV RI WKH KDELWDW DQLPDOV DQG SODQWV ZKR MRLQWO\ IRUP DQ HFRV\VWHP WKURXJK
FRQVWDQW LQWHUDFWLRQV DPRQJ WKHP :KHQ D QHZ VSHFLHV KDSSHQV WR PLJUDWH LQWR DQ HFRV\VWHP DQG WKHUHE\
FKDQJHV WKH FRQGLWLRQV WKH ROGHU GHQL]HQV RI WKH HFRV\VWHP DVVXPLQJ WKH\ DUH DOO SDVVLYH FRSHUV ZLOO WU\ WR
UHDGMXVW WR WKH QHZ FRQGLWLRQV E\ XWLOL]LQJ VRPH RI WKHLU VSHFLHVVSHFLILF PRGH RI DFWLYLWLHV 7KLV SURFHVV RI
UHDGMXVWPHQW ZLOO WDNH VRPH WLPH DV VRPH RI WKH VSHFLHV PD\ ILQG WKH FRQGLWLRQV LQWROHUDEOH DQG FKRRVH WR
PLJUDWH RXW WKXV FKDQJLQJ WKH FRQGLWLRQV DJDLQ +RZHYHU LQ PRVW FDVHV D VRUW RI DQ HTXLOLEULXP ZLOO EH
UHDFKHG E\ WKH HFRV\VWHP ZLWKLQ ZKLFK WKH VHOHFWLRQ SUHVVXUHV IRU PRVW RI WKH VSHFLHV ZRXOG EH NHSW UDWKHU
ORZ
2QFH VXFK DQ HTXLOLEULXP LV DFKLHYHG E\ DQ HFRV\VWHP FRQVLVWLQJ VROHO\ ZLWK SDVVLYH FRSHU VSHFLHV
QR VLJQLILFDQW FKDQJHV PD\ EH VHHQ LQ WKH VWDWH RI DIIDLUV ZLWKLQ WKH HFRV\VWHP HYHQ HYROXWLRQ PD\ YLUWXDOO\
EH DW D VWDQGVWLOO WKHUH LI VHOHFWLRQ SUHVVXUHV IRU WKH VSHFLHV DUH UHDOO\ PLQLPL]HG $QG DV D UHVXOW WKLV PD\
FRQWLQXH IRU D UHDOO\ ORQJ WLPH DV ORQJ DV WKH YDOXHV RI WKH QDWXUDO HQYLURQPHQWDO SDUDPHWHUV VWD\ ZLWKLQ
DGPLVVLEOH OLPLWV GLPLQLVKLQJ DOVR WKH SUREDELOLW\ RI DQ\ VLJQLILFDQW HYROXWLRQDU\ FKDQJH WDNLQJ SODFH
DPRQJ WKHP 6XFK KDOF\RQ GD\V KRZHYHU ZLOO HYHQWXDOO\ FRPH WR DQ HQG HYHQ DIWHU PLOOLRQV RI \HDUV
ZKHQ VRPH UHDOO\ XQWRZDUG WKLQJV KDSSHQ WR WKH HFRV\VWHP OLNH WKH LQWUXVLRQ RI D SRZHUIXO SUHGDWRU RU RI
DFWLYH FRSHUV OLNH WKH KRPLQLG RU PRUH OLNHO\ D VWHDG\ FKDQJH LQ VRPH QDWXUDO FRQGLWLRQV OLNH FOLPDWH
SXQFWXDWLQJ WKH HTXLOLEULXP DW WKH ODVW
$ FOLPDWLF FKDQJH ZLOO ILUVW KLW SODQWV LQ WKH HFRV\VWHP PDQ\ RI WKHP DV HSLWRPHV RI SDVVLYH FRSHUV
ZLWKRXW PRELOLW\ ZLOO SHULVK DQG PD\ EH UHSODFHG E\ QHZ SODQW VSHFLHV WKXV GLVUXSWLQJ WKH WUDGLWLRQDO IRRG
FKDLQ PDLQWDLQHG LQ WKH HFRV\VWHP 0DQ\ RI WKH DQLPDO VSHFLHV ZRXOG PLJUDWH WR PRUH KRVSLWDEOH UHJLRQV
OLNH ZKHQ WKH DQFHVWUDO FKLPSDQ]HHV IROORZHG WKH UHWUHDWLQJ IRUHVW ,I WKDW RSWLRQ LV QRW RSHQ WKH\ ZRXOG
KDYH D OLWWOH FKRLFH EXW ZDLW RXW IRU D UHVFXH WR FRPH UHVFXH SURYLGHG E\ ELRORJLFDO HYROXWLRQ 1RWH WKDW
WKH ZRUVHQHG HQYLURQPHQWDO FRQGLWLRQV LQH[RUDEO\ LQFUHDVHV VHOHFWLRQ SUHVVXUH IDYRULQJ PXWDWHG RIIVSULQJV
WKDW VXLWV WKH QHZ FRQGLWLRQV EHWWHU 7KHUH LV QR VXUHW\ KRZHYHU WKDW VXFK DQ HYROXWLRQ DOZD\V FRPHV WR
UHVFXH DV PXWDWLRQ LV D ILFNOH HQWLW\ DSSDUHQWO\ GHSHQGHQW XSRQ D UDQGRP SURFHVV 6R VRPH VSHFLHV ZLOO
SHULVK ZLWKRXW HYROXWLRQDO UHVFXH DQG VRPH ZLOO VXUYLYH LQ HYROYHG IRUPV RQH ZD\ RU DQRWKHU DQG WKH
VXUYLYRUV ZRXOG WKHQ VWDUW WR HVWDEOLVK DQRWKHU HTXLOLEULXP LQ OLQH ZLWK WKH VSLULW RI WKH SXQFWXDWHG
HTXLOLEULXP WKHRU\ RI *RXOG
V
1RWH WKDW DOO WKLV LV IRU DQ HFRV\VWHP FRQVLVWLQJ HQWLUHO\ RI SDVVLYH FRSHU VSHFLHV $Q HFRV\VWHP WKDW
FRQWDLQV DQ DFWLYH FRSHU VSHFLHV OLNH WKH KXPDQV ZRXOG QHYHU UHDFK DQ HTXLOLEULXP DV WKH\ DFWLYHO\ GLVWXUE
HQYLURQPHQWDO FRQGLWLRQV $V KLVWRU\ WHOOV XV PDQ\ DQLPDO VSHFLHV KDYH DOUHDG\ EHHQ EURXJKW WR H[WLQFWLRQ
EHFDXVH RI WKH KXPDQ LQWHUYHQWLRQV DQG ELRORJLFDO HYROXWLRQ FDQ RIIHU QR KHOS WKHUH VLQFH WKH FKDQJHV
LQWURGXFHG E\ DFWLYH FRSHUV OLNH WKH KXPDQV DUH JHQHUDOO\ WRR TXLFN IRU WKH SURFHVV RI ELRORJLFDO HYROXWLRQ
WR FDWFK XS
1RZ OHW PH WXUQ WR WKH FKDUDFWHULVWLFV RI DFWLYH FRSHUV
LH
WKH KXPDQV $V WKHUH LV QRWKLQJ EHWWHU
UHSUHVHQW WKH FKDUDFWHULVWLFV RI WKH KXPDQ DV DFWLYH FRSHUV WKDQ WKHLU SURGLJDO XVH RI DUWLILFLDO
WRROV
, VKDOO
EHJLQ P\ DUJXPHQWV ZLWK D FRQFHSWXDO DQDO\VLV RI ZKDW LQGHHG WKH WRROV
DUH
7KH QDWXUH RI WKH HTXLOLEULXP ZLOO EH D G\QDPLF RQH WKDW DOORZV IRU VRPH HFRV\VWHP SDUDPHWHU YDOXHV WR RVFLOODWH
SDUDPHWHUV VXFK DV WKH SRSXODWLRQV RI WKH FRQVWLWXHQW VSHFLHV
7KH UROH RI WRROV LQ LPSOHPHQWLQJ WKH DFWLYH FRSLQJ VWUDWHJ\
7KH XVHU RI WRROV LV QRW OLPLWHG WR WKH KXPDQV 6RPH DQLPDOV XVH DUWLILFLDOO\ FRQVWUXFWHG REMHFWV IRU
FHUWDLQ SXUSRVHV 0DQ\ VSHFLHV RI ELUGV IRU LQVWDQFH FRQVWUXFW WKHLU QHVWV XVLQJ VWULSV RI YDULRXV PDWHULDOV
EXW WKDW IDFW GRHV QRW PDNH ELUGV DV DFWLYH FRSHUV VLQFH DOO LQGLYLGXDO ELUGV PDNH WKHLU QHVWV LQ WKH VSHFLHV
VSHFLILF ZD\ LPSO\LQJ WKDW WKH QHVW PDNLQJ LV D SDUW RI WKHLU JHQHWLF SURJUDPPLQJ
6RPH RI WKH WRROXVLQJ H[DPSOHV RI DQLPDOV KRZHYHU DUH QRW DVFULEHG WR JHQHWLF SURJUDPPLQJ
7KRXJK UDUH WKHLU DUH VRPH DQLPDOV HVSHFLDOO\ ELUGV OLNH FURZV DQG SULPDWHV OLNH WKH ROG ZRUOG PRQNH\V
DQG DSHV VKRZ LQJHQXLW\ LQ GLVFRYHULQJ QHZ ZD\V RI XVLQJ YDULRXV REMHFWV DV WRROV WR DFKLHYH WKHLU JRDOV
'LIIHUHQW FURZ VSHFLHV LQ WKH 86 DQG LQ -DSDQ DSSDUHQWO\ LQGHSHQGHQWO\ KDYH GLVFRYHUHG KRZ WR XVH
SDVVLQJ FDUV DV QXWFUDFNHUV 7KH\ GURS ZDOQXWV RQ VWUHHWV DQG ZDLW IRU D FDU WR SDVV RYHU WKHP DQG FUDFN
WKHLU VKHOOV *UREHFNHU 3LHWVFK 1LKHL ,W LV TXLWH OLNHO\ WKDW VRPH FURZV REVHUYHG D ZDOQXW
DFFLGHQWDOO\ GURSSHG RQ D VWUHHW EHLQJ FUDFNHG E\ D SDVVLQJ FDU %XW WKHUH LV D PRXQWDLQ RI GLIIHUHQFHV
EHWZHHQ MXVW REVHUYLQJ D FHUWDLQ HYHQW DQG LQYHQWLQJ WR XVH WKH FDXVDO UHODWLRQV LQKHUHQW LQ WKH REVHUYHG
HYHQW IRU RQH
V RZQ SXUSRVHV WKH ODWWHU UHTXLUHV D
PLQG
LV D ELRORJLFDO
PHWDWRRO
WKLQNLQJ PLQG
EHKLQG LW :KDW LV PHDQW E\ WKLV WKLQNLQJ
WKDW PD\ VKRZ D ZD\ WR FUHDWH DFWXDO WRROV DFFRUGLQJ WR WKH LQIRUPDWLRQ
DFTXLUHG E\ WKH RZQHU RI WKH PLQG $ VLPLODU WKLQNLQJ PLQG VKRXOG DOVR EH DVVXPHG ZLWK FKLPSDQ]HHV ZKR
DUH NQRZQ WR EH FOHYHU XVHUV RI WRROV PDNLQJ XVH RI DOPRVW DQ\WKLQJ DYDLODEOH IRU YDULRXV SXUSRVHV RI WKHLU
RZQ *RRGDOO &KLPSDQ]HHV DUH LQWHOOLJHQW HQRXJK WR OHDUQ WR FRPSUHKHQG VLPSOH QDWXUDO ODQJXDJH
H[SUHVVLRQV DQG DUH DOVR FDSDEOH RI H[SUHVVLQJ WKHLU ZLVKHV E\ FRPSRVLQJ VHQWHQFHV RYHU D VSHFLDO
NH\ERDUG LQ WKH ODQJXDJH WKH\ DUH WDXJKW WR XVH 5XPEDXJK
HW DO
6R LW LV QRW SUHSRVWHURXV WR
DVVXPH WKDW WKHLU PLQG ZRUNV IDLUO\ OLNH WKH KXPDQ PLQG :KDW LV PLVVLQJ LQ WKH DSH PLQGV WKDW SUHYHQWV
WKHP IURP EHFRPLQJ DFWLYH FRSHUV OLNH WKH KXPDQV PD\ EH MXVW WKH
SHUVHYHUDQFH
ZKLFK WKH KXPDQ PLQG LV
ULFKO\ HQGRZHG ZLWK VLQFH SHUVHYHUDQFH LV DQ LQGLVSHQVDEOH WUDLW IRU D PLQG WR EH DEOH WR FUHDWH D FULWLFDO
PDVV
RI LQYHQWLYHQHVV WKDW VHWV RII DQ DUWLILFLDO HYROXWLRQ $V ZLOO EH GLVFXVVHG EHORZ WKH KXPDQV PDNH
WRROV VROHO\ IRU PDNLQJ RWKHU WRROV DQG RQFH HQRXJK QXPEHU RI VXFK WRROPDNLQJ WRROV DUH DFFXPXODWHG
WKHUH ZLOO EH D FKDLQ UHDFWLRQ SURGXFLQJ DQ H[SORVLYH QXPEHU RI WRROV HIIHFWLYHO\ IRUPLQJ D ZRUOG RI WRROV
ZKLFK LV HIIHFWLYH HQRXJK WR DOWHU WKH JLYHQ HQYLURQPHQWDO FRQGLWLRQV
$V ZH WKH PRGHUQ KXPDQV DUH OLYLQJ LQ WKH PLGVW RI WKLV DUWLILFLDO ZRUOG RI WRROV LW PD\ EH
LQVWUXFWLYH IRU JDLQLQJ LQVLJKW DERXW ZKDW WRROV UHDOO\ DUH DQG KRZ WKH\ RSHUDWH WR UHIOHFW XSRQ WKH
UHODWLRQVKLSV EHWZHHQ ZH DQG WKH WRROV ZH XVH
/HW PH SRVH KHUH IRU P\ DUJXPHQW D ZRUNLQJ GHILQLWLRQ IRU ZKDW D WRRO LV $Q\ REMHFW LV WR EH
UHJDUGHG DV D WRRO IRU DQ DJHQW LI D FHUWDLQ GHOLEHUDWH PDQLSXODWLRQ RI WKH REMHFW E\ WKH DJHQW H[HUWV DQ
LQIOXHQFH XSRQ ZRUOGO\ HYHQWV LQ D ZD\ WR EULQJ D EHQHILW WR WKH DJHQW 1RWH WKDW WKLV ZRUNLQJ GHILQLWLRQ
LQFOXGH GRHV WRROV WKDW DUH QRW PDWHULDO REMHFWV WKRXJK , VWDUW P\ DUJXPHQWV ZLWK PDWHULDO WRROV DV WKH\ DUH
HDVLHU WR GLVFXVV
0DWHULDO WRROV PD\ EH URXJKO\ FODVVLILHG LQWR WZR FDWHJRULHV WKH
FRQVXPDEOH
WRROV DQG WKH
FDWDO\]HU
WRROV &RQVXPDEOH WRROV DUH XVXDOO\ MXVW VSHFLDO PDWHULDOV VXFK DV H[SORVLYHV RU VRDSV VD\ VRPH SRUWLRQ RI
ZKLFK LV LUUHYRFDEO\ FRQVXPHG XQGHU XVH DV WKH XVH RI VXFK D WRRO PHDQV WR OHW WKH WRRO GLUHFWO\ LQWHUDFW
ZLWK WKH ZRUOGO\ WDUJHW 2Q WKH RWKHU KDQG FDWDO\]HU WRROV VWD\ HVVHQWLDOO\ LQWDFW HYHQ DIWHU WKHLU XVH DV WKH\
MXVW FKDQQHO WKH DJHQW
V FRQWURO DFWLRQ WR WKH WDUJHW LQ SURSHU ZD\V ZLWKRXW WKHPVHOYHV EHLQJ DIIHFWHG
WKURXJK WKH SURFHVV 7KH PDWHULDO WRROV XVXDOO\ FDOOHG LQVWUXPHQWV RU PDFKLQHV DUH JRRG H[DPSOHV RI
FDWDO\]HU WRROV 7KH\ PD\ EH DIIHFWHG VRPHZKDW WKURXJK WKH SURFHVV D NQLIH EODGH ZLOO JHW GXOO DQG D
PDFKLQH ZLOO ZHDU GRZQ E\ UHSHDWHG XVH EXW WKDW LV MXVW WKH HQWURSLF GHFD\ DQG KDV QRWKLQJ WR GR ZLWK WKHLU
QDWXUH DV FDWDO\]HU WRROV
7KHUH DUH DOVR D ODUJH YDULHW\ RI QRQPDWHULDO WRROV WKDW ILW WKH DERYH ZRUNLQJ GHILQLWLRQ RI WRROV OLNH
ODQJXDJH PXVLF NQRZOHGJH VRFLHWDO V\VWHPV DQG VR RQ DQG WKH\ DUH DOO FDWDO\]HU WRROV DV QRQPDWHULDO
WRROV DUH EDVLFDOO\ LQIRUPDWLRQ V\VWHPV LQ D EURDG VHQVH RI WKH WHUP DQG LQIRUPDWLRQ LV QRW FRQVXPDEOH
JRRGV 6RPH RI WKHVH QRQPDWHULDO WRROV DUH
PHWDWRROV
LH
WRROV WR PDNH WRROV 7DNH D ODQJXDJH IRU
LQVWDQFH 2QH XVHV ODQJXDJH WR IRUP PDVVDJHV DQG D PHVVDJH LV D WRRO RQH XVHV IRU WKH SXUSRVH RI
LQIOXHQFLQJ WKH OLVWHQHU
V VWDWH RI PLQG ,QGHHG WKHVH WRROV DQG PHWDWRROV ERWK PDWHULDO DQG QRQPDWHULDO
SOD\ HQRUPRXVO\ LPSRUWDQW UROHV HVSHFLDOO\ LQ WKH YHU\ FRPSOH[ ZD\V RI OLYHV WKH FRQWHPSRUDU\ KXPDQV DUH
VSHQGLQJ HYHQ WKRXJK ZH DUH VHOGRP DZDUH RI KRZ FRPSOH[ WKH\ DUH /HW PH FRQVLGHU D VQLSSHW RI D VFHQH
IURP VRPHRQH
V GDLO\ OLIH MXVW WR JODQFH DW WKH FRPSOH[LW\ LQYROYHG LQ WKH KXPDQWRROV LQWHUDFWLRQV WDNLQJ
SODFH LQ WKH PRGHUQ VRFLHW\
,PDJLQH WKDW \RX KDYH ERXJKW D PRGHO WUDLQ NLW DV VXFK LV VXSSRVHGO\ \RXU KREE\ 7KH NLW FRQWDLQV D
EURFKXUH LQVWUXFWLQJ \RX RQ KRZ WR DVVHPEOH PDQ\ VPDOO SODVWLF DQG PHWDO SLHFHV FRQWDLQHG LQ WKH NLW LQWR D
ZRUNLQJ WR\ WUDLQ V\VWHP 7KH LQVWUXFWLRQ EURFKXUH LV D WRRO LQGLVSHQVDEOH IRU \RX WR ILJXUH RXW KRZ WR
SURFHHG LQ WKLV DVVHPEOLQJ WDVN 7KH LQVWUXFWLRQV DUH ZULWWHQ LQ D VHTXHQFH RI ODQJXDJH
FRGHV DQG LQ \RXU
PLQG \RX KDYH WR SRVVHVV WKH NQRZOHGJH
DV DQ LQIRUPDWLRQ SURFHVVLQJ WRRO WR GHFRGH WKHVH ODQJXDJH FRGHV
SURSHUO\ -XVW NQRZLQJ WKH ODQJXDJH KRZHYHU LV QRW HQRXJK ,Q DGGLWLRQ WR \RXU OLQJXLVWLF VNLOO \RX DOVR
KDYH WR KDYH VRPH FRPPRQ VHQVH
DQG H[SHULHQFH
DOVR DV VSHFLDO W\SH RI NQRZOHGJH LQ RUGHU WR ILJXUH RXW
WKH PHDQLQJV RI WKH LQVWUXFWLRQV ZKLFK DUH KDELWXDOO\ LOOSKUDVHG 7KHQ ZLWK WKH KHOS RI PDQ\ GLDJUDPV
DQRWKHU NLQG RI ODQJXDJH ZKLFK PD\ EH VKRZQ LQ WKH EURFKXUH \RX PD\ EH DEOH WR VWDUW DVVHPEOLQJ <RX
ZLOO WKHQ ILQG WKDW WKH WDVN UHTXLUHV VRPH RWKHU FRQVXPDEOH DQG FDWDO\WLF PDWHULDO WRROV QRW LQFOXGHG LQ WKH
NLW VXFK DV KDPPHUV
DQG VFUHZGULYHUV
ZKLFK \RX DUH VXSSRVHG WR SRVVHVV :KLOH \RX JR DW LW \RX PD\ EH
RIWHQ IUXVWUDWHG E\ LQWHUPHGLDU\ RXWFRPHV \RXU SURGXFHG <RX PD\ WU\ WR EULJKWHQ \RXUVHOI XS VRPHZKDW E\
ZKLVWOLQJ D WXQH
DQRWKHU XVH RI D QRQPDWHULDO FDWDO\]HU WRRO FUHDWHG E\ VRPH PXVLFLDQ (YHQWXDOO\ \RX
PD\ EH DEOH WR FRPSOHWH WKH WDVN DQG \RX KDG EHWWHU EH IRU QRW VDOO\LQJ WKH IDPH RI \RXU KRPLQLG
DQFHVWRUV ZKR ZHUH UHQRZQHG IRU WKHLU SHUVHYHUDQFH ZKHWKHU WKH WDVN WKH\ KDG DW LW ZDV PDQXIDFWXULQJ
VWRQHV WRROV RU KXQWLQJ D SUH\ :KHQ ILQDOO\ D WR\ WUDLQ VWDUWV FKXJJLQJ DORQJ WKH WR\ UDLOV DLGHG E\ WKH
FRQVXPDEOH PDWHULDO WRRO FDOOHG HOHFWULFLW\
&RQJUDWXODWLRQV <RX KDYH DFKLHYHG \RXU JRDO RI
DOWHULQJ D SDUW RI \RXU HQYLURQPHQW
LH
DFWLYHO\
WKH EDVHPHQW RI \RXU KRXVH WR EHFRPH PRUH HQMR\DEOH WKDQ EHIRUH
(YHQ D JODQFH DW VXFK DQ LQVLJQLILFDQW DFWLYLW\ RI VRPH PRGHUQ SHUVRQ WKXV WHOOV XV KRZ FRPSOH[ D
ZRUOG RI WRROV ZH OLYH LQ WRGD\ ,QGHHG PRVW RI WKH WKLQJV D GZHOOHU RI D PRGHUQ FLW\ GRHV GDLO\ PXVW ORRN
W\SLFDO PDQLIHVWDWLRQV RI PDJLF LQ WKH H\HV RI RXU DQFLHQW DQFHVWRUV :KHQ GXVN IDOOV VXFK D SHUVRQ SUHVVHV
D VZLWFK DQG EULJKW OLJKWV ZLOO FRPH RQ ,W ZLOO QRW EH ORQJ IRU D GD\ WR FRPH ZKHQ WKH SHUVRQ MXVW PXPEOHV
/LJKWV DQG WKHUH ZLOO EH OLJKWV DQG WKLV LV H[DFWO\ ZKDW D PDJLFLDQ VKRXOG GR ZLWK KLV RU KHU SRZHUIXO
LQFDQWDWLRQ /LNHZLVH RQH PD\ FRQWURO WKH WHPSHUDWXUH RI RQH
V URRP ZDUPHU RU FRROHU DV RQH ZLVKHV E\
MXVW WRXFKLQJ VRPH EXWWRQV RU GLDOV D SRZHU HYHQ WKH JUHDW HPSHURUV RI WKH SDVW GLG QRW GUHDP WR SRVVHVV
7KH GD\ ZLOO FRPH VKRUWO\ ZKHQ D SHUVRQ FDOOV /LJKW DQG WKH OLJKWV ZLOO FRPH RQ ZKLFK LV H[DFWO\ ZKDW
RQFH LPDJLQHG D SRZHUIXO PDJLFLDQ ZRXOG GR ZLWK KLV PDJLFDO LQYRFDWLRQ
6R WKDW LV WKH PDJQLWXGH RI WKLQJV DUWLILFLDO HYROXWLRQ WUDQVIRUPHG WKH KXPDQ HQYLURQPHQW IURP WKH
XQWHPSHUHG ZLOG HQYLURQPHQW WR D ZRUOG RI YLUWXDO PDJLFLDQV ZKR GR WKHLU PDJLFDO GHHGV E\ LQWHUDFWLQJ
ZLWK WKH ZRUOG RI WRROV ZLWK DZHVRPH FRPSOH[LW\ ,QFUHGLEO\ WKLV LV WKH RXWFRPH QRW HYHQ WKH WHUPLQDO RQH
DW WKDW RI DUWLILFLDO HYROXWLRQ WRXFKHG RII PLOOLRQV RI \HDUV DJR E\ VRPH PHPEHU RI *HQXV +RPR ZKR
DUWLILFLDOO\ SURGXFHG D VWRQH WRRO WKDW ZDV QHDUO\ LQGLVWLQJXLVKDEOH IURP D QDWXUDO VWRQH 7KH SURFHVV FRXOG
EH FRPSUHKHQGHG RQO\ E\ DVVXPLQJ WKDW WKH KXPDQV KDYH EHHQ HQGRZHG ZLWK VRPH VSHFLDO XUJHV PDQLIHVWV
RI WKHLU QDWXUH DV DFWLYH FRSHUV ZKLFK KDYH NHSW WKHP SXVKLQJ DUWLILFLDO HYROXWLRQ RQZDUG IRU VR ORQJ D WLPH
WKDW ILQDOO\ WKH SURFHVV FDPH WR WKH VWDJH RI WULJJHULQJ D FKDLQ UHDFWLRQ PXOWLSO\LQJ KXPDQ WRROV PLOOLRQIROG
FXOPLQDWLQJ LQ WKH ZRUOG RI WRROV DV ZH VHH LW WRGD\
7KH FRQWURO RI ILUH DQG WKH FUHDWLRQ RI SRUWDEOH HQYLURQPHQW
%HIRUH JRLQJ LQWR WKLV LVVXH RI XUJHV UHVSRQVLEOH IRU DFWLYH FRSLQJ OHW PH ILUVW VHH WKH EHJLQQLQJ
VWDJH RI DUWLILFLDO HYROXWLRQ D OLWWOH FORVHO\ 7KH ILUVW HYLGHQFH RI SULPLWLYH WRROV LV GDWHG DURXQG PLOOLRQ
\HDUV DJR ZKRVH FUHDWLRQ LV DWWULEXWHG WR RQH RI WKH HDUO\ KRPLQLG VSHFLHV ,W LV TXLWH UHPDUNDEOH WKDW WKH
VW\OHV RI WKH ROGHVW VWRQH WRROV UHPDLQHG YLUWXDOO\ XQFKDQJHG IRU D YHU\ ORQJ WLPH DERXW D PLOOLRQ \HDUV
7KLV LV UHPDUNDEOH EHFDXVH PDNLQJ VWRQH WRROV LV FHUWDLQO\ QRW SURJUDPPHG LQ KXPDQ JHQHV DV ELUGV QHVW
PDNLQJV REYLRXVO\ DUH 6R FRQVLGHULQJ WKH REYLRXV ODFN RI DQ\ DGYDQFH ODQJXDJH LQ WKLV VWDJH RI KRPLQLG
HYROXWLRQ WKH VWDELOLW\ LQ WKH VWRQH WRRO VW\OH RQO\ PHDQV WKDW WKH KRPLQLG \RXQJVWHUV IDLWKIXOO\ DQG
VWXEERUQO\ LPLWDWHG WKH VWRQH WRRO PDNLQJ RI DGXOWV DQG WKH\ NHSW DW LW JHQHUDWLRQ DIWHU JHQHUDWLRQ IRU D
PLOOLRQ \HDUV ZLWKRXW PRVW OLNHO\ HYHU ORVLQJ WKH DUW $OWKRXJK NHHSLQJ D WUDGLWLRQ VWULFWO\ WHQGV WR EH
UHJDUGHG DV D OLDELOLW\ PHDQLQJ D VDG ODFN LQ LPDJLQDWLRQ LW KDV WR EH HPSKDVL]HG WKDW NHHSLQJ ZKDW RQH KDV
JDLQHG LV WKH ILUVW VWHS WR PDNH IXUWKHU DGYDQFHV
6R +RPR KDELOLV SDVVHG WKH ILUVW WHVW IRU EHLQJ DFWLYH FRSHUV E\ VKRZLQJ WKHLU SHUVHYHUDQFH LQ
SUHVHUYLQJ WKH DUW RI WKHLU VWRQH WRROV 0RVW OLNHO\ E\ PDNLQJ D JRRG XVH RI WKHVH WRROV WKH\ H[SDQGHG WKHLU
KDELWDWV DQG PHW QHZ NLQGV RI VHOHFWLRQ SUHVVXUH ZKLFK HYHQWXDOO\ FDXVHG WKH ELUWK RI DQRWKHU GRPLQDQW
VSHFLHV +RPR HUHFWXV DW DURXQG PLOOLRQ \HDUV DJR +RPR HUHFWXV LQQRYDWHG WKH DUW RI VWRQH WRROV EXW
DIWHU WKDW WKH\ WRR MXVW VWD\HG ZLWK WKHLU VW\OH RI VWRQH WRROV 7KH\ URDPHG WKH ODQG EURDGO\ UHDFKLQJ VXFK
IDU SODFHV OLNH &KLQD DQG -DYD DURXQG RQH PLOOLRQ \HDUV DJR 7KH PRVW GDULQJ YHQWXUH +RPR HUHFWXV ZHQW
LQWR E\ ZKLFK WKH\ SURYHG WKHPVHOYHV WR EH WUXO\ DFWLYH FRSHUV ZDV WKH FRQWUROOLQJ RI ILUH WR XVH LW DV D WRRO
IRU ZDUPLQJ WKHLU ERGLHV DQG FRRNLQJ IRRG LQ ZKLFK WKH\ KDG DSSDUHQWO\ VXFFHHGHG DOUHDG\ LQ KDOI D PLOOLRQ
\HDUV DJR )HVWLQJHU 1HHGOHVV WR SRLQW RXW ILUH ZDV D YHU\ SRWHQW WRRO DV ORQJ DV LW ZDV XQGHU FRQWURO
EXW RQFH JRWWHQ RXW RI KDQG DQG WXUQHG LQWR D ZLOG ILUH LW FRXOG LQIOLFW DZIXO GDPDJHV XSRQ RQH
V IHOORZV DQG
KDELWDW 6R WKHLU ILUVW DWWHPSW WR FRQWURO ILUH IURP VFUDWFK PXVW KDYH EHHQ D VWXSHQGRXV HQGHDYRU LPSRVVLEOH
WR VXFFHHG DV D RQHSHUVRQ SURMHFW 0RVW OLNHO\ WKH SURMHFW ZRXOG KDYH WDNHQ JHQHUDWLRQV RI FRQWLQXDO DQG
IDLUO\ FRQFHUWHG HIIRUWV RI IHOORZ FRDOLWLRQ PHPEHUV EHIRUH VRPH +RPR HUHFWXV WULEH DFTXLUHG HQRXJK
H[SHUWLVH LQ GRLQJ LW 'XULQJ WKDW SHULRG WKH SDUWLFLSDQWV RI WKH SURMHFW KDG WR VKDUH WKH VDPH JRDO DQG KDG
EHHQ XQGDXQWHG E\ QXPHURXV IDLOXUHV DQG WUDJHGLHV
7KH KRPLQLG WKHUHIRUH UHDOO\ UHYHDOHG WKHLU QDWXUH DV DFWLYH FRSHUV E\ WKLV DFFRPSOLVKPHQW 1RW
RQO\ WKH\ ZHUH SHUVLVWHQW LQ NHHSLQJ WKH VDPH JRDO IRU D YHU\ ORQJ WLPH GHVSLWH QXPHURXV IUXVWUDWLRQV D
JRRG H[DPSOH RI VWURQJ ZLOO GLVFXVVHG LQ &KDSWHU EXW DOVR PDQ\ RI WKHP SUHVXPDEO\ VKDUHG WKLV VDPH
JRDO DQG FRRSHUDWHG )XUWKHUPRUH WKLV DFFRPSOLVKPHQW DOVR GHPRQVWUDWHG WKHLU LQYHQWLYHQHVV DQ DELOLW\
LPSRVVLEOH WR SRVVHVV ZLWKRXW WKH SRZHUV RI WKLQNLQJ DQG LPDJLQDWLRQ WRJHWKHU ZLWK WKH DELOLW\ WR OHDUQ IURP
7KHUH ZHUH KRZHYHU WZR GLIIHUHQW WUDGLWLRQV LQ VWRQH WRRO WHFKQRORJ\ GHYHORSHG E\ +RPR HUHFWXV RQH SUDFWLFHG LQ
$IULFD DQG WKH RWKHU LQ RWKHU SODFHV
1HHGOHVV WR VD\ ZKDW KDV EHHQ UHFHQWO\ GLVFXVVHG XQGHU WKH QDPH RI $,3 DQWLFLSDWRU\ LQWHUDFWLYH SODQQLQJ ZDV
LQYROYHG KHUH DV ZHOO *RRG\ IDLOXUHV , VKDOO DWWHPSW PRUH LQ GHSWK DUJXPHQWV RQ KRZ WKH\ FRXOG KDYH GRQH WKHVH WKLQJV ZLWKRXW DQ
DGYDQFHG ODQJXDJH LQ WKH QH[W VHFWLRQ RI WKLV FKDSWHU 7KLV VXSSRVLWLRQ WKDW +RPR HUHFWXV GLG QRW SRVVHVV
DQ DGYDQFHG ODQJXDJH GRHV QRW GHQ\ WKHLU XVH RI YRFDO VLJQDOV DV PDQ\ DV WKHLU FRRSHUDWLYH DFWLRQV
UHTXLUHG
7KLV FRQWURO RI ILUH E\ +RPR HUHFWXV ZDV LQGHHG D JLDQW DQG YHU\ VLJQLILFDQW VWULGH IRUZDUG LQ WKH
DGYDQFH RI DUWLILFLDO HYROXWLRQ (VSHFLDOO\ QRWHZRUWK\ HIIHFW WKLV LQFLGHQW KDG XSRQ WKH ODWHU GHYHORSPHQW RI
DUWLILFLDO HYROXWLRQ VHHPV WR EH WKDW LW RSHQHG D ZD\ WR WKH WHFKQRORJ\ RI FUHDWLQJ D
ORFDOO\
FRPIRUWDEOH
HQYLURQPHQW HYHQ XQGHU XQFRPIRUWDEOH H[WHUQDO FRQGLWLRQV +RPR HUHFWXV ZRXOG KDYH EHHQ DEOH WR SXW XS
VRPH NLQG RI ZRRGHQ VKHOWHUV DV )HVWLQJHU VXJJHVWV RU VRPH RI WKHP FRXOG KDYH FKRVHQ WR OLYH LQ FDYHV DV
GLG LQ &KLQD ,Q HLWKHU FDVH WKH ILUH LQ KHDUWK FRXOG KDYH JLYHQ WKHP DQ HQRUPRXV VXUYLYDO HGJH HVSHFLDOO\ LQ
WKH ORQJ DQG ELWWHU ZLQWHUV LQ JODFLDO DJHV
7KH EHQHILW DFFUXLQJ IURP WKH DELOLW\ RI FUHDWLQJ D FR]\ ORFDO HQYLURQPHQW ZRXOG KDYH PXOWLSOLHG
ZKHQ WKHVH SHRSOH EHFDPH FDSDEOH RI UHFUHDWLQJ WKH VDPH ORFDO FRQGLWLRQV QHDUO\ DQ\ZKHUH HLWKHU E\
FDUU\LQJ OLYH HPEHUV RU E\ VWDUWLQJ D QHZ ILUH 7KLV FRPELQDWLRQ RI SRUWDEOH ILUH DQG VKHOWHUPDNLQJ
FDSDELOLWLHV LV WR EH UHJDUGHG DV WKH EHJLQQLQJ RI ZKDW , FDOO WKH
SRUWDEOH HQYLURQPHQW
WHFKQRORJ\ 7KH VNLOO
RI PDNLQJ ZHDUDEOH JDUPHQWV ZKRVH RULJLQ EHLQJ XQNQRZQ VKRXOG EH DGGHG WR WKH OLVW RI LQFLSLHQW SRUWDEOH
HQYLURQPHQW WHFKQRORJ\ DV , VXVSHFW WKDW LW FRXOG KDYH EHHQ WKH FDXVH IRU WKH ELRORJLFDO HYROXWLRQ WR OHW WKH
KRPLQLG VKHG PRVW RI WKHLU ERG\ KDLU VLQFH ZLWK JDUPHQWV RQ WKH ERG\ KDLU ZRXOG KDYH EHHQ QR PRUH WKDQ D
QXLVDQFH RIIHULQJ REQR[LRXV YHUPLQV WR QHVW WKHUH
7KH SRUWDEOH HQYLURQPHQW WHFKQRORJ\ KDV VLQFH RFFXSLHG RQH RI WKH PRVW LPSRUWDQW GRPDLQV LQ WKH
KXPDQLQVWLJDWHG DUWLILFLDO HYROXWLRQ ,W KDV SURYLGHG WKH KXPDQV ZLWK DQ LQYDOXDEOH DVVLVWDQFH LQ WKHLU
VHWWOLQJ RQ DOPRVW DQ\ SDUW RI WKH VXUIDFH RI (DUWK $QG HYHQ WKLV VXUIDFH RI (DUWK
UHVWULFWLRQ RQ KXPDQ
UHVLGHQFH ZDV ILQDOO\ UHPRYHG LQ UHFHQW \HDUV E\ H[WUHPH UHILQHPHQWV LQ WKH SRUWDEOH HQYLURQPHQW
WHFKQRORJ\ 6RPH KXPDQV KDYH DOUHDG\ VHW IRRW RQ WKH VXUIDFH RI 0RRQ DQG VRPH VWD\HG LQ 6SDFH IRU D
SURORQJHG SHULRG QHLWKHU RI ZKLFK ZRXOG KDYH EHHQ SRVVLEOH ZLWKRXW WKH SRUWDEOH HQYLURQPHQW WHFKQRORJ\
IRU WKH H[WHUQDO FRQGLWLRQV LQ WKHVH SODFHV DUH WKH KDUVKHVW LPDJLQDEOH IRU OLYLQJ EHLQJV
7KDW WKHQ EULQJV XV WR WKH IXQGDPHQWDO TXHVWLRQ :K\ GR ZH ZDQW WR JR WR WKH 6SDFH RU WR WKH
0RRQ" :KDW NLQG RI D VXUYLYDO HGJH GRHV WKH 2XWHU 6SDFH SURYLGH XV ZLWK" ,V WKDW EHFDXVH WKH (DUWK WXUQV
RXW WRR VPDOO D VSDFH WR DFFRPPRGDWH WKH HYHU LQFUHDVLQJ KXPDQ SRSXODWLRQ" 1RWH WKDW RYHUSRSXODWLRQ
DOZD\V KDV EHHQ D VFRXUJH WR UHODWLYHO\ SURVSHURXV DQLPDO VSHFLHV $V SDVVLYH FRSHUV WKH RQO\ PHDQV IRU
WKHP WR DYRLG WKH WUDS RI RYHUSRSXODWLRQ LV WR FXUWDLO LW DQG HDFK RI WKHP VHHPV WR SRVVHVV VRPH VSHFLHV
VSHFLILF ZD\ IRU GRLQJ LW ,Q FRQWUDVW WKH KRPLQLG KDV D GHILQLWHO\ RSSRVLWH FRXUVH LQVWHDG RI FXUWDLOLQJ LWV
SRSXODWLRQ WKH\ KDYH VKRZQ D VWURQJ WHQGHQF\ WR OHW WKH VXUSOXV SRSXODWLRQ VSLOO RYHU WR QHZ ODQGV FDULQJ
OLWWOH DERXW WKH FRQGLWLRQV RI WKHVH QHZ SODFHV
$SSDUHQWO\ WKH XUJHV VXSSRUWLQJ WKH DFWLYH FRSLQJ VWUDWHJ\ RI WKH KRPLQLG DUH UHVSRQVLEOH LQ VXFK
KXPDQ FKRLFH JLYLQJ WKRVH ZKR MRLQ VXFK H[SHGLWLRQV D UDWKHU VWURQJ FRQILGHQFH RQ WKH YHUJH RI
RYHUFRQILGHQFH WR EH DEOH WR FRSH ZLWK ZKDWHYHU FRQGLWLRQV WKH\ PHHW LQ WKH QHZ SODFHV $W WKLV SRLQW ,
VKRXOG UHHPSKDVL]H RQH RI WKH SRLQWV DUJXHG HDUOLHU WKDW WKH KLGGHQ SXUSRVH RI WKH XUJH V\VWHP FRQWDLQ QR
VXFK KXPDQLVWLF FRQFHUQ DV WKH ZHOIDUH RI WKH KXPDQ VSHFLHV DV D ZKROH 1R VXFK FRQFHUQ ZDV QHHGHG ZKHQ
WKH XUJH V\VWHP HYROYHG ZKRVH PD[LPXP UDQJH RI FRQFHUQ H[WHQGHG WR MXVW DV IDU DV WKH ZHOIDUH RI WKH
JURXS D SHUVRQ EHORQJV WR 6R ZKHQ D KRPLQLG JURXS PLJUDWHG WR D QHZ SODFH IRU ZKDWHYHU D UHDVRQ DQG
IRXQG DQRWKHU KRPLQLG JURXS DOUHDG\ LQKDELWLQJ LW DQG UHOXFWDQW WR YDFDWH LW WKH QHZ DUULYDOV ZRXOG QRW KDYH
KHVLWDWHG E\ RFFXS\LQJ WKH SODFH E\ IRUFH LI WKH RGGV VHHPHG IDYRUDEOH WR WKHP 0DVVDFUHV ZRXOG KDYH EHHQ
UDUH LQ SUHKLVWRULF WLPHV KRZHYHU HYHQ LQ VXFK VWUXJJOHV DV WKHUH VKRXOG KDYH EHHQ DPSOH SODFH IRU WKH
ORVLQJ VLGH WR IOHH (YHQ VR LW LV DOVR WUXH WKDW WKH KRPLQLG KDYH QR EXLOWLQ LQKLELWLRQ DJDLQVW NLOOLQJ RWKHU
KXPDQV ZKHQ LW ZDV QHFHVVDU\ RU FRQYHQLHQW WKH\ ZRXOG KDYH GRQH LW DV NLOOLQJ LV MXVW RQH RI WKH ZD\V
DFWLYH FRSLQJ DOEHLW D VSHFLDO RQH
7KDW LV ZK\ WKH KXPDQV KDYH EHHQ NLOOLQJ VR RIWHQ DQG VR ORQJ E\ ZDUULQJ ZLWK HDFK RWKHU LQ
KLVWRULF WLPHV DQG WKH\ UHIUDLQHG IURP GRLQJ LW LQ DQ\ PDMRU ZD\ RQO\ DIWHU WKH VHFRQG :RUOG :DU ZKHQ
WKH\ UHDOL]HG WKDW DQ\ IXUWKHU ILJKWLQJ ZRXOG EH D VXLFLGH WR WKHPVHOYHV 7KHQ WKDQNV WR WKH DGYDQFHPHQWV LQ
PHGLFLQDO VFLHQFH DQG WHFKQRORJ\ DQG DOVR WR WKH HQGLQJ RI PDMRU ZDUV ZKRVH LQFLGHQWDO IXQFWLRQ ZDV DOVR
SRSXODWLRQ FRQWURO WKH KXPDQ SRSXODWLRQ RQ WKH (DUWK LV UDSLGO\ JURZLQJ XQFKHFNHG 7KLV QDWXUDOO\ PDNHV
WKH XUJH V\VWHP WR JRDG XV WR ILQG D QHZ SODFH DQG ZKHUH FDQ ZH ILQG VXFK D QHZ SODFH EH\RQG WKH
RYHUSRSXODWHG (DUWK H[FHSW IRU WKH 2XWHU 6SDFH" 7KHUH RXU DFWLYH FRSHU VSLULW VHHPV RYHUFRQILGHQW DJDLQ
EXW ZH DUH MXVW XUJHG WR WU\
7KH PDMRU XUJHV WKDW PDNH WKH KXPDQV DFWLYH FRSHUV FXULRVLW\ DQG FKDOOHQJH
1RZ OHW PH GLVFXVV LQGLYLGXDO XUJHV WKDW PDNH WKH KRPLQLG UHDO DFWLYH FRSHUV 7KLV LV DFWXDOO\ D
GLIILFXOW WDVN DV PDQ\ RI WKH KRPLQLG XUJHV KDYH WKHLU RZQ FRQWULEXWLRQV ODUJH RU VPDOO HLWKHU VLQJO\ RU
MRLQWO\ +RZHYHU , FDQ FRXQW DW OHDVW WKH PDMRU WKUHH ZLWK WKH ODUJHVW FRQWULEXWLRQV WKH
FKDOOHQJH
XUJH DQG WKH
GUHDPUHDOL]DWLRQ
FXULRVLW\
XUJH WKH
XUJH , VKDOO GLVFXVV KHUH WKH ILUVW WZR OHDYLQJ WKH ODVW WR WKH QH[W
VHFWLRQ
7KH FXULRVLW\ XUJH LV D FORVH SDUDOOHO WR WKH KXQJHU XUJH WKH ODWWHU XUJHV RQH WR ILQG IRRG IRU WKH
ERG\ WR XVH DQG WKH IRUPHU LQIRUPDWLRQ IRU WKH PLQG WR XVH $V WKH KXQJHU XUJH LV FRPSDUDWLYHO\ VWURQJHU
ZLWK DQLPDOV ZKRVH ERG\ LV ODUJH DQG DFWLYLW\ LQWHQVH WKH VDPH KROGV IRU FXULRVLW\ $Q DQLPDO VSHFLHV ZLWK
D FRPSDUDWLYHO\ ODUJH EUDLQ DQG ZKRVH VXUYLYDO GHSHQGV PXFK RQ PHQWDO DFWLYLWLHV OLNH SODQQLQJ LV H[SHFWHG
WR KDYH JHQHUDOO\ VWURQJ FXULRVLW\ XUJH DFWLYLWLHV DV W\SLFDOO\ VHHQ ZLWK WKH KRPLQLG 6R ZKHQ ELRORJLFDO
HYROXWLRQ LQFUHDVHG WKH EUDLQ VL]H RI WKH KRPLQLG WKHLU OHYHO RI FXULRVLW\ PXVW KDYH ZHQW XS VLPXOWDQHRXVO\
OHVW WKH XQXVHG EUDLQ VKRXOG DWURSK\
6WLOO RQH GRHV QRW JREEOH LQIRUPDWLRQ XQGLVFULPLQDWLQJO\ -XVW DV ZH DUH FKRRV\ DERXW IRRG ZH DUH
FKRRV\ DERXW LQIRUPDWLRQ ,Q WKH ILUVW SODFH WKH LQIRUPDWLRQ KDV WR EH GLJHVWLEOH E\ WKH PLQG DQG KDV WR
KDYH VRPH PDWHULDO IRU WKH ODWWHU WR FKHZ RQ DQG EHQHILW IURP $V IRU GLJHVWLELOLW\ WKH KXPDQ PLQG VHHPV
IDU PRUH YHUVDWLOH WKDQ WKH KXPDQ VWRPDFK HVSHFLDOO\ VLQFH +RPR VDSLHQFH LQYHQWHG ODQJXDJH ZKLFK PDGH
LW HQRUPRXVO\ HDV\ IRU WKH KXPDQV WR DFTXLUH YDULRXV LQIRUPDWLRQSURFHVVLQJ PHWDWRROV DV PHQWDO VNLOOV
WKURXJK OHDUQLQJ
,Q IDWKRPLQJ WKH KLGGHQ SXUSRVH RI WKH FXULRVLW\ XUJH ZH VKRXOG ILUVW SD\ DWWHQWLRQ WR WKH IUHTXHQW
KLJK LQWHQVLW\ DFWLYDWLRQ RI WKH FXULRVLW\ XUJH ZLWK \RXQJ FKLOGUHQ 6LQFH WKH \RXQJ DSHV DQG PRQNH\V VKRZ
WKH VDPH LQFOLQDWLRQ LW LV QDWXUDO WR DVVXPH WKDW D \RXQJ DQLPDO ZLWK D UHODWLYHO\ ODUJH EUDLQ HDUQHVWO\ QHHG
LQIRUPDWLRQ WR JURZ XS PHQWDOO\ XVLQJ LW DV PDWHULDOV WR EXLOG D SUDFWLFDO PRGHO RI WKH VXUURXQGLQJ ZRUOG
7KLV VHHPLQJO\ XQVDWLDEOH KXQJHU IRU NQRZOHGJH LQ D \RXQJ FKLOG KRZHYHU JUDGXDOO\ DEDWHV DV WKLV
SHUVRQDO ZRUOG PRGHO WDNHV RQ D GHILQLWH VKDSH DQG LQ WKH DGXOW VWDJH KXPDQ LQGLYLGXDOV JHQHUDOO\ VKRZ
ODUJH YDULHWLHV LQ WKH ZD\ RI WKH FXULRVLW\ XUJH RSHUDWLRQ UHIOHFWLQJ GLVSDUDWH QHHGV RI WKH ZRUOG PRGHOV WKH\
GHYHORSHG 6RPH SHUVRQ PD\ KDYH DFTXLUHG D PRGHO ZKLFK VHOIPRQLWRULQJ SHUKDSV GRQH XQFRQVFLRXVO\
WHOOV RQH WKDW WKH PRGHO LV ZRUNDEOH DV IDU DV WKH SHUVRQ
V SURIHVVLRQ LV FRQFHUQHG EXW VWUXFWXUDOO\ ZHDN DQG
YXOQHUDEOH 6XFK D SHUVRQ ZRXOG WKHQ HVWDEOLVK D YHU\ VWURQJ )HVWLQJHULDQ GHIHQVH V\VWHP LQRFXODWLQJ PRVW
RI SRWHQWLDOO\ KDUPIXO LQIRUPDWLRQ DQG VKRZ FXULRVLW\ RQO\ LQ WKH QDUURZ EDQG RI LQIRUPDWLRQ UHOHYDQW WR
WKH SHUVRQ
V SURIHVVLRQ 6RPH RWKHU PD\ IHHO D VWURQJ QHHG WR H[SDQG WKH SHUVRQ
V ZRUOG PRGHO DQG PD\
NHHS DFWLYDWLQJ D UDWKHU LQWHQVH FXULRVLW\ XUJH HYHQ DV DQ DGXOW DQG WKH FDSDFLW\ RI WKH KXPDQ EUDLQ DSSHDUV
ODUJH HQRXJK WR KRXVH HYHQ VXFK D FRQVWDQWO\ H[SDQGLQJ PRGHO
6R IDU WKH SDUDOOHOLVP EHWZHHQ WKH FXULRVLW\ DQG WKH KXQJHU XUJH VHHPV WR KROG IDLUO\ ZHOO 7KH\
GLIIHU KRZHYHU LQ RQH EDVLF SRLQW WKDW D IRRG LV FRQVXPHG ZKHQ HDWHQ EXW LQIRUPDWLRQ LV QRW 6R ZKLOH D
KXQJU\ SHUVRQ LV JHQHUDOO\ FRPSHOOHG WR ILQG WKH IRRG IRU RQHVHOI DQRWKHU DFWLYLW\ SODQ LV RSHQ WR D FXULRXV
SHUVRQ RI ZDLWLQJ RXW IRU VRPHERG\ HOVH WR ILQG WKH WKLQJV WKH SHUVRQ WR FXULRXV WR NQRZ 6R WKHUH DUH
IDPLOLDU VFHQHV LQ ROG VWRULHV RI WKH SHRSOH JDWKHULQJ DURXQG D WUDYHOHU ZKR MXVW UHWXUQHG IURP KLV ORQJ
MRXUQH\ WR D IDU RII ODQG DQG OLVWHQLQJ LQWHQWO\ ZLWK DZH DQG VXVSLFLRQ WR WKH WDOHV UHODWHG E\ WKH WUDYHOHU
DERXW WKH H[RWLF DQG RXWUDJHRXV FXVWRPV DQG GHHGV RI IDU RII SHRSOH ,Q D YHU\ VLPLODU ZD\ QRZDGD\V ZH
ZDWFK PRRQVFDSH RU VLFNOHG (DUWK YLHZHG IURP VSDFH WKURXJK 79 VFUHHQV LQ IDVFLQDWLRQ DQG OLVWHQ WR
DVWURQDXWV FRPPHQWLQJ RQ WKHP LQWHQWO\
7KLV LV XQGRXEWHGO\ YHU\ HFRQRPLFDO ULVNOHVV ZD\ RI REWDLQLQJ LQIRUPDWLRQ WR VDWH RQH
V FXULRVLW\ DW
OHDVW SDUWLDOO\ %XW LW LV WR EH QRWHG WKDW WKHVH FXULRVLW\ULGGHQ E\VWDQGHUV DUH DFWXDOO\ DV LPSRUWDQW DV
WUDYHOHUV DQG H[SORUHUV WKHPVHOYHV LQ PDNLQJ WKH KXPDQV DFWLYH FRSHUV 7KH H[SORUHUV PD\ EH WKRVH EUHHG RI
SHRSOH ZLWK DQ LQWHQVH FXULRVLW\ DQG D KLJK VHOIFRQILGHQFH DQ LGHDO PL[ IRU PDNLQJ DQ H[SORUHU DV D KLJK
ULVN WDNHU %XW ZKR ILQDQFH VXFK H[SHGLWLRQV ZKLFK DUH YHU\ FRVWO\" 7KH\ ZHUH RIWHQ EDFNHG E\ DQRWKHU NLQG
RI KLJK ULVN WDNHUV ZKR ZDJHUHG WKHLU PRQH\ RQ WKH H[RWLF REMHFWV WKHVH H[SORUHUV ZLOO EULQJ EDFN IURP
IRUHLJQ ODQGV DQG VXFK KLJK YDOXHV RI WKHVH REMHFW ZHUH EDVHG RQ WKH SHRSOH
V ORYH RI UDUH DQG FXULRXV
WKLQJV 1RWH WKDW WKH SLFWXUH LV QRW PXFK GLIIHUHQW WRGD\ 7KH JHQHUDO SXEOLF GRHV QRW RSSRVH WKH 6SDFH
3URJUDP EHLQJ ILQDQFHG E\ WKHLU WD[ PRQH\ GHVSLWH LWV H[RUELWDQW FRVW PDLQO\ EHFDXVH PDQ\ RI WKHP ORYH WR
KDYH WKH 6SDFH H[SHULHQFH HYHQ VHFRQGKDQGHG
,W LV WUXH WKDW WKHUH PD\ DOVR EH PDQ\ LQ WKH JHQHUDO SXEOLF ZKR DUH HLWKHU LQGLIIHUHQW RU FULWLFDO WR
WKH 6SDFH 3URJUDP /HW PH HPSKDVL]H WKDW WKH\ WKH FRQVHUYDWLYHV WRR DUH LPSRUWDQW IRU WKH KXPDQ VXUYLYDO
DV DFWLYH FRSHUV 7R PDNH WKH SRLQW FOHDU FRQVLGHU WKH IROORZLQJ IDU VLPSOHU EXW YHU\ OLNHO\ VFHQH WKDW
ZRXOG KDYH WDNHQ SODFH IUHTXHQWO\ LQ SUHKLVWRULF WLPHV ,Q DQ\ KRPLQLG WULEHV WKHUH ZRXOG KDYH EHHQ D IHZ
KRWKHDGHG \RXQJVWHUV ZLWK LQWHQVH FXULRVLW\ XUJH 6XSSRVH WKDW RQH RI VXFK GHFLGHG WR JR VHH ZKDW ZRXOG EH
WKHUH LQ WKH IRUELGGHQ UHJLRQ EH\RQG WKH EDFN RI WKH YLOODJH ZKHUH LW ZDV EHOLHYHG WKDW PRQVWHUV OLYHG ZKR
DWH VWUD\ KXPDQV 6XFK DGYHQWXURXV \RXQJVWHU ZRXOG KDYH VHOGRP UHWXUQHG WR WKH YLOODJH DJDLQ WR QRERG\
V
VXUSULVH %XW ZKDW LI WKH SHUVRQ UHWXUQHG DQG WROG RWKHUV WKDW WKH SODFH ZDV IXOO RI JDPHV DQG QR PRQVWHUV"
7KHQ WKHUH ZRXOG EH PDQ\ YROXQWHHUV IROORZLQJ WKH SHUVRQ RQ KLV QH[W WULS DV WKHLU RULJLQDO IHDU EHLQJ
DVVXDJHG E\ WKH SLRQHHU
V UHSRUW %XW SUREDEO\ QRW DOO WKH PHPEHUV RI WKH WULEH 6RPH ZRXOG KDYH VWRXWO\
UHIXVHG WR EHOLHYH WKH FUHGLELOLW\ RI WKH UHSRUW DQG UHPDLQHG LQ WKH ROG SODFH 7KLV LV REYLRXVO\ WKH FRUUHFW
VROXWLRQ IRU VXUYLYDO DQG H[SDQVLRQ RI D VSHFLHV )RU D VSHFLHV WR EH DFWLYH FRSHUV GRHV QRW PHDQ WKDW DOO RI
LWV PHPEHUV DUH DGYHQWXURXV WKDW LV WRR ULVN\ 7KH YLDELOLW\ RI DQ DFWLYH FRSLQJ VSHFLHV
LH
WKH KRPLQLG
FDQ EH JXDUDQWHHG RQO\ E\ WKH VSHFLHV KDYLQJ WKUHH W\SHV RI SHRSOH D IHZ SLRQHHUV D ODUJH QXPEHU RI
IROORZHUV ZKR DSSUHFLDWH WKH ZRUNV RI WKH SLRQHHUV DQG DOVR D ODUJH QXPEHU RI FRQVHUYDWLYHV ZKR IURZQ DW
SLRQHHUV DQG WKHLU IROORZHUV
7KH FXULRVLW\ XUJH LV QRW WKH RQO\ XUJH WKDW PD\ GULYH SLRQHHUV 7KH\ PD\ GR WKHLU SLRQHHULQJ ZRUNV
XQGHU YDULRXV XUJHV XQGHU D VKHHU QHFHVVLW\ IRU VXUYLYDO RU IRU REWDLQLQJ IDPH DQG IRUWXQH DV D VXFFHVVIXO
SLRQHHULQJ HQGHDYRU JHQHUDOO\ DFTXLUHV D KLJK FUHGLW %XW WKH PRVW LPSRUWDQW DPRQJ DOO WKH RWKHU XUJHV WKDW
GULYH SLRQHHUV WR WKHLU H[WUHPHO\ KDUG ZRUN LV WKH FKDOOHQJH XUJH WKH XUJH WKDW ZDV LQWURGXFHG LQ WKH
SUHYLRXV FKDSWHU LQ UHODWLRQ WR WKH W\SLFDOO\ KXPDQ UHVSRQVHV WRZDUG REVWDFOHV 7KH NLQG RI REVWDFOHV , ZDQW
WR GUDZ WKH UHDGHU
V DWWHQWLRQ KHUH LQ UHODWLRQ WR WKH KRPLQLG DFWLYH FRSLQJ VWUDWHJ\ DUH WKRVH ZKLFK PD\
EHWWHU EH FDOOHG WKH
ERUGHUOLQHV RI WKH SDVW KXPDQ DFFRPSOLVKPHQWV
&RQVLGHU WKH ]HDO DQG ULYDOU\ VRPH
SLRQHHUV SXW LQWR UHDFKLQJ WKH 3ROHV RI WKH (DUWK RU WKH WRS RI WKH KLJKHVW PRXQWDLQ LQ WKH ZRUOG (YHUHVW
7KH TXHVWLRQ LV :KDW PDNHV WKHVH SODFHV VR VSHFLDO" 7KH\ DUH FHUWDLQO\ QR WRSRJUDSKLFDO REVWDFOHV
IRU KXPDQ WUDYHOLQJ 7KHUH DUH QHLWKHU DQ\ VSHFLDO WUHDVXUHV LQ WKHVH SODFHV QRU HYHQ DQ\ VSHFLDO
LQIRUPDWLRQ 1RUWK 3ROH LV MXVW D SODFH RI HQGOHVV H[SDQVLRQ RI VQRZ DQG LFH DQG E\ DGGLQJ URFNV DQG WKLQ
DLU \RX JHW WKH WRS RI (YHUHVW 6R HYHQ WKH SLRQHHUV WKHPVHOYHV ZHUH KDUG SXW LQ DQVZHULQJ TXHVWLRQV DERXW
WKHLU PRWLYDWLRQV 7KH ZHOO NQRZQ %HFDXVH LW
V WKHUH KRZHYHU LV QRW WKH FRUUHFW DQVZHU EHFDXVH WKH WRS
RI (YHUHVW KDG EHHQ WKHUH VLQFH WKH IDU JHRORJLFDO SDVW DQG QRERG\ HYHU ZDQWHG WR JR WKHUH LQ WKH SDVW IRU
WKDW SDUWLFXODU UHDVRQ
6R LW ZDV RQO\ D UHFHQW WKLQJ WKDW ZH EHJDQ WR QRWLFH WKDW WKH WRS RI (YHUHVW ZDV WKHUH MXVW EH\RQG
RXU UHDFK 7KH H[SODQDWLRQ IRU WKLV QHZ UHDOL]DWLRQ
LV FORVHO\ UHODWHG WR ZKDW DQ REVWDFOH LV $Q REMHFW LV QRW
DQ REVWDFOH QRW IRU LWV RZQ ULJKW EXW LW
EHFRPHV
DQ REVWDFOHV ZKHQ D SHUVRQ UHDOL]HV WKDW LW KDPSHUV WKH
SHUVRQ IURP UHDFKLQJ VRPHWKLQJ EH\RQG LW OLNH D ZLGH ULYHU MXVW VKRZQ XS LQ IURQW RI D WUDYHOHU LQ D IRUHLJQ
ODQG ZKRVH WUDYHOLQJ LQWHQWLRQ KDV EHHQ VHW WRZDUG WKH GLUHFWLRQ RI WKH RWKHU VLGH RI WKH ULYHU 6R WKH WRS RI
(YHUHVW RU WKH 3ROHV RI (DUWK DUH MXVW OLNH WKLV RWKHU VLGH RI WKH ULYHU IRU WKH WUDYHOHU ZKRVH H[LVWHQFH KDV MXVW
EURXJKW WR SHRSOH
V DWWHQWLRQ RQO\ EHFDXVH SHRSOH WKHPVHOYHV KDYH FRPH FORVHU WR WKHVH HDVLO\ LGHQWLILDEOH
WDUJHWV WKURXJK WKHLU WHFKQRORJLFDO DGYDQFHV 7KHQ WKH UHFRJQLWLRQ RI WKHVH WDUJHWV DV VRPHWKLQJ WKDW PD\
EDUHO\ OLH ZLWKLQ UHDFK VWLUV XS WKH FKDOOHQJH XUJH ZLWKLQ WKH DGYHQWXURXV IHZ DQG SHRSOH DFFRODGH WKRVH
ZKR VXFFHHGHG LQ RYHUFRPLQJ WKH REVWDFOHV WKDW OLHG LQ EHWZHHQ
6R ZH PD\ FRQFOXGH WKDW WKH KLGGHQ SXUSRVH RI WKH FKDOOHQJH XUJH LV WR H[SDQG WHUULWRULDO ERUGHUV RI
WKH KXPDQ GRPDLQ LQ ZKDWHYHU GLPHQVLRQV ZKHWKHU RU QRW WKHUH LV DQ\ LPPHGLDWH EHQHILW IURP VXFK DQ
H[SDQVLRQ ,QGHHG ZKDW LV WKH SUDFWLFDO XVH RI UHGXFLQJ WKH ZRUOG UHFRUG RI UXQQLQJ D KXQGUHG PHWHUV E\ D
KXQGUHGWK RI D VHFRQG" 1HYHUWKHOHVV UXQQHUV FRPSHWH IRU LW DQG SHRSOH DUH FUD]\ DERXW WKH ZRUOG UHFRUG
EUHDNHU 1RWH WKDW WKLV LV DOVR TXLWH D UHFHQW WKLQJ LQ WKH WK &HQWXU\ ZKHQ ZH KDYH EHFRPH FDSDEOH RI
PHDVXULQJ UXQQLQJ VSHHG ZLWK D ILQH DFFXUDF\ 6R WKH WK &HQWXU\ LV WKH UHPDUNDEOH SHULRG ZKHQ SHRSOH
KDYH EHFRPH WKLQNLQJ WKHPVHOYHV DV DOPRVW D VLQJOH JURXS RQO\ ZLWK UHVSHFW WR ZKLFK D FRQFHSW OLNH WKH
ERUGHUOLQHV RI WKH KXPDQ SDVW DFFRPSOLVKPHQWV OLNH WKH ZRUOG UHFRUGV LQ VSRUWV FRXOG EH JLYHQ D PHDQLQJ
7KH FKDOOHQJH XUJH KRZHYHU VKRXOG KDYH H[LVWHG VLQFH WKH EHJLQQLQJ RI KRPLQLG VSHFLHV ZRUNLQJ MXVW IRU
WKH JURXS RQH EHORQJV WR JUDGXDOO\ H[SDQGLQJ WKH WHUULWRULHV RI KXPDQ DFKLHYHPHQWV DV DQ RXWFRPH ,Q WKLV
VHQVH WKH FKDOOHQJH XUJH PD\ EH YLHZHG DV WKH H[HPSODU\ RI WKH KXPDQ DFWLYH FRSHU VSLULW
$UWLILFLDO HYROXWLRQ DQG LWV DFFHOHUDWLRQ
7KH PRVW FRQVSLFXRXV DVSHFW RI WKH DUWLILFLDO HYROXWLRQ LQ FRPSDULVRQ WR WKH ELRORJLFDO HYROXWLRQ LV
WKH KLJK VSHHG RI WKH IRUPHU DQG LW LV QRW MXVW D PDWWHU RI VSHHG WKH SURFHVV RI DUWLILFLDO HYROXWLRQ LV DOVR
DFFHOHUDWLQJ 7R\QEHH 7RGD 7KLV DFFHOHUDWLQJ QDWXUH RI WKH DUWLILFLDO HYROXWLRQ ZLOO EH
PDGH HYLGHQW RQO\ E\ FRPSDULQJ WKH VWDWHV RI WHFKQRORJ\ LQ D IHZ GLIIHUHQW DJHV LQ WKH KXPDQ KLVWRU\
HJ
WKH WLPHV OLNH ILYH KXQGUHG WKRXVDQG \HDUV %3 EHIRUH SUHVHQW ZKHQ +RPR KDELOLV VWDUWHG WR FRQWURO ILUH WHQ
WKRXVDQG \HDUV %3 ZKHQ WKH DJULFXOWXUDO UHYROXWLRQ WRRN SODFH WKH WLPH RI LQGXVWULDO UHYROXWLRQ RQO\ DERXW
WZR FHQWXULHV DJR DQG WRGD\ ZKHQ WKH UHYROXWLRQ RI LQIRUPDWLRQ WHFKQRORJ\ LV FKDQJLQJ HYHU\ IDFHW RI WKH
KXPDQ OLIH $W WKH EHJLQQLQJ WKH WLPH RI FRQWUROOLQJ ILUH WKH VSHHG RI WKH WHFKQRORJLFDO GHYHORSPHQW ZDV
DOPRVW FUDZOLQJ 9HU\ JUDGXDOO\ WKH SURFHVV KDV JDLQHG PRPHQWXP DQG QRZ LWV DFFXPXODWHG VSHHG LV VR
IDVW WKDW ZH KDYH EHFRPH SHUKDSV WKH ILUVW EUHHG RI KXPDQV ZKR VKDOO GLH LQ DQ HQYLURQPHQW FRPSOHWHO\
DOWHUHG IURP WKH HQYLURQPHQW ZH ZHUH ERUQ LQWR (YHQ WKRXJK PRVW RI XV KDYH ORQJ ORVW WKH VHQVH RI ZRQGHU
IRU UDSLG FKDQJHV WDNLQJ SODFH LQ WKH ZRUOG VXUURXQGLQJ XV WKH YHU\ XQFHUWDLQW\ ZH DUH IHHOLQJ DERXW RXU
RZQ QHDU IXWXUH LV WHVWLPRQ\ HQRXJK IRU RXU VXEFRQVFLRXV UHDOL]DWLRQ RI WKH PDJQLWXGH RI WKLQJV WDNLQJ
SODFH WRGD\ 2I FRXUVH LW LV QRW MXVW D PDWWHU LQ WKH VSKHUH RI SXUH WHFKQRORJ\ VLQFH DOO WKH KXPDQ VRFLHWLHV
FXOWXUHV DQG HYHU\WKLQJ HOVH WKDW PDNH XS WKH IDFHWV RI WKH FXUUHQW KXPDQ OLIH DUH GHVWLQHG WR XQGHUJR
GUDVWLF FKDQJHV LQ RUGHU WR EH DEOH WR DFFRPPRGDWH WKHVH WHFKQRORJLFDO DGYDQFHPHQWV LQ WKH JOREDO VFDOH
1RWLFH WKDW LQ DOO WKLV ORQJ SHULRG GXULQJ ZKLFK DUWLILFLDO HYROXWLRQ KDV PDGH VLJQLILFDQW DGYDQFHV
OLWWOH KDV RFFXUUHG LQ ELRORJLFDO HYROXWLRQ DV IDU DV *HQXV +RPR LV FRQFHUQHG +RPR VDSLHQFH VDSLHQFH WKDW
PHDQV XV LV QRW WKH VDPH VSHFLHV DV +RPR HUHFWXV EXW WKH GLIIHUHQFH LV LQVLJQLILFDQW FRPSDUHG WR WKH VWULGHV
PDGH E\ DUWLILFLDO HYROXWLRQ GXULQJ WKH VDPH SHULRG 7KH VSHHG RI FKDQJH LQ ELRORJLFDO HYROXWLRQ LV
DSSDUHQWO\ PXFK VORZHU WKDQ LWV DUWLILFLDO FRXQWHUSDUW DQG WKH QH[W KRPLQLG VSHFLHV WKH VXFFHVVRU WR +RPR
VDSLHQFH VDSLHQFH LV XQOLNHO\ WR HPHUJH LQ WKH QHDU IXWXUH HVSHFLDOO\ ZKHQ ZH DUH ZRUNLQJ KDUG DW
HOLPLQDWLQJ ELRORJLFDO VHOHFWLRQ SUHVVXUH E\ WU\LQJ WR SUHVHUYH KXPDQ OLYHV QR PDWWHU ZKDW XVLQJ WKH SRZHUV
RI PHGLFDO VFLHQFH DQG WHFKQRORJ\ DOVR RIIVKRRWV RI DUWLILFLDO HYROXWLRQ
1RZ ZK\ FRXOG DUWLILFLDO HYROXWLRQ EH DQ HYROXWLRQ
" 1RWH WKDW DV PHQWLRQHG LQ &KDSWHU WKH WKUHH
FULWLFDO FRQGLWLRQV QHFHVVDU\ WR FDXVH DQ HYROXWLRQDU\ SURFHVV WR WDNH SODFH DUH PHW E\ WKH GHQL]HQV RI WKH
ZRUOG
RI DUWLILFLDOV WKH WKUHH FRQGLWLRQV EHLQJ VHOIFRS\LQJ
PXWDWLRQ
DQG VHOHFWLRQ
$OWKRXJK WRROV DUH
FRSLHG E\ WKH KDQGV RI KXPDQV ZKR GRHV WKH FRS\LQJ LV LUUHOHYDQW WR WKH PHFKDQLFV RI HYROXWLRQ 7RROV DOVR
PXWDWH DJDLQ HQJLQHHUHG E\ KXPDQV DQG WKLV DUWLILFLDO PXWDWLRQ LV KDUGO\ UDQGRP RU QHXWUDO DV LQ ELRORJLFDO
HYROXWLRQ 7KLV LQWHQWLRQDOO\
LQYHQWLYH
QDWXUH RI WKH WRROV PXWDWLRQ LV WKH YHU\ DJHQW GLUHFWO\ UHVSRQVLEOH WR
WKH DFFHOHUDWLRQ RI DUWLILFLDO HYROXWLRQ 7KH RULJLQDO DQG PXWDWHG YHUVLRQV RI WKH VDPH NLQG RI WRROV ZLOO WKHQ
EH H[SRVHG WR WKH XVHU VHOHFWLRQ WKDW ZKLFK VXLWV WKH KXPDQ SXUSRVHV EHWWHU ZLOO ZLQ WKH FRPSHWLWLRQ DQG
WKH EHVW DW RQH WLPH PD\ GRPLQDWH WKH PDUNHW IRU WKDW W\SH RI WRROV D QLFKH LQ WKH DUWLILFLDO ZRUOG E\ EHLQJ
UHSOLFDWHG LQ TXDQWLWLHV 7KHUH DUH RI FRXUVH PDQ\ PRUH GHWDLOV EXW WKHVH HOHPHQWV FRQVWLWXWH MXVW DERXW WKH
EDVLF PHFKDQLFV ZLWK ZKLFK DUWLILFLDO HYROXWLRQ LV GULYHQ
1RWH WKDW WKH UROH RI KXPDQV SOD\HG LQ WKLV SLFWXUH RI DUWLILFLDO HYROXWLRQ LV HQWLUHO\ FDWDO\WLF DV WKH\
WKHPVHOYHV GR QRW GLUHFWO\ DOWHUHG E\ WKHLU PHGGOLQJ LQ DUWLILFLDO HYROXWLRQ ,Q WKH DEVWUDFW OHYHO WKHLU DFWV
PD\ EH YLHZHG WR WXUQ NQRZOHGJH
LQWR FRQWURO
DV WKH VRXUFH IRU LQYHQWLYH PXWDWLRQ PXVW EH NQRZOHGJH
DQG WRROV DUH IRU FRQWURO $QG VLQFH D EHWWHU FRQWURO ZLOO OHDG WR NQRZOHGJH RI D EHWWHU TXDOLW\ WKH
UHODWLRQVKLS EHWZHHQ NQRZOHGJH DQG FRQWURO LV PXWXDOO\ IDFLOLWDWLYH JLYHQ WKH DFWLYH FRSLQJ KXPDQV DV HYHU
GLOLJHQW FDWDO\VWV $ SURFHVV GULYHQ E\ D PXWXDOO\ IDFLOLWDWLYH UHODWLRQVKLS EHWZHHQ WKH FDXVH DQG WKH HIIHFW LV
QDWXUDOO\ DFFHOHUDWLYH
7KHUH DUH WZR LPSRUWDQW SUHFRQGLWLRQV IRU WKLV DFFHOHUDWLYH DUWLILFLDO HYROXWLRQ WR PDWHULDOL]H )LUVW
NQRZOHGJH PXVW EH SUHVHUYHG EHIRUH VRPH JRRG
LGHDV
RI FUHDWLYH PXWDWLRQ RI WRROV DUH ERUQ RXW RI LW DQG
NQRZOHGJH LV SHULVKDEOH LI QRW LQWHQWLRQDOO\ SUHVHUYHG DV DQ\ NQRZOHGJH KDV WR EH HQFRGHG RQ VRPH
SK\VLFDO PDWHULDO DQG SK\VLFDO PDWHULDOV DUH VXEMHFW WR HQWURSLF GHFD\ )RU RXU ORQJ JRQH DQFHVWRUV WKHUH
ZHUH QR PDWHULDOV DYDLODEOH WR SUHVHUYH WKHLU NQRZOHGJH EXW WKH VWRQH WRROV WKHPVHOYHV DQG WKH EUDLQV DQG
WKH ODWWHU DUH TXLWH SHULVKDEOH 6R LW LV PLUDFXORXV WKDW +RPR KDELOLV DQG +RPR HUHFWXV SUHVHUYHG WKHLU VWRQH
WRRO WHFKQRORJLHV HVVHQWLDOO\ XQFKDQJHG IRU VR ORQJ SHULRGV 7KH PHDJHUQHVV RI WKH NQRZOHGJH LWVHOI LV WKH
RQO\ DOOHYLDWLQJ IDFWRU IRU WKH GLIILFXOW\
7KLV WDVN RI SUHVHUYLQJ NQRZOHGJH LV H[SHFWHG WR EHFRPH PXFK KDUGHU ZKHQ WKH DPRXQW RI
NQRZOHGJH EHFDPH PRUH VL]DEOH OLNH ZKHQ +RPR VDSLHQFH 1HDQGHUWKDOHQVLV WKH VXFFHVVRU IRU +RPR
HUHFWXV LQQRYDWHG WKH VWRQH WRROV ZKLFK FRXOG EH PDQXIDFWXUHG RQO\ E\ WDNLQJ D VHULHV RI H[DFWO\ GHILQHG
VWHSV 6R )HVWLQJHU DUJXHV UDWKHU FRQYLQFLQJO\ WKDW WKHLU DGXOWV PXVW KDYH
WDXJKW
WKHLU \RXQJ WKDW LV
WUDQVIHUUHG WKH NQRZOHGJH IURP WKH DGXOWV
EUDLQV WR WKRVH RI WKH \RXQJ XVLQJ D IDLUO\ DGYDQFHG ODQJXDJH D
PHWDWRRO EHVW VXLWHG WR WKLV NLQG RI WDVNV 7KRXJK WKHUH H[LVWV QR HYLGHQFH WR FRQILUP WKH VXSSRVLWLRQ WKDW
1HDQGHUWKDOV KDG D ODQJXDJH , ZRXOG QRW EH VXUSULVHG LI WKH\ GLG DV QHZ HYLGHQFH WHQGV WR LQGLFDWH WKDW RXU
SUHKLVWRULF DQFHVWRUV ZHUH VPDUWHU WKDQ WKH\ ZHUH WKRXJKW SUHYLRXVO\
:LWK RU ZLWKRXW D GHYHORSHG ODQJXDJH KRZHYHU LW LV DOPRVW FHUWDLQ WKDW WKH SUHKLVWRULF KXPDQV
WDXJKW WKHLU \RXQJ DV WKH KXPDQV DUH WKH RQO\ DQLPDO VSHFLHV HQGRZHG ZLWK WKH VWURQJ WHDFKLQJ XUJH :KDW
, PHDQ E\ WHDFKLQJ
KHUH LV DQ LQGLYLGXDO
V DWWHPSW WR WUDQVIHU SHUVRQDOO\ DFTXLUHG FKXQNV RI QRQVSHFLHV
VSHFLILF NQRZOHGJH WR DQRWKHU LQGLYLGXDO 7KLV RIWHQ LQWHQVH WHDFKLQJ XUJH VHHQ LQ KXPDQV PLJKW EH
UHVSRQGHG E\ WKH FRUUHVSRQGLQJ ]HDO LQ OHDUQHUV VWLUUHG E\ WKH FXULRVLW\ DQG WKH FKDOOHQJH XUJH RI WKH ODWWHU
LI WKH FRQWHQW RI WKH NQRZOHGJH WR EH WUDQVIHUUHG PDWFKHV EHWZHHQ WKHP
6R WKLV DFWLYH SUHVHUYDWLRQ RI NQRZOHGJH LV REYLRXVO\ D SDUW RI WKH KLGGHQ SXUSRVH RI WKH WHDFKLQJ
XUJH 7KH WHDFKLQJ XUJH KRZHYHU LQFOXGHV PRUH DV LWV SXUSRVH DQG WKDW LV WKH VKDULQJ RI NQRZOHGJH DPRQJ
RWKHUV HVSHFLDOO\ RQH
V FORVH FRDOLWLRQ SDUWQHUV VR WKDW WKH\ FDQ FRRUGLQDWH WKHLU MRLQW DFWLRQV HIIHFWLYHO\
7KH XUJHG QDWXUH RI WHDFKLQJ LV TXLWH FOHDUO\ VKRZQ LQ WKH JHQHUDO GLIILFXOW\ RI NHHSLQJ VHFUHWV HVSHFLDOO\
IURP RQH
V FORVH IULHQGV 6RPHWLPHV WKH LQWHQVLW\ RI RQH
V WHDFKLQJ XUJH UHDFKHV DQ H[WUHPHO\ KLJK OHYHO
ZKHQ LW PD\ GHVHUYH D VSHFLDO QDPH RI WKH PLVVLRQDU\
V
XUJH
DV VRPH PLVVLRQDULHV LQ SDVW WLPHV DUH
FRQVLGHUHG DV SDUDJRQV RI H[WUHPHO\ KLJK WHDFKLQJ XUJH 7KH PLVVLRQDU\ XUJH LV DFWLYDWHG W\SLFDOO\ ZKHQ D
SHUVRQ UHFRJQL]HV WKDW RWKHUV HVSHFLDOO\ RQH
V FRDOLWLRQ SDUWQHUV DUH IRROHG E\ VRPH HYLO LQWHQW VXFK DV WKH
GHYLO
V ZLWKRXW WKHPVHOYHV NQRZLQJ LW 7KH\ PXVW EH WDXJKW RI WKH
WUXWK
LV WKH EHOLHI RI WKH PLVVLRQDU\ RU
DQ\RQH XQGHU WKH XUJH ZKR PD\ HYHQ WDNH WKH ULVN RI EHLQJ FUXFLILHG IRU WKH WHDFKLQJ
1RZ OHW PH JHW EDFN WR WKH WRSLF RI DUWLILFLDO HYROXWLRQ 7KH VHFRQG SUHFRQGLWLRQ IRU DUWLILFLDO
HYROXWLRQ WR WDNH SODFH LV WKDW WKH KXPDQV WKH FDWDO\VW LQ WKLV SURFHVV PXVW GHULYH QHZ LGHDV IURP WKH
DFFXPXODWHG NQRZOHGJH WKURXJK WKLQNLQJ DQG LPDJLQDWLRQ DV NQRZOHGJH
SHU VH
ZLWKRXW D ZRUNLQJ PLQG
GRHV QRWKLQJ RI WKH VRUW 6R OHW PH GHOYH D OLWWOH LQWR WKHVH G\QDPLF SURFHVVHV RI WKH PLQG LQ WKH QH[W VHFWLRQ
WRJHWKHU ZLWK WKH PHWDWRRO FDOOHG WKH ODQJXDJH WKDW SURYLGHV D SRZHUIXO DLG IRU WKHP
7KLQNLQJ LPDJLQDWLRQ DQG ODQJXDJH
7KLQNLQJ ZLWKRXW ODQJXDJH
%\ HPEDUNLQJ RQ FRQVLGHULQJ WKLQNLQJ , RXJKW WR UHPLQG WKH UHDGHU WKDW WKH KXPDQV DUH QRW WKH RQO\
DQLPDOV WKDW WKLQN $V GLVFXVVHG D ZKLOH HDUOLHU FURZV DQG FKLPSDQ]HHV DUH RIWHQ LQYHQWLYH WRROXVHUV DQG
DV VXFK WKHLU FDSDELOLW\ RI RFFDVLRQDO FUHDWLYH WKLQNLQJ FDQQRW EH GHQLHG LQ VSLWH RI WKHLU ODFN RI DQ
DGYDQFHG ODQJXDJH 6R OHW PH ILUVW FRQVLGHU KRZ D FKLPSDQ]HH FDQ WKLQN FUHDWLYHO\ ZLWKRXW XVLQJ ODQJXDJH
XVLQJ WKH FODVVLFDO H[SHULPHQW FRQGXFWHG E\ .|KOHU DW <HUNHV /DERUDWRU\ DV DQ H[DPSOH ,Q RQH RI
KLV H[SHULPHQWV D PDOH FKLPSDQ]HH FDOOHG 6XOWDQ ZDV VKRZQ D EDQDQD VXVSHQGHG IURP WKH FHLOLQJ ZKLFK
6XOWDQ FRXOG QRW UHDFK E\ VWUHWFKLQJ KLV DUPV ,Q WKH ODERUDWRU\ ZHUH SODFHG D ZRRGHQ FUDWH DQG D ORQJ VWLFN
DQG 6XOWDQ KDG DOUHDG\ OHDUQHG KRZ WR XVH HDFK RI WKHP DV D WRRO WR UHDFK REMHFWV OLNH EDQDQDV +H NQHZ
KRZ WR JHW DW D EDQDQD E\ VWDQGLQJ XSRQ D FUDWH RU E\ VZLQJLQJ WR VWLFN WR KLW WKH EDQDQD GRZQ ,Q WKH
H[SHULPHQW LQ TXHVWLRQ KRZHYHU QHLWKHU RI WKHP ZRUNHG DV WKH HQWLFLQJ EDQDQD ZDV SRVLWLRQHG WRR KLJK
6XOWDQ SDXVHG D ZKLOH DV LI KH ZHUH LQ PHGLWDWLRQ DQG WKHQ VDLG $KD 1R LW PXVW KDYH EHHQ .|KOHU ZKR
VDLG WKDW ZKHQ 6XOWDQ VXGGHQO\ ZHQW LQWR D UDSLG VHULHV RI DFWLRQV +H PRYHG WKH FUDWH GLUHFWO\ EHORZ WKH
KDQJLQJ EDQDQD JUDEEHG WKH VWLFN DQG FOLPEHG XSRQ WKH FUDWH DQG JRW WR WKH EDQDQD E\ VZLQJLQJ WKH VWLFN
IURP WKHUH :KLOH GRLQJ DOO WKLV KH VKRZHG QR VLJQ RI KHVLWDWLRQ
2EVHUYLQJ WKLV .|KOHU FRQFOXGHG WKDW FKLPSDQ]HHV FRXOG VROYH SUREOHPV E\ XVLQJ WKHLU
LQVLJKW
%XW
ZKDW QHHG LV WKHUH WR XVH D VSHFLDO WHUP OLNH LQVLJKW
WR GHVFULEH 6XOWDQ
V WKLQNLQJ ZKHQ H[DFWO\ WKH VDPH
NLQG RI SUREOHPVROYLQJ PD\ EH GRQH E\ D KXPDQ FKLOG" 6XSSRVH WKDW D ER\ FDPH EDFN KRPH IURP VFKRRO
YHU\ KXQJU\ DQG QR RQH DW KRPH %\ ORRNLQJ DURXQG WKH NLWFKHQ KH VDZ EDQDQDV SXW RQ D VKHOI WRR KLJK IRU
KLP WR UHDFK %XW LW PD\ WDNH RQO\ D PRPHQW IRU KLP WR FOLPE XSRQ WKH NLWFKHQ WDEOH DQG SXOO GRZQ WKH
EDQDQDV XVLQJ VRPH VWLFN ,W LV TXLWH OLNHO\ WKDW QR YHUEDOL]HG WKLQNLQJ SURFHVV WDNHV SODFH LQ KLV PLQG
LQVWHDG KLV PLQG PD\ EH VWXFN LQ DQ DXWKHQWLF -DPHVLDQ ZD\ ZLWK WKH LPDJH RI EDQDQDV
LH
WKH JRDO RI KLV
DFWLRQV 2QH PD\ VD\ WKDW WKLV LV MXVW DQRWKHU LQVWDQFH RI LQVLJKW ,I VR LQVLJKW PXVW EH WKH PRVW EDVLF PRGH
RI WKLQNLQJ HPSOR\HG E\ DQLPDOV DQG FKLOGUHQ DQG WKH WKLQNLQJ SURFHVV HQJDJHG E\ KXPDQ DGXOWV FDQQRW EH
PXFK GLIIHUHQW QDPHO\ WKH\ WRR WKLQN LQ LQVLJKWV H[FHSW WKDW WKH\ XVH WKH PHWDWRRO WKH ODQJXDJH DV D
VSHFLDO WKLQNLQJ DLG UDWKHU IUHTXHQWO\
$PRQJ LWV PXOWLSOH IXQFWLRQV ODQJXDJH LV HVSHFLDOO\ XVHIXO LQ IL[DWLQJ LGHDV 6XSSRVH IRU LQVWDQFH
\RX DUH HQJDJHG LQ D IDLUO\ FRPSOH[ WDVN RI GHVLJQLQJ DQ HODERUDWH SODQ ,Q GRLQJ VXFK D WDVN \RX PD\
RFFDVLRQDOO\ REWDLQ D SURPLVLQJORRNLQJ LGHD EXW DUH WRR EXV\ LQ IROORZLQJ XS RWKHU SRVVLELOLWLHV WR H[SORUH
WKH IXUWKHU SRWHQWLDOLW\ RI WKH LGHD %XW LGHDV DUH HOXVLYH DQG \RX PD\ QRW EH DEOH WR JHW DQ LGHD EDFN ZKHQ
QHHGHG XQOHVV \RX FRGHG WKDW LGHD LQ ODQJXDJH DQG SXW LW RQ D QRWHERRN RU NHSW LW LQ PHPRU\ DW WKH WLPH RI
LWV GLVFRYHU\ $V ODQJXDJHFRGHG LGHDV DUH IDU PRUH VWDEOH WKDQ XQFRGHG RQHV \RX PD\ EH DEOH WR NHHS WUDFN
RI ZKDW \RX KDYH EHHQ GRLQJ RYHUYLHZ \RXU ZKROH WKLQNLQJ SURFHVV LI QHFHVVDU\ MXVW E\ ORRNLQJ DW \RXU
QRWHERRN RU VHDUFKLQJ \RXU PHPRU\
7KLV LV QRW WR VD\ WKDW KXPDQ FKLOGUHQ GR QRW XVH ODQJXDJH LQ WKHLU WKLQNLQJ ,W LV RQO\ WKDW DGXOWV
QHHG PRUH KHOS IURP ODQJXDJH LQ WKLQNLQJ ZKLFK IDFW RFFDVLRQDOO\ OHDGLQJ WR DQ LOOXVRU\ FODLP WKDW DQ
DGYDQFHG ODQJXDJH LV
VLQH TXD QRQ
IRU WKLQNLQJ 7KH IDOVHQHVV RI WKLV FODLP LV DSSDUHQW FRQVLGHULQJ WKDW
FKLPSDQ]HHV FURZV DQG +RPR HUHFWXV REYLRXVO\ GLG DQG GR WKLQNLQJ ZLWKRXW DQ DGYDQFHG ODQJXDJH 6R QR
IDQF\ QDPHV OLNH LQVLJKW LQWXLWLRQ RU ZKDWHYHU DUH QHHGHG IRU WKLV ODQJXDJHOHVV WKLQNLQJ DV LW VHHPV WR EH
WKH WKLQNLQJ SURFHVV RQ WKH JURXQG OHYHO HYHQ IRU XV +RPR VDSLHQFH VDSLHQFH ZKRVH XVH RI ODQJXDJH RQO\
PXOWLSOLHV WKH SRZHU RI WKH JURXQG OHYHO WKLQNLQJ PXOWLIROG DV WKH XVH RI DQ\ JRRG WRRO LV VXSSRVHG WR HQWDLO
&RQGLWLRQDO DQWLFLSDWLRQ
6R DQ\ DQLPDOV ZLWK VRPHZKDW GHYHORSHG EUDLQV
LH
KXPDQV SULPDWHV DQG PDQ\ RWKHU DQLPDOV
FDQ WKLQN 4XHVWLRQV DUH QRZ WR EH UDLVHG DERXW KRZ DQG ZKDW DQG ZK\ WKH\ WKLQN 7KH ZKDW
TXHVWLRQ
FRQFHUQV LWVHOI ZLWK WKH W\SH RI PHGLD XSRQ ZKLFK WKLV LQIRUPDWLRQ SURFHVVLQJ FDOOHG WKLQNLQJ LV FRGHG DQG
FDUULHG RXW 0\ K\SRWKHWLFDO DQVZHU EHJLQV ZLWK WKH DVVXPSWLRQ WKDW D WKLQNLQJ PLQG RI HLWKHU DQ DQLPDO RU
D KXPDQ LV DEOH WR SDUWLDO RXW WKH H[WHUQDO ZRUOG LQWR REMHFWV DQG HYHQWV DQG WKHVH FRGHG PHGLD VHUYH DV
WKHLU
UHSUHVHQWDWLRQV
ZKHUHE\ VHQVRU\ LQSXWV DQG WKHLU PHQWDO LPDJHV RSHUDWH DV PDMRU OLQNV EHWZHHQ WKH
RULJLQDOV DQG WKHLU UHSUHVHQWDWLRQV , ZLOO GLVFXVV KRZ WKLV FDQ EH GRQH ODWHU ZKHQ WKH KRZ
TXHVWLRQ LV
DGGUHVVHG DQG PRYH RQ WR WKH ZK\
TXHVWLRQ QRZ
1RWH KHUH WKDW WKLQNLQJ LV DQ XUJHG DFWLYLW\ DV DOO RWKHU KXPDQ DFWLYLWLHV DUH 7KH UHDVRQ ZK\ ZH
VHOGRP IHHO XUJHG WR WKLQN LV EHFDXVH WKLQNLQJ LV DQ DOPRVW RQJRLQJ DFWLYLW\ DQG LW FDQ EH H[HFXWHG LQ
SDUDOOHO ZLWK PRVW RI H[WHUQDO DFWLYLWLHV H[FHSW ZKHQ WKH LQWHQVLW\ RI WKLQNLQJ DFWLYLW\ JHWV YHU\ KLJK
PDNLQJ RQH HQJURVVHG LQ WKLQNLQJ 2QO\ WKHQ PRVW RI WKH SHUVRQ
V H[WHUQDO DFWLYLWLHV ZLOO JUDGXDOO\ JULQG WR D
KDOW 1RZ WKH ZK\
TXHVWLRQ FRQFHUQLQJ WKLQNLQJ GHDOV ZLWK WKH KLGGHQ SXUSRVH RI WKLV XUJHG DFWLYLW\ RI
WKLQNLQJ $V , KDYH EHHQ GRLQJ WKURXJKRXW WKLV ERRN KLGGHQ SXUSRVHV RI XUJHV DUH WR EH VRXJKW LQ WKH
FRQWH[W RI VXUYLYDO DQG FRQVLGHULQJ WKH HODERUDWLRQV LQ WKH ELRORJLFDO VRIWZDUH DQG KDUGZDUH WKDW VXSSRUW
WKLQNLQJ WKH VXUYLYDO EHQHILW EURXJKW E\ WKLQNLQJ HYHQ UXGLPHQWDU\ RQHV RI DQLPDOV PXVW LQGHHG EH JUHDW
HQRXJK WR PDNH VXFK HYROXWLRQDU\ LQYHVWPHQWV ZRUWKZKLOH 7KH RQO\ FDQGLGDWH WKDW VDWLVILHV VXFK
UHTXLUHPHQW DQ HQKDQFHG DELOLW\ RI
FRQGLWLRQDO DQWLFLSDWLRQ
ZKHUH E\ WKH WHUP FRQGLWLRQDO DQWLFLSDWLRQ
LV
PHDQW DQ DELOLW\ WR DQWLFLSDWH WKH RXWFRPHV RI HDFK DFW WDNHQ E\ WKH LQGLYLGXDO DW WKH PRPHQW WKH RXWFRPHV
WKDW PD\ GLIIHU FRQWLQJHQW XSRQ WKH JLYHQ VLWXDWLRQ
1RWH WKDW WKH OHDUQLQJ PHFKDQLVPV RI FRQGLWLRQLQJ DQG JHQHUDOL]DWLRQ SURSRVHG E\ EHKDYLRULVWV
VXSSO\ DQ RUJDQLVP ZLWK D OLPLWHG GHJUHH RI FRQGLWLRQDO DQWLFLSDWLRQ DELOLW\ DQ H[SHULPHQWDO DQLPDO OLNH D
UDW RU D SLJHRQ OHDUQV WR SUHVV D EDU RU SXVK D EXWWRQ ZKHQ DQG RQO\ ZKHQ D FRUUHFW VLJQDO LV JLYHQ WR WKHP
ZKLFK LV DQ LQVWDQFH RI FRQGLWLRQDO DQWLFLSDWLRQ 7KH FRQGLWLRQLQJ WKHRULHV KRZHYHU ZRXOG QRW EH DEOH WR
H[SODLQ WKH EHKDYLRUV RI 6XOWDQ WKH FKLPSDQ]HH RU WKRVH RI FURZV FUDFNLQJ QXWV XVLQJ SDVVLQJ FDUV DV WKH\
GLG QRW KDYH D FKDQFH RI OHDUQLQJ WKH HIIHFWLYHQHVV RI VXFK EHKDYLRUV WKH DFWV RI FRQGLWLRQDO DQWLFLSDWLRQ
ZKRVH HIIHFWLYHQHVV FRXOG KDYH RQO\ LQIHUUHG WKURXJK WKLQNLQJ DQG WKLQNLQJ UHTXLUHV D IDU PRUH HODERUDWH
ELRORJLFDO VRIWZDUH DQG KDUGZDUH WKDQ WKH FRQGLWLRQLQJ WKHRULHV GR 6R OHW PH QRZ FDOO WKH KLGGHQ SXUSRVH
RI WKLQNLQJ LV WR JLYH WKH WKLQNHU DQ
,&$
FDSDELOLW\ ZKHUH ,
PD\ VWDQG IRU HLWKHU LQIHUHQWLDO
RU LQYHQWLYH
,Q WKH DERYH DUJXPHQW , GR QRW PHDQ WR LPSO\ WKDW H[SHULPHQWDO DQLPDOV OLNH UDWV DQG SLJHRQV GR
QRW KDYH WKLV ,&$ FDSDELOLW\ $V D PDWWHU RI IDFW , DP TXLWH VXUH WKDW WKH\ DUH WKLQNHUV DV FURZV DUH ,W LV
RQO\ WKDW WKH\ DUH JLYHQ QR FKDQFH RI VKRZLQJ WKHLU ,&$ DV WKH EHKDYLRULVW H[SHULPHQWHUV GR QRW DOORZ LW
DQG WKH\ VWLOO GRHV VRPHWKLQJ LQYHQWLYH LW LV PRVW OLNHO\ GLVPLVVHG E\ WKH H[SHULPHQWHUV DV VXSHUVWLWLRXV
EHKDYLRU
7KH VRFDOOHG VXSHUVWLWLRXV EHKDYLRU KRZHYHU LV DFWXDOO\ D JLYHDZD\ IRU ,&$ WKLQNHUV DV ,&$
WKLQNHUV DUH WKRVH ZKR PDNH TXLWH D IHZ LQIHUHQFHV DQG DFW DFFRUGLQJ WR WKHP RIWHQ SURYLQJ WKHP ZURQJ ,W
LV RQO\ WKDW JRRG LQIHUHQFHV PDGH DW FULWLFDO PRPHQWV PDNH D UHDO GLIIHUHQFH LQ VXUYLYDO DQG WKDW LV WKH
UHDVRQ ZK\ HYROXWLRQ FUHDWHG ,&$ DQG IXUWKHU DGYDQFHG LW ODWHU RQ
6SHDNLQJ RI HYROXWLRQ LW LV DOVR WR EH QRWHG WKDW WKH VSHFLHV ZKLFK DGRSWHG ,&$ GLG QRW GLVFDUGHG
WKH FRQGLWLRQLQJ W\SH RI OHDUQLQJ PHFKDQLVP (YROXWLRQ VHOGRP RSHUDWHV RQ WKH HLWKHURU SULQFLSOH LW VLPSO\
DGGV QHZ IXQFWLRQV WR WKH ROG DV ORQJ DV WKH ODWWHU DUH VWLOO XVHIXO 6R FKLPSDQ]HHV DQG FURZV ZLOO XWLOL]H
FRQGLWLRQLQJ PHFKDQLVPV WR ILOO LQ WKH JDSV OHIW RXW E\ WKHLU ,&$ DQG VR GR WKH KXPDQV :KHQ WKH KXPDQV
DFTXLUHG WKH OLQJXLVWLF FRPSHWHQFH WKH\ QRW RQO\ GLG QRW GLVFDUGHG WKH ZD\V RI DQLPDO ,&$ WKLQNHUV EXW
DOVR WKH\ SUHVHUYHG D JUHDW GHDO RI FRQGLWLRQLQJ W\SH OHDUQLQJ PHFKDQLVPV ZKLFK ZHUH UDWKHU HFRQRPLF
UHVRXUFHZLVH WR GR WULYLDO OHDUQLQJ
'\QDPLF VFKHPDV
$V WKLQNLQJ LV D W\SH RI LQIRUPDWLRQ SURFHVVLQJ GRQH E\ WKH PLQG WKHUH KDV WR EH LQIRUPDWLRQ WR EH
SURFHVVHG LQ WKH ILUVW SODFH 7KH PDMRU VRXUFH RI LQIRUPDWLRQ LV WKH H[WHUQDO ZRUOG FDUULHG E\ VHQVRU\ LQSXWV
7KH VHQVRU\ LQSXWV DIWHU XQGHUJRLQJ YDULRXV VHQVRU\ DQG SHUFHSWXDO WUDQVIRUPDWLRQV DUH WKHQ SUHVHQWHG DV
SHUFHLYHG LPDJHV QRW MXVW YLVXDO
LQ WKH PLQG )RU WKLV LQIRUPDWLRQ WR EH SURFHVVHG LW KDV WR EH UHWDLQHG
DQG PHPRU\ LV WKH QHFHVVDU\ ELRORJLFDO KDUGZDUH WR SUHVHUYH LQIRUPDWLRQ +RZHYHU LW LV VLPSO\ LPSRVVLEOH
WR VWRUH HYHU\ SLHFH RI SHUFHLYHG LPDJHV LQ PHPRU\ GXH WR WKH VKHHU EXON RI VXFK LPDJHV SHUFHLYHG HYHU\
PRPHQW DQG IXUWKHUPRUH LW LV IRROLVK WR GR VR HYHQ LI SRVVLEOH EHFDXVH RI WKH WUHPHQGRXV UHGXQGDQF\
H[LVWLQJ LQ WKH FRQVHFXWLYHO\ UHFHLYHG VHULHV RI LQIRUPDWLRQ 6R WKLV SXWV VRPH NLQG RI UHGXQGDQF\
FRPSUHVVLRQ RQ WRS RI WKH GHPDQG OLVW RQ WKH IXQFWLRQ RI WKH PLQG DV DQ LQIRUPDWLRQ SURFHVVRU
,Q IDFW WKLV UHGXQGDQF\ FRPSUHVVLRQ IXQFWLRQ LV DOUHDG\ JHQHWLFDOO\ EXLOWLQ ZLWKLQ WKH ZD\V WKH
KXPDQV DQG HYROXWLRQDU\ DGYDQFHG DQLPDOV DV ZHOO SHUFHLYH WKH H[WHUQDO ZRUOG LQ DQ REMHFWFHQWHUHG
IDVKLRQ 6LQFH WKH VDPH REMHFW WHQGV WR UHSOLFDWH WKH VDPH LQIRUPDWLRQDO RXWSXW WKH REMHFWFHQWHUHG
SHUFHSWLRQ DOORZV WKH PLQG WR FDUU\ RXW UHGXQGDQF\ FRPSUHVVLRQ PRVW HIIHFWLYHO\
7R REWDLQ VRPH LGHD DERXW WKH DFWXDO SURFHVV RI GDWD FRPSUHVVLRQ LPDJLQH D PRYLH FDPHUD GLUHFWHG
DW VRPH VWDEOH REMHFW OLNH D JUHHQ XQULSH IUXLW ZKLFK WDNHV D SLFWXUH RI WKH REMHFW RQO\ LI WKH FXUUHQW IHDWXUH
RI WKH REMHFW LV VLJQLILFDQWO\ GLIIHUHQW IURP WKH SUHFHGLQJ LPDJH %\ UHSOD\LQJ WKH ILOP WDNHQ E\ WKLV FDPHUD
\RX ZLOO VHH D JUHHQ IUXLW JHWWLQJ ELJJHU ZKLOH WXUQLQJ LWV FRORU WR \HOORZ DQG UHG D WDVW\ ULSH DSSOH 1RZ
VXSSRVH WKDW D PLQG KDV D VLPLODU PHFKDQLVP ZKLFK NHHSV LQ PHPRU\ VXFK LPDJHV RI DQ REMHFW HDFK RI
ZKLFK LV VLJQLILFDQWO\ GLIIHUHQW IURP WKH SUHYLRXV RQH LQ D SURSHU VHTXHQFH 7KLV SURFHGXUH GRHV QRW WDNH
PXFK PHPRU\ VSDFH DV PRVW RI WKH UHGXQGDQF\ DERXW WKH IHDWXUHV RI WKH REMHFW LV HIIHFWLYHO\ HOLPLQDWHG
1RZ VXSSRVH WKDW RQH RI WKHVH PHPRUL]HG UHFRUG LV DFWLYDWHG SHUKDSV E\ DFWXDOO\ VHHLQJ D VLPLODU
JUHHQ DSSOH 7KHQ WKH PHPRUL]HG UHFRUGV RI WKH REMHFW ZLOO SOD\ RXW WKH VHTXHQFH DQG SURGXFH D ULSH UHG
DSSOH YHU\ TXLFNO\ HYHQ WKRXJK FXUUHQWO\ SHUFHLYHG LPDJH RI WKH DSSOH XQGHUJRHV QR FKDQJH 7KLV LV
DQWLFLSDWLRQ DQG ODQJXDJH SOD\V QR SDUW LQ WKLV PHFKDQLVP
7KLV VHTXHQFH RI VWRUHG LPDJHV DV DQ RUJDQL]HG LQIRUPDWLRQ LV DFWXDOO\ D FKXQN RI NQRZOHGJH
GHVHUYLQJ WKH QDPH VFKHPD
8QOLNH LQ RUGLQDU\ QRWLRQV RI VFKHPD LQ ZKLFK PDMRU HPSKDVLV LV SODFHG XSRQ
DVVRFLDWLYH OLQNV PDLQWDLQHG DPRQJ WKH FRPSRQHQWV RI D VFKHPD P\ HPSKDVLV KHUH LV DW WKH VFKHPD
V
SURSHUW\ RI DXWRQRPRXVO\ XQIROGLQJ LPDJHV
LQ DQ DQWLFLSDWRU\ IDVKLRQ %HFDXVH RI WKLV GLIIHUHQFH LQ
HPSKDVLV , VKDOO FDOO WKH NLQG RI VFKHPDV , KDYH EHHQ GHVFULELQJ DV
G\QDPLF VFKHPDV
RU
G\VFV
IRU VKRUW
7RGD 1RZ OHW PH FRQVLGHU KRZ DQ DQLPDO RU D SHUVRQ PD\ WKLQN ZLWK G\QDPLF VFKHPDV LQ RQH
V
SRVVHVVLRQ ,PDJLQH VRPH HDUO\ KRPLQLG SHUVRQ ZKR KDG RQFH HDWHQ DQ XQULSH JUHHQ DSSOH DQG H[SHULHQFHG
D VRXU WDVWH 6R ZKHQ KH VDZ DQRWKHU JUHHQ DSSOH WKH G\VF DFWLYDWHG E\ WKLV SHUFHSWLRQ XQIROGHG WKH SDVW
H[SHULHQFH DQG SURGXFHG D JXVWDWRU\ LPDJH RI VRXUQHVV HQRXJK WR SUHYHQW KLP IURP WU\LQJ WR HDW LW $IWHU D
ZKLOH KH VDZ WKH VDPH DSSOH ZKLFK KDG WXUQHG LWV FRORU WR UHG ZLWK D VZHHW VFHQW 6R KH WRRN WKH DSSOH DQG
ELW LQWR LW DQG IRXQG LW GHOLFLRXV 7KHQ KLV G\VF RI DQ DSSOH KDV LQFRUSRUDWHG WZR VFHQDULRV LQ LW ,I KH HDWV DQ
DSSOH ZKLOH JUHHQ KH ZLOO JHW D VRXU WDVWH %XW LI KH GRHV QRW HDW LW DQG ZDLW IRU D ZKLOH LW ZLOO WXUQ UHG ZLWK
D VZHHW GHOLFLRXV WDVWH 6R MXVW E\ KDYLQJ VXFK D G\QDPLF VFKHPD DQ RUJDQLVP EHFRPHV DQ ,&$ WKLQNHU DV
IDU DV DSSOHV DUH FRQFHUQHG
/HW PH QRZ LQWURGXFH DQRWKHU FRPSOLFDWLRQ :KLOH WKLV HDUO\ KRPLQLG SHUVRQ
DQRWKHU DSSOH WR ULSHQ QH[W VHDVRQ DQRWKHU SHUVRQ
7KLV QHZ HYHQW QRZ LQYROYHV DQRWKHU G\VF DV
PHPEHU DQG
$
V
$
%
ZDV ZDLWLQJ IRU
$
FDPH XS DQG SOXFNHG WKH DSSOH SUHPDWXUHO\ DQG HDWHQ LW
ZRXOG QDWXUDOO\ SRVVHVV D G\VF RI
%
ZKR LV WKH VDPH WULEH
DSSOH G\VF ZLOO EH JLYHQ DQ DVVRFLDWLYH SRZHU WR DFWLYDWH WKH G\VF RI
%
ZKHQ WKH IRUPHU
WDNHV WKH EHJLQQLQJ VWDWH RI ULSHQHVV 7KHQ WKH WZR DFWLYDWHG G\VFV ZLOO LQWHUDFW DQG WKH RXWFRPH RI WKH
LQWHUDFWLRQ LV WKH GLVDSSHDUDQFH RI WKH DSSOH 6LQFH WKLV RXWFRPH LV TXLWH GLVDJUHHDEOH IRU
G\VF
MRLQ WKH VFHQH LQ WKH UHSOD\ RI WKLV
HPHUJHV LQ WKH VFHQH DQG VQDUO DW
WHOO WKDW
%
%
VLPXODWLRQ
$
KH OHW KLV
VHOI
SURFHVV WKLV LV LQGHHG D VLPXODWLRQDO WKLQNLQJ ZKHQ
7KLV ZLOO WKHQ OHDYH WKH DSSOH LQWDFW DV WKH G\VF RI
ZLOO VOLQN DZD\ XQGHU VXFK DQ DJJUHVVLRQ 1RZ LI
UHJDUGHG DV WKLQNLQJ DQG EHKDYLQJ DV D JHQXLQH ,&$ WKLQNHU
$
DFWXDOO\ H[HFXWH WKLV
%
LQ
$
V
SODQ
%
PLQG ZLOO
KH PD\ EH
7KLV LPDJLQDU\ H[DPSOH MXVW DERXW OD\V RXW WKH PRVW EDVLF SULQFLSOHV RI ODQJXDJHOHVV ,&$ WKLQNLQJ
XWLOL]LQJ G\QDPLF VFKHPDV 1RWH WKDW DOO WKLV FDQ EH DFFRPSOLVKHG MXVW E\ VHOHFWLYH PHPRUL]DWLRQ ZKLFK
ZKLOH HIIHFWLYHO\ HOLPLQDWLQJ UHGXQGDQFLHV DQG FRPSUHVVLQJ SHUFHLYHG GDWD DOVR HQKDQFHV DQG KHOS GHWHFW
ZKDWHYHU FDXVDO RU DQWHFHGLQJVXFFHHGLQJ UHODWLRQVKLSV WKDW H[LVW ZLWKLQ WKH REVHUYHG HYHQW VHTXHQFHV ,W LV
RQH RI P\ IDQF\ K\SRWKHVHV WKDW WKH FDXVDOLW\EDVHG FRPSUHKHQVLRQ RI WKH SURFHVVHV RI WKH ZRUOG FRXOG
KDYH EHHQ MXVW D VHUHQGLSLW\ D E\SURGXFW RI WKLV LPDJH VSOLFLQJ ZKRVH GLUHFW SXUSRVH ZDV UHGXQGDQF\
FRPSUHVVLRQ ZKLFK WXUQHG RXW WR EH D YHU\ XVHIXO PHQWDO WRRO IRU WKH ODWWHU GD\ KXPDQLW\
6R WKH PLQG RI DQ ,&$ ZLOO FRQWDLQ LQ LWV PHPRU\ D JUHDW PDQ\ RI VXFK G\VFV DV PHQWDO WRROV
FRUUHVSRQGLQJ WR DOO WKH IDPLOLDU REMHFWV LQ RQH
V HQYLURQPHQW UHSUHVHQWLQJ D VXEVWDQWLDO SDUW RI WKH
NQRZOHGJH LQ SRVVHVVLRQ RI WKH PLQG $ JUHDW DGYDQWDJH RI KDYLQJ NQRZOHGJH LQ WKLV IRUP LV WKDW WKH XVH RI
NQRZOHGJH UHTXLUHV QRW PXFK RI WKH FHQWUDO FRQWURO DV HDFK DFWLYDWHG G\VF XVXDOO\ D JURXS RI WKHP
VLPXOWDQHRXVO\ DFWLYDWHG ZLOO SOD\ RXW WKHLU FRQWHQW QHDUO\ DXWRQRPRXVO\ DQG WKLV VPDOO GHPDQG RQ WKH
FDSDELOLW\ RI FHQWUDO FRQWURO ZRXOG KDYH EHHQ YHU\ LPSRUWDQW SDUWLFXODUO\ DW WKH EXUJHRQLQJ VWDJH RI ,&$
LQWHOOLJHQFH
6PDOO WKRXJK WKH GHPDQG RQ LW FRXOG KDYH EHHQ ZLWK LQFLSLHQW ,&$ WKLQNHUV WKH FHQWUDO FRQWURO
VKRXOG KDYH H[LVWHG DV G\VFV KRZHYHU DXWRQRPRXV WKH\ FRXOG EH DUH NQRZOHGJH DQG NQRZOHGJH QHHGV D
XVHU $PRQJ WKH FRPSRQHQWV RI WKH PLQG VR IDU LQWURGXFHG WKH DSSUDLVDO PRQLWRU LV WKH EHVW FDQGLGDWH IRU
WKH SULPH XVHU RI G\VFV VLQFH WKH IXQFWLRQ RI WKH DSSUDLVDO PRQLWRU LV WR DSSUDLVH WKH JLYHQ VLWXDWLRQ E\
DQWLFLSDWLQJ ZKDW ZLOO KDSSHQ LQ WKH H[WHUQDO ZRUOG VRRQ :KDW WKH DSSUDLVDO PRQLWRU QHHGV WR GR LV WR
DFWLYDWH WKH G\VFV FRUUHVSRQGLQJ WR WKH PDMRU REMHFWV FRQVWLWXWLQJ WKH JLYHQ VLWXDWLRQ 7KHQ WKHVH DFWLYDWHG
G\VFV ZLOO GLVSOD\ LQ WKH PLQG LQ DQ LQWHUDFWLYH IDVKLRQ ZKDW ZLOO KDSSHQ IURP WKHQ RQ PXFK IDVWHU WKDQ
UHDO WLPH 'XULQJ WKH SURFHVV WKH DSSUDLVDO PRQLWRU ZLOO FRQVWDQWO\ EH DSSUDLVLQJ WKH XQIROGLQJ VFHQHV YLD
WKH PRRGVWDWHV WKH\ WULJJHU DQG PD\ SXW WKLV VLPXODWLRQ SURFHVV WR D VWRS W\SLFDOO\ ZKHQ VRPH SDUWLFXODU
VFHQH VLJQLILFDQW HQRXJK WR DFWLYDWH DQ XUJH XVXDOO\ D YHU\ JRRG RU D YHU\ EDG VFHQH
6XSSRVH WKDW WKH XQIROGHG VFHQH ZDV D GLVDVWHU WR WKH WKLQNHU 7KHQ LW PD\ DFWLYDWH WKH IHDU XUJH WR
WKH LQGLYLGXDO XUJLQJ WKH SHUVRQ WR IOHH LPPHGLDWHO\ 1RWH WKDW WKH GLVDVWHU KDV QRW \HW KDSSHQHG LQ WKH UHDO
ZRUOG 6R WKLV HDUO\ IOLJKW ZLOO PXFK LQFUHDVH WKH PDUJLQ RI VDIHW\ IRU WKLV ,&$ WKLQNHU &RQVLGHU DQRWKHU
FDVH ZKHQ WKH WLPH SUHVVXUH IRU DFWLQJ LV OHVV DFXWH 7KHQ WKH ,&$ WKLQNHU PD\
SODQ
RQH
V FRXUVH RI DFWLRQ WR
UHDFK WKH XUJHVHW JRDO E\ XVLQJ VLPLODU G\VF VLPXODWLRQ SURFHVVHV 7KH KDOWHG VLPXODWLRQ PD\ EH UHVWDUWHG
IURP WKH EHJLQQLQJ WKLV WLPH ZLWK WKH VHOIG\VF DV RQH RI WKH DFWLYH SDUWLFLSDQWV 7KH DSSUDLVDO PRQLWRU PD\
WU\ YDULRXV VLPXODWLRQ VHTXHQFHV ZLWK WKH VHOI G\VF LQWHUYHQLQJ LQ WKH SURFHVV LQ GLIIHUHQW ZD\V DW GLIIHUHQW
WLPH XQWLO LW ILQGV D SDUWLFXODU LQWHUYHQWLRQ WKDW DFKLHYHV WKH GHVLUHG JRDO 7KLV SDUWLFXODU LQWHUYHQWLRQ RI WKH
VHOIG\VF ZLOO WKHQ EH HPSOR\HG DV WKH DFWLRQ SODQ IRU WKH XUJH DFWLYLW\
, VKDOO GLVFXVV WKLV SODQQLQJ SKDVH RI WKH G\VF VLPXODWLRQ D OLWWOH PRUH LQ GHWDLO ODWHU )RU WKH PRPHQW
OHW PH DGG D IHZ FRPPHQWV RQ WKLV G\VF VLPXODWLRQ SURFHVV WR SUHYHQW PLVXQGHUVWDQGLQJV )LUVW DERXW WKH
VHOIG\VF $Q ,&$ WKLQNHU PXVW KDYH D VHOIG\VF DV WKH VRXUFH RI RQH
V DFWLRQV DQG WKH WDUJHW RI RWKHU REMHFWV
DFWLRQV ZLWKRXW ZKLFK WKH ,&$ FDSDELOLW\ KDV OLWWOH XVH 7KH VHOIG\VF KRZHYHU RFFXSLHV D YHU\ VSHFLDO
SRVLWLRQ DPRQJ WKH ZRUOG RI G\VFV WKH YLUWXDO FHQWHU RI WKH ZRUOG IURP ZKLFK HYHU\ RWKHU REMHFW LV YLHZHG
$QG DV VXFK WKH VHOIG\VF PD\ EH LPDJHOHVV 6R WKH SRVVHVVLRQ RI D VHOIG\VF GRHV QRW LPSO\ WKDW WKH ,&$
WKLQNHU KDV D FRQFHSW RI VHOI
LQ WKH PRGHUQ KXPDQ VHQVH ZKLFK FDQ EH DFTXLUHG E\ DQ ,&$ WKLQNHU RQO\
ZKHQ WKH LQGLYLGXDO EHFRPHV DEOH WR LQWURGXFH D
UHODWLYLW\
LQWR WKH ZRUOG PRGHO LW HQWHUWDLQV PDNLQJ WKH VHOI
VRPHZKDW HTXLYDOHQW WR RWKHU FRQVSHFLILF LQGLYLGXDOV $ FKLPSDQ]HH ZKR VHHPV WR EH DEOH WR LGHQWLI\
RQHVHOI LQ LWV PLUURU LPDJH PD\ OLNHO\ EH RQ WKLV OHYHO DOWKRXJK VKRZLQJ LQWHUHVW RU GLVLQWHUHVW LQ RQH
V
PLUURU LPDJH LV QR GHILQLWH WHVW IRU HLWKHU SURYLQJ RU GLVSURYLQJ WKH LQGLYLGXDO
V SRVVHVVLRQ RI WKH FRQFHSW
OLNH D UHODWLYH VHOI
0\ VHFRQG SRLQW LV DERXW WKH XQLTXHQHVV RI REMHFWG\VFV $V ORQJ DV WKH JHQHUDO SULQFLSOH JRHV D
FODVV RI REMHFWV OLNH DSSOHV PD\ EH UHSUHVHQWHG E\ D VLQJOH G\VF DJDLQ IRU WKH VDNH RI UHGXQGDQF\
FRPSUHVVLRQ WKRXJK WKLV SULQFLSOH GRHV QRW IRUELG IRU VRPH VSHFLDO PHPEHU RI D FODVV KDV D VHSDUDWH G\VF
IURP WKDW RI WKH FODVV 7DNHQ WKLV DVVXPSWLRQ IRU JUDQWHG WKHQ RQH PXVW DOORZ WKDW LPDJHV XQIROGHG E\ WKH
VDPH G\VF LV QRW XQLTXH $Q LQGLYLGXDO PD\ H[SHULHQFH VRPHWLPHV WKDW D JUHHQ DSSOH WXUQV LQWR D GHOLFLRXVO\
ULSH UHG DSSOH EXW LQ RWKHU WLPHV LW PD\ EH EORZQ RII E\ D VWURQJ ZLQG RU HDWHQ E\ D ZRUP 6R WKH FRXUVH DQ
REMHFWG\VF PD\ WDNH LQ LWV VWDWH WUDQVLWLRQ PD\ JHQHUDOO\ KDYH PDQ\ IRUNV DQG WKH SUREDELOLW\ WKDW LW WDNHV
HDFK EUDQFK DW VXFK D IRUN PD\ GHSHQG SULPDULO\ RQ WKH IUHTXHQF\ DQG UHFHQF\ RI WKH LQGLYLGXDO
V
H[SHULHQFH FRUUHVSRQGLQJ WR ZKDW WKDW SDUWLFXODU EUDQFK UHSUHVHQWV 6R E\ TXLFNO\ UHSHDWLQJ WKH VDPH
VLPXODWLRQ SURFHVV PDQ\ WLPHV D VXEMHFWLYH YHUVLRQ RI 0RQWH &DUOR SURFHGXUH RQH PD\ REWDLQ D URXJK
HVWLPDWH RI KRZ PXFK OLNHO\ RQH W\SH RI RXWFRPH REWDLQV FRPSDUHG WR RWKHU RXWFRPHV SURYLGLQJ WKH EDVLV
IRU WKH VXEMHFWLYH SUREDELOLW\ RI REWDLQLQJ WKDW SDUWLFXODU RXWFRPH $V WKH VXEMHFWLYH YDOXH RI HDFK RXWFRPH
LV HVWLPDEOH WKURXJK WKH PRRGVWDWH WKDW RXWFRPH FUHDWHV WKH ,&$ WKLQNHU LQ TXHVWLRQ FDQ PDNH GHFLVLRQV
FRPELQLQJ WKDW YDOXH DQG WKLV VXEMHFWLYH SUREDELOLW\ 7KH SUHFLVLRQ RI WKH VXEMHFWLYH SUREDELOLW\ QHHG QRW EH
YHU\ SUHFLVH LW QHHG WR EH SUHFLVH RQO\ ZKHQ WKH LQGLYLGXDO LV XS DJDLQVW D UDWKHU LPSRUWDQW DQG GHOLFDWH
GHFLVLRQ DQG EHFDXVH RI WKH UDULW\ RI VXFK GHFLVLRQ VLWXDWLRQV WKH ,&$ WKLQNHU ZRXOG XVXDOO\ VSHQG PXFK
WLPH LQ WKLV SUREDELOLW\ HVWLPDWLRQ 1HHGOHVV WR VD\ WKH SUREDELOLW\ RI HDFK HYHQW VHTXHQFH ZLOO VRPHWLPHV
XQGHUJR D GUDVWLF FKDQJH GHSHQGLQJ XSRQ ZKLFK RWKHU REMHFWG\VFV DUH LQWHUDFWLQJ ZLWK WKH REMHFWG\VF LQ
IRFXV 6R WKH VXEMHFWLYH SUREDELOLWLHV DFWXDOO\ LQ XVH ZLOO PDLQO\ EH VXEMHFWLYH FRQGLWLRQDO SUREDELOLWLHV
7RGD 7KH WKLUG SRLQW WR EH PDGH KHUH LV DERXW LPDJHV 7KHUH PD\ EH REMHFWLRQV IURP VRPH UHDGHUV WKDW
WKH\ GR QRW XVH LPDJHV PXFK LQ WKHLU WKLQNLQJ DQG WKDW FRQWUDGLFW P\ DVVXPSWLRQ WKDW WKH G\VF VLPXODWLRQ
SURFHGXUH GLVFXVVHG DERYH LV WKH EDVLF PRGH RI WKLQNLQJ IRU DOO ,&$ WKLQNHUV LQFOXGLQJ WKH KXPDQV 7R
DQVZHU WKLV REMHFWLRQ OHW PH UHIHU WR D VHULHV RI H[SHULPHQWDO VWXGLHV GRQH E\ +DWDQR DQG KLV FROODERUDWRUV
RQ PHQWDO DEDFXV
DV WKH\ VHHP WR SURYLGH D JRRG FOXH DERXW WKH QDWXUH RI LPDJHV ZH XVH LQ RXU WKLQNLQJ
+DWDQR HW DO +DWDQR 2VDZD $EDFXV LV SUDFWLFHG LQ -DSDQ PDLQO\ DV D KREE\ QRZ DQG WKHUH DUH VWLOO DEDFXV FODVVHV ZKHUH H[SHUWV
DUH WHDFKLQJ FKLOGUHQ 5HDOO\ JRRG DEDFXV H[SHUWV XVXDOO\ EHDW GHVN FDOFXODWRU H[SHUWV LQ FRQWHVWV ERWK LQ
VSHHG DQG DFFXUDF\ ,Q WKH DEDFXV FRQYHQWLRQV KHOG UHJXODUO\ SDUWLFLSDQWV XVXDOO\ MRLQ LQ PHQWDO DULWKPHWLF
FRQWHVWV DV ZHOO VLQFH DEDFXV H[SHUWV DUH NQRZQ WR EH JRRG PHQWDO DULWKPHWLFLDQV
LH
WKH\ FDQ GR
DULWKPHWLF WDVNV QHDUO\ DV ZHOO ZLWK RU ZLWKRXW XVLQJ D UHDO DEDFXV 7KH VHFUHW IRU WKLV IHDW ZDV WKDW
DFFRUGLQJ WR +DWDQR DQG KLV FROODERUDWRUV WKH DEDFXV H[SHUWV FDQ QRW RQO\ PDLQWDLQ D PHQWDO LPDJH RI
DEDFXV EXW DOVR PDQLSXODWH LW DV GHIWO\ DV D UHDO DEDFXV VRPHWLPHV HYHQ IDVWHU EHFDXVH LW UHTXLUHV QR ILQJHUV
PRYHPHQWV IRU RSHUDWLRQ
7KLV VNLOO RI XVLQJ PHQWDO DEDFXV RI FRXUVH QHHGV D KDUG SUDFWLFH WR DFTXLUH ,W LV QRW WRR GLIILFXOW
IRU DEDFXV H[SHUWV WR XVH D PHQWDO DEDFXV RI DERXW ILYH GLJLWV EXW RQO\ FRQVWDQW SUDFWLFH DOORZV WKHP WR
LQFUHDVH WKH QXPEHU RI PDQLSXODEOH GLJLWV EH\RQG WKDW OHYHO DW WKH UDWH RI RQH PRUH GLJLW SHU \HDU XS WR WKH
PD[LPXP RI DERXW GLJLWV 2QH RI WKH PDQ\ LQWHUHVWLQJ DVSHFWV RI WKH PHQWDO DEDFXV VNLOO REVHUYHG E\
+DWDQR
V JURXS LV WKDW WKH PHQWDO DEDFXV LV UHSUHVHQWHG LQ WKH EHJLQQLQJ VWDJH E\ D IDLUO\ FRQFUHWH LPDJH
FRPSOHWH ZLWK DQ DEDFXV IUDPH DQG DOO WKDW DQG WKH SHUVRQ WHQGV WR WZLWFK KLV RU KHU ILQJHUV DV LI ZRUNLQJ RQ
D UHDO DEDFXV $V WKH VNLOO LPSURYHV KRZHYHU WKH SDUWV RI WKH PHQWDO DEDFXV XQQHHGHG IRU WKH RSHUDWLRQ OLNH
WKH IUDPH JUDGXDOO\ GURS RXW IURP WKH LPDJH WRJHWKHU ZLWK WKHLU ILQJHU PRYHPHQWV :KHQ WKH\ UHDFK WKH
KLJK OHYHO RI PDVWHU\ HYHQ WKH EHDGV RI WKH DEDFXV GLVDSSHDU IURP WKH LPDJH OHDYLQJ RQO\ VRPH VHQVH RI
EHDG PRYHPHQWV ZKLOH WKHLU ILQJHUV EHFRPH FRPSOHWHO\ VWLOO 'HVSLWH WKLV IDGLQJ RXW RI WKHLU DEDFXV LPDJH
WKHLU SHUIRUPDQFHV DQG VHOIUHSRUWV DWWHVW WKH H[LVWHQFH RI D PHQWDO DEDFXV DV D WRRO WR EH RSHUDWHG XSRQ )RU
LQVWDQFH VXFK DQ H[SHUW FDQ UHDG RII WKH QXPEHU FXUUHQWO\ VKRZQ RQ WKH SHUVRQ
V PHQWDO DEDFXV RI ILIWHHQ
GLJLWV IRUZDUG DQG EDFNZDUG ZLWK QR GLIIHUHQFH LQ VSHHG DQG DFFXUDF\
(YHQ WKRXJK WKH IHDW SHUIRUPHG E\ PHQWDO DEDFXV XVHUV DPD]HV XV LW WHOOV XV PXFK DERXW WKH QDWXUH
RI LPDJHV ZH XVH LQ WKLQNLQJ 7KH\ PD\ VWDUW RXW DV FRQFUHWH VHQVRU\ LPDJHV WKH LQH[RUDEOH KDQG RI
UHGXQGDQF\ FRPSUHVVLRQ ZRUNV RQ WKHP DV WKH\ DUH XVHG UHSHDWHGO\ RIWHQ HOLPLQDWLQJ IURP WKHP DOO GHWDLOV
EXW WKH PRVW HVVHQWLDO IHDWXUHV WKDW DUH UHTXLUHG IRU WKHLU IXQFWLRQV DV G\QDPLF VFKHPDV $OWKRXJK PHQWDO
DEDFXV XVHUV QHHG WR JR WKURXJK KDUG SUDFWLFH WR DFTXLUH WKHLU VNLOO ZH DUH VLPLODUO\ SXWWLQJ WR D KDUG XVH RI
LPDJHV RI SHUVRQV DQG REMHFWV DURXQG XV DQG WKH\ WHQG WR ORVH XQHVVHQWLDO GHWDLOV )RU LQVWDQFH VRPHERG\
YHU\ FORVH WR \RX OLNH \RXU VSRXVH <RX PD\ EH DEOH WR WHOO YHU\ OLWWOH DERXW \RXU VSRXVHV SK\VLFDO IHDWXUHV
LI DVNHG DXEXUQ KDLU EODFN H\HV PHGLXP KHLJKW D OLWWOH RQ WKH SOXPS VLGH DQG VR RQ EXW QRW PXFK PRUH
(YHQ WKRXJK WKDW LV DOO \RX FDQ H[WUDFW IURP WKH LPDJH RI \RXU VSRXVH IRU WKH PRPHQW LW GRHV QRW PHDQ WKDW
\RX PLVWDNH HYHU\ SHUVRQ ZKR ILWV WKDW GHVFULSWLRQ DV \RXU VSRXVH (YHQ LI \RX DUH XQDEOH WR SXW LQWR ZRUGV
PRVW RI SK\VLFDO IHDWXUHV RI \RXU VSRXVH \RX VWLOO SRVVHVV LQIRUPDWLRQ HQRXJK WR LGHQWLI\ WKH VSRXVH
XQHUULQJO\ DOPRVW XQGHU DQ\ FRQGLWLRQV $QG WKDW G\VF LPDJH ZRXOG WDNH RQ WKH FKDUDFWHULVWLF DQJU\ IDFH RI
WKH VSRXVH LI \RX LPDJLQH GHOLEHUDWHO\ LQVXOWLQJ WKH VSRXVH EH\RQG D FHUWDLQ OLPLW 6R , DVVXPH WKDW
HYHU\ERG\ KDV VNLOOV RI XVLQJ G\VFV IRU DOPRVW HYHU\ IDPLOLDU REMHFWV ZKLFK DUH QHDUO\ DV JRRG DV WKH VNLOOV
RI PHQWDO DEDFXV XVHUV H[FHSW WKDW WKH IRUPHU VXUSULVHV QR RQH VLQFH LW LV RQO\ D SDUW RI RXU GDLO\ WKLQNLQJ
9DULRXV UROHV RI ODQJXDJH LQ WKLQNLQJ DQG LPDJLQDWLRQ
+DYLQJ WKH PHWDWRRO RI ODQJXDJH QDWXUDOO\ KHOSV VXFK G\VF RSHUDWLRQV LQ WKH PLQG LQ IDU PRUH ZD\V
WKDQ RQH 2QH RI WKH HDUOLHVW LQQRYDWLRQV WKH KXPDQV PDGH WRZDUG GHYHORSLQJ ODQJXDJHV ZRXOG KDYH EHHQ WR
DWWDFK VRPH GHILQLWH
VSHHFK WDJV
RU
QDPHV
DIIL[HG WR PDMRU REMHFWV LQ D KDELWDW RI D KXPDQ WULEH FRPPRQO\
XVHG E\ DOO WKH PHPEHUV RI WKH WULEH $IIL[LQJ
KHUH PHDQV WKDW WKH DXGLWRU\ LPDJH RI WKH VSHHFK WDJ RI HDFK
REMHFW LV
DVVRFLDWHG
LQ WKH PLQG RI HDFK JURXS PHPEHU ZLWK WKH SHUVRQ
V G\VF RI WKH REMHFW 7KH PHULW RI
KDYLQJ FRPPRQ QDPHV IRU WKH REMHFWV LPSRUWDQW IRU D KXPDQ WULEH LV REYLRXV ZKHQ RQH RI WKHP VKRXWV WKH
QDPH RI D FHUWDLQ REMHFWV WKH DWWHQWLRQ RI WKH WULEH PHPEHUV ZLOO EH WXUQHG WR WKH REMHFW QDPHG DQG LQ WKH
PLQG RI HDFK RI WKHP WKH G\VF RI WKH REMHFW ZLOO EH DFWLYDWHG (YHQ WKRXJK WKH GLVFV WKXV DFWLYDWHG PD\ QRW
EH H[DFWO\ LGHQWLFDO DV HDFK RI WKH WULEH PHPEHUV ZRXOG KDYH KDG VRPHZKDW GLIIHUHQW SHUVRQDO H[SHULHQFHV
ZLWK WKH REMHFW WKH\ PD\ VWLOO EH TXLWH VLPLODU ,Q RWKHU ZRUGV WKH WKRXJKW SURFHVVHV JRLQJ RQ LQ WKH PLQGV
RI DOO WKH WULEH PHPEHUV ZRXOG EH TXLWH DOLNH SURYLGLQJ D JURXQG ZRUN IRU WKHLU FRRSHUDWLYH DFWLRQV DERXW
WKH REMHFW LI RQH VXFK LV QHFHVVDU\
/HW PH OHDYH WKH FRPPXQLFDWLRQDO UROHV RI ODQJXDJH IRU D PRPHQW DQG FRQFHQWUDWH RQ WKH IXQFWLRQ
RI ODQJXDJH LQ SHUVRQDO WKLQNLQJ DV ODQJXDJH KDV LWV RZQ XVH LQ VROLWDU\ SHUVRQ
V WKLQNLQJ :KHQ , VDLG WKDW
WKH QDPH RI DQ REMHFW LV DVVRFLDWHG ZLWK WKH G\VF RI WKH VDPH REMHFW , PHDQW WKDW WKH QDPH ZDV QRW D SDUW RI
WKH REMHFW G\VF 6LQFH DVVRFLDWLRQ LV RFFDVLRQDOO\ ORVW \RX PD\ WHPSRUDULO\ IRUJHW WKH QDPH RI \RXU FORVH
IULHQG VWLOO EHLQJ DEOH WR WKLQN DERXW WKH SHUVRQ ZLWKRXW DQ\ WURXEOH 1DPHV WKHUHIRUH PXVW EH FRQVLGHUHG
DV DQRWKHU NLQG RI HQWLWLHV ZKLFK PD\ VWLOO EH VFKHPDV EXW QRW G\QDPLF 7KLV VWDELOLW\ LV SHUKDSV RQH RI WKH
JUHDWHVW DVVHWV RI QDPHV DQG VXEVHTXHQWO\ RI ODQJXDJHV DV WKH\ QLFHO\ VHUYH DV VROLG EDFNERQHV WR VXSSRUW
WKH SULQFLSDOO\ IOXLG G\QDPLF VFKHPDV WKH ODWWHU GD\ KXPDQV FRXOG QHYHU EH DEOH WR EXLOG ODUJH HGLILFHV RI
NQRZOHGJH DQG EHOLHIV VXFK DV UHOLJLRXV DQG VFLHQWLILF PRGHOV RI WKH ZRUOG ZLWKRXW WKH VWDELOLW\ SURYLGHG E\
ODQJXDJHV
7KHUH DUH PDQ\ ODUJH VWULGHV WDNHQ IRU WKH ODQJXDJH WR HYROYH IURP D IHZ PHUH QDPHV RI REMHFWV WR
IXOOIOHGJHG ODQJXDJHV ZH DUH XVLQJ WRGD\ DV KDSSHQHG LQ QHDUO\ HYHU\ EUDQFK RI DUWLILFLDO HYROXWLRQ 6R
VNLSSLQJ LQWHUPHGLDU\ VWDJHV OHW PH QRZ LQYHVWLJDWH DERXW WKH IXQFWLRQ RI VWULQJV RI ZRUGV FDOOHG
VHQWHQFHV
WKH IXQFWLRQ WKH\ SOD\ LQ RXU WKLQNLQJ SURFHVV OLNH WKH RQH GHVFULEHG DERYH )RU WKH SXUSRVH RI REWDLQLQJ
VRPH FOXHV IRU WKH LQYHVWLJDWLRQ OHW XV LPDJLQH ZKDW KDSSHQV LQ WKH PLQG RI D FKLOG ZKR LV UHDGLQJ RU
OLVWHQLQJ WR WKH FKLOG
V PRWKHU WHOOLQJ D IDLU\ WDOH VWDUWLQJ ZLWK D VHQWHQFH 2QFH XSRQ D WLPH WKHUH OLYHG D
SUHWW\ SULQFHVV LQ DQ ROG FDVWOH ,I WKH FKLOG XQGHUVWRRG WKH VHQWHQFH LW ZRXOG PHDQ WKDW WKH FKLOG VXFFHHGHG
LQ VHWWLQJ XS DQ LPDJLQDU\ VFHQH WKDW FRUUHVSRQGHG WR WKH
FRPPDQGLQJ LQVWUXFWLRQ
JLYHQ E\ WKH VHQWHQFH E\
DFWLYDWLQJ DQG SURSHUO\ DUUDQJLQJ VRPH SDUWLFXODU G\VFV VWRUHG LQ WKH PLQG RI WKH FKLOG ,I WKH FKLOG IDLOHG LQ
WKLV WDVN LW ZRXOG XVXDOO\ PHDQ WKDW WKH FKLOG FRXOG QRW ILQG D SURSHU G\VF DVVRFLDWHG ZLWK VRPH RI WKH
ZRUGV RU WKH RUGHULQJ RI ZRUGV DQG WKH FKLOG ZRXOG DVN D TXHVWLRQ 7R WKH TXHVWLRQ WKH PRWKHU ZLOO JLYH
DQRWKHU VHQWHQFH ZKLFK DOORZV WKH FKLOG WR IDEULFDWH WKH PLVVLQJ G\VF IURP WKRVH WKH FKLOG LV VXSSRVHG WR
RZQ
1RZ OHW PH JHW WR PRUH GHWDLOV RI WKLV VHQWHQFH XQGHUVWDQGLQJ SURFHVV ,Q WKH DERYH VHQWHQFH
SULQFHVV
DQG FDVWOH
DUH ERWK REMHFW QDPHV DQG WKH FKLOG EHLQJ IDPLOLDU ZLWK IDLUO\ WDOHV PD\ HDVLO\ ILQG
WKH DSSURSULDWH G\VFV DVVRFLDWHG WR WKHP 6RPH RWKHU QDPHV LQ WKH VHQWHQFH PRGLILHUV OLNH SUHWW\
DQG ROG
DUH QRW REMHFW QDPHV 6LQFH WKH IXQFWLRQ RI DOO QDPHV LV WR OHW WKH PLQG DFFHVV WR VRPH SDUW RI WKH VWRUHG
NQRZOHGJH WKHVH QRQREMHFW QDPHV DUH DOVR H[SHFWHG WR DFWLYDWH VRPH VFKHPDV DVVRFLDWHG ZLWK WKHP 7KH
IXQFWLRQ RI WKHVH DGMHFWLYH VFKHPDV
LV DSSDUHQWO\ WR DVVLJQ D FHUWDLQ DWWULEXWH WR WKH REMHFW G\VF RU WR
UHSODFH LWV GHIDXOW DWWULEXWH E\ WKH DWWULEXWH GHVLJQDWHG E\ HDFK DGMHFWLYH
7KHUH LV DOVR D YHUE OLNH OLYH
LQ WKH DERYH VHQWHQFH $ YHUE VFKHPD
GHVLJQDWHV HLWKHU WKH DFWLRQV
IRU WKH REMHFW G\VF WR WDNH RU WKH LQWHUDFWLYH UHODWLRQV WKDW VKRXOG KROG DPRQJ WKH DFWLYDWHG REMHFW G\VFV
7KH YHUE VFKHPD /LYH
IRU LQVWDQFH GHILQHV D VHW RI FRQVWUDLQWV XQGHU ZKLFK WKH SULQFHVV GLVF RSHUDWHV LQ
UHODWLRQ WR WKH FDVWOH G\VF 7KHUH DUH PDQ\ RWKHU W\SHV RI VFKHPDV FRUUHVSRQGLQJ WR YDULRXV SDUWV RI VSHHFK
EHVLGHV WKH QRXQV DQG OHW PH FDOO WKHP DOO WRJHWKHU DV
RSHUDWRU
VFKHPDV
7RGD 7KH RSHUDWRU
VFKHPDV DFWLYDWHG E\ D JLYHQ VHQWHQFH ZLOO ZRUN RQ WKH REMHFW G\VFV DOVR DFWLYDWHG E\ WKH VHQWHQFH RU
PRGLI\ IXQFWLRQV RI RWKHU RSHUDWRU VFKHPDV DOO DFFRUGLQJ WR WKH FRPSOLFDWHG JUDPPDWLFDO UXOHV RI WKH
ODQJXDJH DQG LI HYHU\ LQVWUXFWLRQ FRQWDLQHG LQ WKH VHQWHQFH KDV ZRUNHG VXFFHVVIXOO\ D
PLQGVFDSH
ZLOO EH
HVWDEOLVKHG LQ WKH OLVWHQHU
V RU WKH UHDGHU
V PLQG ZLWKLQ ZKLFK DOO WKH DFWLYDWHG GLVFV ZLOO EH FRPELQHG ZLWK
LQWHUDFWLYH UHODWLRQV DV D VLQJOH ZKROH UHDG\ WR GHYHORS G\QDPLFDOO\ LQWR WKH QH[W PHQWDO VFHQH 7KH
SULQFLSDO YHUE RIWHQ SOD\V WKH FULWLFDO SDUW LQ SXWWLQJ DOO WKH G\VFV WRJHWKHU DQG VHWWLQJ WKH ZKROH LQ
UHDGLQHVV
7KH FUHDWLRQ RI WKHVH RSHUDWRU VFKHPDV DV PHQWDO WRROV LV DQ LQQRYDWLRQ RI WUHPHQGRXV VLJQLILFDQFH
QHDUO\ DV LPSRUWDQW DV WKH HPHUJHQFH RI WKH ,&$ WKLQNHU ZKR WKLQNV XVLQJ G\VFV 2QH RI WKH LPPHGLDWH
PHULWV RI KDYLQJ WKHP LV WKDW RQH FDQ LGHQWLI\ DQG DFWLYDWH D G\VF DPRQJ D JUHDW PDQ\ ZLWKRXW KDYLQJ
DVVLJQLQJ LQGLYLGXDO QDPHV IRU HDFK RI WKHP 7KLV RSHQV WKH ZD\ IRU D SHUVRQ WR NHHS D UHDOO\ ODUJH QXPEHU
RI G\VFV ZLWKRXW WD[LQJ WKH PHPRU\ WRR KHDYLO\ IRU UHPHPEHULQJ WKHLU LQGLYLGXDO QDPHV DV WKH XWLOL]DWLRQ RI
FRPELQDWLRQV
RI ZRUGV LQFUHDVHV WKH QXPEHUV RI LGHQWLILDEOH G\VFV H[SRQHQWLDOO\ )XUWKHUPRUH RQH QHHG QRW
SRVVHVV DOO RI WKH G\VFV WKXV PDGH LGHQWLILDEOH DV RQH PD\ IDEULFDWH D QHZ G\VF IURP ROG G\VFV LI SRVVLEOH
DQG QHFHVVDU\ 6R WKH XVH RI RSHUDWRU VFKHPDV LV DQRWKHU PHDQV IRU UHGXQGDQF\ FRPSUHVVLRQ RI D JUHDW
HIILFLHQF\
7KHUH DUH IHZ FOXHV IRU KRZ WKH KXPDQV FRXOG KDYH FUHDWHG VXFK PHQWDO WRROV OLNH RSHUDWLRQDO
VFKHPDV 1RWH DW WKLV SRLQW WKDW REMHFW G\VFV DQG RSHUDWRU VFKHPDV DUH HQWLUHO\ GLIIHUHQW HQWLWLHV HYHQ WKRXJK
WKH\ DUH ERWK PHQWDO WRROV IRU WKLQNLQJ '\VFV DUH G\QDPLF DQG PD\ FKDQJH LWV VWDWH DXWRQRPRXVO\ %XW
RSHUDWRU VFKHPDV DUH QRQG\QDPLF HYHQ YHUE VFKHPDV DUH &RQVLGHU IRU LQVWDQFH WKH YHUE VFKHPD
FRUUHVSRQGLQJ WR WKH ZRUG GLVDSSHDU
:KHQ WKH GLVDSSHDU
VFKHPD LV DSSOLHG WR DQ REMHFW G\VF LQ WKH
PLQGVFDSH E\ D VHQWHQFH WKH REMHFW G\VF PD\ GLVDSSHDU IURP WKH VFHQH EXW WKH GLVDSSHDU
RSHUDWRU PD\ EH
UHSHDWHGO\ XVHG ZLWK GLIIHUHQW REMHFW G\VFV XVXDOO\ ZLWK WKH VDPH HIIHFW $SSDUHQWO\ RSHUDWRU VFKHPDV DUH
REWDLQHG E\ GLVPDQWOLQJ REMHFW G\VFV LQWR DFWLRQV DWWULEXWHV DQG VR RQ EXW KRZ VXFK D IHDW OLNH GLVPDQWOLQJ
G\VF FRXOG KDYH EH GRQH UHPDLQV DV D P\VWHU\
*RLQJ EDFN WR WKH VHQWHQFH RQ D SUHWW\ SULQFHVV OLYLQJ LQ DQ ROG FDVWOH XVHG DERYH OHW PH FRQVLGHU
WKH IXQFWLRQ RI D ZKROH VHQWHQFH DV DQ LQVWUXFWLYH FRPPDQG 7KLV RSHQLQJ VHQWHQFH LV REYLRXVO\ IRU VHWWLQJ
WKH VWDJH IRU D VWRU\ :KDW LW GRHV KRZHYHU LV QRW MXVW LQWURGXFLQJ WKH PDMRU DFWRUV RI WKH FRPLQJ VWRU\ 7KH
SDVW WHQVH XVHG LQ LW WHOOV WKH OLVWHQHU WKDW WKH FRPLQJ VWRU\ ZLOO EH VRPHWKLQJ DERXW D ZRUOG LQ WKH SDVW 0RUH
WHOOLQJ WKDQ WKH SDVW WHQVH XVHG LV WKH RSHQLQJ FOLFKp 2QFH XSRQ D WLPH ZKLFK LQGLFDWHV WKDW WKH ZRUOG WKH
VWRU\ LV DERXW QRW WKH UHDO ZRUOG LQ WKH SDVW EXW D IDQWDV\ ZRUOG LQ ZKLFK WKH UHDO ZRUOG UXOHV GR QRW
QHFHVVDULO\ DSSO\
7KH IDQWDV\ ZRUOG LV REYLRXVO\ D SURGXFW RI
LPDJLQDWLRQ
%XW ZKDW LV LPDJLQDWLRQ" ,I LW PHDQV DQ
PHQWDO RSHUDWLRQ WKDW SURGXFHV LPDJHV LQ WKH PLQG RI WKLQJV WKDW DUH QHLWKHU UHWULHYHG IURP PHPRU\ RU
FXUUHQWO\ EHLQJ REVHUYHG WKH ,&$ WKLQNLQJ LV LPDJLQDWLRQ LWVHOI DV G\VFV DUH XQIROGLQJ WKH VFHQHV WKDW PD\
RFFXU LQ WKH IXWXUH 6R WKH LPDJLQDWLRQ LQ WKLV VHQVH LV WKH EDVLF SURFHVV RI WKLQNLQJ XSRQ ZKLFK ERWK VHULRXV
WKLQNLQJ DQG IDQWDVL]LQJ GHSHQG 7KH GLIIHUHQFH EHWZHHQ WKHVH WZR PHQWDO SURFHVVHV VHHPV WR OLH RQO\ LQ WKH
NLQG RI
FRQVWUDLQWV
ZRUOG FRQVWUDLQWV
DSSOLHG WR WKH G\VF RSHUDWLRQV ,Q WKH VHULRXV WKLQNLQJ SURFHVV ZKDW WR EH FDOOHG WKH
DUH VXSSRVHG WR DSSO\
LH
UHDO
G\VFV VKRXOG JHQHUDOO\ VSHDNLQJ REH\ WKH ODZV RI WKH UHDO
ZRUOG VLQFH RWKHUZLVH WKH ,&$ WKLQNLQJ ZRXOG KDYH KDG OLWWOH SUDFWLFDO XVH :KHWKHU DQLPDOV DQG HDUO\
KXPDQV KDG DFWXDOO\ REVHUYHG WKHVH UHDO ZRUOG FRQVWUDLQWV LV DQ LVVXH QRW WR EH ZRUULHG WKH G\VFV WKH\ XVHG
DUH QRWKLQJ EXW KHDYLO\ FRQGHQVHG YHUVLRQV RI UHDO ZRUOG SURFHVVHV DQG WKHUHIRUH WKH VWDWH WUDQVLWLRQV WKHLU
G\VF FRXOG KDYH XQGHUJRQH ZRXOG VHOGRP GHYLDWHG IDU IURP SRVVLEOH UHDO ZRUOG HYHQWV ,Q RWKHU ZRUGV
DQLPDOV DQG HDUO\ KXPDQV ZLWKRXW DQ DGYDQFH ODQJXDJH GLG QRW DQG VWLOO GR QRW PXFK IDQWDVL]H
6R LQWHUHVWLQJO\ HQRXJK WKH ZRUOG RI IDQWDVLHV LV DQ RXWFRPH RI ODQJXDJH RU PRUH VSHFLILFDOO\
FUHDWHG DV D E\SURGXFW RI WKH RSHUDWRU VFKHPD WHFKQRORJ\ $V PHQWLRQHG DERYH RQH FDQ FUHDWH DQ HQRUPRXV
QXPEHU RI SRWHQWLDO LGHQWLILHUV RI G\VFV E\ JUDPPDWLFDOO\ FRPELQLQJ YDULRXV RSHUDWRU VFKHPDV VRPH RI
ZKLFK PD\ QRW H[LVW LQ WKH OLVWHQHU
V PLQG :KHQ RQH VXFK GHVFULSWLRQ LV JLYHQ LQ FRPPXQLFDWLRQ WKH
OLVWHQHU LV XVXDOO\ H[SHFWHG WR IDEULFDWH RQH VXFK G\VF LQ WKH PLQG XVLQJ WKH H[LVWLQJ G\VFV IRU WKH HIILFLHQF\
RI FRPPXQLFDWLRQ 6RPHWLPHV WKH OLVWHQHU PD\ VXFFHHG LQ WKLV DQG VRPHWLPHV IDLO DQG LQ WKH ODWWHU FDVH WKH
OLVWHQHU XVXDOO\ DVN IRU D IXUWKHU H[SODQDWLRQ 6RPHWLPHV WKH OLVWHQHU PD\ VXFFHHG LQ IDEULFDWLQJ RQH EXW
ILQGV WKDW VXFK REMHFW GRHV QRW H[LVW LQ WKH UHDO ZRUOG
6XSSRVH WKDW LQ WKH DERYH IDLU\ WDOH H[DPSOH WKH ILUVW VHQWHQFH LV IROORZHG E\ VXFK D VHQWHQFH DV
2QH GD\ WKH SULQFHVV VDZ D
ZLQJHG KRUVH
(YHQ ZLWKRXW DQ\ SUHYLRXV NQRZOHGJH DERXW ZLQJHG KRUVHV
WKH FKLOG ZRXOG KDYH QR WURXEOH LQ FRQVWUXFWLQJ WKH G\VF IRU D ZLQJHG KRUVH ZKLFK LV SULPDULO\ D KRUVH EXW
KDYH D SDLU RI ZLQJV RQ WKH EDFN DQG EHVLGHV DFWLQJ OLNH D KRUVH LW PD\ DOVR IO\ 7KH FKLOG PD\ DOVR NQRZ
WKDW WKHUH DUH QR VXFK FUHDWXUHV DV ZLQJHG KRUVHV LQ WKH UHDO ZRUOG EXW GRHV QRW FDUH EHFDXVH WKH VWRU\ LV
DERXW WKH IDQWDV\ ZRUOG ZKHUH FRQVWUDLQWV DUH PXFK ZHDNHU WKDQ WKH UHDO ZRUOG 1RZ VXSSRVH WKDW LQVWHDG
RI WKLV FKLOG LW LV \RX ZKR KHDUG VRPHERG\ WDONLQJ DERXW D ZLQJHG KRUVH LQ \RXU RIILFH , VDZ D ZLQJHG
KRUVH WKLV PRUQLQJ <RX ZRXOG ORRN DW WKH SHUVRQ WR GHFLGH ZKHWKHU KH LV MRNLQJ RU FUD]\
7KH UHDO ZRUOG FRQVWUDLQWV DUH WKH SHUYDVLYH GHIDXOW FRQVWUDLQWV ZH XVH LQ FRPPXQLFDWLRQ HVSHFLDOO\
ZKHQ ZH DUH WDONLQJ EXVLQHVV DQG WKH\ H[FOXGH DV D SULQFLSOH DOO XQUHDO WKLQJV WR EH PHQWLRQHG LQ
FRPPXQLFDWLRQ DV WKH\ VHUYH QR SUDFWLFDO SXUSRVHV 1HYHUWKHOHVV WKHUH REYLRXVO\ ZHUH VRPHRQH ZKR
VWDUWHG WR WKLQN DERXW VXFK XQUHDO WKLQJV VXFK DV D ZLQJHG KRUVH RU D ZLQJHG SHUVRQ 7KHUH DUH DW OHDVW WZR
SRVVLEOH FDXVHV WKDW PDGH WKLV KDSSHQ 7KH ILUVW SRVVLELOLW\ LV WKDW D SHUVRQ KDG QRWKLQJ VHULRXV WR WKLQN
DERXW ZKHQ VXFK DQ XQUHDO G\VF KDSSHQHG WR KDYH IDEULFDWHG LQ WKH SHUVRQ
V PLQG 6R LQVWHDG RI GLVFDUGLQJ
WKH G\VF RXWULJKW WKH SHUVRQ IROORZHG WKURXJK WKH SURFHVV WKH IDEULFDWHG G\VF XQIROGHG $ ZLQJHG KRUVH LV
IO\LQJ :K\ QRW SXW \RXUVHOI WKH VHOIG\VF RQ WKH EDFN RI WKLV IO\LQJ KRUVH &KLOGUHQ XVXDOO\ VWDUW VSLQQLQJ
WKHLU IDQWDVWLF LPDJLQDWLRQ WKLV ZD\ DV WKH\ RIWHQ KDYH QR VHULRXV WKLQNLQJ WR PDNH DQG WKH\ DUH DOVR GULYHQ
E\ DQ LQWHQVH FXULRVLW\ XUJH
7KH VHFRQG SRVVLEOH FDXVH KRZHYHU LV PRUH SRWHQW DQG WKDW LV WKH IUDJLOLW\ RI WKH ERUGHUV EHWZHHQ
WKH UHDO ZRUOG DQG WKH IDQWDV\ ZRUOG :H WKH GHQL]HQV RI WKH PRGHUQ ZRUOG VHHP WR SRVVHVV D IDLUO\ VROLG
LGHD DERXW ZKDW WKH UHDOLW\ LV 6WLOO WKHUH DUH TXLWH D IHZ SHRSOH ZKR EHOLHYH LQ WKH H[LVWHQFH RI ZLQJHG
SHUVRQV FDOOHG DQJHOV VRPH VDWDQV DV ZHOO DQG ZKDW LV WKH GLVWLQFWLRQ EHWZHHQ ZLQJHG SHUVRQV DQG ZLQJHG
KRUVHV" -XVW JRLQJ EDFN D IHZ FHQWXULHV ZH ILQG DQ HUD ZKHQ WKH H[LVWHQFH RI DQJHOV ZDV D FRPPRQ EHOLHI
RI FRPPXQLWLHV ZKHUH GRXEWHUV ZHUH SHUVHFXWHG DQG VRPH VFKRODUV VHULRXVO\ GLVFXVVHG KRZ PDQ\ DQJHOV
FRXOG GDQFH RQ D SLQKHDG
$QLPDOV DQG HDUO\ KXPDQV ZRXOG QRW KDYH QHHGHG UHDOLW\ FRQVWUDLQWV ZKHQ WKHLU G\VF RQO\ SOD\HG
RXW RQO\ WKHLU RZQ H[SHULHQFHV HYHQ KRZHYHU KHDYLO\ HGLWHG (YHQ FKLPSDQ]HHV ZRXOG QRW LPDJLQH ZLQJHG
FKLPSDQ]HHV EHFDXVH WKH\ KDYH QR FKDQFH RI WKLQNLQJ DERXW VXFK DQ H[WUDRUGLQDU\ HQWLWLHV )RU WKH KXPDQV
KRZHYHU D FRQIXVLRQ VWDUWHG ZKHQ WKH\ LQYHQWHG D ODQJXDJH ZLWK LWV RSHUDWRU VFKHPDV DV FRPELQDWLRQV RI
G\VFV DQG RSHUDWRU VFKHPDV FRXOG KDYH SURGXFHG DQ\ QXPEHU RI DUWLILFLDO IDEULFDWHG G\VFV DQG WKH UHDOLW\
FRQVWUDLQWV VKRXOG KDYH EHFRPH D GLUH QHFHVVLW\ WR WKH WKLQJV DQG HYHQWV GHVFULEHG E\ ODQJXDJH 7KH
ERUGHUOLQH EHWZHHQ UHDO DQG XQUHDO KRZHYHU VKRXOG KDYH EHHQ WHQXRXV DW EHVW HVSHFLDOO\ EHFDXVH ODQJXDJH
DOORZHG WKH KXPDQV MRLQWO\ EXLOG FDXVDO PRGHOV RI WKH ZRUOG RI D ODUJH VFDOH
7KH EHQHILW EURXJKW E\ D ODUJH VFDOH FDXVDO PRGHO DERXW WKH H[WHUQDO ZRUOG LV LQGHHG JUHDW DV KDYLQJ
RQH VXFK LV SUHUHTXLVLWH WR KDYLQJ DQ HIIHFWLYH FRQWURO SRZHU RYHU WKH H[WHUQDO HYHQWV 7KH WURXEOH ZLWK VXFK
D PRGHO LV WKDW LW NHHSV ILQGLQJ PLVVLQJ FDXVHV WR REVHUYDEOH HIIHFWV 7KH HDUO\ KXPDQV ZKR VWDUWHG WR XVH D
ODQJXDJH PXVW KDYH EHHQ ZRUULHG PXFK DW WKHLU LQDELOLW\ WR ILQGLQJ JRRG FDXVHV IRU PDQ\ QDWXUDO
SKHQRPHQD :K\ WKH ZHDWKHU LV VR IRXO WKLV ZLQWHU" /DQJXDJH KRZHYHU ZRXOG KDYH KHOSHG WKHP WKHUH
HDVLO\ MXVW E\ FRPELQLQJ D IHZ RSHUDWRU VFKHPD VXFK DV YHU\ SRZHUIXO DQG XQVHHQ ZLWK D SHUVRQ G\VF RQH
FRXOG KDYH JRWWHQ DW D IDEULFDWHG G\VF RI XQVHHQ SRZHUIXO KXPDQOLNH HQWLW\ ZKR ZDV LQ D IRXO PRRG $V
VXFK DQ HQWLW\ ILW LQWR WKHLU FDXVDO PRGHO VR QLFHO\ WKDW WKH\ EHOLHYHG LWV H[LVWHQFH DV D SDUW RI UHDOLW\ DQG
JDYH WKHP DQ DFWLRQ SODQ WR FRQWURO WKH EDG ZHDWKHU 3ODFDWH WKH GHLW\ ZLWK RIIHULQJV
6R SHRSOH ZRXOG KDYH DFTXLUHG UHOLJLRQV UDWKHU HDUO\ VLQFH WKH\ JRW ODQJXDJH %HVLGHV UHOLJLRQV
RWKHU NLQGV RI LPDJLQDWLYH VWRU\WHOOLQJ VKRXOG KDYH EHFRPH UDWKHU SRSXODU VRRQ 1RWH WKDW ZKDW
GLVWLQJXLVKHV LPDJLQDWLRQ IURP VHULRXV WKLQNLQJ LV WKDW WKH FRQVWUDLQWV RSHUDWLQJ RQ WKH G\VFV RSHUDWLQJ LQ
WKH IRUPHU DUH D OLWWOH OHVV VWULQJHQW WKDQ LQ WKH IRUPHU :KHQ WKH UHDOLW\ VWDQGDUGV WKHPVHOYHV ZHUH
VRPHZKDW VKDN\ KRZHYHU LPDJLQDWLYH VWRULHV VKRXOG QRW MDU ZLWK SHRSOH
V EHOLHIV WRR PXFK 5DWKHU RQ WKH
FRQWUDU\ WKHVH VWRULHV WROG DERXW WKH ERUGHUODQG RI WKH SHRSOH
V PHQWDO UHDOP RI UHDOLW\ ZKHUH WKHLU FXULRVLW\
ZDV SLTXHG PRVW 6R OLNH ZKHQ SHRSOH OLVWHQHG WR WKH LQFUHGLEOH VWRULHV WROG E\ D WUDYHOHU IURP D IDU RII ODQG
WKH\ PLJKW KDYH OLVWHQHG WR WKH ZHOO IDEULFDWHG VWRULHV KDOI LQ EHOLHI DQG KDOI LQ GLVEHOLHI IDVFLQDWHG LQ HLWKHU
FDVH DQG JRRG VWRULHV FRXOG KDYH EHHQ LQWHJUDWHG LQWR WKHLU VKDUHG EHOLHIV OLNH LQ WKH FDVH RI OHJHQGV DQG
WKXV KDYH FRPH WR GHILQH WKHLU QHZ UHDOLW\
1RWH WKDW WKHVH DUH QRW WKLQJV WKDW KDSSHQHG LQ WKH ORQJ SDVW ,W LV VWLOO KDSSHQLQJ HYHQ PRUH
YLJRURXVO\ WRGD\ $OWKRXJK WKH UHDOLW\ ZH SHUFHLYH LW QRZ LV IDU PRUH VROLG DQG VRSKLVWLFDWHG WKDQ LW ZDV LQ
SUHKLVWRU\ PDQ\ SDUWV RI LW FDQ EH XSWXUQHG HDVLO\ E\ D SDUDGLJP FKDQJH LQ RQH RI WKH EUDQFKHV RI VFLHQWLVWV
DQG VFLHQWLVWV DW OHDVW JRRG RQHV DUH GUHDPHUV ZRUNLQJ LQ WKLV ERUGHUODQG ZKLFK KDV WXUQHG RXW WR EH D
WUHDVXUH KRXVH IRU QHZ LGHDV 7KH FDVH RI LQYHQWRUV PD\ SURYLGH D EHWWHU FDVH LQ SRLQW )RU LQVWDQFH WKH LGHD
RI D ZLQJHG SHUVRQ
QRW DQ DQJHO EXW RQH
V VHOI IO\LQJ ZLWK VRPH NLQG RI DUWLILFLDO ZLQJV KDG NHSW FDSWXULQJ
LQYHQWRUV
IDQFLHV IRU D ORQJ WLPH
7KLV FDSWXULQJ RQH
V IDQF\
XVXDOO\ LPSOLHV WKH DFWLYDWLRQ RI WKH
GUHDPUHDOL]DWLRQ
XUJH PHQWLRQHG
HDUOLHU WRJHWKHU ZLWK WKH FXULRVLW\ DQG WKH FKDOOHQJH XUJHV DV WKH W\SLFDO XUJHV WKDW PDNH WKH KXPDQV DV
DFWLYH FRSHUV 7KH KLGGHQ SXUSRVH RI WKH GUHDP UHDOL]DWLRQ XUJH LV YHU\ VLPLODU WR WKH RWKHU WZR XUJHV
LH
WKH H[SDQVLRQ RI WKH UHDOP RI KXPDQ DFKLHYHPHQWV 1RWH WKDW WKH SODFH ZKHUH WKHVH IDQF\ LGHDV RU GUHDPV
DUH IRXQG LV XVXDOO\ LQ WKH ERUGHUODQGV RI WKH ODQGV RI UHDOLW\ DQG VLQFH WKH ERUGHUOLQHV DUH DFWXDOO\ UDWKHU
IX]]\ WKHUH PD\ EH D UHDO SDWKZD\ DFURVV WKH ERUGHU WKDW PDNHV WKH GUHDP FRPH WUXH 6R ILUVW SHRSOH URDP
LQ WKH IDQWDV\ ODQG GULYHQ E\ WKH FXULRVLW\ XUJH IRU WKH SXUH IXQ RI LW 7KHQ WKH\ ZLOO RFFDVLRQDOO\ HQFRXQWHU
LQWHUHVWLQJ LPDJLQDU\ VWDWHV WKDW WHPSRUDULO\ HODWH RQH
V PRRGVWDWH OLNH IO\LQJ LQ WKH VN\ ZLWK DUWLILFLDO
ZLQJV
1RW WKDW HYHU\RQH ZKR IDQWDVL]HG DERXW RQHVHOI IO\LQJ DFWLYDWHV WKH GUHDPUHDOL]DWLRQ XUJH XQOHVV
WKH SHUVRQ VHHV D SRVVLELOLW\ D QRQ]HUR VXEMHFWLYH SUREDELOLW\ IRU ILQGLQJ D UHDO SDWKZD\ IURP WKH GUHDP WR
UHDOLW\ %LUGV IO\ ZLWK WKHLU ZLQJV :KDW LI , PDNH ELJ HQRXJK ZLQJV WR FDUU\ PH XS LQ WKH VN\" $QG
WUDJHGLHV ZRXOG KDYH EHIDOOHQ RQ QXPHURXV IRROKDUG\ GUHDPHUV VLQFH WLPH LPPHPRULDO XQWLO :ULJKW
EURWKHUV ILQDOO\ VXFFHHGHG LQ WKH HDUO\ WK &HQWXU\ W\SLFDOO\ DWWHVWLQJ WR WKH DFWLYH FRSLQJ QDWXUH RI WKH
KXPDQV DQG WKHLU SHUVHYHUDQFH
7KH WZRZLQGRZ PRGHO RI G\QDPLF VFKHPD RSHUDWLRQV
$W WKLV SRLQW OHW PH GLVFXVV D OLWWOH PRUH LQ GHWDLO DERXW WKH FHQWUDO FRQWURO RI G\VF RSHUDWLRQV
WKURXJK LQWURGXFLQJ D
WZR RSHUDWLRQZLQGRZ
PRGHO RI WKH FRQVFLRXV PLQG ZKHUH WKH PLQG EH HLWKHU RI D
FKLPSDQ]HH RU RI D KXPDQ ,Q WKH PLQG LV DVVXPHG WR EH WZR RSHUDWLRQ ZLQGRZV DQDORJRXV WR WKRVH RQ
FRPSXWHU GLVSOD\V DQG RQ HDFK RI WKHP D VHW RI G\VFV DUH RSHUDWLQJ DOO WKH WLPH 2QH RI WKH ZLQGRZV PD\ EH
FDOOHG WKH
ZRUOGZDWFK
ZLQGRZ
RU WKH
::
ZLQGRZ
IRU VKRUW DQG WKH G\VFV ZRUNLQJ RQ LW DUH WKRVH
FRUUHVSRQGLQJ WR WKH PDMRU REMHFWV LQ WKH REVHUYHG ZRUOG 6LQFH G\VFV LQ DFWLRQ WHQG WR XQGHUJR VWDWH
FKDQJHV DOZD\V D OLWWOH IDVWHU WKDQ UHDO WLPH G\VFV VKRZQ RQ WKH :: ZLQGRZ JHQHUDOO\ GHSLFW DQ
DQWLFLSDWHG
LPDJH RI WKH UHDO ZRUOG D PRPHQW LQ WKH IXWXUH ZKLFK ZLOO EH UHVHW WR DJUHH ZLWK WKH RQFRPLQJ
SHUFHSWXDO LPDJHV LI VLJQLILFDQW GLVFUHSDQFLHV DUH IRXQG EHWZHHQ WKHP 7KLV VKRUW UDQJH DQWLFLSDWLRQ DQG
FRQVWDQW UHVHWWLQJ LV DQ HFRQRPLFDO ZD\ RI NHHSLQJ WKH GLVSOD\ RI WKH :: :LQGRZ XSWRGDWH QHDUO\ DOO WKH
7KLV FRUUHFWLRQ FDQ XVXDOO\ EHHQ GRQH LPPHGLDWHO\ HLWKHU E\ UHVHWWLQJ WKH VWDWHV RI WKH FXUUHQWO\ DFWLYDWHG G\VFV RU E\
DFWLYDWLQJ QHZ RQHV 7KRXJK YHU\ UDUH LW KDSSHQV WKDW WKH RQFRPLQJ SHUFHSWXDO LPDJHV IDLO WR EH PDWFKHG E\ IDPLOLDU
G\VFV WKH :: ZLQGRZ PD\ PRPHQWDULO\ JR EODQN DV , GHVFULEHG P\ RZQ H[SHULHQFHV VRPHZKHUH HOVH 7KRXJK , VKDOO QRW JR LQWR WKLV WRSLF KHUH LW LV LQWHUHVWLQJ WR QRWH WKDW RQH KDV QR FRQVFLRXV PHPRU\ GXULQJ WKLV
EODFNHGRXW SHULRG RI WKH :: ZLQGRZ GHVSLWH WKH IDFW WKDW WKH PLQG WKHQ PXVW KDYH EHHQ RSHUDWLQJ IXULRXVO\ RQ VRPH
RWKHU OHYHO LQ RUGHU WR PDNH RXW XQLQWHOOLJLEOH MXPEOH RI RQFRPLQJ VHQVRU\ LQSXWV
WLPH ZKHUHE\ WKH DFWLYDWHG G\VFV DUH IRUFHG WR SXW XQGHU WKH
GH IDFWR
FRQVWUDLQWV WKDW PD\ EH FDOOHG WKH
REVHUYHGZRUOG FRQVWUDLQWV
7KH G\VFV RSHUDWLQJ WKLV ZD\ LQ WKH :: ZLQGRZ PD\ EH WUDQVIHUUHG WR RU PRUH SUHFLVHO\ FRSLHG LQ
WKH VHFRQG ZLQGRZ ZKLFK ZLOO EH FDOOHG WKH
,PDJLQDWLRQWKLQNLQJ
ZLQGRZ RU WKH
,7 ZLQGRZ
IRU VKRUW 2QFH
FRSLHG WKHVH G\VFV ZLOO EH UXQ IDU PRUH IDVWHU LQ WKH ,7 ZLQGRZ IRU WKH VLPXODWLRQDO SXUSRVH GLVFXVVHG
DERYH ZLWKRXW ERXQG E\ WKH REVHUYHGZRUOG FRQVWUDLQW EXW RQO\ EH WKH UHDOLW\ FRQVWUDLQW 7KH VLPXODWLRQ
PD\ EH GRQH DQ\ WLPH VRPHWLPHV ZLWKRXW DQ\ VSHFLILF SXUSRVH H[FHSW IRU PDNLQJ WKH DSSUDLVDO PRQLWRU WR
VHH WKLQJV DKHDG RI WKH WLPH
,Q RQH VXFK D SODLQ DQWLFLSDWRU\ VLPXODWLRQ WKH DSSUDLVDO PRQLWRU PD\ HQFRXQWHU D SRVVLEOH VFHQH RI
LQWHUHVW HLWKHU JRRG RU EDG ZKLFK ZLOO WKHQ DFWLYDWH DQ XUJH $V DQ DFWLYDWHG XUJH ZLOO VHW LWV JRDO WR DFKLHYH
WKH VLPXODWLRQ RQ WKH ,7 ZLQGRZ ZLOO EHFRPH
JRDOGLUHFWHG
IURP WKHQ RQ DQG ZLOO EH UHSHDWHG ZLWK WKH VHOI
G\VF MRLQHG LQ WKH VFHQH ZKLFK ZLOO WU\ YDULRXV DOWHUQDWLYH DFWLRQ SODQV WLOO WKH JRDO LV UHDFKHG RQ WKH ,7
ZLQGRZ 1RWH WKDW LW LV QRW UHTXLUHG WR SUHVHUYH WKH LQLWLDO VWDWH IRU WKLV LWHUDWLYH VLPXODWLRQ HDFK WULDO RI
ZKLFK PD\ EH VWDUWHG E\ FRS\LQJ WKH FXUUHQW FRQWHQW RI WKH :: ZLQGRZ 6RPHWLPHV WKLV FXUUHQW PD\ KDYH
XQGHUJRQH VRPH VHULRXV FKDQJH IURP SUHYLRXV WULDOV VKRZLQJ IRU LQVWDQFH DQ DSSHDUDQFH RI D SUHGDWRU E\
ZKLFK WKH LQGLYLGXDO ZLOO LPPHGLDWHO\ VWRS WKH VLPXODWLRQ DQG UXQ XQGHU WKH IHDU XUJH
,Q DQ\ FDVH WKH ,7 ZLQGRZ RSHUDWLRQV RI HYHQ ,&$ WKLQNHUV DQLPDOV DQG HDUO\ KXPDQV ZRXOG KDYH
EHHQ VWURQJO\ ERXQG E\ WKH FXUUHQW FRQWHQW RI WKH :: ZLQGRZ , DP QRW FODLPLQJ WKDW LW LV LPSRVVLEOH IRU
WKHP WR KDYH DQ ,7 ZLQGRZ RSHUDWLRQ QRW GLUHFWO\ OLQNHG WR WKH FXUUHQW :: ZLQGRZ FRQWHQW EHFDXVH WKH\
WRR EH DEOH WR DFWLYDWHG G\VFV XQUHODWHG WKH FXUUHQW G\VFV LQ WKH :: ZLQGRZ WKURXJK DVVRFLDWLRQ ,W LV
KRZHYHU RQO\ WKH SRZHU RI WKH ODQJXDJH WKH KXPDQV DFTXLUHG LQ ODWHU WLPHV WKDW HQWLUHO\ OLEHUDWHG WKH ,7
ZLQGRZ RSHUDWLRQV IURP WKH FXUUHQW FRQWHQW RI WKH :: ZLQGRZ
,PDJLQH WKH FRQWHQW RI WKH ,7 ZLQGRZ LQ WKH PLQG RI WKH FKLOG WR ZKRP WKH PRWKHU LV WHOOLQJ D IDLUO\
VWRU\ DW WKH EHGVLGH )XOO RI WKH FKDUDFWHUV RI WKH VWRU\ WKH SULQFHVV WKH SHJDVXV YLOODLQV DQG KHURHV LW KDV
QRWKLQJ WR GR ZLWK ZKDW DUH UHJLVWHUHG LQ WKH FKLOG
V :: ZLQGRZ WKH IDPLOLDU REMHFWV LQ WKH FR]\ EHGURRP
H[FHSW IRU WKH YRLFHV RI WKH PRWKHU ZKLFK FRPPDQG WKH FKLOG
V ,7 ZLQGRZ WR DFWLYDWH G\VFV RI GHQL]HQV RI
WKH IDQWDV\ ZRUOG ZKR DFW DFFRUGLQJ WR WKH VWRU\ WROG DQG GR D OLWWOH PRUH IRU WKHLU RZQ LQ D FRQWH[W
FRPSOHWHO\ DOLHQDWHG IURP WKH FRQWHQW RI WKH :: ZLQGRZ
7KLV DOLHQDWLRQ RI WKH FRQWHQW RI WKH ,7 ZLQGRZ IURP WKDW RI WKH :: ZLQGRZ RI FRXUVH QHHG QRW
EH DOZD\V VR FRPSOHWH 6RPHWLPHV SHRSOH PD\ GLVFXVV ZKDW WKH\ DUH FXUUHQWO\ VHHLQJ %XW HYHQ ZKHQ
SHRSOH DUH WDONLQJ DERXW UHDO ZRUOG HYHQWV ,7 ZLQGRZ FRQWHQW PD\ EH LQGHSHQGHQW RI :: ZLQGRZ FRQWHQW
$ FRXSOH RI VFKRROJLUOV VWDQGLQJ LQ D VWUHHW PD\ EH WDONLQJ DERXW VRPH SDUWLFXODUO\ QDVW\ WULFN SOD\HG DJDLQVW
WKHLU GLVOLNHG WHDFKHU E\ VRPH ER\ IULHQG RI WKHLUV DQG WKH UHPHPEUDQFH RI WKH DVWRXQGHG IDFH RI WKH WHDFKHU
PD\ PDNH WKHP EXUVW LQWR ODXJKWHU ,Q WKLV FDVH WKH G\VFV RSHUDWLQJ LQ WKH JLUOV
,7 ZLQGRZ DUH UHDO ZRUOG
REMHFWV DQG WKH HYHQW SOD\HG RXW E\ WKHP IROORZV WKH UHDO ZRUOG FRQVWUDLQWV HYHQ WKRXJK LW KDV QRWKLQJ WR
GR ZLWK FRQWHQW RI WKHLU :: ZLQGRZ $IWHU WKHLU PHUULPHQW VXEVLGHG KRZHYHU RQH RI WKH JLUOV PD\ QRWLFH
WKH FRQWHQW RI KHU :: ZLQGRZ LQ ZKLFK D IHZ SDVVHUVE\ DUH JDSLQJ DW WKHP ZRQGHULQJ ZKDW DUH VR IXQQ\
DERXW (PEDUUDVVHG JLUOV ZLOO WKHQ ZDON DZD\ KXUULHGO\
7KLV HSLVRGH WHOO WZR WKLQJV )LUVW ODQJXDJH PD\ EH DEOH WR FUHDWH DOPRVW DQ\ NLQG RI G\VF
RSHUDWLRQV LQ RQH
V ,7 ZLQGRZ ZLWK GLVSDUDWH VHWV RI FRQVWUDLQWV 7KH\ FRXOG EH D IDLUO\ WDOH ZLWK D SULQFHVV
DQG D SHJDVXV RU UHPHPEUDQFH RI DQWLFV RI WKHLU IULHQGV RU HVRWHULF VSHFXODWLRQV DUJXHG E\ PDWKHPDWLFLDQV
:KDWHYHU EHLQJ WKH FDVH WKH FRQVWUDLQWV WR EH DSSOLHG WR WKH G\VF RSHUDWLRQV DUH JHQHUDOO\ VHOIVXJJHVWLYH
6HFRQGO\ D SHUVRQ
V DSSUDLVDO PRQLWRU LV GLYLGLQJ LWV DWWHQWLRQ RYHU WKH WZR ZLQGRZV :KLFK RQH RI WKH WZR
GUDZV PRUH DWWHQWLRQ GHSHQGV PXFK RQ WKH XUJH FXUUHQWO\ DFWLYDWHG :KHQ WKH DFKLHYHPHQW RI WKH JRDO VHW
E\ WKH XUJH LV FRQFHUQHG PRUH ZLWK WKH H[WHUQDO ZRUOG HYHQWV OLNH LQ WKH FDVH ZKHQ D SHUVRQ LV IOHHLQJ IURP
D FKDVLQJ SUHGDWRU WKH :: ZLQGRZ ZLOO GRPLQDWH WKH DWWHQWLRQ ,I WKH XUJH LQWHQVLW\ LV YHU\ KLJK WKH KHUH
DQGQRZ HIIHFW ZLOO VHW LQ DQG WKH SHUVRQ ZLOO KDUGO\ EH DEOH WR WKLQN DV WKH SHUVRQ
V ,7 ZLQGRZ RSHUDWLRQ LV
WKHQ VHULRXVO\ KDPSHUHG
2Q WKH RWKHU KDQG ZKHQ WKH DFKLHYHPHQW RI D JRDO GHSHQGV PDLQO\ RQ WKLQNLQJ RU LPDJLQLQJ RQH
V
DWWHQWLRQ ZLOO EH RFFXSLHG PDLQO\ E\ WKH ,7 ZLQGRZ DQG WKH KLJK XUJH LQWHQVLW\ ZLOO PDNH RQH HQJURVVHG LQ
WKH ,7 ZLQGRZ RSHUDWLRQV ZLWK D VFDQW DWWHQWLRQ SDLG WR WKH FRQWHQWV RI WKH :: ZLQGRZ 6R WKH SKLORVRSKHU
GHHS LQ WKRXJK PD\ IDOO LQWR D KROH LQ WKH JURXQG DQG D GD\GUHDPLQJ \RXQJVWHU PD\ QRW QRWLFH ZKDWHYHU LV
KDSSHQLQJ DURXQG RQHVHOI 6R WKH KHUH
DQG QRZ
HIIHFW LQ WKLV FDVH PXVW EH UHGHILQHG DV WKH KHUH
DQG QRZ
GHILQHG UHODWLYH WR WKH FRQWHQWV RI WKH ,7 ZLQGRZ
,Q HLWKHU FDVH RI WKH KHUHDQGQRZ FRQFHQWUDWLRQ LW LV LQWHUHVWLQJ WR REVHUYH WKDW WKH DSSDUHQWO\
XQDWWHQGHG ZLQGRZ LV VWLOO QRW HQWLUHO\ FORVHG $ SHUVRQ ZDONLQJ LQ D GDUNHQHG DOOH\ IHDUIXO RI D OXUNLQJ
PXJJHU PD\ ZDWFK HYHU\ VKDGRZHG DUHD YHU\ FORVHO\ XQDEOH WR WKLQN DQ\WKLQJ FRKHUHQWO\ 6WLOO WKH SHUVRQ
PD\ EH VWDUWOHG E\ DQ RFFDVLRQDO ZLOG LPDJLQDWLRQ WKDW VRPHRQH LV VWDONLQJ XS WR WKH SHUVRQ IURP EHKLQG
<RX PD\ KLW D ER\ GHHS LQ GD\GUHDPLQJ KDUG RQ WKH EDFN DQG WKH ER\ ZLOO MXPS XS VWDUWOHG 6R WKH
QHJOHFWHG ZLQGRZ LV QRW VKXW GRZQ EXW RQO\ D VXUYLYDOUHOHYDQW VLJQLILFDQW HYHQW WDNLQJ SODFH LQ WKDW
ZLQGRZ ZLOO GUDZ WKH SHUVRQ
V DWWHQWLRQ EDFN WR LW ZLWK WKH PRRGHVWDWH RI VXUSULVH
7KH SRZHU RI ODQJXDJH
$V PHQWLRQHG HDUOLHU DOO WKLV SRZHU RI ODQJXDJH LV JDLQHG E\ WKH HPHUJHQFH RI RSHUDWRU VFKHPDV
DQG HYHQ WKRXJK PXFK RI WKH HYROXWLRQDO SURFHVV LV VKURXGHG LQ P\VWHU\ , VXVSHFW UDWKHU VWURQJO\ WKDW
RSHUDWRU VFKHPDV RULJLQDWHG IURP WKH VXEDFWLRQ DJHQWV RI WKH VHOIG\VF
LH
ZKDW DFWLRQV RQH FRXOG LQIULQJH
XSRQ RWKHU REMHFWV DQG ZKDW HIIHFWV FRXOG WKHVH DFWLRQV KDYH XSRQ WKHP :KDWHYHU KDYH EHHQ WKH VXVSHFWHG
RULJLQ WKHUH LV QR GRXEW WKDW ELRORJLFDO HYROXWLRQ KDG LWV KDQG LQ VRPH SHULRG RI WKH KRPLQLG HYROXWLRQ
:KDWHYHU KXPDQ WULEHV ZKRVH PHPEHU FRXOG H[SUHVV KLV RU KHU LQWHQWLRQV PRUH FOHDUO\ WR RWKHU PHPEHUV RI
WKH WULEH E\ VRPH YRLFH VLJQDOV ZRXOG KDYH KDG D EHWWHU VXUYLYDO HGJH RYHU RWKHU WULEHV FRQFHUQLQJ HIILFLHQF\
LQ JURXS FRRSHUDWLRQ WKHUHE\ FUHDWLQJ D VWURQJ VHOHFWLRQ SUHVVXUH $QG LQ D UHODWLYHO\ VKRUW WLPH VKRUW LQ
HYROXWLRQDU\ WLPH VFDOH D ODQJXDJH VSHDNLQJ KXPDQV FDPH RXW DV WKH ZLQQHU RI DOO HQGRZHG ZLWK WKH
OLQJXLVWLF FRPSHWHQFH ERWK LQ KDUGZDUH DQG VRIWZDUH
, KDYH PHQWLRQHG D SDUW RI WKH ODQJXDJH VRIWZDUH WKDW FRUUHVSRQGV WR FRQVWUXFWLQJ DQG SUHSDULQJ
G\VF RSHUDWLRQV LQ WKH ,7 ZLQGRZ DFFRUGLQJ WR WKH FRPPDQGLQJ LQVWUXFWLRQ SKUDVHG LQ VHQWHQFHV 1RZ OHW
PH FRQVLGHU WKH UHYHUVH PHQWDO RSHUDWLRQ LQ WUDQVFULELQJ WKH PLQGVFDSH EH LW RI HLWKHU WKH ,7 ZLQGRZ RU WKH
:: ZLQGRZ LQ VHQWHQFHV DV HTXLYDOHQW WR WKH RULJLQDO PLQGVFDSH DV SRVVLEOH 7KLV UHYHUVH RSHUDWLRQ WKH
ODQJXDJH FRGLQJ LV SUHUHTXLVLWH DV ZHOO DV WKH ODQJXDJH GHFRGLQJ QRW RQO\ WR PDLQWDLQ D ELODWHUDO
FRPPXQLFDWLRQ EXW DOVR WR PDNH D SURJUHVV LQ D FRPSOH[ VHULRXV WKLQNLQJ SURFHVV WKH KXPDQV DUH RIWHQ
HQJDJHG LQ
/HW XV ILUVW FRQVLGHU KRZ WKH ODQJXDJH FRGLQJ KHOSV RXU FRPSOH[ WKLQNLQJ SURFHVV 6XSSRVH WKDW D
SHUVRQ LV PDNLQJ D UDWKHU HODERUDWH SODQQLQJ 7KH VXFK D SODQQLQJ LV XVXDOO\ GRQH LQ DGYDQFH UDWKHU WKDQ
VLWX
LQ
WKH FRQWHQW RI WKH WKLQNLQJ SHUVRQ
V ,7 ZLQGRZ WKH VLWH RI WKH G\VF VLPXODWLRQ ZLOO EH FRPSOHWHO\
LQGHSHQGHQW RI WKH FRQWHQW RI WKH :: ZLQGRZ ,Q VXFK D SODQQLQJ WDVN RQH KDV WR JR WKURXJK PDQ\ WULDO
DQGHUURUV WRVVLQJ RXW RQH LGHD DQG SLFNLQJ XS DQRWKHU DQG WKH VLPXODWLRQ KDV WR EH LWHUDWHG PDQ\ WLPHV
XQGHU GLIIHUHQW FRQGLWLRQV ,Q RUGHU WR GR WKLV LWHUDWLRQ WKH SHUVRQ PXVW EH DEOH WR UHFRQVWUXFW WKH VWDUWLQJ
VFHQH RI WKH VLPXODWLRQ EXW LQ WKLV FDVH LW FDQQRW EH VLPSO\ FRSLHG IURP WKH :: ZLQGRZ ZKLFK LV LUUHOHYDQW
WR WKH SUREOHP DW KDQG 7KRXJK WKH SHUVRQ PD\ WU\ WR NHHS WKLV VWDUWLQJ PLQGVFDSH GLUHFWO\ LQ PHPRU\ VXFK
D PHPRU\ LV UDWKHU XQWUXVWZRUWK\ DV G\VFV WHQG WR DOWHU WKHLU VWDWHV DXWRQRPRXVO\ ZKHQ DFWLYDWHG 7KDW LV
ZK\ D SHUVRQ ZKR LV HQJDJHG LQ DQ HODERUDWH WKLQNLQJ RIWHQ YHUEDOL]HV RQH
V WKRXJKWV RU FRGLI\ RQH
V
PLQGVFDSHV LQ VHQWHQFHV XVLQJ QDPHV IRU G\VF RSHUDWRU VFKHPDV 6LQFH VHQWHQFHV DUH OHVV SURQH WR PHPRU\
UHODWHG HUURUV EHFDXVH WKH QDPHV DUH IDU VWDEOH WKDQ G\VFV WKH\ UHSUHVHQW DQG SDUWLFXODUO\ LPSRUWDQW LGHDV
PD\ EH VFULEEOHG DV PHPRV RQ D QRWHSDG WR IXUWKHU GHFUHDVH WKH PHPRU\ HUURU 7KHVH PHPRUL]HG RU
UHFRUGHG YHUEDO GHVFULSWLRQV RI PLQGVFDSHV PD\ WKHQ EH UHWULHYHG DQG UHFRQVWUXFWHG LQ WKH ,7 ZLQGRZ HLWKHU
E\ UHFDOOLQJ RU UHDGLQJ WKH PHVVDJHV WKURXJK WKH IXQFWLRQ RI VHQWHQFHV DV FRPPDQGLQJ LQVWUXFWLRQV IRU
EXLOGLQJ PLQGVFDSHV
,I ZKDW , KDYH EHHQ GHVFULELQJ DV WKH PDMRU XVH RI ODQJXDJH LQ WKLQNLQJ WKHQ ZH DUH WKLQNLQJ QRW E\
ODQJXDJH EXW
ZLWK
ODQJXDJH 8VLQJ D PHWDSKRU ODQJXDJH LV D VRUW RI WRRO WR IUHH]HGU\
PLQGVFDSHV RU LGHDV
ZKLFK LQ WKHLU IUHH]HGULHG VWDWH PD\ EH SUHVHUYHG QHDUO\ LQGHILQLWHO\ $QG WKH\ PD\ EH GHIUR]HQ DQ\ WLPH
WKH\ DUH UHTXLUHG OLNH ZKHQ WKH WKLQNHU ZDQWV WR VWDUW RYHU WKH VLPXODWLRQ SURFHVV 1RWH WKDW VLPXODWLRQ QHHG
QRW DOZD\V EH UHVWDUWHG IURP WKH EHJLQQLQJ $V ORQJ DV WKH WKLQNHU NHHSV YHUEDO UHFRUGV RQ PDMRU
LQWHUPHGLDU\ VWDJHV RI WKH WKLQNLQJ SURFHVV WKH WKLQNHU PD\ MXVW EDFNWUDFN WR RQH RI WKHVH VWDJHV WR UHGR KLV
RU KHU WKLQNLQJ )XUWKHUPRUH WKH WKLQNHU PD\ EH DEOH WR FRQGXFW D FRQVLVWHQF\ FKHFN IRU RQH
V ZKROH
WKRXJKW SURFHVV E\ VD\ MX[WDSRVLQJ WKH PLQGVFDSHV GHIUR]HQ IURP WKHVH YHUEDO UHFRUGV DQG VHH LI WKHUH LV
QR REYLRXV FRQWUDGLFWLRQ DPRQJ WKHP 7KRXJK , DP QRW JRLQJ LQWR GHWDLOV RI WKLV FRQVLVWHQF\ FKHFNLQJ
SURFHGXUH WKH YHUEDO VHQWHQFHV LQFOXGLQJ SURSRVLWLRQV KDYH WR VXEMHFW WKHPVHOYHV WR VRPH FRQVWUDLQWV RI
WKHLU RZQ HVSHFLDOO\ ORJLFDO RQHV SDUWLFXODUO\ EHFDXVH WKHUH DUH XVXDOO\ PDQ\ ZD\ RI SXWWLQJ WKH VDPH LGHD
LQ VHQWHQFHV DQG WKHUH LV QR JXDUDQWHH WKDW WKH\ SURGXFH H[DFWO\ WKH VDPH PLQGVFDSH ZKHQ GHFRGHG ,Q
RWKHU ZRUGV HUURUV PD\ RFFXU LQ DQ\ RI WKHVH SURFHVVHV EXW ODQJXDJH DV VWDEOH PDWHULDOV SURYLGHV PHDQV WR
FRUUHFW VRPH RI WKHVH HUURUV
1HHGOHVV WR VD\ WKH JUHDWHVW DGYDQWDJH RI ODQJXDJH FRPHV IURP LWV XVH LQ FRPPXQLFDWLRQ 2QH
FDQQRW WUDQVIHU RQH
V PLQGVFDSH GLUHFWO\ WR DQRWKHU
V PLQG LWV IUHH]HGULHG ODQJXDJH FRGHV FDQ EH
WUDQVPLWWHG HLWKHU LQ YRLFHV RU LQ OHWWHUV ZKLFK RQFH UHJLVWHUV LQ WKH RWKHU
V :: ZLQGRZ ZLOO EH
DXWRPDWLFDOO\ WUDQVODWHG DV D PLQGVFDSH LQ WKLV SHUVRQ
V ,7 ZLQGRZ
7KH DGYDQWDJHV WKDW WKH KXPDQV JDLQHG E\ WKH DFTXLVLWLRQ RI WKLV PRGH RI FRPPXQLFDWLRQ ZRXOG
LQGHHG KDYH EHHQ EH\RQG PHDVXUH &RDOLWLRQ PHPEHUV FRXOG KDYH GLVFXVVHG DERXW WKHLU MRLQW SURMHFW VKDUH
SUDFWLFDOO\ WKH VDPH JRDO DQG RUJDQL]H WKHLU MRLQW DFWLRQV WR DFKLHYH WKH JRDO 0RUH WKDQ WKHVH LPPHGLDWH
EHQHILWV VWRULHV PD\ KDYH EHHQ FRPSRVHG DQG WROG UHJXODWLQJ WKH G\VF RSHUDWLRQV LQ WKH OLVWHQHUV
PLQGV
DQG VRPH RI WKHP EHFDPH OHJHQGV DQG P\WKRORJLHV RI WKH FRPPXQLW\ IRUPLQJ D SDUW RI WKHLU UHDOLW\
FRQVWUDLQWV 7KHVH WKHQ HQDEOHG WR HVWDEOLVK WKH FXOWXUDO KHULWDJH RI HDFK FRPPXQLW\ RSHQLQJ D ZD\ IRU
FRPPXQLFDWLRQ WR JR EH\RQG IDFHWRIDFH FRPPXQLFDWLRQ 2QFH YLVXDO V\PEROV ZHUH DGGHG WR WKH V\VWHP RI
ODQJXDJHV NQRZOHGJH FDQ EH DPDVVHG DQG SUHVHUYHG IDU PRUH HIILFLHQWO\ DQG LW HQDEOHG WKH KXPDQV WR
HVWDEOLVK D YDVW V\VWHPV RI NQRZOHGJH DV D FRPPRQ OHJDF\ WR WKH ZKROH KXPDQLW\ ZKRHYHU KDV DQ DFFHVV
FDQ GHIUHH]H ZULWWHQ UHFRUGV HYHQ DV ROG DV 6XPHULDQ FOD\ WDEOHWV ZULWWHQ DERXW \HDUV %3 LI RQH VR
ZLVKHV
6R WKH DGYDQWDJHV EURXJKW E\ DGYDQFHG ODQJXDJHV DQG ODQJXDJHEDVHG FRPPXQLFDWLRQ DUH
7KH QRWHV PD\ QRW EH FRPSOHWH VHQWHQFHV ZKHQ D FRXSOH RI ZRUGV DUH FRQVLGHUHG HQRXJK WR UHFRYHU WKH PLVVLQJ
ZRUGV WKURXJK DVVRFLDWLRQV
QXPHURXV DQG PDJQLILFHQW +RZHYHU WKHUH DUH OLPLWDWLRQV LQ WKLV PRGH RI FRPPXQLFDWLRQ WRR DQG WKHVH
OLPLWDWLRQV FRPH PDLQO\ IURP WZR VRXUFHV )LUVW QR WZR SHUVRQV
G\VFV DUH H[DFWO\ WKH VDPH HYHQ IRU WKH
VDPH REMHFW 7KLV LV XQDYRLGDEOH DV G\VFV JURZ DQG FKDQJH DV D SHUVRQ DFFXPXODWH H[SHULHQFHV ZLWK WKH
REMHFW 6R WKH PLQGVFDSH DFTXLUHG E\ D OLVWHQHU E\ GHIUHH]LQJ D VSRNHQ PHVVDJH ZLOO EH JHQHUDOO\ D OLWWOH
GLIIHUHQW IURP WKH PLQGVFDSH WKH VSHDNHU LQWHQGHG WR FRPPXQLFDWH DOEHLW LW LV IDU EHWWHU WKDQ QR
FRPPXQLFDWLRQ 1RWH WKDW WKLV KDSSHQV HYHQ ZKHQ WKH FRGHU DQG WKH GHFRGHU LV WKH VDPH SHUVRQ $ PHPR
RQH ZURWH VRPH WLPH DJR PD\ EHFRPH XQLQWHOOLJLEOH WR RQHVHOI ODWHU SHUKDSV EHFDXVH WKH
FRQWH[W
WKH
WRWDOLW\ RI WKH FRQVWUDLQWV RSHUDWLQJ ZKHQ WKH PHVVDJH ZDV ZULWWHQ ZDV ORVW RU EHFDXVH RQH
V G\VFV
WKHPVHOYHV EHLQJ WUDQVIRUPHG GXULQJ WKH SHULRG
7KH VHFRQG FDXVH IRU LPSUHFLVLRQ IRU YHUEDO FRPPXQLFDWLRQ DULVHV IURP WKH LPSHUIHFWLRQ RI WKH
ODQJXDJH DV D WRRO WR GHVFULEH PLQGVFDSHV 'HVSLWH WKH HQRUPRXV GHVFULSWLYH SRZHU RI ODQJXDJH QRW HYHU\
GHWDLOV DQG QXDQFHV RI D PLQGVFDSH FDQ EH FDSWXUHG ZLWKLQ D PHVVDJH VKRUW HQRXJK WR EH SUDFWLFDO
)XUWKHUPRUH WKH UHDGHU RU WKH OLVWHQHU RI D YHUEDO PHVVDJH GRHV QRW ZDQW WR EH ERWKHUHG E\ LQVLJQLILFDQW
GHWDLOV DV GHIUHH]LQJ UHTXLUHV PHQWDO UHVRXUFHV 6R D ZULWHU RU D UHSRUWHU WHQGV WR VNLS GHWDLOV ZKLFK FDQ EH
ILOOHG XS E\ WKH UHDGHUV HVSHFLDOO\ WKH SDUWV WKDW EHORQJ WR WKH FRPPRQ VHQVH
,W LV ZHOO NQRZQ WKDW WKLV
RPLVVLRQ RI FRPPRQ VHQVH NQRZOHGJH LV D FRQVLVWHQW KHDGDFKH WR KLVWRULDQV ZKR WU\ WR PDNH RXW DQFLHQW
UHFRUGV $QG QRWH WKDW FRPPRQ VHQVH FRUUHVSRQGV DOPRVW H[DFWO\ WR ZKDW , KDYH EHHQ FDOOLQJ WKH UHDOLW\
FRQVWUDLQW 6R ZKDW ZH WDNH DV P\WKV RI WKH SHRSOH LQ DQFLHQW WLPHV ZHUH MXVW D SDUW RI WKHLU UHDOLW\ DQG WKDW
DOVR LPSOLHV WKDW PRVW RI ZKDW ZH FRQVLGHU DV UHDOLW\ WRGD\ ZLOO EHFRPH P\WKV LQ WKH WLPHV WR FRPH
&+$37(5 7$%/( 2) &217(176
0DQDJHPHQW RI FRPPXQLWLHV LQ DQLPDOV DQG WKH KXPDQV
7KH XUEDQG 7KH LVVXHV RI PDQDJHPHQW IRU DQLPDO DQG KXPDQ JURXSV /LQHDU UDQN RUGHU V\VWHP DQG WKH
LQWUDJURXS FRPSHWLWLRQ 6WDWXV VWUXJJOH WKH FDVH RI ZROYHV $OOLDQFH SRZHU WKH FDVH RI FKLPSDQ]HHV 7KH
V\VWHP RI VRFLDO VWDWXV WR UHSODFH WKH OLQHDU UDQN RUGHU V\VWHP 0XOWLGLPHQVLRQDO FRQWURO SRZHU DQG WKH
FRPPXQLW\ QRUP IRU LWV DJJUHJDWLRQ 7KH FRQVWDQW PHDQ DVVXPSWLRQ IRU VWDWXV GLVWULEXWLRQ 3DFN RI ZROYHV
JURXSV RI FKLPSDQ]HHV DQG KXPDQ XUEDQGV
$ PRGHO IRU WKH V\VWHP RI VRFLDO VWDWXV
'LPHQVLRQV RI FRQWURO SRZHU EDVHV 7KH SULQFLSOH IRU UHFRJQL]LQJ RWKHUV
FRQWURO SRZHU DQG WKH DGDSWDWLRQ
OHYHO K\SRWKHVLV 3HUVRQDO DSSUDLVDO RI RWKHUV
PXOWLGLPHQVLRQDO SRZHU &RPPXQLW\ QRUP D[LV DQG VRFLDO
VWDWXV 6WDWXV VWUXJJOH ZLWKLQ VXEFRPPXQLWLHV 3HUVRQDO VWDWXV DSSUDLVDOV DQG WKH HPRWLRQDO DWWLWXGH RI
SD\LQJUHVSHFW 6RXUFHV RI SRZHU 7KH GHPRQVWUDWLRQ XUJH 3ULGH DQG VKDPH 6WDWXV PDUNHW 0HQWDO
GHYHORSPHQW DQG HGXFDWLRQ RI QRUPV
7KH ILUVW JUDQG WUDQVLWLRQ
7KH DJULFXOWXUDO UHYROXWLRQ WKDW VHW XS WKH ILUVW JUDQG WUDQVLWLRQ LQ WKH KXPDQ KLVWRU\ 7KH UXOLQJ ERG\ DV DQ
DUWLILFLDO FRDOLWLRQ 7KH VWUXFWXUH DQG WKH SULQFLSOHV RI DUWLILFLDO FRDOLWLRQV $UWLILFLDO FRDOLWLRQ DV D YHUVDWLOH
V\VWHP &RPPXQLWLHV DV VHPLQDWXUDO DUWLILFLDO FRDOLWLRQV ,QFLSLHQW ODUJH VWDWXV YDULDQFH FRPPXQLWLHV
7KH 7LPHV RI :DU
7KH DGYHQW RI WKH 7LPHV RI :DU /DUJH VWDWXV YDULDQFH FRPPXQLWLHV LQ WKH 7LPHV RI :DU 6RFLDO FODVVHV DQG
VWDWXV V\PEROV $Q DGPLVVLYHO\ IDLU DOORFDWLRQ VFKHPH SUDFWLFHG LQ KLHUDUFKLFDO DUWLILFLDO FRDOLWLRQV
)HXGDOLVWLF NLQJGRPV &RPPXQLW\ LQ WKH 7LPHV RI :DU +RQRU DQG GLVKRQRU 7KH SULQFLSOHV RI PRGLILDEOH
VWDWXVGHSHQGHQW DOORFDWLRQ (PSHURUV DQG EXUHDXFUDWV %XLOGLQJXS WKH SHDN VWDWXV IRU WKH UXOHU 0RQRSRO\
RI NQRZOHGJH DV D VRXUFH RI SRZHU ,VVXHV RI WKH ULVLQJ PLGGOH FODVV 7KH DUW RI UXOLQJ
7KH VHFRQG JUDQG WUDQVLWLRQ
3UHOXGH WR WKH VHFRQG JUDQG WUDQVLWLRQWKH GUHDP RI XWRSLDQ VRFLDOLVP 7KH WRWDOLWDULDQ GLFWDWRUV DW WKH HQG
RI WKH 7LPHV RI :DU 7KH HQG RI WKH 7LPHV RI :DU DQG WKH FRPLQJ RI WKH VHFRQG JUDQG WUDQVLWLRQ 6PDOO
VWDWXV YDULDQFH FRPPXQLWLHV &DSLWDOLVP YHUVXV FRPPXQLVP 7KH JURZWKGHSHQGHQW HFRQRP\
&RQWHPSRUDU\ VRFLHWLHV DQG WKHLU SUREOHPV
3XWWLQJ QHZ ZLQH LQ ROG ERWWOHVKRZ FRQWHPSRUDU\ VRFLHWLHV DUH UXQ 0RUH DERXW FRQWHPSRUDU\ FDSLWDOLVP
$UWLILFLDO FRDOLWLRQV RI PRGHUQ WLPHV 3UREOHPV RI WKH FRQWHPSRUDU\ GHPRFUDF\
$ YLVLRQ RI QHZ VRFLHW\ WKDW IXQFWLRQV DV D PHWDPLQG
%DVLF LGHDV IRU D PHWDPLQG VRFLHW\ 'LUHFW SDUWLFLSDWRU\ GHPRFUDF\ RI WKH PHWDPLQG VRFLHW\ 6RPH RWKHU
LVVXHV RI WKH PHWDPLQG VRFLHW\ LQ OLHX RI FRQFOXVLRQ
&KDSWHU +80$1 62&,(7,(6 $1' +80$1 9$/8(6
0DQDJHPHQW RI FRPPXQLWLHV LQ DQLPDOV DQG WKH KXPDQV
7KH XUEDQG
,Q WKLV ODVW FKDSWHU RI WKLV ERRN WKH IRFXV RI DUJXPHQWV ZLOO EH VKLIWHG IURP KXPDQ LQGLYLGXDOV WR
KXPDQ
FRPPXQLWLHV
ZLWK WKH HPSKDVLV RQ WKH LVVXH RI FRPPXQLW\ PDQDJHPHQW 7KH WHUP VRFLHW\
PD\ EH
XVHG IRU WKH WHUP FRPPXQLW\
DOWHUQDWLYHO\ HVSHFLDOO\ WR LQGLFDWH D YHU\ ODUJH FRPPXQLW\ OLNH WKH (DUWK
6RFLHW\
EXW QR H[SOLFLW GLVWLQFWLRQ EHWZHHQ WKH WZR WHUPV ZLOO EH PDGH ,Q P\ DUJXPHQWV , VKDOO GLYLGH WKH
KXPDQ FXOWXUDO KLVWRU\ LQ IRXU SHULRGV :KDW FRPHV ILUVW LV WKH SHULRG MXVW SUHFHGLQJ WKH DJULFXOWXUDO
UHYROXWLRQ WKH
7UDQVLWLRQ
7LPHV RI 8U%DQGV
7KHQ FRPHV WKH DJULFXOWXUDO UHYROXWLRQ WKH SHULRG RI WKH
LQ WKH GHYHORSPHQW RI WKH KXPDQ FLYLOL]DWLRQ 7KH WKLUG SHULRG WKH
7LPHV RI :DU
)LUVW *UDQG
HQFRPSDVVLQJ
WKH KXPDQ FXOWXUDO KLVWRU\ IURP WKH HQG RI WKH ILUVW JUDQG WUDQVLWLRQ WKURXJK DURXQG WKH PLGGOH RI WKH WK
&HQWXU\ ZKHQ WKH
6HFRQG *UDQG 7UDQVLWLRQ
DV WKH IRXUWK SHULRG DSSUR[LPDWHO\ EHJDQ WKH SHULRG LQ WKH
PLGGOH RI ZKLFK WKH FRQWHPSRUDU\ KXPDQV OLYH
,Q WKH SUHYLRXV FKDSWHU , VNHWFKHG KRZ KRPLQLG VSHFLHV JUDGXDOO\ UHYHDOHG WKHLU QDWXUH DV DFWLYH
FRSHUV WKURXJK D ORQJ WLPH VSDQ RI PLOOLRQV \HDUV WLOO +RPR VDSLHQFH VDSLHQFH WKH ODVW FKDLQ RI WKH KRPLQLG
HYROXWLRQ FDPH LQWR WKH VFHQH DURXQG WKRXVDQG \HDUV %3 EHIRUH SUHVHQW 7KRXJK GHWDLOV DERXW WKHLU
ZD\ RI OLIH DUH QRW DYDLODEOH LW LV TXLWH FOHDU WKDW WKH\ LQKHULWHG PRVW RI WKH UHPDUNDEOH KXPDQ
FKDUDFWHULVWLFV RI WKHLU SUHGHFHVVRUV WKRVH RI EHLQJ DFWLYH FRSHUV YHUVDWLOH FRRSHUDWRUV DYLG WRROXVHUV DQG
LQ DGGLWLRQ WR DOO RI WKHVH WKH\ DSSDUHQWO\ KDG D IDLUO\ DGYDQFHG ODQJXDJH
, EHJLQ P\ DUJXPHQWV RQ WKH LVVXHV RI FRPPXQLW\ E\ VSHFXODWLQJ DERXW WKH NLQG RI FRPPXQLWLHV
+RPR VDSLHQFH VDSLHQFH ZRXOG KDYH KDG D OLWWOH HDUOLHU WKDQ WKH\ UHDFKHG WKH VWDJH RI DJULFXOWXUDO UHYROXWLRQ
,Q VSLWH RI OLWWOH DUFKHRORJLFDO HYLGHQFH VXJJHVWLQJ H[DFWO\ ZKDW WKHLU ZD\ RI OLIH ZRXOG KDYH EHHQ WKLV
VSHFXODWLRQ LV HVSHFLDOO\ FKDOOHQJLQJ EHFDXVH WKHLU FRPPXQLW\ VWUXFWXUH ZDV H[SHFWHG WR EH VLPSOH HQRXJK
DOPRVW PDQDJHDEOH ZLWK WKH UHJXODWRU\ SRZHU RI WKH XUJH V\VWHP DORQH EHIRUH WKH FRPPXQLWLHV ZHUH ERXQG
E\ D KRUGH RI VRFLDO UXOHV QHFHVVLWDWHG E\ WKH VHGHQWDU\ OLIH VW\OH DQG LQFUHDVHG FRPPXQLW\ SRSXODWLRQ
EURXJKW E\ WKH DJULFXOWXUDO UHYROXWLRQ $QG QHHGOHVV WR DGG WKH XUJH V\VWHP RI WKHLUV ZHUH DSSUR[LPDWHO\
LGHQWLFDO WR WKH XUJH V\VWHP RI WKH PRGHUQ KXPDQV
7KH\ XQGRXEWHGO\ KDG FRPPXQLWLHV KXQWHUJDWKHUHU JURXSV UHODWLYHO\ RI D VPDOO VL]H ZLWK UDWKHU
H[FHOOHQW KXQWLQJ VNLOOV DQG ZHUH QHDUO\ FRQVWDQWO\ RQ WKH PRYH &RQVLGHULQJ WKDW WKH\ KDG D ODQJXDJH
WKHUH LV HYHU\ UHDVRQ WR EHOLHYH WKDW WKHLU FRPPXQLW\ OLIH ZDV UDWKHU ERLVWHURXV WDONLQJ ODXJKLQJ ELFNHULQJ
DQG GLG DOPRVW DQ\WKLQJ WKHLU XUJH V\VWHP VXJJHVWHG /HW PH FDOO WKHVH SUHFLYLOL]DWLRQDO KXPDQ JURXSV WKH
XUEDQGV
RU DOWHUQDWLYHO\ WKH
XUFRPPXQLWLHV
7KH WHUP XUFRPPXQLW\
ZLOO EH XVHG PRUH RIWHQ ZKHQ ZH
DUH GLVFXVVLQJ WKHLU LQWUDEDQG DFWLYLWLHV
7KHUH DUH YDULRXV VSHFXODWLRQV DUH PDGH RQ WKH VL]H RI KXPDQ EDQGV LQ WKH SUHDJULFXOWXUDO WLPHV
UDQJLQJ DURXQG ILIW\ WR RQH KXQGUHG ILIW\ +XQGUHG ILIW\ DW WKH RXWVLGH PXFK OHVV PRVW RI WKH WLPHV VHHPV
WR KDYH EHHQ WKH SURSHU VL]H IRU XUEDQGV SURSHU IURP WKH SRLQWV RI YLHZ ERWK IURP WKH QDWXUDO UHVRXUFHV
DYDLODEOH WR D KXQWHUJDWKHUHU EDQG DQG DOVR IURP WKH OLPLWHG UHJXODWLYH FDSDELOLW\ RI WKH XUJH V\VWHP $V
6HH IRU LQVWDQFH 'XQEHU IRU DUJXPHQWV RQ WKLV SRLQW
IRU WKH ODWWHU SRLQW UHPHPEHU P\ EDVLF DVVXPSWLRQ WKDW XUFRPPXQLWLHV KDG IHZ VRFLDO UXOHV ZKLFK LPSOLHV
WKDW DOO WKH PDQDJHPHQW RI FRPPXQLW\ LVVXHV KDG WR EH KDQGOHG RQ SHUVRQDO OHYHOV ,W PHDQV WKHQ WKDW WKH
PHPEHUV RI D XUFRPPXQLW\ KDG WR NQRZ HDFK RWKHU IDLUO\ ZHOO SHUVRQDOO\ &RQVLGHULQJ RQ WKH RQH KDQG WKH
SUHVVXUH WRZDUG LQFUHDVLQJ WKH EDQG VL]H IURP WKH HIILFLHQF\ RI JURXS DFWLYLWLHV OLNH RUJDQL]LQJ KXQWLQJ DQG
JDWKHULQJ SDUWLHV DQG DOVR IURP WKH QHFHVVLW\ RI VHFXULQJ D ELJ HQRXJK JHQH SRRO DQG RQ WKH RWKHU WKH
FRXQWHUSUHVVXUH WRZDUG UHGXFLQJ WKH QXPEHU WR LQFUHDVH WKH PDQDJHDELOLW\ RI WKH EDQG RQH KXQGUHG VHHPV
WR EH D UHDVRQDEOH DSSUR[LPDWH IRU WKH DYHUDJH XUEDQG VL]H
1RZ QRWH WKDW WKLV DV WKH XUEDQG VL]H LV HYHQ DGPLWWLQJ SUREDEOH GHYLDWLRQV IURP WKLV
K\SRWKHWLFDO VWDQGDUG WRR ODUJH DV PDNLQJ WKH XUEDQG DV DQ\ NLQG RI FORVH FRDOLWLRQ %X\V /DUVRQ FRQFOXGHV RQ WKH EDVLV RI WKHLU TXHVWLRQQDLUH GDWD WKDW D SHUVRQ PD\ EH HPRWLRQDOO\ ERQGHG RQO\ ZLWK SHUVRQV RQ WKH RXWVLGH $V ORQJ DV FORVH SRVLWLYH ERQGV DUH FRQFHUQHG WZHQW\ VHHPV WR SUHVHQW D JRRG
DSSUR[LPDWH XSSHU OLPLW VLQFH RQO\ D SHUVRQ ZLWK DQ H[WUHPHO\ ULFK FRJQLWLYH UHVRXUFHV FRXOG DIIRUG WR SD\
FORVH DWWHQWLRQV WR DQG FDUH IRU WKDW PDQ\ RWKHU SHUVRQV $V VWURQJ SHUVRQDO KDWH DOVR UHTXLUHV HYHQ D
JUHDWHU DPRXQW RI FRJQLWLYH UHVRXUFHV WKH VLJQ RI WKH HPRWLRQDO ERQGLQJ SRVLWLYH RU QHJDWLYH GRHV QRW
SUREDEO\ PDWWHU
7KH VL]H RI FORVH QRQNHUQHOOHG FRDOLWLRQ ZLOO DOVR EH ERXQG E\ WKLV OLPLWLQJ QXPEHU DQG PD\
DFWXDOO\ EH PXFK VPDOOHU DV QRW HYHU\ PHPEHU RI D FORVH QRQNHUQHOOHG FRDOLWLRQ LV H[SHFWHG WR EH HQGRZHG
ZLWK WKDW PXFK HPRWLRQDO FDSDELOLW\ 1RWH DOVR WKDW VKRXOG ZH DFFHSW WKLV QXPEHU DV WKH OLPLWLQJ QXPEHU
IRU RQH
V FORVH ERQGV FDQQRW EH WKH XSSHU ERXQG IRU WKH VL]H RI QRQ NHUQHOOHG FORVH FRDOLWLRQV DV HYHU\
PHPEHU RI D QRQNHUQHOOHG FORVH FRDOLWLRQ LV DVVXPHG WR KDYH D FORVH ERQG ZLWK HYHU\ RWKHU RI WKH VDPH
FRDOLWLRQ 6R D FRDOLWLRQ RI VL]H ZRXOG GHSULYH LWV PHPEHUV RI DQ\ PXOWLSOH FORVH FRDOLWLRQ PHPEHUVKLS ,W
LV WKHUHIRUH H[SHFWHG WKDW WKH SUDFWLFDO XSSHU ERXQG IRU WKH VL]H RI QRQNHUQHOOHG FORVH FRDOLWLRQV WR EH IDU
VPDOOHU WKDQ PD\EH HYHQ OHVV WKDQ VLQFH LW ZRXOG EH XQOLNHO\ WKDW DOO WKH PHPEHUV RI D FORVH QRQ
NHUQHOOHG FRDOLWLRQ DUH VR HPRWLRQDOO\ UHVRXUFHIXO
7KLV GRHV QRW DSSO\ WR WKH VL]H RI FORVH NHUQHOOHG FRDOLWLRQV KRZHYHU VLQFH ZLWK D NHUQHOOHG
FRDOLWLRQ LW LV RQO\ WKH NHUQHOOHG PHPEHU ZKR LV UHTXLUHG WR KDYH VXFK DQ HPRWLRQDO FDSDELOLW\ 6R LW LV
SRVVLEOH IRU D FORVH NHUQHOOHG FRDOLWLRQ WR UHDFK WKLV VL]H RI WZHQW\ RU PRUH DV LW VHHPV WKDW VXFK HPRWLRQDO
ULFKHV LV D SDUW RI WKH SHUVRQDO DWWUDFWLYHQHVV RI WKH NHUQHO PHPEHU 6WLOO HYHQ D FORVH NHUQHOOHG FRDOLWLRQV
PD\ QRW JURZ WRR IDU EH\RQG WKLV OLPLW EHFDXVH WKH EXUGHQ RQ WKH VKRXOGHU RI WKH NHUQHO PHPEHU ZRXOG
WKHQ EH WRR KHDY\ WR EHDU WKH EXUGHQ RI LQWHUDFWLQJ ZLWK DOO WKH QRQNHUQHOOHG PHPEHUV FRQVWDQWO\ FDULQJ
DQG GLVFLSOLQLQJ WKHP ,I VRPH NHUQHOOHG FRDOLWLRQ ORRN ODUJHU WKDQ WKLV OLPLW LW LV XVXDOO\ DQ DUWLILFLDO
FRDOLWLRQ ZKRVH FRDOLWLRQDO LQWHJULW\ LV KHOSHG WR PDLQWDLQ E\ VRPH VRFLDO UXOHV $V ZLOO EH GLVFXVVHG ODWHU
DUWLILFLDO FRDOLWLRQV DUH JHQHUDOO\ IRUPHG DFFRUGLQJ WR DQ H[WHQGHG
NHUQHOOHG FRDOLWLRQ IRUPDW ZKRVH
H[DPSOHV UDQJH IURP ODUJH IDPLOLHV H[WHQGHG IDPLOLHV DQG PDPPRWK VRFLDO RUJDQL]DWLRQV DSSDUHQWO\ ZLWK
QR VL]H OLPLW
$OWKRXJK WKHVH DUH VSHFXODWLRQV RI WKH FRQWHPSRUDU\ FRDOLWLRQV WKH VL]H OLPLWV PD\ DSSO\ HTXDOO\
ZHOO ZLWK FRDOLWLRQV LQ WKH XUEDQG WLPHV H[FHSW WKDW WKHUH ZRXOG KDYH EHHQ IHZ DUWLILFLDO FRDOLWLRQV WR VSHDN
RI DW OHDVW ZKHQ WKH\ GLG QRW XVH WKHLU ODQJXDJH PXFK IRU PDNLQJ VRFLDO UXOHV 7KHQ WKDW OHDYHV RQO\ WKH
QDWXUDO VSHFLDOSXUSRVH FRDOLWLRQ WR FDWHJRUL]H WKH XUEDQG ZKRVH H[SHFWHG VL]H LV MXVW DERXW WRR ODUJH IRU
DQ\ NLQG RI FORVH FRDOLWLRQV $SSDUHQWO\ WKH VSHFLDO SXUSRVH RI IRUPLQJ D XUEDQG FRXOG EH QRWKLQJ HOVH EXW
WKH VXUYLYDO RI LWV PHPEHUV
LH
GHIHQGLQJ WKHPVHOYHV E\ MRLQLQJ IRUFHV ZKHQ QHFHVVDU\ DQG DOVR
RFFDVLRQDOO\ VKDULQJ IRRGV ILQGLQJ PDWHV DQG VR RQ
/HW PH FDOO WKLV NLQG RI QDWXUDO VSHFLDOSXUSRVH FRDOLWLRQ WK
FRPPXQLW\ FRDOLWLRQ
7KH DVVXPSWLRQ
WKDW LW ZDV D VSHFLDOSXUSRVH FRDOLWLRQ LPSOLHV WKDW QRW DOO RI WKHP ZHUH FORVHO\ ERQGHG WR HDFK RWKHU QRW
DFWLQJ WRJHWKHU DOO WKH WLPH DOORZLQJ FORVH FRDOLWLRQV DQG RWKHU NLQGV RI VSHFLDOSXUSRVH FRDOLWLRQV WR H[LVW
LQVLGH LW 1HYHUWKHOHVV WKH\ ZRXOG KDYH OLYHG IDLUO\ FORVH E\ KDYLQJ LQWHUDFWLRQV DPRQJ WKHPVHOYHV VR WKDW
WKH\ FRXOG WDNH FRQFHUWHG DFWLRQV ZKHQ JURXS DFWLRQV ZHUH QHHGHG DQG FRXOG DOVR VHHN WR ILQG DSSURSULDWH
SDUWQHUV DV D PDWH RU DV D ZRUN SDUWQHU DPRQJ WKHPVHOYHV ZKHQ VXFK D QHHG DURVH 1RWH WKDW WKHVH
VXPPDUL]H WKH IXQFWLRQV D FRPPXQLW\ ZDV H[SHFWHG WR VHUYH HYHQ LQ PXFK ODWHU SRVWFLYLOL]DWLRQDO WLPHV
7KH RQO\ UHDOO\ VHULRXV GLIIHUHQFH EHWZHHQ WKH HDUO\ DQG WKH ODWWHU WLPH FRPPXQLWLHV VHHPV WR OLH LQ WKH SRLQW
WKDW WKH XUFRPPXQLWLHV ZHUH PDQDJHG ZLWKRXW KDYLQJ PXFK UHFRXUVH WR DUWLILFLDO VRFLDO UXOHV
7KH LVVXHV RI PDQDJHPHQW IRU DQLPDO DQG KXPDQ JURXSV
7KLV DVVXPSWLRQ WKDW XUFRPPXQLWLHV DUH PDQDJHG ZLWKRXW DUWLILFLDO VRFLDO UXOHV GR QRW H[FOXGH WKH
SRVVLELOLW\ RI WKHLU XVLQJ QDWXUDO UXOHV WKRVH ZKLFK DUH LQFRUSRUDWHG LQ WKH KXPDQ JHQHV DV D SDUW RI WKH XUJH
V\VWHP 7R REWDLQ D FOXH RQ WKLV SRLQW OHW XV VHH ZKDW WKH JURXSIRUPLQJ DQLPDOV DUH GRLQJ WR PDLQWDLQ WKHLU
JURXSV 6RPH DQLPDO VSHFLHV HVSHFLDOO\ ODUJH KHUELYRUHV DUH RIWHQ NQRZQ WR IRUP UDWKHU ODUJH JURXSV RU
KRUGHV 7KH FKDUDFWHULVWLFV RI KRUGHV WKDW , FDOO WKH UHDGHU
V DWWHQWLRQ LV WKDW KRUGH PHPEHUV VHOGRP LQWHUDFW
DPRQJ WKHPVHOYHV DV LQGLYLGXDOV H[FHSW SHUKDSV LQ RFFDVLRQV VXFK DV PDWLQJ :LWK IHZ LQWHUDFWLRQV WKHUH
ZLOO EH IHZ LQWHUQDO FRQIOLFWV WKDW FDOO IRU VRPH NLQG RI PDQDJHPHQW (YHQ VR D KRUGH VHUYHV VRPH EDVLF
IXQFWLRQV RI D FRPPXQLW\ PRVW RI DOO LW SURYLGHV LWV PHPEHUV ZLWK D IDU JUHDWHU VHFXULW\ WKDQ EHLQJ DORQH
1RWH WKDW WKH VPDOO QHHG IRU PDQDJHPHQW VHWV SUDFWLFDOO\ QR LQWHUQDO VL]H OLPLW DQG D KRUGH PD\ JURZ YHU\
ODUJH DQG WKH VKHHU QXPEHU RI WKHP LV WKH PDMRU VRXUFH RI WKH KRUGH
V SRZHU WKDW JLYHV D VHFXULW\ WR LWV
PHPEHUV
:KHQ WKH IRRG UHVRXUFHV DUH QRW DV DEXQGDQW DV JUDVVHV IRU KHUELYRURXV LQ WKH SODLQV RWKHU DQLPDO
VSHFLHV ZLWK D UHODWLYHO\ ODUJH ERG\ VL]H VHHPV WR KDYH PHW D FKRLFH LQ WKHLU HYROXWLRQ EHWZHHQ WKH WZR OLIH
VW\OHV HLWKHU RSHUDWLQJ SULPDULO\ DV ORQHUV RU OLYLQJ LQ JURXSV ,Q RUGHU WR FKRRVH WKH IRUPHU LQGLYLGXDOV RI
WKH VSHFLHV PXVW KDYH EHHQ HLWKHU H[WUHPHO\ SRZHUIXO SK\VLFDOO\ DQGRU H[WUHPHO\ IXUWLYH 2WKHUZLVH WKH\
KDG WR IRUP JURXSV WR LQFUHPHQW WKHLU FROOHFWLYH SRZHU ERWK IRU GHIHQVH DQG RIIHQVH )XUWKHUPRUH WKH\ KDG
WR ZRUN LW XS ZLWKRXW WKH VKHHU QXPEHU RI D KRUGH WR WKH OHYHO RI HIIHFWLYHQHVV WKDW ZRXOG GHWHU DQ\ SRWHQWLDO
DJJUHVVRUV LQ VSLWH RI WKHLU FRQVSLFXRXVQHVV DV D JURXS
$V PHQWLRQHG HDUOLHU WKH HIIHFWLYHQHVV RI FRDOLWLRQDO FRRSHUDWLRQ ZRXOG UHDFK LWV SHDN ZKHQ WKH
ZKROH JURXS RSHUDWHV DV LI LW ZHUH D VLQJOH LQGLYLGXDO ZLWK D VLQJOH EUDLQ DQG PDQ\ ERG\ SDUWV 7KRXJK WKLV
LV IDU HDVLHU WR EH VDLG WKDQ GRQH WKH JURXS IRUPLQJ DQLPDO VSHFLHV DSSDUHQWO\ HYROYHG WRZDUG WKDW GLUHFWLRQ
FUHDWLQJ WKRVH SDUWV RI WKH XUJH V\VWHP ZKRVH SULPDU\ IXQFWLRQ LV VRFLDO 6XFK DQ HYROXWLRQ WRZDUG VRFLDO
DQLPDOV KRZHYHU PDNHV LW D SUHUHTXLVLWH WKDW WKH DQLPDOV DOUHDG\ SRVVHVV WKH ,&$ FDSDELOLW\ DV WKH LQWHQVH
LQWHUDFWLRQ DPRQJ WKHPVHOYHV UHTXLUHV HDFK JURXS PHPEHU WR UHFRJQL]H HDFK RWKHU PHPEHU DQG FUHDWH
VHSDUDWH G\VFV VR WKDW RWKHUV
UHVSRQVHV WR RQH
V RZQ DFWLRQ FDQ EH DQWLFLSDWHG SURSHUO\ PRVW RI WKH WLPHV
,W DSSHDUV WKDW ELRORJLFDO HYROXWLRQ WHQGV WR PDNH DQLPDO VSHFLHV WR IRUP JURXSV LQVRIDU DV WKH
QDWXUDO UHVRXUFHV WKH\ QHHG SHUPLW WKHP WR GR VR ZKHQ WKH VSHFLHV DUH DGYDQFHG HQRXJK WR EH HTXLSSHG
ZLWK DQ ,&$ FDSDELOLW\ 7KH FRDOLWLRQDO EHQHILWV DFFUXLQJ IURP GRLQJ VR FDQ EH DWWDLQDEOH KRZHYHU RQO\
ZKHQ WKH JURXS PHPEHUV FDQ UHVWUDLQ WKHPVHOYHV E\ VDFULILFLQJ VRPH RI WKHLU IUHHGRP RI EHKDYLRU VR WKDW
6RFLDO LQVHFWV DSSDUHQWO\ IRXQG DQRWKHU VROXWLRQ IRU DFKLHYLQJ WKLV JRDO RI JURXS LQWHJUDWLRQ ZLWKRXW WKH FDSDELOLW\
UHFRJQL]LQJ LQGLYLGXDO RWKHUV E\ DVVLJQLQJ WKH JURXS PHPEHUV UHFRJQL]DEOH FXHV WR WKHLU JHQHWLFDOO\ GHWHUPLQHG UROHV
7KDW KRZHYHU LV DQ HQWLUHO\ GLIIHUHQW VWRU\
WKH JURXSV FDQ RSHUDWH DV VHOI UHJXODWRU\ V\VWHPV ,QWHQVH LQWUDFRDOLWLRQDO LQWHUDFWLRQV DQG VHOIUHJXODWLRQV
PD\ EH PDGH FRPSDWLEOH RQO\ ZLWK ,&$ FDSDEOH DQLPDOV EXW LW LV VWLOO D YHU\ GLIILFXOW JRDO WR DFKLHYH
$ VROXWLRQ WR WKLV GLIILFXOW WDVN LV SURYLGHG E\ WKH XUJH V\VWHP DQG VRPH RI WKH VSLULW RI WKLV VROXWLRQ
VHHPV WR EH UHSUHVHQWHG E\ WKH VRFDOOHG
OLQHDU UDQN RUGHU V\VWHP
NQRZQ WR EH ZLGHO\ SUDFWLFHG E\ JURXS
IRUPLQJ DQLPDO VSHFLHV RI KLJKHU RUGHU (LEO(LEHVIHOGW /HW PH H[DPLQH ZKDW WKLV V\VWHP VWDQGV IRU
/LQHDU UDQN RUGHU V\VWHP DQG WKH LQWUDJURXS FRPSHWLWLRQ
7KH OLQHDU UDQN RUGHU V\VWHP WKDW KROGV DPRQJ JURXSV RI DQLPDOV ILUVW GUHZ DWWHQWLRQ RI HWKRORJLVW
ZKHQ 6FKMHOGHUXS(EEH IRXQG WKH SHFNLQJ RUGHU
DPRQJ WKH JURXS RI KHQV LQ KLV NHHS WKH\ EHKDYHG
DV LI WKH\ KDG D OLQHDU UDQN RUGHU DPRQJ WKHP ZKLFK DOORZHG KLJKHU UDQNLQJ KHQV WR SHFN ORZHU RUGHUHG
RQHV EXW QRW
YLFH YHUVD
6LQFH WKHQ D VLPLODU V\VWHP H[LVWV LQ DOPRVW DQ\ ELUG RU PDPPDO JURXSV VPDOO
HQRXJK WR DOORZ WKH PXWXDO LGHQWLILFDWLRQ RI JURXS PHPEHUV DSSDUHQWO\ DV D PHDQV WR UHJXODWH WKHLU LQWUD
JURXS LQWHUDFWLRQV $V PRVW ELUGV DQG PDPPDOV KDYH VRPH GHJUHH RI ,&$ FDSDELOLW\ LW LV QRW VXUSULVLQJ WKDW
WKH\ FDQ UHFRJQL]H ZKR LQ WKH JURXS LV PRUH SRZHUIXO RU OHVV WKDQ RQHVHOI :KDW LV QRWHZRUWK\ LV WKDW WKH
VXFK UHODWLYH SRZHU HYDOXDWLRQV WKH\ PDNH DPRQJ WKHPVHOYHV DJUHH WR HDFK RWKHU ZHOO HQRXJK WR SURGXFH D
OLQHDU UDQN RUGHU HYHQ WKRXJK LW LV QRW UDUH WKDW VRPH UDQNV DUH FRQWHVWHG DQG XQGHFLGHG DPRQJ PXOWLSOH
LQGLYLGXDOV
7KLV XELTXLW\ RI WKLV V\VWHP DFURVV VSHFLHV DQG LWV DSSUR[LPDWH OLQHDULW\ VWURQJO\ VXJJHVW LWV ROG
RULJLQ LQ WKH HYROXWLRQDU\ SURFHVV RI WKH XUJH V\VWHP FUHDWHG IRU WKH VHOIPDQDJHPHQW RI UHODWLYHO\ VPDOO EXW
LQWHQVHO\ LQWHUDFWLQJ JURXSV KDQGHG GRZQ WR ODWH FRPLQJ VSHFLHV HDFK RI ZKLFK XVHG LW
PXWDWLV PXWDQGLV
LQ
DFFRUGDQFH ZLWK WKHLU SDUWLFXODU OLIH VW\OH )RU LQVWDQFH PDPPDOV GR QRW SHFN 6R WKH\ HLWKHU JURZOV RU
VTXHDOV RU GRHV VRPHWKLQJ VLPLODU WR VKRZ RQH
V GRPLQDQFH LQ UDQN WR DQRWKHU HLWKHU VLPSO\ WR FRQILUP WKH
UDQN GLIIHUHQWLDO RU FODLP RQH
V SUHURJDWLYH RYHU DQ LVVXH $QG LQ UHVSRQVH WR VXFK D GRPLQDQFH GLVSOD\ WKH
WDUJHW LQGLYLGXDO RI VXFK D GLVSOD\ DQ LQIHULRU UDQNHU XVXDOO\ DFWV VXEPLVVLYHO\ LQ D VSHFLHVVSHFLILF VW\OL]HG
ZD\ ,W LV WKURXJK WKHVH VW\OL]HG H[FKDQJHV WKDW PDNH LW UHODWLYHO\ HDV\ IRU DQ HWKRORJLVW WR LGHQWLI\ WKH
GRPLQDQFH UHODWLRQV DPRQJ WKH PHPEHUV RI DQLPDO JURXS KH RU VKH LV REVHUYLQJ DQG QHHGOHVV WR VD\
KDYLQJ VXFK UDQNGHSHQGHQW ZD\ RI LQWHUDFWLRQ SUHYHQWV PRVW WKRXJK KDUGO\ DOO VHHGV RI GLVSXWHV IURP
GHYHORSLQJ LQWR PRUH VHULRXV FRQIOLFWV
7KH UHDOO\ DQFLHQW RULJLQ RI WKLV VHOIUHJXODWLRQ V\VWHP RI JURXSV PD\ EH DWWHVWHG WKH REVHUYDWLRQV
PDGH E\ %ODQFKDUG DQG RWKHUV WKDW HYHQ EHDUV ZKR DUH ZHOONQRZQ ORQHUV GHYHORS GRPLQDQFH
UHODWLRQV DV VRRQ DV WKH\ DUH PDGH WR OLYH LQ D JURXS 7KH WDUJHW RI WKHLU REVHUYDWLRQ ZDV D JURXS RI FDSWLYH
DGXOW -DSDQHVH EURZQ EHDUV ZKR ZHUH XVHG RQFH DV D WRXULVW DWWUDFWLRQ $OO WKH SRZHUIXO DGXOW PDOHV ZHUH
VHHQ IUHTXHQWO\ HQJDJHG LQ ILJKWLQJ DPRQJ WKHPVHOYHV IRU WKH SRVLWLRQ RI WKH
DOSKD PDOH
RU WKH KLJKHVW
UDQNLQJ PDOH 7KLV ILJKWLQJ VHOGRP LQFXU DQ\ VHULRXV LQMXULHV EHFDXVH WKH\ HPSOR\HG WKH PRGH RI ILJKWLQJ
FDOOHG WKH
ULWXDO
ILJKWLQJ
LQ WKHVH HQJDJHPHQWV WDUJHWLQJ WKH VZLSHV E\ WKHLU SRZHUIXO IRUHSDZV DW WKH
RSSRQHQW
V QHFN DQG VKRXOGHU DUHDV ZKHUH WKH EHDU IXUV ZHUH WKLFNHVW 7KLV ULWXDO ILJKWLQJ VKRZHG D PDUNHG
FRQWUDVW WR SXQLWLYH VZLSLQJ D SRZHUIXO RQH PLJKW JLYH WR D OHVVHU UDQNLQJ RQH ZKR EUHDFKHG WKH IRRG
SULRULW\ UXOH WKH VZLSHV ZRXOG EH DLPHG DW WKH ODWWHU
V DEGRPLQDO DUHD ZKHUH WKH IXU LV WKLQQHVW RIWHQ
FDXVLQJ VHULRXV LQMXULHV 7KLV LV WKH EHDUYHUVLRQ RI JURXS PDQDJHPHQW WKURXJK WKHLU OLQHDU UDQN RUGHU
ZKLFK VWD\V GRUPDQW DV ORQJ DV EHDUV DUH DOORZHG WR RSHUDWH DV ORQHUV
$V WKH KLGGHQ SXUSRVH RI KDYLQJ D OLQHDU UDQN RUGHU DPRQJ JURXS PHPEHUV LV LQ WKH JURXS
V VHOI
UHJXODWLRQ WKH DFWXDO UDQN RUGHU LV GHVLUHG WR UHPDLQ VWDEOH EXW QRW RYHUO\ VR 1RWH ILUVW WKDW WKH DQ
HVWDEOLVKHG UDQN RUGHU ZRXOG EH PRVW VWDEOH ZKHQ LW FRUUHFWO\ UHIOHFWV WKH RUGHU RI DFWXDO
FRQWURO SRZHUV
SRVVHVVHG E\ WKH PHPEHUV RI D JURXS ZKHUH E\ FRQWURO SRZHU LV PHDQW KRZ PXFK DQ LQGLYLGXDO FDQ FRQWURO
DW RQH
V ZLOO HYHQWV KDSSHQLQJ LQ RQH
V HQYLURQPHQW LQFOXGLQJ WKRVH LQYROYLQJ RQH
V FRJURXS PHPEHUV )RU
WKH PRPHQW OHW PH DVVXPH IRU WKH VDNH RI VLPSOLFLW\ RI DUJXPHQWV WKDW RQH
V FRQWURO SRZHU LV UHSUHVHQWHG
VROHO\ E\ RQH
V
SK\VLFDO VWUHQJWK
ZKLFK LV DW OHDVW WKH PRVW SRWHQW FRPSRQHQW RI WKH FRQWURO SRZHU RQH
ZLHOGV DV IDU DV DQLPDO NLQJGRP LV FRQFHUQHG
6R LPDJLQH DQ DQLPDO JURXS ZKRVH UDQN RUGHU SDUDOOHOV WKH RUGHU RI DFWXDO SK\VLFDO VWUHQJWKV RI LWV
PHPEHUV 6R ORQJ DV LW LV QDWXUDO WKDW D ZHDNHU JLYHV ZD\ WR D VWURQJHU WKLV UDQN RUGHU ZLOO UHPDLQ VWDEOH
RQFH LW LV HVWDEOLVKHG DQG UHFRJQL]HG E\ LWV PHPEHUV DV VXFK DQG WKH UDQN RUGHU V\VWHP ZLOO SHUIRUP WKH
JURXS
V VHOIUHJXODWRU\ IXQFWLRQ DV GHVLUHG %XW WKDW VWDWH RI DIIDLUV FDQQRW ODVW LQGHILQLWHO\ DV SK\VLFDO
SRZHUV RI JURXS PHPEHUV ZLOO ZD[ DQG ZDQH ZLWK WLPH $ \RXQJ FXE ZLOO JDLQ SK\VLFDO VWUHQJWK UDWKHU
UDSLGO\ DQG PD\ ZDQW WR KDYH D KLJKHU UDQN WKDW LWV LQFUHDVHG SRZHU GHVHUYHV -XVW WKLQNLQJ LV QRW HQRXJK
RI FRXUVH LW PXVW
GHPRQVWUDWH
LWV LQFUHDVHG SRZHU LQ SXEOLF VR WKDW QHZ SRZHU EH UHFRJQL]HG E\ RWKHU JURXS
PHPEHUV DQG WKH UDQN RUGHU EH UHYLVHG DFFRUGLQJO\ $QG ZKDW EHWWHU GHPRQVWUDWLRQ LV WKHUH IRU LW WKDQ
FKDOOHQJLQJ
D KLJKHU UDQNHU DQG RYHUZKHOP WKH ODWWHU LQ D ILJKW"
6R WKLV GLUHFW FKDOOHQJH LV DOORZHG LQ PDQ\ DQLPDO JURXSV DV D OHJLWLPDWH PHWKRG RI GHPRQVWUDWLRQ
GHVSLWH WKDW WKLV
FRPSHWLWLYH
VWUXJJOH DSSDUHQWO\ VHHPV WR LPSDLU WKH VSLULW RI SHDFH DQG RUGHU LQ WKH JURXS
IRVWHUHG E\ WKH XUJH V\VWHP +RZHYHU WKH XUJH V\VWHP QHYHU SXWV WKH LQWHUQDO SHDFH DQG RUGHU DERYH
HYHU\WKLQJ HOVH 7KH SULPH JRDO RI WKH XUJH V\VWHP LV DOZD\V VXUYLYDO DQG NHHSLQJ WKH SHDFH DQG RUGHU LV
MXVW RQH RI WKH PHDQV WR NHHS WKH FRDOLWLRQDO HIIHFWLYHQHVV RI D JURXS KLJK 7KH FRDOLWLRQDO HIIHFWLYHQHVV RI
DQ DQLPDO JURXS DOVR GHSHQGV XSRQ KRZ SRZHUIXO LWV LQGLYLGXDO PHPEHUV DUH ZKHQ WKH\ FRRSHUDWHG LQ
PHHWLQJ D WKUHDW OLNH D UDLG IURP QHLJKERULQJ JURXSV RU LQ JURXS KXQWLQJ
6R UDWKHU WKDQ LQKLELWLQJ VXFK GLUHFW FKDOOHQJHV WKH XUJH V\VWHP UDWKHU VHHPV HQFRXUDJLQJ WKHP
WKURXJK FRPSHWLWLYH XUJHV LQVRIDU DV GLUHFW FKDOOHQJHV DUH GRQH RQO\ XQGHU WKH
VSHFLHV VSHFLILF UXOHV
7KH
UXOHV HPSOR\HG DUH UDWKHU GLYHUVH GHSHQGLQJ PXFK XSRQ WKH OLIH VW\OHV RI WKH VSHFLHV DQG WKH SRLQW RI
KDYLQJ WKHVH UXOHV VHHPV WR EH PDLQO\ LQ VDYLQJ WKH JURXS IURP EHLQJ RYHUO\ GLVUXSWHG E\ FRQVWDQW LQWHUQDO
VWUXJJOHV 7KHUH LV KRZHYHU RQH FHQWUDO UXOH WKDW KROGV DFURVV VSHFLHV DOO GLUHFW FRQIURQWDWLRQV
DUH WR EH
WHPSRUDULO\ VXVSHQGHG GXULQJ WKH SHULRG ZKHQ WKH VXUYLYDO RI WKH JURXS FDOOV IRU LWV PHPEHUV
FRRSHUDWLRQ
OLNH ZKHQ WKH JURXS LV HQJDJHG LQ D FRPPXQDO KXQW RU ZKHQ LW LV GHIHQGLQJ LWVHOI DJDLQVW DQ HQFURDFKPHQW
RI RWKHU JURXS LQWR LWV WHUULWRU\ 7KH H[LVWHQFH RI VXFK D FHQWUDO UXOH RI FRXUVH PDNHV D JRRG VHQVH 1RWH DOVR
WKDW WKLV UXOH GRHV QRW SURKLELW ULYDOU\ GXULQJ VXFK H[WHUQDO HQJDJHPHQWV (DFK RI WKH JURXS PHPEHUV PD\
XVH VXFK DQ RFFDVLRQ D JRRG VWDJH IRU WKH GHPRQVWUDWLRQ RI WKHLU SRZHUV WR RWKHU PHPEHUV RI WKH JURXS
$OWKRXJK WKHUH LV QR NQRZQ HYLGHQFH WKDW DQLPDOV GR WKLV LW LV D ZHOONQRZQ PHDQV RI GHPRQVWUDWLRQ IRU
KXPDQ ZDUULRUV WR SURYH WKHLU ILJKWLQJ SURZHVV
1RWH WKDW WKLV FHQWUDO UXOH JHQHUDOO\ DSSOLHV WR WKH KXPDQV DV ZHOO VR WKDW ODWHU GD\ KXPDQ UXOHUV WKH
FRQFHSWXDO HTXLYDOHQW WR DOSKDV DUH NQRZQ WR LQWHQWLRQDOO\ FUHDWH DQ H[WHUQDO HQHP\ DV D SROLWLFDO SOR\ WR
IHQG RII GLUHFW FKDOOHQJHV WR WKHLU SRVLWLRQ HVSHFLDOO\ ZKHQ WKH UXOHU IHHOV KLV RU KHU SROLWLFDO SRZHU EDVH
JHWWLQJ D OLWWOH VKDN\ 7KH UHDVRQ ZK\ , DP FRQVLGHULQJ DQLPDOV KHUH LQ P\ DUJXPHQWV RQ VRFLDO XUJHV LV WKDW
WKHUH DUH FRQWLQXLWLHV EHWZHHQ WKH DGYDQFHG DQLPDOV DQG WKH KXPDQV DV IDU DV WKH RSHUDWLRQV DUH FRQFHUQHG
DQG DQLPDOV RIWHQ VKRZ WKHP LQ IDU PRUH FOHDUFXW ZD\V WKDQ KXPDQV GR DV WKH ODWWHU WHQGV WR EH PDUUHG E\
XELTXLWRXV RWKHU FRQVLGHUDWLRQV
)RU LQVWDQFH WKHUH DUH DOZD\V VRPH KXPDQV ZKR DUH ZLOOLQJ WR EUHDN DQ\
JLYHQ VRFLDO UXOH DQG DERYH FHQWUDO UXOH WRR PD\ EH EURNHQ E\ D EUHHG FDOOHG WUDLWRUV
1RWH WKH
VLJQLILFDQFH IRU D KXPDQ FRPPXQLWLHV RI KDYLQJ VXFK UXOHEUHDNHUV ZKLFK DUH RIWHQ YHU\ GDULQJ DFWV DV
SXQLVKPHQW DJDLQVW WKHP DUH XVXDOO\ VHYHUH 1RWZLWKVWDQGLQJ RFFDVLRQDO VHULRXV GDPDJHV WKH\ FDXVH WR WKH
ZHOIDUH RI WKH FRPPXQLW\ WKH\ VWLOO IXQFWLRQ DV WKH ODVW VDIHW\YDOYH SUHYHQWLQJ FRPPXQLWLHV IURP
VPRWKHULQJ WKHPVHOYHV ZLWK HQRUPRXV QXPEHU RI VRFLDO UXOHV RI WKHLU RZQ FUHDWLRQ 6R OHW PH JR RQ
GLVFXVVLQJ DQLPDO VRFLDO EHKDYLRUV IRU D OLWWOH PRUH ZKLOH NHHSLQJ WKHLU KXPDQ HTXLYDOHQWV LQ PLQG
6WDWXV VWUXJJOH WKH FDVH RI ZROYHV
7R VHH KRZ DQLPDOV JR DW WKHLU LQWUDJURXS FRPSHWLWLRQV OHW PH FRQVLGHU EULHIO\ DERXW ZROYHV DQG
FKLPSDQ]HHV ZROYHV DV DQ H[DPSOH RI D KXQWLQJ VSHFLHV DQG FKLPSDQ]HHV DV JDWKHUHUV
:ROYHV KDYH WZR UDQN RUGHUV RQH IRU PDOHV DQG WKH RWKHU IRU IHPDOHV DQG WKH UHODWLRQVKLSV EHWZHHQ
WKHVH WZR UDQN RUGHUV DUH QRW LGHQWLILHG
7KH FRQIURQWDWLRQV IRU SURPRWLQJ RQH
V UDQN WDNHV SODFH GXULQJ WKH
PRQWKV SUHFHGLQJ WKH IHPDOH HVWURXV SHULRGV LQ VSULQJ DQG IDOO DQG PDOHV DQG IHPDOHV ILJKW ZLWKLQ RQH
V
RZQ VH[ ZLWK OLWWOH LQWHUIHUHQFH IURP WKH RWKHU VH[ PHPEHUV &KLPSDQ]HHV DUH NQRZQ IRU WKHLU SROLWLFDO
PDQHXYHUV GH :DDU EXW ZROYHV DUH DOVR SROLWLFDO HQRXJK WR XVH DOOLDQFHV IRU DXJPHQWLQJ RQH
V
FRQWURO SRZHU 2QH RI WKH SRSXODU SDWWHUQV LV VXFK DV WKH IROORZLQJ $ JDPPDUDQNLQJ LQGLYLGXDO LQ HLWKHU
WKH PDOH RUGHU RU WKH IHPDOH RUGHU PD\ DVVLVW WKH EHWD ZKR LV FKDOOHQJLQJ WKH FXUUHQW DOSKD ,Q D WZRWRRQH
FRQIURQWDWLRQ WKH DOOLHG VLGH XVXDOO\ ZLQV HOHYDWLQJ WKH IRUPHU EHWD WR D QHZ DOSKD DQG WKH IRUPHU JDPPD
QRZ EHWD WKHQ FKDOOHQJHV WKH QHZ DOSKD 7KLV WDFWLF FHUWDLQO\ LPSURYHV WKH FKDQFH IRU WKH RULJLQDO JDPPD WR
HYHQWXDOO\ EHFRPH DOSKD FRPSDUHG WR XVLQJ QR VXFK WDFWLFV
6XFK FRQIURQWDWLRQV DPRQJ ZROYHV DUH TXLWH YLFLRXV DQG WKH VHYHUHO\ ZRXQGHG ORVHU ZLOO ORVH KLV RU
KHU UDQN DV ZHOO ZLWK QR FRQWURO SRZHU OHIW WR VXSSRUW LW DQG LQ WKLV SRLQW IHPDOHV DUH QR OHVV YLFLRXV WKDQ
PDOHV 7KH\ DUH RIWHQ PRUH PHUFLOHVV WKDQ PDOHV LQ WKH SRLQW WKDW WKH YLFWRU GRHV QRW VWRS WRUPHQWLQJ WKH
ORVHU DQG WKH ORVHU LV XVXDOO\ IRUFHG WR OHDYH WKH SDFN $ ORVW PDOH KRZHYHU PD\ EH DOORZHG WR VWD\ LQ WKH
SDFN LI KH VR FKRRVHV DQG VRPHWLPHV KH GRHV DSSDUHQWO\ SROLWLFDOO\ UHWLUHG DQG SOD\V WKH UROH RI JRRG XQFOH
WR ZROI FXEV
7KLV IUDQWLF PHOHH IRU VWDWXV FRPSHWLWLRQ VXEVLGHV DW WKH HQG RI WKLV SHULRG DQG D QHZ UDQN RUGHU LV
ILUPO\ HVWDEOLVKHG ERWK IRU PDOHV DQG IRU IHPDOHV JRRG IRU QH[W VXFK SHULRG 7KHQ IHPDOHV EHFRPH HVWURXV
DQG WKH DOSKD PDOH KDV WKH H[FOXVLYH FRSXODWRU\ ULJKWV 1RW WKDW RWKHU PDOHV UHPDLQ TXLHWO\ FHOLEDWH LQ
UHVSHFW RI WKH DOSKD
V ULJKWV DV WKH\ DUH DOO KRUPRQDOO\ H[FLWHG WKH\ DWWDFN WKH DOSKD LQ IUXVWUDWLRQ +RZHYHU
WKLV LV GLIIHUHQW IURP WKH VWDWXV VWUXJJOH LW RQO\ UHTXLUHV WKH DOSKD PDOH KLV ZRUWKLQHVV E\ GHIHQGLQJ KLV
ULJKWV DQG WKH IDFW WKDW KH LV FDSDEOH RI GRLQJ LW LPSOLHV WKDW WKLV IUHQ]\ LV DOVR D SDUW RI WKH UXOHV
/HW PH DVN DW WKLV MXQFWXUH ZK\ HDFK ZROI SROLWLFDOO\ UHWLUHG RQHV H[FHSWHG ORRNV VR VWURQJO\
PRWLYDWHG WR UDLVH RQH
V VRFLDO VWDWXV 7KLV TXHVWLRQ DFWXDOO\ DSSOLHV WR DQ\ JURXS IRUPLQJ DQLPDO VSHFLHV RI
DGYDQFH RUGHU LQFOXGLQJ KXPDQNLQG 0\ DQVZHU LV DV QDWXUDOO\ H[SHFWHG WKDW WKH XUJH V\VWHP HTXLSSHG
DQ\ VXFK DQLPDO VSHFLHV WKH FRPSHWLWLYH XUJHV ZLWK WKH KLGGHQ SXUSRVH RI NHHSLQJ WKH FRDOLWLRQDO
HIIHFWLYHQHVV RI VXFK D JURXS DOO WKH WLPH DV KLJK DV SRVVLEOH 7KLV TXHVWLRQ LV GHOLFDWH EHFDXVH WKHUH VHHP
WR EH DOWHUQDWLYH DQVZHUV $V IDU DV ZROI PDOHV DUH FRQFHUQHG WKH VHOILVK JHQH
K\SRWKHVLV DQVZHUV WKH
TXHVWLRQ DSWO\ VLQFH RQO\ WKH DOSKD PDOH FDQ UHSURGXFH KLV JHQHV ,W DOVR H[SODLQV QLFHO\ ZK\ WKH IHPDOH
7KH SULPDU\ VRXUFH IRU P\ DUJXPHQWV RQ WKH VRFLDO OLIH RI ZROYHV LV WKH ERRN 'HU :ROI E\ =LPHQ =LPHQ ZRQGHUV ZKDW PHULW WKLV EHKDYLRU RI SROLWLFDOO\ UHWLUHG ZROYHV ZRXOG KDYH IURP SUHVHUYLQJ RQH
V JHQHV
$Q ZROI SDFN DV ZHOO DV DQ\ QDWXUDO DQLPDO JURXS LV D FRPPXQLW\ FRDOLWLRQ DQG D FRPPXQLW\ PHPEHU IHHOV PRUH DW
HDVH DQG PRUH VHFXUH E\ PDNLQJ ZKDWHYHU FRQWULEXWLRQV WR WKH FRPPXQLW\ DQG WKDW VKRXOG VXSSO\ D EHWWHU DW OHDVW
PRUH QDWXUDO DQVZHU WR WKH TXHVWLRQ
ZROI QHZO\ ULVHQ WR DOSKD NHHSV SHUVHFXWLQJ WKH EHDWHQ IRUPHU DOSKD DQG YLUWXDOO\ IRUFHV WKH ODWWHU WR OHDYH
WKH SDFN 7KLV GRHV QRW H[SODLQ KRZHYHU ZK\ PRVW IHPDOHV GR QRW FKRRVH D PXFK VDIHU ZD\ RI VWD\LQJ
VXEPLVVLYH WR WKH FXUUHQW DOSKD IHPDOH DV WKH DOSKD PDOH ZLOO FRSXODWH ZLWK WKHP LQ DQ\ FDVH
$OWKRXJK WKH VHOILVK JHQH
K\SRWKHVLV ZRUNV IDLUO\ ZHOO ZLWK ZROI PDOHV DQG PDQ\ RWKHU PDPPDO
VSHFLHV DV ZHOO LW GRHV QRW DSSO\ WR WKH KXPDQV ,W LV DEVXUG WR DVVXPH WKDW DQ\ KXPDQ WR FOLPE XS WKH UDQN
ODGGHU RI FXUUHQW GD\ FRUSRUDWH RUJDQL]DWLRQ LV OXUHG E\ KLJKHU FRSXODWRU\ ULJKWV ,Q ROGHU GD\V VRPH RI WKH
UXOHUV NHSW D UDWKHU ODUJH KDUHP EXW WKDW FDQ EH H[SODLQHG E\ D PXFK PLOGHU DQG WKHUHIRUH PRUH XQUHVWULFWHG
DVVXPSWLRQ WKDW UDQNV DFFUXH SULYLOHJHV 6LQFH WKH KLJKHU UDQNHU DUH WKH PRUH SRZHUIXO ZLWKLQ WKH JURXS LW LV
PRUH WKDQ QDWXUDO WKDW WKH\ JHW JUHDWHU SULYLOHJHV DQG WKH WRS UDQNHU DOSKD NHHSV WKH JUHDWHVW SULYLOHJHV
VXFK DV WKH H[FOXVLYH FRSXODWRU\ ULJKWV DV ZROYHV KDYH OLWWOH HOVH LQ WHUPV RI SULYLOHJHV WKDW FRXQW
&RPSDUHG ZLWK ZROYHV KXPDQV KDYH DQ HQRUPRXV YDULHW\ RI SULYLOHJHV PRQHWDU\ UHZDUGV ULJKWV
RI GRLQJ YDULRXV WKLQJV DOORZHG RQO\ WR KLJK UDQNHUV DQG VR RQ VR IRUWK 7KH SRLQW LV KRZHYHU ZKHWKHU RQH
ZKR ZDQWV WR SURPRWH RQH
V VRFLDO VWDWXV LV DIWHU RQO\ WKHVH SULYLOHJHV WKDW DFFRPSDQ\ WKH KLJK VWDWXV ,V
ZKDW PDNHV VRPHRQH DVSLUH WR EH D SUHVLGHQW RI D QDWLRQ MXVW WKH SULYLOHJHV RI D SUHVLGHQW RU EHFRPLQJ WKH
WRS SROLWLFDO ILJXUH RI WKH QDWLRQ" ,W LV TXLWH SUREDEO\ ERWK EXW WKH IRUPHU DORQH REYLRXVO\ FDQQRW EH WKH
DQVZHU 6R OHW PH UHVWDWH P\ K\SRWKHVLV WKH XUJH V\VWHP RI DQ\ DGYDQFHG JURXSIRUPLQJ DQLPDO EH LW D
KXPDQ RU DQ ZROI LV HTXLSSHG ZLWK FRPSHWLWLYH XUJHV WR SURPRWH RQH
V VRFLDO VWDWXV ZLWK WKH KLGGHQ SXUSRVH
RI PDLQWDLQLQJ DQG LQFUHDVLQJ WKH FRDOLWLRQDO HIIHFWLYHQHVV RI WKH JURXS RQH EHORQJV WR
7KHUH LV DQ LPSRUWDQW SURYLVR VXSSOHPHQWLQJ WKLV K\SRWKHVLV HVSHFLDOO\ LQ WKH FDVH RI WKH KXPDQV
$OWKRXJK LW LV DVVXPHG WKDW HYHU\ SHUVRQ LV HTXLSSHG ZLWK WKHVH FRPSHWLWLYH XUJHV QRW HYHU\RQH DWWHPSWV
DFWLYHO\ WR SURPRWH RQH
V VWDWXV 3UREDEO\ GXH WR WKH HQODUJHG FRJQLWLYH FDSDFLW\ RI WKH KXPDQV WKH\ DUH
JHQHUDOO\ IDU PRUH GHOLEHUDWHG GHFLVLRQ PDNHUV WKDQ ZROYHV DQG WKH HVWLPDWHG FRVW RI VXFK FRPSHWLWLYH
DFWLYLWLHV DQG WKH GXWLHV DQG UHVSRQVLELOLWLHV DFFRPSDQ\LQJ D KLJK VRFLDO VWDWXV ZLOO RIWHQ IDU RXWZHLJK WKH
JORU\ RI D KLJK VWDWXV DQG WKH DFFRPSDQ\LQJ SULYLOHJHV DWWHQXDWHG E\ ORZ VXFFHVV SUREDELOLW\ ,Q VXFK D FDVH
D SHUVRQ ZLOO SUHIHU 1R$FWLRQ WR DQ\ GLUHFW FRPSHWLWLYH DFWLYLWLHV HYHQ ZKHQ VRPH FRPSHWLWLYH XUJH OLNH
HQY\ LV DFWLYDWHG
$OOLDQFH SRZHU WKH FDVH RI FKLPSDQ]HHV
7KH SDWWHUQV RI VRFLDO EHKDYLRU VHHQ LQ FKLPSDQ]HHV DUH YHU\ FRPSOH[ EXW WKH SULQFLSOHV RI WKHLU
VWDWXV VWUXJJOH DUH TXLWH VLPLODU WR WKRVH RI ZROYHV 0DQ\ PDOHV H[HUW WKHPVHOYHV WR DFTXLUH KLJKHU VRFLDO
VWDWXV HVSHFLDOO\ WKH SRVLWLRQ RI DOSKD PDOH DQG IHPDOHV GR WKH VDPH DPRQJ WKHPVHOYHV DOWKRXJK HYHU\
PDOH LQ SULQFLSOH RXWUDQNV DOO IHPDOHV *RRGDOO )RU WKH SXUSRVH RI VWDWXV SURPRWLRQ WKH\ DOVR IRUP
DOOLDQFHV XVXDOO\ DPRQJ PDOHV 2QH RI WKH WZR PDMRU GLIIHUHQFHV LQ WKH ZD\V RI VWDWXV VWUXJJOH DPRQJ
FKLPSDQ]HHV IURP WKRVH DPRQJ ZROYHV LV WKDW FRQIURQWDWLRQV DPRQJ FKLPSDQ]HHV DUH IDU OHVV YLFLRXV WKDQ
WKRVH RI ZROYHV LQ PDQ\ FDVHV MXVW GHPRQVWUDWLQJ RQH
V VXSHULRU SRZHU WKURXJK WKUHDWHQLQJ GLVSOD\V OLNH
UXQQLQJ WRZDUG WKH WDUJHW LQGLYLGXDO ZLWK WKH FKLPSDQ]HH
V ZDUFU\ RI SXQWKRRWLQJ PD\ EH HQRXJK WR PDNH
WKH RSSRQHQW FRZHU DQG IOHH VFUHDPLQJ 6R HYHQ WKRXJK PDOHV DUH RFFDVLRQDOO\ HQJDJHG LQ D UHDO SK\VLFDO
ILJKW WKH SK\VLFDO ZRXQGV VXVWDLQHG E\ WKH ORVHU DUH UDUHO\ VHYHUH 7KLV GLIIHUHQFH LQ WKH PRGH RI
FRQIURQWDWLRQ REYLRXVO\ UHIOHFWV WKH UHVSHFWLYH OLIH VW\OHV RI WKHVH WZR VSHFLHV :ROYHV DUH JURXSKXQWLQJ
SUHGDWRUV DQG QR LQGLYLGXDO FDQ FODLP RQH
V VWDWXV ZLWKLQ WKHLU SDFN ZLWKRXW D UHDO ILJKWLQJ SURZHVV ,Q
FRQWUDVW WR ZROYHV FKLPSDQ]HHV DUH QR ERUQ ILJKWHUV 7KH\ DUH RPQLYRURXV DQG D IHZ RI WKHP PD\ KXQW
RFFDVLRQDOO\ EXW WKHLU KXQWV DUH IDU PRUH FDSULFLRXV FRPSDUHG WR WKH ZHOO RUJDQL]HG KXQWLQJ PHWKRG RI
ZROYHV
2Q WKH RWKHU KDQG WKH VWDWXV VWUXJJOH DPRQJ FKLPSDQ]HHV DUH QRW NH\HG WR DQ\ IL[HG SHULRGV DV
WKHUH LV QR VHDVRQDO HVWURXV SHULRGV IRU FKLPSDQ]HH IHPDOHV HDFK RI ZKRP EHFRPHV HVWURXV LQGLYLGXDOO\
RQFH LQ HYHU\ GD\V RQ WKH DYHUDJH 6R WKH FKLPSDQ]HH DOSKD PDOH KDV SUDFWLFDOO\ QR WLPH WR UHVW
GHIHQGLQJ KLPVHOI IURP DPELWLRXV FRQWHQGHUV ZKLOH HQIRUFLQJ KLV FRSXODWRU\ ULJKWV ZKLFK KH KDV DV WKH
ZROI DOSKD GRHV EXW LV YHU\ RIWHQ LJQRUHG E\ RWKHU PDOHV
6R WKH FKLPSDQ]HH DOSKD DSSDUHQWO\ QHHGV D UDWKHU SRZHUIXO DOO\ RU DOOLHV QRW RQO\ IRU EHFRPLQJ WKH
DOSKD EXW DOVR WR UHPDLQ DV WKH DOSKD /HW PH UHODWH WZR LQWHUHVWLQJ HSLVRGHV DERXW WKH FKLPSDQ]HH DOOLDQFH
ZKLFK DUH LQVWUXFWLYH DERXW WKH QDWXUH RI SROLWLFV ZKLFK KROGV UHJDUGOHVV RI ZKHWKHU WKH FRQFHUQHG SDUWLHV
DUH FKLPSDQ]HHV RU KXPDQV
1LVKLGD GHVFULEHV D SLHFH RI SROLWLFDO PDQHXYHU SOD\HG E\ WKUHH FKLPSDQ]HH PDOHV LQ D ZLOG
FKLPSDQ]HH JURXS KH REVHUYHG LQ 0DKDOH 0RXQWDLQV RI 7DQ]DQLD 1LVKLGD 7KH FRQWHVW IRU WKH
SRVLWLRQ RI DOSKD ZDV IRXJKW EHWZHHQ WZR SRZHUIXO PDOHV .DVRQWD DQG 6RERQJR LQWR ZKLFK D WKLUG PDOH
.DPHPDQIX LQWUXGHG ZLWK D FOHYHU SROLWLFDO JDPH RI DOOLDQFHVKLIWLQJ 6LQFH WKH FRQWURO SRZHUV RI WKH WZR
PDMRU FRQWHVWDQWV ZHUH QHDUO\ HYHQO\ PDWFKHG ZKLFKHYHU RI WKH WZR FRXOG EHFRPH DOSKD LI KH FRXOG DOO\
ZLWK .DPHPDQIX $QG .DPHPDQIX FKDQJHG KLV DOOLDQFH YHU\ RIWHQ DFWXDOO\ VHYHQ WLPHV LQ IRXU PRQWKV
IRUFLQJ HDFK RI WKH WZR PDMRU FRQWHVWDQWV WR DEGLFDWH YHU\ TXLFNO\ DIWHU KH EHFDPH WKH DOSKD 7KH TXHVWLRQ
LV ZKDW EHQHILW GLG .DPHPDQIX JHW E\ EHLQJ VR ILFNOH LQ PDNLQJ KLV DOOLDQFH" 7KH DQVZHU VHHPV WR OLH
DFFRUGLQJ WR 1LVKLGD LQ WKH IDFW WKDW .DPHPDQIX KDG FRSXODWHG GXULQJ WKLV SHULRG QHDUO\ WZLFH DV RIWHQ DV
DQ\ RI WKH RWKHU WZR GLG IRU WKH REYLRXV UHDVRQ WKDW ZKRHYHU EHLQJ WKH DOSKD DW WKH WLPH ZDV DIUDLG RI
DQWDJRQL]LQJ .DPHPDQIX E\ UHVWULFWLQJ KLV FRSXODWLRQ ULJKWV VR WKDW KH PLJKW FKDQJH VLGH DJDLQ
)HPDOHV FKLPSDQ]HHV XVXDOO\ WU\ WR DYRLG WKH VFHQH RI VWDWXV FRQIURQWDWLRQ DPRQJ PDOHV EXW WKHUH
DUH H[FHSWLRQDO FDVHV DV ZHOO DQG DQ LQWHUHVWLQJ FDVH ZDV UHSRUWHG E\ YDQ +RRII DERXW WKH VRFLDO
EHKDYLRU RI H[SHULPHQWDO FKLPSDQ]HH JURXS LQ $UQKHP ]RR 7KH DOSKD PDOH RI WKH JURXS DW WKH WLPH RI KLV
REVHUYDWLRQ <HURHQ ZDV RIWHQ FKDOOHQJHG E\ WKH EHWD PDOH /XLW DQG WKH JDPPD PDOH 1LNNLH ZKRVH
DOOLDQFH FRXOG KDYH RYHUZKHOPHG KLP KDG LW QRW EHHQ IRU WKH IHPDOHV RI WKH JURXS DOLJQLQJ WKHPVHOYHV
DURXQG <HURHQ ZKHQHYHU /XLW DQG 1LNNLH DSSURDFKHG KLP EHOOLJHUHQWO\ (YHQ WKRXJK WKHVH IHPDOHV GLG
QRWKLQJ RXWZDUGO\ DJJUHVVLYH WKHLU SUHVHQFH WKHUH ZDV PHQDFLQJ HQRXJK WR PDNLQJ WKH FRQWHQGHUV UHWUHDW
/XLW WULHG WR KDUDVV VRPH RI WKH IHPDOHV EXW WKHQ <HURHQ FDPH WR KHOS IROORZHG E\ DOO WKH RWKHUV ,Q
IUXVWUDWLRQ /XLW FOLPEHG XS D KLJKHVW WUHH LQ WKH FRPSRXQG GHVSLWH WKH MROW RI HOHFWULF SURWHFWLYH IHQFH RI
YROWV KH JRW DQG VFUHDPHG WKHUH IRU D ORQJ WLPH (YHQWXDOO\ KRZHYHU /XLW VXFFHHGHG LQ LQWLPLGDWLQJ
WKHVH IHPDOHV RQH E\ RQH DQG ILQDOO\ FRQIURQWHG ZLWK <HURHQ DORQH ZKLOH 1LNNLH GURYH RII DOO IHPDOHV ZKR
ZHUH LQ VXSSRUW RI <HURHQ LQWR D FRUQHU RI WKH FRPSRXQG 6HHLQJ WKLV <HURHQ ZKR GLG QRW ZDQW WR ILJKW
VWHSSHG GRZQ IURP WKH DOSKD
V SRVLWLRQ
'HVSLWH WKH UDULW\ RI VXFK DQ LQFLGHQW WKLV HSLVRGH LV VXJJHVWLYH LQ PDQ\ ZD\V )LUVW DQ DOOLDQFH
SRZHU PD\ EH FUHDWHG E\ UHODWLYHO\ SRZHUOHVV PHPEHUV LI HQRXJK QXPEHU RI WKHP XQLWH WKH FRPELQHG
SRZHU PLJKW EH GDXQWLQJ HYHQ WR SRZHUIXO EXOO\LQJ PDOHV $W WKLV SRLQW OHW PH GLVWLQJXLVK EHWZHHQ WKHVH
WZR W\SHV RI DOOLDQFH FRDOLWLRQV WKH WHUP DOOLDQFH
SRZHUIXO IHZ DQG WKH WHUP VXSSRUW
FRDOLWLRQ
FRDOLWLRQ
PD\ EH UHVHUYHG IRU DQ DOOLDQFH RI UHODWLYHO\
PD\ EH XVHG IRU D VXEJURXS RI UHODWLYHO\ ODUJH QXPEHU RI
LQGLYLGXDOV LQ VXSSRUW RI D FDQGLGDWH IRU DQ LPSRUWDQW SRVLWLRQ %RWK RI WKHVH DUH VSHFLDO SXUSRVH FRDOLWLRQV
IRU SROLWLFDO SXUSRVHV PHDQW WR EH XVHG IRU KXPDQ DOOLDQFH FRDOLWLRQV DV ZHOO
,Q WKH KXPDQ SROLWLFDO
7KH SRVVLELOLW\ LV QRW H[FOXGHG WKDW DQ DOOLDQFH FRDOLWLRQ LV D FORVH IULHQGVKLS FRDOLWLRQ $OVR LQ FKLPSDQ]HH JURXSV D
PRWKHU DQG KHU FKLOGUHQ RIWHQ WHQG WR IRUP DQ DOOLDQFH KHOSLQJ HDFK RWKHU LQ WKHLU UHVSHFWLYH VWDWXV VWUXJJOH
V\VWHP FDOOHG
GHPRFUDF\
WKH UXOHV RI FRPSHWLWLRQ DUH JHQHUDOO\ EDVHG RQ WKH VL]H RI WKH VXSSRUW FRDOLWLRQ
IRU HDFK FRPSHWLWRU :KHWKHU WKH SROLWLFDO V\VWHP RI D FRPPXQLW\ LV GHPRFUDWLF RU QRW WKHVH WZR W\SHV RI
DOOLDQFH FRDOLWLRQV QHYHU IDLO WR SOD\ VRPH NH\ UROHV LQ WKH KXPDQ SROLWLFDO VWUXJJOHV DV WKH HDVLHVW PHDQV WR
DFTXLUH FRQWURO SRZHU
7KH SRLQW , ZLVK WR SXW D VSHFLDO HPSKDVLV KHUH LV WKH EDVLF FRQWLQXLW\ DFURVV DQLPDO DQG KXPDQ
VRFLRSROLWLFDO EHKDYLRU ,W LV QRW WKDW WKH VRFLRSROLWLFDO EHKDYLRUV RI VRPH DQLPDOV
UHVHPEOH
WKRVH RI WKH
KXPDQV WKH\ DUH YLUWXDOO\ WKH VDPH DV IDU DV WKH XQGHUO\LQJ SULQFLSOHV DUH FRQFHUQHG 7KH DSSDUHQW
GLIIHUHQFHV DUH FUHDWHG RQO\ EHFDXVH DQLPDOV XVH VSHFLHVVSHFLILF VHOIUHJXODWRU\ UXOHV PDNLQJ WKHLU
EHKDYLRUV IDLUO\ XQLIRUP JLYHQ WKH VSHFLHV ZKLOH WKH KXPDQV XVH ODQJXDJHFRGHG DUWLILFLDO UXOHV DV WRROV IRU
VHOIJRYHUQDQFH $QG WKHVH KXPDQ VRFLRSROLWLFDO UXOHV HYROYH DQG SUROLIHUDWH UDWKHU TXLFNO\ DV DOO WRROV GR
WKURXJK DUWLILFLDO HYROXWLRQ FRQWULEXWLQJ WR SURGXFH D ODUJH KHWHURJHQHLW\ LQ WKH RXWZDUG DSSHDUDQFH RI
KXPDQ VRFLRSROLWLFDO V\VWHPV DV ZLOO EH GLVFXVVHG ODWHU
7KH V\VWHP RI VRFLDO VWDWXV WR UHSODFH WKH OLQHDU UDQN RUGHU V\VWHP
%HIRUH JRLQJ LQWR DQ\ IXUWKHU DUJXPHQWV RQ WKH VRFLR SROLWLFDO EHKDYLRU RI DQLPDOV DQG KXPDQV
HVSHFLDOO\ WKH KXPDQV ZH QHHG WR H[SDQG WKH WKHRUHWLFDO IUDPHZRUN DV RXU FRQFHSWXDO WRRO RI DQDO\VLV D
OLWWOH IXUWKHU VR WKDW ZH PD\ EH DEOH WR PDNH UHDVRQDEOH LQIHUHQFHV DERXW WKHLU SULQFLSOHV 1HHGOHVV WR VD\
WKH VRFLDO EHKDYLRU RI DQLPDOV DQG KXPDQV DUH H[WUHPHO\ FRPSOH[ (YHQ WKRVH RI ZROYHV DUH IDU EH\RQG WKH
OHYHO WKH EULHI GHVFULSWLRQV JLYHQ DERYH GR MXVWLFH WR OHW DORQH WKRVH RI WKH KXPDQV :KDW WKDW LPSOLHV LV WKDW
ZH ZRXOG VLPSO\ EH GURZQHG LQ LQILQLWH GHWDLOV LI ZH IDLO WR JUDVS VRPH XQGHUO\LQJ SULQFLSOHV IURP ZKLFK
WKHVH GHWDLOV DUH VXSSRVHGO\ GHULYHG
2I FRXUVH ZKDW ZH FDQ GR IRU WKH PRPHQW LV WR ILQG D ZRUNLQJ PRGHO IRU VXFK SULQFLSOHV D PRGHO
WKDW DFWXDOO\
ZRUNV
PHDQLQJ D PRGHO WKDW LV HTXLSSHG ZLWK D EXLOWLQ LQIHUHQFH HQJLQH 2QH RI WKH VLPSOHVW
DQG RIWHQ PRVW HIIHFWLYH W\SH RI FRQFHSWXDO PRGHOV ZLWK DQ LQWHUQDO LQIHUHQFH HQJLQH DUH DOJHEUDLF PRGHOV
7KH SDUWLFXODU PHULW RI DOJHEUDLF PRGHOV LV WKDW HYHQ WKRXJK WKH\ GHDO ZLWK QXPEHUV WKH QXPEHUV DUH
UHSUHVHQWHG E\ V\PEROV DQG H[DFW ILJXUHV RI WKHVH QXPEHUV QHHG QRW EH NQRZQ WR PDNH LQIHUHQFHV ZLWK
WKHP ,Q RWKHU ZRUGV DOJHEUDLF PRGHOV DOORZ XV WR PDNH TXDOLWDWLYH DUJXPHQWV XVLQJ QRW H[DFWO\ LGHQWLILHG
TXDQWLWLHV
%\ DOJHEUDLF PRGHOV , PHDQ QR HVRWHULF RQHV ZKLFK QR RQH FDQ SURYH RU GLVSURYH 7KH NLQG , PHDQ
DUH VLPSOH OLQHDU RQHV OLNH WKRVH KDYLQJ EHHQ XVHG LQ HDUOLHU FKDSWHUV /LQHDU PRGHOV DUH ERXQG WR EH
DSSUR[LPDWLRQV RI WKH UHDOLW\ %XW LW KDV D PHULW WKDW DOPRVW DQ\RQH IDPLOLDU ZLWK VLPSOH PDWKHPDWLFDO
H[SUHVVLRQV FDQ XVH LWV LQIHUHQFH HQJLQH DQG IDOVLI\ VXFK LQIHUHQFHV HYHQ DV DSSUR[LPDWLRQV 0DQ\ RI WKH
UHDGHUV RI WKLV ERRN SUREDEO\ ZRXOG KDYH IRXQG VRPH RI WKH VWDWHPHQWV , PDGH IDOVH LUUHVSHFWLYH RI
ZKHWKHU WKH\ ZHUH H[SUHVVHG LQ PDWKHPDWLFDO WHUPV RU RWKHUZLVH EHFDXVH P\ LQWHQWLRQ ZDV DOZD\V ZLWK WKH
IRUPHU DQG LI VR LW WHVWLILHV WKH IDOVLILDELOLW\ RI VXFK PRGHOV DQG WKHUHE\ WKHLU LPSURYDELOLW\
6R PXFK IRU UDWLRQDOL]DWLRQ DQG OHW PH JHW RQ ZLWK WKH H[SDQVLRQ RI FRQFHSWXDO WRROV , KDYH EHHQ
XVLQJ LQ DQDO\]LQJ WKH VRFLRSROLWLFDO EHKDYLRU RI DQLPDOV 7KH ILUVW WDUJHW LV WKH OLQHDU UDQN RUGHU V\VWHP
'HVSLWH WKH XVHIXOQHVV RI VXFK DQ RUGLQDO VFDOH IRU DQ RXWVLGHU REVHUYHU RI DQLPDO JURXSV LW LV TXLWH REYLRXV
WKDW LQGLYLGXDO DQLPDOV DUH QRW UHJXODWLQJ WKHLU LQWHUDFWLYH EHKDYLRU DFFRUGLQJ WR WKH UDQNV DVVLJQHG E\
RXWVLGHUV QRW LQ DQ\ OLWHUDO ZD\ VXFK DV 7KDW RQH LV WKH VHFRQG LQ UDQN DQG WKLV RQH LV WKH WHQWK 6LQFH , DP
WKH ILIWK , SD\ UHVSHFW WR WKDW RQH DQG H[SHFW WKDW WKLV RQH ZLOO SD\ PH UHVSHFW
:KDW WKH\ PXVW EH GRLQJ ZKHQ RQH HQFRXQWHUV DQRWKHU LV D GLUHFW HYDOXDWLRQ RI SRZHU GLIIHUHQWLDO
EHWZHHQ WKHP D TXDQWLWDWLYH MXGJPHQW ZKLFK PD\ EH FUXGH EXW HQRXJK WR PDNH WKHP GHFLGH TXLFNO\ ZKDW LV
DQ DSSURSULDWH DFWLRQ WR WDNH $SSDUHQWO\ WKLV LV DQ DELOLW\ RI D YHU\ ROG RULJLQ DV WKH\ PD\ QRW EH DEOH WR
VXUYLYH ZLWKRXW VRPH VXFK DELOLW\ 1RWH WKDW WKLV GLUHFW HYDOXDWLRQ LV UHTXLUHG WR EH UDWKHU SUHFLVH ZKHQ WKH
SRZHU GLIIHUHQWLDO LV VPDOO VLQFH ZKHQ LW LV YHU\ ODUJH ZKDW RQH GRHV ZRXOG QRW GHSHQG XSRQ KRZ ODUJH LW
UHDOO\ LV
6WLOO ZKHQ D QXPEHU RI DQLPDOV JHQHUDOO\ OLYH WRJHWKHU DV D JURXS WKHVH SRZHU GLIIHUHQWLDO
UHFRJQLWLRQV PDGH E\ LWV PHPEHUV ZLOO FXPXODWLYHO\ GHYHORS D FUXGH OLQHDU VFDOH ZLWK D ELW RI KHOS IURP D
JURXS SUHVVXUH WRZDUG FRQIRUPLW\ VXFK DV D FRQFHLWHG \RXQJVWHU ZKR RYHUUDWHG RQH
V SRZHU EHDULQJ WKH
EUXQW RI SXQLWLYH DFWLRQV E\ JURXS HOGHUV WLOO LWV LQIODWHG VHOIHYDOXDWLRQ EH VXIILFLHQWO\ GHIODWHG
6R OHW PH QRZ WDNH WKLV FUXGHO\ FRPSRVHG OLQHDU VFDOH RI VRFLDOO\ UHFRJQL]HG FRQWURO SRZHU DV
JUDQWHG DQG FDOO LW WKH
VFDOH RI VRFLDO VWDWXV
HVWDEOLVKHG ZLWKLQ D JURXS RI DQLPDOV RU DQ DQLPDO FRPPXQLW\
$QG XSRQ WKLV VFDOH HDFK PHPEHU RI WKH JURXS LV SRVLWLRQHG LQ DFFRUGDQFH ZLWK LWV VRFLDOO\ UHFRJQL]HG
FRQWURO SRZHU ZKLFK KHQFHIRUWK ZLOO EH FDOOHG WKH
VRFLDO VWDWXV
RI WKH LQGLYLGXDO FRQFHUQHG $Q LQGLYLGXDO
V
VRFLDO VWDWXV WKXV SRVLWLRQHG RQ WKH VFDOH KRZHYHU ZLOO LQ JHQHUDO EH PRUH EOXUU\ WKDQ SLQSRLQWHG ILUVW
EHFDXVH WKH VFDOH LWVHOI LV FRDUVHO\ JUDLQHG DQG VHFRQGO\ EHFDXVH WKH DJUHHPHQW DPRQJ WKH PHPEHUV
HYDOXDWLRQV RI WKH LQGLYLGXDO
V SRZHU FDQQRW EH SHUIHFW DQG WKH SUHVVXUH WRZDUG FRQIRUPLW\ PD\ QRW ERWKHU
VPDOO GLIIHUHQFHV
%HVLGHV DOORZLQJ WR EXLOG DQ DOJHEUDLF PRGHO RI VRFLDO SURFHVVHV DV ZLOO EH GRQH VKRUWO\ WKH
DGRSWLRQ RI VRFLDO VWDWXV DV RQH RI WKH EDVLF FRQFHSWV LQ OLHX RI UDQNV LV D QHFHVVLW\ LQVRIDU DV RQH DVVXPHV D
FRQWLQXLW\ DFURVV DQLPDO DQG KXPDQ GRPDLQV &RQVLGHU WKH WURXEOHV RI UDQN RUGHULQJ HYHQ DV VPDOO D KXPDQ
FRPPXQLW\ DV D XUFRPPXQLW\ RI QHDU KXQGUHG PHPEHUV %HVLGHV UDQN RUGHUV KDYH WR EH UHGHILQHG DQ\WLPH
WKHUH LV D PHPEHU FKDQJH ZKLFK LV HVSHFLDOO\ IUHTXHQW ZLWK KXPDQ FRPPXQLWLHV ZKLOH LW KDV D IDU OHVV
HIIHFW XSRQ WKH V\VWHP RI VRFLDO VWDWXV WKRXJK WKHUH PD\ EH VRPH DV ZLOO EH PHQWLRQHG ODWHU
0XOWLGLPHQVLRQDO FRQWURO SRZHU DQG WKH FRPPXQLW\ QRUP IRU LWV DJJUHJDWLRQ
%HIRUH JRLQJ LQWR DQ\ IXUWKHU DUJXPHQWV RQ VRFLDO VWDWXV , QHHG DQRWKHU H[SDQVLRQ RI D EDVLF
FRQFHSW DQG WKDW LV DERXW WKH FRQWURO SRZHU 6R IDU , KDYH FRQVLGHUHG RQO\ SK\VLFDO VWUHQJWK DV WKH
FRPSRQHQW RI RQH
V FRQWURO SRZHU 7KLV LV DQ RYHUVLPSOLILFDWLRQ HYHQ ZLWK DQLPDOV DV IRU LQVWDQFH ILJKWLQJ
DV D VWDWXV FRQWHVW LV QRW MXVW D PDWWHU RI GLUHFW FRQIURQWDWLRQ RI EUXWH PXVFOH IRUFHV RI WKH FRQWHVWDQWV
)LJKWLQJ WDFWLFV GHSHQGV PXFK XSRQ LQWHOOLJHQFH DQG H[SHULHQFH WKH SRZHUV RULJLQDWLQJ IURP WKHLU EUDLQV
$OOLDQFHV DUH D JUHDW VRXUFH RI SRZHU EXW ZKR DOOLHV ZLWK ZKRP ZLOO GHSHQG D JUHDW GHDO PRUH WKDQ MXVW
PXVFOH DQG EUDLQ SRZHUV 7KHUH PXVW DOVR EH SHUVRQDO DWWUDFWLYHQHVV ZRUNLQJ DPRQJ DQLPDOV WR IDFLOLWDWH
IRUPLQJ DOOLDQFHV
7KH PXOWLGLPHQVLRQDO QDWXUH RI WKH FRQWURO SRZHU EHFRPHV PRUH WKDQ DSSDUHQW ZKHQ ZH VKLIW
DWWHQWLRQ IURP WKH DQLPDO NLQJGRP WR WKH FRQWHPSRUDU\ KXPDQV
:HDOWK
IRU LQVWDQFH FUHDWHV DQ HQRUPRXV
FRQWURO SRZHU (YHQ ZLWK QR SK\VLFDO VWUHQJWK DQG QR LQWHOOLJHQFH WR VSHDN RI D ZHDOWK\ SHUVRQ FDQ H[HUW D
JUHDW FRQWURO SRZHU DV RQH PD\ FRQWURO PDQ\ SHRSOH ZLWK PRQH\ HYHQ LI LW FDQQRW EX\ HYHU\WKLQJ +DYLQJ
FHUWDLQ VSHFLDO VNLOOV NQRZOHGJH SHUVRQDO DWWUDFWLYHQHVV RFFXS\LQJ D FHUWDLQ KLJK SRVLWLRQ LQ DQ LPSRUWDQW
VRFLDO RUJDQL]DWLRQ KDYLQJ LPSRUWDQW NLQ DQG IULHQGV DQG VR RQ VR IRUWK $OWKRXJK WKHVH SHUVRQDO WUDLWV DQG
UHODWLRQVKLSV RQH KROGV DUH QRW HQWLUHO\ LQGHSHQGHQW IURP HDFK RWKHU LW LV XQPLVWDNDEOH WKDW WKH FRQWURO
SRZHU RI D SHUVRQ LQ D FLYLOL]HG ZRUOG H[SDQG LQWR D UHDOO\ PXOWLGLPHQVLRQDO VSDFH
7KH UHDVRQ ZK\ WKH FLYLOL]HG KXPDQV KDYH VRPH PDQ\ GLIIHUHQW NLQGV RI FRQWURO SRZHU GLPHQVLRQV
LV FOHDUO\ WKDW WKH\ XVH VR ODUJH D YDULHW\ RI WRROV LQFOXGLQJ PHWDWRROV OLNH ODQJXDJH DQG NQRZOHGJH HDFK
VSHFLDOL]LQJ LQ GLIIHUHQW NLQG RI FRQWUROV /HDYLQJ PRUH GHWDLOHG DUJXPHQWV FRQFHUQLQJ WKHVH FRQWURO SRZHU
GLPHQVLRQV OHW PH DGGUHVV D PRUH LPPHGLDWH LVVXH DULVLQJ IURP WKLV PXOWLGLPHQVLRQDOLW\ RI FRQWURO SRZHU
WKDW LV KRZ WR
DJJUHJDWH
WKHVH GLYHUVH FRQWURO SRZHU FRPSRQHQWV RI DQ LQGLYLGXDO LQWR D XQLGLPHQVLRQDO
VRFLDO VWDWXV
1RWH DW WKLV SRLQW WKDW WKH SK\VLFDO VWUHQJWK WKDW VHHPV WKH PRVW LPSRUWDQW SRZHU FRPSRQHQW LQ PRVW
WKH DQLPDO VSHFLHV LV LWVHOI DQ DJJUHJDWHG SRZHU $Q LQGLYLGXDO ZLWK VWURQJ YHU\ VWURQJ PXVFOHV EXW FOXPV\
LQ ILJKWLQJ RU RQH ZKR LV XQDEOH WR PDNH VXLWDEOH DOOLHV ZRXOG IDLO WR EHFRPH DQ DOSKD 6R ZROYHV PD\ EH
VDLG WR KDYH D VSHFLHVVSHFLILF
QRUP
ZKLFK DJJUHJDWHV LQGLYLGXDO
V SRZHU FRPSRQHQWV LQWR D VLQJOH DWWULEXWH
RI WKH ILJKWLQJ SURZHVV
ZKLFK E\ WKH QRUPGHSHQGHQW VRFLDO UHFRJQLWLRQ FRQYHUWV WKH PXOWLGLPHQVLRQDO
FRQWURO SRZHU RI HDFK LQGLYLGXDO LQWR D XQLGLPHQVLRQDO VRFLDO VWDWXV RI WKH LQGLYLGXDO LQ WKH SDFN 7KLV
UHODWLYH VLPSOLFLW\ RI WKH VSHFLHVVSHFLILF QRUP RI ZROI SDFNV FRPH IURP WKHLU YHU\ KRPRJHQHRXV OLIH VW\OHV
DSDUW IURP PDNLQJ DOOLHV LQ WKH SHULRG VWDWXV VWUXJJOH WKHLU JURXS KXQW LV DOZD\V GRQH XVLQJ WKH JHQHWLFDOO\
HQGRZHG VHW RI ELRORJLFDO WRROV
OLNH WKHLU OLWKH ERG\ DQG VKDUS WHHWK DQG FODZV
7KH FKLPSDQ]HHV PD\ XVH D OLWWOH GLIIHUHQW QRUPV IURP ZROYHV DQG WKH\ PD\ FRXQW LQWHOOLJHQFH
PRUH WKDQ WKH ODWWHU LQ WKHLU QRUP 6WLOO WKHLU QRUP VHHPV DOVR VSHFLHVVSHFLILF DV WKHLU OLIH VW\OHV DUH DOVR
TXLWH KRPRJHQHRXV DQG WKHLU XVH RI WRROV LV RQO\ PDUJLQDO ,Q FRQWUDVW WR DQLPDOV WKH QRUPV XVHG E\
KXPDQV GLIIHU JUHDWO\ DFFRUGLQJ WR WKH FXOWXUH DQG WKH VLWXDWLRQ WKH FRPPXQLW\ LV XQGHU DSSDUHQWO\ ZLWKRXW
DQ\ VXFK WKLQJ DV D VSHFLHVVSHFLILF QRUP &RQFHUQLQJ WKH VLWXDWLRQGHSHQGHQW QDWXUH RI WKH KXPDQ
FRPPXQLW\ QRUP QRWH WKDW WKH VRFLDO VWDWXV RI ZDU WLPH KHURHV GHFOLQHV UDWKHU UDSLGO\ ZKHQ WKH ZDU HQGV
DQG WKH FRPPXQLW\ FDQ HQMR\ D UDWKHU SURORQJHG SHDFH LQ ZKLFK KHURHV DQG KHURLQHV RI DQ HQWLUHO\ GLIIHUHQW
JHQUH WHQG WR HPHUJH
7KHUH LV RQH SRLQW ZRUWK WRXFKHG XSRQ KHUH DERXW WKH V\VWHP RI VRFLDO VWDWXV DPRQJ DQLPDO JURXSV
FRQFHUQV RQH RI =LPHQ
V FRPPHQWV RQ ZROI SDFN +H REWDLQHG D GHILQLWH LPSUHVVLRQ WKDW KLJK UDQNHUV LQ D
ZROI SDFN DUH IDU EHWWHU GHILQHG DQG ZLWK D ODUJHU VWDWXV GLIIHUHQFH WKDQ ORZ UDQNHUV FRQWDLQLQJ FXEV ZKRVH
UDQN GLIIHUHQFHV DUH RIWHQ TXLWH LQVLJQLILFDQW LI DQ\ GLIIHUHQFH DW DOO 7KLV VXJJHVWV D VKDSH RI VRFLDO VWDWXV
GLVWULEXWLRQ ZLWKLQ D ZROI SDFN EHLQJ URXJKO\ RI WKH IRUP GHSLFWHG LQ )LJ ,Q WKLV ILJXUH MXVW IRU
FRQYHQLHQFH DOSKDV DUH ORFDWHG QHDU DW WKH FHQWHU RI DEVFLVVD ZLWK WKH SHDN VWDWXV DQG RWKHUV DUH ORFDWHG
IDUWKHU IURP WKH FHQWHU DV WKHLU VWDWXV JHWV ORZHU
,QVHUW )LJ DURXQG KHUH
:KDW WKLV VFKHPDWLFDOO\ GUDZQ VRFLDO VWDWXV GLVWULEXWLRQ JLYHQ LQ )LJ PDLQO\ SXUSRUWV WR LPSO\
LV ILUVW WKDW WKHUH ZLOO JHQHUDOO\ EH IHZHU KLJK VWDWXV PHPEHUV WKDQ ORZ VWDWXV RQHV DQG VWDWXV GLIIHUHQWLDOV
DPRQJ KLJK VWDWXV RQHV ZLOO XVXDOO\ EH ODUJHU WKDQ WKRVH DPRQJ ORZ VWDWXV RQHV 6HFRQGO\ LW LPSOLHV WKDW
VWDWXV GLIIHUHQWLDOV DPRQJ KLJK VWDWXV RQHV ZLOO LQ JHQHUDO EH ODUJHU WKDQ DPRQJ ORZHU VWDWXV RQHV /HW PH
UHIHU WR WKLV W\SH RI VWDWXV FRPSRVLWLRQ ZLWKLQ D FRPPXQLW\ DV D
WDSHUHG S\UDPLG
W\SH
,W LV RQH RI P\ PDMRU DVVXPSWLRQV WKDW WKLV WDSHUHG S\UDPLGDO VWDWXV FRPSRVLWLRQ ZRXOG EH WKH
PDMRU SURWRW\SH RI VWDWXV FRPSRVLWLRQV ZLWKLQ DQ FRPPXQLW\ EH LW WKDW RI DQLPDOV RU KXPDQV DOWKRXJK WKH
DFWXDO FRPSRVLWLRQ PD\ FRQWDLQ PDQ\ LUUHJXODULWLHV 7KH DVVXPSWLRQ LV PDGH SULPDULO\ RQ WKH IROORZLQJ WZR
UHDVRQV )LUVW QRWH WKDW VRFLDO VWDWXV LV D QRQQHJDWLYH TXDQWLW\ DV RQH
V VRFLDO VWDWXV LV D VRFLDOO\ UHFRJQL]HG
SRZHU RI WKH SHUVRQ DQG LW LV GLIILFXOW WR FRQFHLYH D QHJDWLYH FRQWURO SRZHU 6R WKH GRZQVLGH RI WKH VFDOH RI
VRFLDO VWDWXV LV ERXQGHG DW WKH RULJLQ ]HUR 6HFRQGO\ WKH RUGHUOLQHVV RI FRPPXQLW\ UHTXLUHV WKDW D OLWWOH
EOXUU\ YDOXHV RI VRFLDO VWDWXV DUH FOHDUO\ VHSDUDWHG HVSHFLDOO\ ZLWK KLJK VWDWXV PHPEHUV VLQFH LW LV WKH
FRQIOLFWV DPRQJ WKHVH LQGLYLGXDOV RI KLJK SRZHU WKDW PD\ KDUP WKH RUGHUOLQHVV RI WKH FRPPXQLW\ &RPSDUHG
WR WKHVH FRQIOLFWV XS DERYH VWULIHV DPRQJ WKRVH ZLWK ZHDN SRZHUV OLNH WKRVH DPRQJ ZROI FXEV DUH WULIOHV D
FRPPXQLW\ FDQ HDVLO\ GLVPLVV
7KH FRQVWDQW PHDQ DVVXPSWLRQ IRU VWDWXV GLVWULEXWLRQ
2QH PRUH FRQGLWLRQ D FULWLFDO RQH QHHG WR EH DGGHG WR FRQVWUDLQ WKH VWDWXV FRPSRVLWLRQ LQ RUGHU WR
PDNH WKH WDSHUHG S\UDPLG VWDWXV FRPSRVLWLRQ SURWRW\SLFDO 1RWH WKDW WKH FRQFHSW RI VRFLDO VWDWXV
LQ RXU
GDLO\ XVDJH RI WKH WHUP UHSUHVHQWV D
UHODWLYH
SRZHU DQG QRW DQ DEVROXWH SRZHU $V PHQWLRQHG HDUOLHU DQ\
SHUVRQ ZKR OLYHV LQ D PRGHUQ VRFLHW\ ZLWK DOO WKH DPHQLWLHV RI FLYLOL]DWLRQ LV PRUH SRZHUIXO E\ IDU WKDQ
DQ\RQH LQ WKH IDU SDVW WLPHV LQ 0LGGOH $JHV RU LQ WKH WLPHV RI XUEDQGV %XW WKDW GRHV QRW JLYH XV DOO WKDW
PRUH VRFLDO VWDWXV WKDQ WKH SHRSOH LQ WKH SDVW 6R LI RQH
V VRFLDO VWDWXV LV WR UHIOHFW WKH FRQWURO SRZHU LQ RQH
V
SRVVHVVLRQ ZKDW LW DFWXDOO\ UHIOHFWV LV KRZ PXFK FRQWURO SRZHU RQH KDV LQ FRPSDULVRQ WR WKRVH RI RWKHUV LQ
WKH VDPH FRPPXQLW\
7KH VLPSOHVW FRQVWUDLQW WKDW ZLOO PDNH WKH VRFLDO VWDWXV WR UHSUHVHQW LWV UHODWLYH DVSHFW LV JLYHQ E\
DVVXPLQJ WKDW WKH
PHDQ
VRFLDO VWDWXV RYHU WKH ZKROH FRPPXQLW\ SRSXODWLRQ LV DSSUR[LPDWHO\ NHSW FRQVWDQW
HTXDO WR VRPH SRVLWLYH QXPEHU
P
VD\ 1RWH WKDW WKH H[DFW YDOXH RI
P
LV LUUHOHYDQW DV WKH XQLW RI VRFLDO VWDWXV
LV IUHH :KDW LV LPSRUWDQW LV LQ WKLV DVVXPSWLRQ LV WKDW WKHUH LV D VRFLDO SURFHVV LQ D FRPPXQLW\ WR UHVWRUH LWV
FRQVWDQW PHDQ VWDWXV ZKHQHYHU D FKDQJH RFFXUV LQ LWV VWDWXV FRPSRVLWLRQ
1HHGOHVV WR VD\ WKLV DVVXPSWLRQ PDNHV VRFLDO VWDWXV D UHODWLYH PHDVXUH 6XSSRVH IRU LQVWDQFH
HYHU\ERG\ LQ D FRPPXQLW\ KDV VRPHKRZ GRXEOHG KLV RU KHU FRQWURO SRZHU $FFRUGLQJ WR WKH WUDGLWLRQDO ZD\
RI VWDWXV UHFNRQLQJ WKLV PD\ DOVR PDNH HYHU\ERG\
V VRFLDO VWDWXV GRXEOHG OHWWLQJ HYHU\ERG\ IHHO HODWHG
PRPHQWDULO\ %XW VLQFH WKLV VWDWXV FKDQJH ZLOO EULQJ XS WKH PHDQ VWDWXV RI WKH FRPPXQLW\ WR
P
WKH VWDWXV
QRUPDOL]DWLRQ SURFHVV ZLOO EH LQLWLDWHG FXWWLQJ HYHU\ERG\
V VWDWXV LQ KDOI FDQFHOLQJ DOO WKH WHPSRUDU\ HIIHFW
RI VWDWXV HOHYDWLRQ
7KLV FRQVWDQW VWDWXV PHDQ K\SRWKHVLV DOVR PDNHV VRFLDO VWDWXV D YHU\ FRPSHWLWLYH FRPPRGLW\
6XSSRVH WKDW VRPHERG\ KLJK LQ VWDWXV ORVW WKH SHUVRQ
V SRZHU DQG ORVW KLV RU KHU VWDWXV DV D FRQVHTXHQFH
6LQFH WKH ORVW VWDWXV PXVW EH PDGH XS IRU WR NHHS WKH FRPPXQLW\ VWDWXV PHDQ VXFK DQ HYHQW ZLOO JLYH
HYHU\ERG\ HOVH LQ WKH FRPPXQLW\ H[FHSW WKRVH ZKRVH SRZHUV ZHUH WLHG XS ZLWK WKLV KDSOHVV SHUVRQ DV
IDPLOLHV RU DOOLHV ZLOO KDYH D FKDQFH WR LQFUHDVH RQH
V VWDWXV 7KH *HUPDQ WHUP VFKDGHQIURK
WR EH SOHDVHG
E\ RWKHUV
PLVIRUWXQH WKHUHIRUH KDV D JURXQG MXVW LQ WKH VDPH ZD\ DV DQ HQYLRXV SHUVRQ LV WHPSWHG WR
VODQGHU WKH RQH ZKR KDV UHFHQWO\ JDLQHG D KLJK VWDWXV
6R WKH FRQVWDQW VWDWXV PHDQ DVVXPSWLRQ JLYHV WKH PHDVXUH RI VRFLDO VWDWXV WKH UHTXLUHG UHODWLYLW\ DQG
FRPSHWLWLYHQHVV 7KH TXHVWLRQ LV LI LW LV WKH RQO\ RQH WKDW VDWLVILHV VXFK UHTXLUHPHQWV $Q DOWHUQDWLYH
DVVXPSWLRQ WKDW FRPHV LQWR PLQG LV WKH RQH SRSXODU LQ WKH JDPH WKHRU\ WKDW SHRSOH DUH SOD\LQJ D FRQVWDQW
VXP VWDWXV JDPH PHDQLQJ WKDW WKH VXP WRWDO RI WKH FRPPXQLW\ PHPEHUV
VWDWXV LV NHSW FRQVWDQW 7KLV
DVVXPSWLRQ LV LGHQWLFDO WR WKH FRQVWDQW PHDQ DVVXPSWLRQ DV ORQJ DV WKH FRPPXQLW\ SRSXODWLRQ UHPDLQV WKH
VDPH %XW WKH FRPPXQLW\ SRSXODWLRQ LV VXEMHFW WR IUHTXHQW FKDQJHV DQG LI RQH LQWHUSUHWV WKH FRQVWDQWVXP
VWDWXV DVVXPSWLRQ OLWHUDOO\ LW VKRXOG PHDQ WKDW SHRSOH PXVW DYHUVH WR D SRSXODWLRQ LQFUHDVH DV LW PHDQV PRUH
HDWHUV IRU WKH IL[HG VL]HG SLH
7KH FRQVWDQW PHDQ K\SRWKHVLV KDV QR VXFK VKRUWFRPLQJV ,PDJLQH D SRSXODU VFHQH LQ PLGGOH DJHV
ZKHQ D FRPPXQLW\ DFTXLUHG D QHZ EDWFK RI SHRSOH RI YHU\ ORZ VWDWXV DV ZDU SULVRQHUV RU VODYHV ZKLFK
RIWHQ PHDQW WKH VDPH WKLQJ $V VXFK D ORZ VWDWXV DGGLWLRQ WR WKH FRPPXQLW\ SRSXODWLRQ ZLOO GHFUHDVH WKH
FRPPXQLW\ VWDWXV PHDQ LW KDV WR EH FRPSHQVDWHG E\ HOHYDWLQJ WKH VWDWXV RI PRVW LI QRW DOO RI WKH ROG
FLWL]HQV ZKR ZRXOG WKHUHIRUH JHQHUDOO\ ZHOFRPH VXFK D FKDQJH ,W LV SRVVLEOH WKDW WKH\ FODLP D KLJKHU
LQFRPH WKHQ DV RQH
V LQFRPH LV RIWHQ GHWHUPLQHG URXJKO\ LQ SURSRUWLRQ WR RQH
V VWDWXV DQG WKH\ PD\ HYHQ
JHW LW DV WKH QHZ ODERU IRUFH ZLOO JHQHUDOO\ LPSURYH WKH SURGXFWLYLW\ RI WKH FRPPXQLW\
6R HYHQ DV VLPSOH DQ DVVXPSWLRQ RI D FRQVWDQW PHDQ VWDWXV SURYLGHV WKH FRQFHSW RI TXDQWLILHG VRFLDO
VWDWXV ZLWK D IDLU LQIHUHQFH SRZHU ZKLFK JHQHUDOO\ DJUHHV ZLWK RXU GDLO\ REVHUYDWLRQ RI ZKDW SHRSOH IHHO
DERXW WKHLU VWDWXV 1RZ OHW PH WU\ DQRWKHU H[DPSOH LQ ZKLFK HDFK FRPPXQLW\ PHPEHU
V FRQWURO SRZHU LV
DXJPHQWHG ZLWK WKH VDPH DPRXQW LQVWHDG RI GRXEOHG DV LQ WKH HDUOLHU H[DPSOH 6XSSRVH WKDW WKLV
LQFUHPHQWDO SRZHU VKRXOG HOHYDWHG RQH
V VRFLDO VWDWXV E\ WKH VDPH DPRXQW
G
DFFRUGLQJ WR WKH ROG SRZHU
VWDWXV FRQYHUVLRQ UXOH %XW VLQFH WKLV ZLOO LQFUHDVH WKH PHDQ VWDWXV RI WKH FRPPXQLW\ IURP
LQFUHDVHG VWDWXV FRPSRVLWLRQ PXVW EH QRUPDOL]HG WR EULQJ LW GRZQ WR
WKH QRUPDOL]DWLRQ FRQVWDQW
PPG
P
P
WR
PG
WKH
DJDLQ ,I WKLV LV GRQH E\ PXOWLSO\LQJ
DV LV XVXDOO\ GRQH WKHQ WKH GHFUHPHQW LQ RQH
V VWDWXV FDXVHG E\ WKLV
QRUPDOL]DWLRQ SURFHGXUH ZLOO EH ODUJHU IRU KLJKHU VWDWXV DQG VPDOOHU IRU ORZHU VWDWXV
7KH FULWLFDO LPSOLFDWLRQ WKLV H[DPSOH EULQJV DERXW LV WKDW ZKHQ WKH PHPEHUV RI D FRPPXQLW\
EHFRPH XQLIRUPO\ ULFKHU DSSUR[LPDWHO\ VSHDNLQJ RI FRXUVH WKH JHQHUDO VKDSH RI WKH VWDWXV FRPSRVLWLRQ LV
SUHVHUYHG LH IRUPHUO\ KLJK VWDWXV RQHV VWLOO UHPDLQ KLJK VWDWXV DQG ORZ RQHV ORZ EXW WKH
YDULDQFH
RI WKH
VWDWXV GLVWULEXWLRQ ZLWKLQ D FRPPXQLW\ JRHV GRZQ EULQJLQJ GRZQ WKH SHDN VWDWXV DV ZHOO /LNHZLVH LI HYHU\
PHPEHU RI D FRPPXQLW\ LV QHDUO\ HTXDOO\ LPSRYHULVKHG WKH YDULDQFH RI WKH VWDWXV GLVWULEXWLRQ ZLOO JR XS
ZKLOH SUHVHUYLQJ WKH JHQHUDO VKDSH RI WKH VWDWXV FRPSRVLWLRQ LQ WKH FRPPXQLW\ ZLWK LWV SHDN VWDWH KLNHG XS
, DP QRW SURSRVLQJ DW OHDVW LQ WKH FXUUHQW VWDJH RI DUJXPHQW WKDW WKLV LV DQ\ ZRUNDEOH K\SRWKHVLV WR
EH DSSOLHG WR UHDO KXPDQ VRFLHWLHV DV WKHUH DUH PDQ\ RWKHU WKLQJV WKDW DIIHFW WKH VWDWXV YDULDQFH LQ D
FRPPXQLW\ 1HYHUWKHOHVV WKLV H[DPSOH VHHPV WR SURYLGH D SUHFLRXV FOXH WR LQWHUSUHW ZKDW LV KDSSHQLQJ LQ
WKH FRQWHPSRUDU\ ZRUOG 1RWH WKDW ZH DUH FXUUHQWO\ ZLWQHVVLQJ WKH FUXPEOLQJ RI DXWKRULWLHV LQ DOPRVW HYHU\
FRUQHU RI WKH ZRUOG DW OHDVW VLQFH WKH HQG RI &ROG :DU QHLWKHU RI WKH KHDG RI D VWDWH SUHVLGHQW RI D FRPSDQ\
WHDFKHUV LQ D VFKRRO QRU SDUHQWV RI D IDPLO\ KDYH WKH DXWKRULW\ ZKLFK WKH SHUVRQV LQ WKH SRVLWLRQV RQFH KDG
$QG RQH RI WKH PDMRU FKDUDFWHULVWLFV RI WKH FRQWHPSRUDU\ FLYLOL]HG ZRUOG LV WKDW DOPRVW HYHU\ERG\ SRVVHVVHV
D JUHDW DPRXQW RI FRQWURO SRZHU DV PHQWLRQHG HDUOLHU WKDQNV WR WKH DPHQLWLHV RI FLYLOL]DWLRQ 7KH DPHQLWLHV
RI FLYLOL]DWLRQ KRZHYHU KDYH FRQWULEXWHG WR DXJPHQW D SHUVRQ
V FRQWURO SRZHU QHDUO\ HTXDOO\ ZKHWKHU WKH
SHUVRQ LV WKH KHDG RI D VWDWH RU DQ RUGLQDU\ FLWL]HQ 7KH KHDG RI WKH VWDWH GRHV QRW HDW WZLFH PRUH WKDQ WKH
ODWWHU QRU ZDWFKHV WZR 79 VHWV DW WKH VDPH WLPH 6R HYHQ WKRXJK WKH KHDG RI WKH VWDWH KDV D OLWWOH PRUH
SULYLOHJHV WKDQ DQ RUGLQDU\ FLWL]HQ WKH GLIIHUHQFH LV QRW PXFK WR VSHDN RI FRPSDUHG WR WKH EDVLF FRQWURO
SRZHU WKDW WKH FRQWHPSRUDU\ FLYLOL]DWLRQ KDV PDGH DYDLODEOH WR DOPRVW HYHU\RQH 6R DV ORQJ DV ZH DUH
ORRNLQJ DW RQO\ WKH SKHQRPHQRQ RI FUXPEOLQJ DXWKRULWLHV DQG WKH YDVWO\ DXJPHQWHG FRQWURO SRZHU RI WKH
FLWL]HQV RI WKH PRGHUQ ZRUOG WKH FRQFOXVLRQ RI WKH DERYH VLPSOH H[DPSOH PDNHV VHQVH LQ D UDWKHU GHHS
VHDWHG ZD\
, VKDOO FRPH EDFN WR WKLV WRSLF DW WKH HQG RI WKLV FKDSWHU %HIRUH GRLQJ LW KRZHYHU , QHHG WR DGGUHVV
RWKHU IDFWRUV WKDW DIIHFW WKH VWDWXV YDULDQFH RI FRPPXQLWLHV WRJHWKHU ZLWK D PRUH HODERUDWH PRGHO RI WKH
V\VWHP RI VRFLDO VWDWXV
3DFN RI ZROYHV JURXSV RI FKLPSDQ]HHV DQG KXPDQ XUEDQGV
7KH QHZ YDULDQFH ZLOO EH PPG WLPHV RI WKH ROG YDULDQFH ZKHWKHU G EH SRVLWLYH RU QHJDWLYH
2QH RI WKH PDMRU IDFWRUV WKDW DIIHFWV WKH YDULDQFH RI D FRPPXQLW\ LV WKH IUHTXHQF\ DQG ILHUFHQHVV
ZLWK ZKLFK WKH FRPPXQLW\ KDV WR GHDO ZLWK H[WHUQDO DIIDLUV OLNH KXQWLQJ DQG ZDUULQJ $V WKHVH HYHQWV FDOO IRU
HIILFLHQWO\ RUJDQL]HG JURXS DFWLRQV WKH VWDWXV FRPSRVLWLRQ RI D UHODWLYHO\ ODUJH VWDWXV YDULDQFH ZLOO JLYH VXFK
VSHFLHV D EHWWHU HGJH IRU VXUYLYDO DV D ODUJH VWDWXV YDULDQFH IDFLOLWDWHV FRRUGLQDWLRQ RI JURXS PHPEHUV
DFWLYLWLHV DQG WKHLU TXLFN REHGLHQFH WR SURSHUO\ JLYHQ FRPPDQGV 1RWH DOVR WKDW D JRRG JURXS FRRUGLQDWLRQ
PDNHV WKH VWDELOLW\ RI WKH VWDWXV V\VWHP ZLWKLQ WKH JURXS RQFH LW LV HVWDEOLVKHG 7KH REVHUYHG FKDUDFWHULVWLFV
RI ZROI SDFNV JHQHUDOO\ PHHW WKHVH UHTXLUHPHQWV 7KH\ KDYH D UDWKHU FOHDUO\ GHILQHG WDSHUHG S\UDPLGDO
VWDWXV FRPSRVLWLRQ ZKLFK UHPDLQV VWDEOH DW OHDVW EHWZHHQ WKH ELDQQXDO YLFLRXV VWDWXV VWUXJJOH SHULRGV
(WKRORJLVWV RIWHQ HPSKDVL]H WKDW WKH DOSKD RI DQ DQLPDO JURXS LV QRW WKH OHDGHU
RI WKH JURXS DW OHDVW
QRW LQ WKH VHQVH WKH WHUP OHDGHU LV XVHG ZLWK D KXPDQ JURXS $W WKH VDPH WLPH WKH DOSKD PDOH RI D ZROI SDFN
LV QRW MXVW WKH PDOH RI WKH KLJKHVW VWDWXV EXW WKHUH PXVW EH VRPHWKLQJ OLNH WKH
RIILFH
RI WKH DOSKD PDOH VLQFH
SULYLOHJH OLNH H[FOXVLYH FRSXODWRU\ ULJKWV EHORQJV WR WKH RIILFH DQG QRW GLUHFWO\ WR WKH LQGLYLGXDO ZKR
RFFXSLHV WKH RIILFH $QG WKHUH XVXDOO\ DUH GXWLHV ZKHUH WKH SULYLOHJHV DUH 7KRXJK LW LV QRW NQRZQ ZKHWKHU
WKH DOSKD PDOH RU DOSKD IHPDOH WDNHV DQ\ OHDGHUVKLS LQ ZROI SDFN KXQWLQJ EXW IRU RQH RI WKHP EHLQJ RQ WKH
WRS RI WKHLU PDUFKLQJ FROXPQ RQ DERXW RI WKH WLPH =LPHQ PHQWLRQV WKDW WKH DOSKD PDOH VHHPV
HVSHFLDOO\ NHHQ WR SUHVHUYH WKH FRKHUHQFH RI WKH SDFN ZLWKRXW DQ\ IXUWKHU HODERUDWLRQ
&RPSDUHG WR ZROI DOSKDV WKH DOSKD PDOH RI D FKLPSDQ]HH JURXS LV HYHQ OHVV OLNH D OHDGHU
DSSDUHQWO\ GRLQJ QRWKLQJ E\ ZD\ RI JURXS DGPLQLVWUDWLRQ 6WLOO WKH FKLPSDQ]HH DOSKD PDOH LV DOVR WR EH
FRQVLGHUHG WR KDYH KLV RIILFH DQG *RRGDOO PDNHV DQ LQWHUHVWLQJ FRPPHQW RQ WKLV SRLQW WKDW WKH JURXS ORRNV
GLVWXUEHG
ZKHQ LWV DOSKD LV PLVVLQJ IRU RQH UHDVRQ RU DQRWKHU :LWK RU ZLWKRXW DQ RIILFH WKH SHDN VWDWXV RI
WKH FKLPSDQ]HH DOSKD VHHPV PXFK ORZHU WKDQ WKDW RI WKH ZROI DOSKD DQG WKHLU VWDWXV V\VWHP DV D ZKROH
VHHPV WR EH LQ D FRQVWDQW WXUPRLO 7KLV LV SHUKDSV EHFDXVH D FKLPSDQ]HH JURXS LV PRUH IRU LWV IXQFWLRQ RI
SURYLGLQJ D FRPPXQLW\ IRU WKHP WR LQWHUDFW ZLWKLQ UDWKHU WKDQ IRU H[WHUQDO JURXS DFWLRQV $ FKLPSDQ]HH
JURXS KRZHYHU LV RFFDVLRQDOO\ LQ VWULIH ZLWK D QHLJKERULQJ JURXS DQG WKRXJK VXFK UDUHO\ GHYHORSV LQWR D
VHULRXV FRQIOLFW WKH\ KDYH GHPRQVWUDWHG WKDW WKH\ DUH FDSDEOH RI LQWHQWLRQDO VODXJKWHUV
6R IDU ZH KDYH VHHQ KRZ WZR DQLPDO JURXSV ZROYHV DQG FKLPSDQ]HHV VHOIUHJXODWHG WKHLU JURXS
OLYHV LQ WKHLU UHVSHFWLYH ZD\V WKDW PDWFK WKHLU OLIH VW\OHV VRPH DVSHFWV RI ZKLFK DUH FRPPRQ WR ERWK DQG
VRPH GLIIHUHQW $QG DSSDUHQWO\ WKH\ ERWK KDYH VXFFHHGHG LQ PDLQWDLQLQJ HVVHQWLDOO\ VDPH OLIH VW\OHV DFURVV
FRXQWOHVV QXPEHU RI JHQHUDWLRQV ZLWKRXW LQWURGXFLQJ YLUWXDOO\ QR QHZ LQQRYDWLRQV DV SDVVLYHO\ FRSLQJ
VSHFLHV DUH VXSSRVHG WR GR
1RZ OHW PH WXUQ WR WKH KXPDQV DW WKH WLPH RI XUEDQGV +XPDQV DUH DFWLYH FRSHUV DQG FRXOG DGDSW
WR D YDVW YDULHW\ RI HQYLURQPHQWV WKURXJK WKHLU YHUVDWLOLW\ 6R XUEDQGV VSUHDG RYHU D ODUJH SRUWLRQ RI WKH
ZRUOG VXUIDFH ZRXOG KDYH FKRVHQ UDWKHU GLVSDUDWH OLIH VW\OHV RQ WKH VXUIDFH 1HYHUWKHOHVV WKH EDVLF
SULQFLSOHV WKDW JRYHUQHG WKHLU VRFLDO OLYHV FRXOG QRW KDYH EHHQ WRR GLIIHUHQW IURP WKRVH RI FKLPSDQ]HHV RU
HYHQ RI ZROYHV
LH
WKH\ ZHUH FRQVWUDLQHG E\ WKH VWDWXV V\VWHP RI D WDSHUHG S\UDPLGDO FRPSRVLWLRQ DQG
WKH\ ZHUH QHDUO\ FRQVWDQWO\ HQJDJHG LQ VWDWXV VWUXJJOH DV HYLGHQWO\ ZH VWLOO GR WKDW ZDV PRUH RI WKH
FKLPSDQ]HH VW\OH WKDQ WKDW RI ZROYHV
7KHUH ZHUH RWKHU UHVSHFWV ZKLFK PXVW KDYH GLVWLQJXLVKHG XU EDQGHUV IURP FKLPSDQ]HHV )LUVW WKH
XUEDQGHUV ZHUH H[FHOOHQW KXQWHUV 8QOLNH ZROYHV ZKR DUH ERUQ KXQWHUV WKH KXPDQV KDYH QR VSHFLHV
VSHFLILF KXQWLQJ PHWKRG ,QVWHDG WKH\ KDG FUDIWLQHVV DQG YHUVDWLOLW\ DV DFWLYH FRSHUV DQG ZHUH H[SHFWHG WR
LQYHQW KXQWLQJ PHWKRGV DQG WRROV WKDW PDWFKHG WKH VSHFLILF HQYLURQPHQWV WKH\ KDSSHQHG WR OLYH 7XGJH
$ IDEULFDWHG QRW VSHFLHVVSHFLILF KXQWLQJ PHWKRG KRZHYHU ZRXOG KDYH UHTXLUHG VRPH NLQG RI D
FRPPDQG VWUXFWXUH WR LPSOHPHQW LW OLNH D KXQWLQJ FKLHI PDNLQJ TXLFN GHFLVLRQV GHSHQGLQJ XSRQ UDSLGO\
GHYHORSLQJ KXQWLQJ VLWXDWLRQV EDUNLQJ RUGHUV ZKLFK ZHUH REH\HG E\ RWKHUV ZLWKRXW SURWHVWV +XQWHUV DOVR
QHHGHG WR EH WUDLQHG ZLWK WKH XVH RI YDULRXV KXQWLQJ WRROV
%HVLGHV RUJDQL]LQJ HIILFLHQW KXQWLQJ SDUWLHV WKH PHPEHUV RI D XUFRPPXQLW\ SHUKDSV HYHQ PRUH
ERLVWHURXV WKDQ FKLPSDQ]HH JURXSV GXH WR WKHLU FRQVWDQW FKDWWLQJ DQG YHUEDO TXDUUHOLQJ ZRXOG KDYH
DSSUHFLDWHG D UHODWLYH SHDFH WKDW PLJKW HQVXH LI WKH
FKLHI
RI WKH FRPPXQLW\ FRXOG DFWLYHO\ LQWHUIHUH DQG
DGMXGLFDWH RQ GLVSXWHG LVVXHV 7KH\ FRXOG HYHQ KDYH DIIRUGHG WR EHVWRZ D OLWWOH H[WUD VWDWXV RQ ZKRHYHU
RFFXS\LQJ WKH FKLHI
V RIILFH DV DQ HQKDQFHG DXWKRULW\ RI WKH FKLHI ZRXOG VHUYH WZR XVHIXO IXQFWLRQV )LUVW LW
ZRXOG PDNH WKH FKLHI
V UROH RI NHHSLQJ WKH SHDFH DQG WKH RUGHU RI WKH XUJURXS D OLWWOH HDVLHU 6HFRQGO\ WKLV
HQKDQFHG DXWKRULW\ RI WKH FKLHI ZLOO LPSURYH WKH FKDQFH RI WKH LQFXPEHQW FKLHI WR UHPDLQ LQ WKH RIILFH
SURWHFWLQJ WKH FKLHI DV D VHDVRQHG DGPLQLVWUDWRU IURP VFKHPHV RI KXPDQ .DPHPDQIX
V RI WKH NLQG ZKLFK
KXPDQ FRPPXQLWLHV ZRXOG QHYHU EH LQ VKRUW VXSSO\
/HW PH HODERUDWH D OLWWOH RQ WKLV ILUVW SRLQW DV LW LV LPSRUWDQW 1RWH WKDW KHOSLQJ WKH FKLHI FRQWURO WKH
FRPPXQLW\ ZLWK D OLWWOH H[WUD DXWKRULW\ LPSOLHV WKDW DQ\RQH ZLOOLQJ WR GR VR LV DFWXDOO\ KDQGLQJ RYHU WKH
FKLHI WKDW PXFK FRQWURO SRZHU RYHU RQHVHOI 2QH ZRXOG IHHO WKLV SRZHU WUDQVIHU D VPDOO SULFH WR SD\ IRU WKH
SHDFH DQG RUGHU IRU WKH FRPPXQLW\ EXW ZLOO GR VR ZLOOLQJO\ RQO\ DV PXFK DV WKH FRPPXQLW\ GHHPV
QHFHVVDU\ /HW PH FDOO WKLV WKH
QHFHVVLW\EDVHG XSZDUG SRZHU WUDQVIHU
1RWH WKDW HYHQ WKRXJK WKH DPRXQW RI
SRZHU WKXV WUDQVIHUUHG PLJKW EH D VPDOO IUDFWLRQ RI HDFK FRPPXQLW\ PHPEHU
V SRZHU LWV VXP WRWDO FRXOG EH
VLJQLILFDQW HQRXJK WR FUHDWH D SLQQDFOH LQ WKH VWDWXV FRPSRVLWLRQ RI WKH XUFRPPXQLW\
2Q WKH RWKHU KDQG LW ZRXOG QRW GR WR LPDJLQH D XUFRPPXQLW\ FKLHI DV D VRUW RI GLFWDWRU 7KHUH DUH
WR UHDVRQV WKDW H[FOXGHV WKLV SRVVLELOLW\ 7KH ILUVW RI WKHVH UHDVRQV FRPHV IURP WKH VL]H OLPLW IRU WKH
SRSXODWLRQ RI D XUFRPPXQLW\ 7KH VHFRQG LV WKDW WKLV QHFHVVLW\EDVHG XSZDUG SRZHU WUDQVIHU LV PDGH
WRZDUG WKH RIILFH RI WKH FKLHI DQG QRW WRZDUG WKH FKLHI LQ SHUVRQ /HW PH HODERUDWH RQ WKH ILUVW UHDVRQ ILUVW
,PDJLQH D FRPPXQLW\ ZLWK DQ H[WUHPHO\ VPDOO VWDWXV YDULDQFH ,I VXFK D FRPPXQLW\ H[LVWHG LW
PLJKW ORRN OLNH DV LI LW ZHUH D QRQNHUQHOOHG FORVH FRDOLWLRQ H[FHSW IRU LWV VL]H VLQFH HYHU\ WKH FRPPXQLW\
PHPEHU KDV D VWDWXV QHDUO\ HTXDO WR WKH FRPPXQLW\ PHDQ
P
/LNHZLVH D FRPPXQLW\ ZLWK DQ H[WUHPHO\
ODUJH VWDWXV YDULDQFH ZRXOG ORRN OLNH DQ RYHUVL]HG FORVH NHUQHOOHG FRDOLWLRQ ZKRVH VWDWXV FRPSRVLWLRQ LV
PDGH XS RI D IHZ YHU\ KLJK VWDWXV SHUVRQV DQG DOO WKH UHVW ZLWK DOPRVW ]HUR VWDWXV 6RPHWKLQJ OLNH WKLV PD\
EH REVHUYHG LQ FXOW W\SH FRPPXQLW\ ZLWK D UHOLJLRXV OHDGHU ZLWK D UHDO FKDULVPD ZKR KDV DQ DEVROXWH FRQWURO
RYHU WKH SHUVRQ
V GLVFLSOHV 1RZ DVVXPH IRU FRQYHQLHQFH WKDW WKH VWDWXV RI GLVFLSOHV LQ WKH UHOLJLRXV
FRPPXQLW\ LV HTXDO WR ]HUR DV WKH\ KDYH OLWWOH SHUVRQDO FRQWURO RYHU DQ\WKLQJ 7KHQ WR NHHS WKH PHDQ VWDWXV
RI FRPPXQLW\
P
WKH FKDULVPDWLF OHDGHU
V VWDWXV PXVW EH HTXDO WR
QP
ZKHUH
Q
LV WKH SRSXODWLRQ RI WKLV
FRPPXQLW\
6R WKLV
QP
LV DFWXDOO\ WKH XSSHU ERXQG IRU WKH VWDWXV DFKLHYDEOH ZLWKLQ D FRPPXQLW\ RI SRSXODWLRQ
Q
:LWK WKH OLPLWHG SRSXODWLRQ RI D XUEDQG DQG QR PHPEHU RI ZKLFK ZRXOG KDYH JLYHQ XS DOO WKH SHUVRQDO
SRZHUV IRU QHFHVVLW\EDVHG XSZDUG SRZHU WUDQVIHU WKH FKLHI
V SRZHU DXJPHQWHG WKLV ZD\ FRXOG QRW EH
RYHUO\ LPSUHVVLYH
%\ WKH ZD\ LQ WKH H[DPSOH RI D UHOLJLRXV FXOW WKH SRZHU WUDQVIHU PDGH IURP GLVFLSOHV WR WKH
FKDULVPDWLF OHDGHU LV QRW WKH QHFHVVLW\EDVHG WUDQVIHU DV ZLWK WKH IRUPHU WKH WUDQVIHUUHG SRZHU JRHV GLUHFWO\
WR WKH OHDGHU LQ SHUVRQ ZKLOH ZLWK WKH ODWWHU LW JRHV WR WKH RIILFH RI WKH FKLHI UDWKHU WKH FKLHI LQ SHUVRQ 7KH
IRUPHU PD\ WKHQ UHIHUUHG WR D
GHYRWLRQEDVHG XSZDUG SRZHU WUDQVIHU
PDGH ZLOOLQJO\ E\ GHYRWHG IROORZHUV
RI D OHDGHU 7KHUH LV DQRWKHU W\SH RI XSZDUG SRZHU WUDQVIHU WKDW PD\ EH FDOOHG WKH
SRZHU WUDQVIHU
FRHUFLRQEDVHG XSZDUG
XVHG E\ GLFWDWRUV DV ZLOO EH GLVFXVVHG ODWHU ,Q WKH SUHVHQW FRQWH[W RI XUFRPPXQLWLHV WKHVH
WZR H[WUHPH W\SHV RI SRZHU WUDQVIHU DUH PRVW OLNHO\ LUUHOHYDQW
1RZ OHW PH JHW WR WKH SRLQW WKDW WKH QHFHVVLW\EDVHG XSZDUG SRZHU WUDQVIHU LV DVVRFLDWHG ZLWK WKH
FKLHI
V RIILFH DQG QRW WKH FKLHI LQ SHUVRQ ,W ZLOO KHOS SURWHFW WKH LQFXPEHQW FKLHI D OLWWOH EHWWHU IURP
FKDOOHQJHUV EXW LW LV QR DEVROXWH SRZHU OLNH WKH RQH REWDLQHG WKURXJK GHYRWLRQEDVHG SRZHU WUDQVIHU 6R LI
WKH FKLHI
V SHUIRUPDQFH LV GHHPHG WR EH ORZHU WKDQ WKH H[SHFWHG VWDQGDUG E\ WKH PDMRULW\ RI WKH FRPPXQLW\
PHPEHUV WKH\ FRXOG KDYH SXOO GRZQ WKH LQFXPEHQW IURP WKH FKLHI
V RIILFH E\ UHGLUHFWLQJ WKHLU VXSSRUW IURP
WKH FXUUHQW FKLHI WR DQRWKHU PRUH GHVLUDEOH FDQGLGDWH IRU WKH FKLHI
V RIILFH
2QH PRUH TXHVWLRQ WR EH DVNHG DERXW WKH XUEDQG LV LI LW ZDV VXSSRVHGO\ HQJDJHG LQ FKURQLF ZDUV OLNH FRQIOLFWV ZLWK QHLJKERULQJ XUEDQGV 7KH SRVVLELOLW\ FDQQRW EH GHQLHG EXW WKH SUREDELOLW\ IRU VXFK EHLQJ
WKH JHQHUDO FDVH VHHPV UDWKHU ORZ :KDW FRXOG XUEDQGHUV KDYH HYHU JDLQHG E\ ZLQQLQJ D EDWWOH ZKHQ WKHUH
ZDV YLUWXDOO\ QR VSRLOV RI ZDU ZKHQ WKH HQHP\ ZDV DQRWKHU KXQWHU JDWKHU JURXS ZLWK QR KROGLQJV" 2Q WKH
RWKHU KDQG WKH\ FRXOG KDYH ORVW PXFK E\ EHLQJ EHDWHQ LQ VXFK D FRQIOLFW DV XQOLNH FKLPSDQ]HHV WKH\ ZHUH
JRRG KXQWHUV ZLWK GHDGO\ KXQWLQJ WRROV DQG OLNH FKLPSDQ]HHV WKH\ ZRXOG KDYH KDG QR FRPSXQFWLRQ DJDLQVW
NLOOLQJ
6R HYHQ WKRXJK WKHUH PLJKW KDYH EHHQ RFFDVLRQDO EORRG\ VWULIHV WDNLQJ SODFH EHWZHHQ QHLJKERULQJ
XUEDQGV GXH WR WKHLU ELODWHUDO DQJHU RQ D FHUWDLQ LVVXH WKHVH VKRXOG KDYH EHHQ UHODWLYHO\ VKRUWOLYHG DIIDLUV
1RWH WKDW WKHUH ZDV QRWKLQJ ZRUWK GHIHQGLQJ IRU D ORVLQJ KXQWHUJDWKHUHU EDQG DW WKH FRVW RI WKHLU OLYHV QR
ODQG QR WRZQ QR KROGLQJV 6R ZLWK WKH ORVLQJ VLGH VLPSO\ IOHG WR DQRWKHU SODFH WKHUH ZRXOG KDYH EHHQ OLWWOH
FKDQFH IRU VXFK D VWULIH WR GHYHORS LQWR D FKURQLF DIIDLU
7KH UHDVRQ , DP VSHFXODWLQJ DERXW LV EHFDXVH FRQVWDQW ZDUULQJ FUHDWHV WKH QHFHVVLW\
WKDW UDLVHV WKH
DPRXQW RI QHFHVVLW\ EDVHG XSZDUG SRZHU WUDQVIHU 7KLV PLJKW QRW KDYH FRXQWHG PXFK ZLWK D XUEDQG ZKRVH
SRSXODWLRQ ZDV OLPLWHG E\ D QDWXUDO XSSHU ERXQG EXW LW ZRXOG PDNH DOO WKH GLIIHUHQFH LQ ODWHU WLPHV ZKHQ
WKLV SRSXODWLRQ OLPLW ZDV UHPRYHG E\ WKH DJULFXOWXUDO UHYROXWLRQ ZKHQ WKH FRPPXQLW\ SRSXODWLRQ EHFDPH
KXQGUHGV RU WKRXVDQGV RI WLPHV ODUJHU WKDQ WKDW RI D XUEDQG DQG ZKHQ WKH QHHG DURVH WR GHIHQG WKH ODQG WR
ZKLFK WKH VHGHQWDU\ FRPPXQLW\ ZDV ERXQG D SRVVLELOLW\ HPHUJHG IRU WKH VWDWXV RI WKH UXOHU RI WKH
FRPPXQLW\ WR VKRRW VN\ KLJK DV WKH LQFUHDVHG FRPPXQLW\ SRSXODWLRQ FUHDWHG WKH QHFHVVDU\ PDUJLQ IRU VXFK
D KLJK VWDWXV E\ UHVHWWLQJ WKH XSSHU ERXQG RI VRFLDO VWDWXV FRUUHVSRQGLQJO\ KLJKHU $QG WKHUH PLJKW KDYH
EHHQ WKH QHFHVVLW\
IRU LW ZKHQ FRPPXQLWLHV VWDUWHG ZDUULQJ ZLWK HDFK RWKHU 1RWH WKDW WKH KLJKHU WKH SHDN
VWDWXV WKH PRUH HODERUDWH D FRPPDQG VWUXFWXUH LQ WKH IRUP RI DUWLILFLDO FRDOLWLRQ OLNH WKH KLHUDUFKLFDO
VWUXFWXUH HPSOR\HG LQ WKH DUP\ FRXOG D FRPPXQLW\ KRXVH LQVLGH LW DV ZLOO EH HODERUDWHG ODWHU
6R RQFH RQH RI WKH ZDUULQJ FRPPXQLWLHV HPSOR\HG VXFK D VRFLDO VWUXFWXUH LW ZRXOG KDYH EHHQ
QHFHVVDU\ IRU RWKHUV WR IROORZ VXLW DQG WKLV QHFHVVLW\ FRXOG KDYH VHUYHG DV WKH EDVLV IRU KHLJKWHQHG
QHFHVVLW\EDVHG XSZDUG SRZHU WUDQVIHU LQ WKH IRUPV RI KLJKHU WD[HV OHYLHV DQG PLOLWDU\ VHUYLFHV 1RW WKDW
SHRSOH OLNHG VXFK D WUDQVIHU EXW LW ZDV HDV\ WR FRQYLQFH WKHP RI LWV QHFHVVLW\ DV WKHLU VXUYLYDO KLQJHG XSRQ
LW
6R EHKLQG WKH UHODWLYHO\ FDOP FDOP RQO\ PHWDSKRULFDOO\ VFHQHV RI XUFRPPXQLWLHV WKH VHHGV
ZHUH DOUHDG\ JHUPLQDWLQJ WKDW ZRXOG HQJHQGHU JUHDW FKDQJHV LQ KXPDQ VRFLHWLHV FRPLQJ VRRQ DIWHU %HVLGHV
WKH RIILFH RI WKH FKLHI ZKLFK ZLOO ODWHU WXUQ LQWR RIILFHV RI NLQJV HPSHURUV DQG SUHVLGHQWV WKHUH PXVW KDYH
EHHQ D IHZ RWKHU IHDWXUHV IDLUO\ FOHDUO\ GHILQHG DOUHDG\ LQ XU FRPPXQLWLHV ZKLFK ZRXOG FRPH WR SOD\
VLJQLILFDQW UROHV LQ WKH ODWHU VRFLHWLHV $V DUWLILFLDO HYROXWLRQ VKRXOG KDYH SURGXFHG D YDULHW\ RI WRROV LQ WKH
WLPHV RI XUFRPPXQLWLHV WRJHWKHU ZLWK PHWDWRROV OLNH VNLOOV DQG NQRZOHGJH IRU WKH XVH RI WKH WRROV WKH
PHPEHUV RI DQ XUFRPPXQLW\ ZRXOG KDYH PRUH RU OHVV VHJUHJDWHG WKHPVHOYHV LQWR VHPLSURIHVVLRQDOV HDFK
VSHFLDOL]LQJ LQ D FHUWDLQ VNLOO DV VXFK
GLYLVLRQ
RI
ODERU
ZKLFK QDWXUDOO\ LQFOXGHG GLYLVLRQ RI VNLOO DQG
NQRZOHGJH XVXDOO\ OHG WR PRUH VDWLVIDFWRU\ RXWFRPHV WKURXJK H[FKDQJH FKDQQHOV HVWDEOLVKHG DFURVV
GLIIHUHQW VHPLSURIHVVLRQDO JURXSV DQG HYHQ DFURVV GLIIHUHQW XUFRPPXQLWLHV
6LQFH WKH SHRSOH VKDULQJ WKH VDPH SURIHVVLRQ ZRXOG KDYH RSHUDWHG WRJHWKHU PRVW RI WKH WLPHV LW LV
QDWXUDO WR H[SHFW IRU WKHP WR KDYH IRUPHG D VXEFRPPXQLW\ ZLWK LWV RZQ FKLHI OLNH WKH KHDG KXQWHU 6XFK D
SHUVRQ PLJKW DOVR KDYH KDG WKH KLV RZQ VKDUH RI XSZDUG SRZHU WUDQVIHU FRQWULEXWHG E\ WKH PHPEHUV RI KLV
SURIHVVLRQ $ OLNHO\ VFHQDULR PLJKW WKHQ EH WKDW WKH FKLHI RI WKH FRPPXQLW\ DQG WKHVH KHDGV RI YDULRXV
SURIHVVLRQV ZHUH LQ DOOLDQFH IRU PXWXDO VXSSRUW DQ DOOLDQFH WKDW PLJKW KDYH IXQFWLRQHG DV D SUHFXUVRU RI WKH
ODWWHU GD\ JRYHUQPHQW
6XFK DQ JRYHUQLQJ DOOLDQFH ZRXOG DOVR KDYH QHHGHG WR LQFOXGH D ILJXUH OLNH D VKDPDQ DQG LW ZRXOG
QRW EH VXUSULVLQJ LI PXFK RI WKH FKLHI
V SRZHU ZDV EDVHG RQ KLP RU KHUVHOI EHLQJ D VKDPDQ
1RZ , VKDOO OHDYH WKH FRQWH[W RI WKH XUFRPPXQLW\ DQG SUHVHQW ILUVW D PRUH DUWLFXODWHG PRGHO IRU WKH
FRQYHUVLRQ RI PXOWLGLPHQVLRQDO FRQWURO SRZHU LQWR XQLGLPHQVLRQDO VRFLDO VWDWXV ,Q WKLV SUHVHQWDWLRQ P\
YLHZSRLQW ZLOO EH VHW PDLQO\ RQ LQGLYLGXDOV DQG WKHLU XUJH RSHUDWLRQV ZKLOH FKRRVLQJ DSSURSULDWH
EDFNJURXQG FRQWH[W IUHHO\ IURP WKH NQRZQ KLVWRULFDO WLPHV RQ WKH EDVLV WKDW WKH SULQFLSOH RI XUJH V\VWHP
RSHUDWLRQV KDYH UHPDLQHG YLUWXDOO\ WKH VDPH VLQFH WKH XUEDQG WLPHV WLOO WRGD\ $IWHU WKLV JURXQG ZRUN ,
VKDOO FRPH EDFN WR WKH SHULRG ULJKW DIWHU XU EDQGV DQG GLVFXVV WKH SURFHVV RI DUWLILFLDO HYROXWLRQ LQ WKH DUHD
RI VRFLDO V\VWHPV WKDW KDV WDNH SODFH VLQFH DJULFXOWXUDO UHYROXWLRQ WLOO WRGD\
$ PRGHO IRU WKH V\VWHP RI VRFLDO VWDWXV
'LPHQVLRQV RI FRQWURO SRZHU EDVHV
$V DUWLILFLDO HYROXWLRQ KDV PDGH LWV SURJUHVV LW FUHDWHG PDQ\ QHZ FRQWURO SRZHU EDVHV XQNQRZQ LQ
WKH WLPHV RI XUEDQGV LQ UHODWLRQV WR YDULRXV W\SHV RI WRROV LW SURGXFHG /HW PH OLVW XS D VDPSOH RI
UHSUHVHQWDWLYH SRZHU EDVHV WKDW KDYH ZRUNHG DV VXFK LQ KLVWRULFDO WLPHV DV ZHOO DV WRGD\ SK\VLFDO VWUHQJWK
LQWHOOLJHQFH FKDULVPD DOOLDQFH PDWHULDO ZHDOWK NQRZOHGJH VNLOOV OLQHDJH PRUDOLW\ SK\VLFDO DWWUDFWLYHQHVV
VRFLDO SRVLWLRQV DQG VR RQ VR IRUWK WKH OLVW LV YLUWXDOO\ HQGOHVV 7KHUH LV REYLRXVO\ QR GRXEW DERXW WKH PXOWL
GLPHQVLRQDOLW\ RI FRQWURO SRZHU EDVHV HYHQ WKRXJK QRW DOO RI WKHP DUH PXWXDOO\ LQGHSHQGHQW
/HDYLQJ GHWDLOHG DUJXPHQWV FRQFHUQLQJ LQGLYLGXDO SRZHU EDVHV WR ZKHQ VXFK DUJXPHQWV DUH FDOOHG
IRU OHW PH FRQVLGHU KHUH PDLQO\ DERXW WKH SULQFLSOHV FRQFHUQLQJ KRZ SDUWLFXODU FRQWURO SRZHUV DUH FUHDWHG
RXW RI WKHVH SRZHU EDVHV
1RWH ILUVW WKDW KRZ PXFK RI D FRQWURO SRZHU LV SURGXFHG E\ RQH RI WKHVH SRZHU EDVHV GHSHQGV YHU\
PXFK RQ WKH FRQWH[W LQ ZKLFK WKH RZQHU RI WKH SRZHU EDVH LV VLWXDWHG )RU LQVWDQFH LPDJLQH D SHUVRQ OHIW
DORQH LQ ZLOGHUQHVV IRU ZKDWHYHU D UHDVRQ VHYHUHG HQWLUHO\ IURP WKH KXPDQ VRFLHW\ 6XFK D SHUVRQ ZLOO
XVXDOO\ ILQG RQHVHOI XWWHUO\ SRZHUOHVV
DV PRVW RI WKH SRZHU EDVHV WKH SHUVRQ PD\ SRVVHVV ZRXOG JHQHUDWH
QR SRZHU LQ VXFK D FRQWH[W :HDOWK DQG JRRG ORRNV IRU LQVWDQFH DUH UHQGHUHG XVHOHVV DV ZLOG DQLPDOV DUH
XQEULEDEOH DQG XQFKDUPDEOH
6R DSSDUHQWO\ WKH VRFLHW\ DQG WKH LQWHUSHUVRQDO LQWHUDFWLRQV WDNLQJ SODFH ZLWKLQ WKH VRFLHW\ DUH
FDXVLQJ WR JHQHUDWH D ODUJH DPRXQW RI FRQWURO SRZHU 7KH UHDVRQ PD\ EH LOOXVWUDWHG E\ WKH IROORZLQJ
H[DPSOH &RQVLGHU IRU LQVWDQFH D SHUVRQ ZKR KDV KLW XSRQ D QHZ PHWKRG RI JURZLQJ JUDLQV ZKLFK SURGXFHV
DERXW WZLFH DV PXFK KDUYHVW FRPSDUHG WR WKH WUDGLWLRQDO PHWKRG 7KLV LV E\ LWVHOI D VLJQLILFDQW FRQWURO SRZHU
RI WKH SHUVRQ EXW LV QR PRUH WKDQ WKDW EHIRUH WKH IDFW LV EURXJKW WR QRWLFH E\ RWKHU PHPEHUV RI WKH
FRPPXQLW\ DV ZLOO KDSSHQ VRRQHU RU ODWHU 2QFH WKH IDFW EHFRPHV D FRPPRQ NQRZOHGJH KRZHYHU WKH
SHUVRQ
V FRQWURO SRZHU ZLOO EH PDJQLILHG PXOWLIROG DV HYHU\ERG\ HOVH ZRXOG ZDQW WR OHDUQ WKH WHFKQLTXH $V
D UHVXOW RI VXFK GHVLUH RI RWKHUV WKH SHUVRQ PD\ EHFRPH ULFK E\ VHOOLQJ WKH LQIRUPDWLRQ RU DFTXLUH D ODUJH
DPRXQW RI SRWHQWLDO IDYRU UHWXUQ IURP RWKHUV LI WKH SHUVRQ FKRRVHV WR WHDFK WKH WHFKQLTXH IUHHO\ WR RWKHUV ,Q
HLWKHU FDVH WKH FRPPXQLW\ ZLOO EHQHILW PXFK E\ WKH LQQRYDWLRQ LQWURGXFHG E\ WKLV SHUVRQ DV WKH WRWDO JUDLQ
RXWSXW RI WKH FRPPXQLW\ ZLOO DOVR EH GRXEOHG
6R IRU WKH VXUYLYDO RI D FRPPXQLW\ LW LV LPSRUWDQW IRU LW WR FXOWLYDWH ZKDWHYHU D SRZHU EDVH QHZO\
DULVHQ ZLWK RQH RI LWV LQKDELWDQWV DQG WR PDNH WKH SRZHU D FRPPRQ DVVHW RI WKH FRPPXQLW\ 7KH KLGGHQ
SXUSRVH RI WKH YHU\ LPSRUWDQW XUJH RI
GHPRQVWUDWLRQ
OLHV LQ SURYLGLQJ WKH QHFHVVDU\ LQWHUPHGLDU\ VWHS IRU
WKLV WR RFFXU 7KLV XUJH LV DFWLYDWHG ZKHQ D SHUVRQ UHFRJQL]HV D JURZWK LQ RQH
V FRQWURO SRZHU ZKRVH DFWLRQ
SODQ W\SLFDOO\
ERDVWLQJ
LV VHW WRZDUG WKH JRDO RI OHWWLQJ RWKHUV NQRZ WKH SHUVRQ
V QHZO\ DFTXLUHG SRZHU 2I
FRXUVH WKH EHQHILW RI WKH FRPPXQLW\ PD\ QRW XVXDOO\ RQ D ERDVWHU
V PLQG ZKDW D ERDVWHU LQWHQGV WR DFKLHYH
E\ WKH DFW LV XVXDOO\ MXVW IRU WKH SHUVRQ
V DXJPHQWHG SRZHU WR EH SURSHUO\ UHFRJQL]HG E\ RWKHUV ZLWK WKH
FRUUHVSRQGLQJ LQFUHDVH LQ WKH SHUVRQ
V VWDWXV DV D QDWXUDO FRQVHTXHQFH RI VXFK VRFLDO UHFRJQLWLRQ QRW IDU
EHKLQG LQ WKH PLQG
$V D PDMRU PHPEHU RI WKH VWDWXV SURPRWLRQ XUJH IDPLO\ D JUHDW GHDO QHHGV WR EH GLVFXVVHG DERXW WKH
RSHUDWLRQDO PRGHV RI WKH GHPRQVWUDWLRQ XUJH %HIRUH JRLQJ LQWR VWDWXVUHODWHG XUJH RSHUDWLRQV OHW PH ILUVW
LQWURGXFH D OLQHDU PRGHO IRU WKH SRZHU UHFRJQLWLRQ DQG WKH FRQYHUVLRQ RI PXOWLGLPHQVLRQDO SRZHU LQWR
XQLGLPHQVLRQDO VWDWXV 1HHGOHVV WR VD\ WKH DVVXPSWLRQ RI OLQHDULW\ KHUH LV QR PRUH WKDQ D FRQYHQWLRQ DV
QRWKLQJ DERXW SRZHU DQG VWDWXV VHHPV VWULFWO\ OLQHDU EXW WKLV PRGHO HDV\ WR KDQGOH EHFDXVH RI OLQHDULW\ VWLOO
LV D JRRG WRRO WR JOLPSVH DW WKH EDVLF SULQFLSOHV XQGHUO\LQJ WKH SV\FKRORJLFDO DQG VRFLDO SURFHVVHV LQYROYHG
7KH SULQFLSOH IRU UHFRJQL]LQJ RWKHUV
FRQWURO SRZHU DQG WKH DGDSWDWLRQ OHYHO K\SRWKHVLV
,PDJLQH DQ HSLVRGH LQ VRPH PHGLHYDO WLPHV LQ ZKLFK D PLJKW\ ZDUULRU FDPH WR D NLQJGRP DQG
RIIHUHG KLPVHOI WR MRLQ WKH NLQJV
V DUP\ 7KH NLQJ QDWXUDOO\ ZDV YHU\ SOHDVHG DV VXFK D ILQH ZDUULRU ZDV DQ
LQYDOXDEOH DVVHW IRU WKH NLQJGRP ZKLFK ZDV LQ D FRQVWDQW EDWWOH ZLWK LWV QHLJKERUV 6XSSRVH WKDW WKH
VXSHULRULW\ LQ SK\VLFDO VWUHQJWK RI WKLV QHZFRPHU WR WKH NLQJ
V IRUPHU FKDPSLRQV ZDV REYLRXV WR
HYHU\ERG\
V H\HV $V XVXDOO\ H[SHFWHG WR KDSSHQ LQ VXFK D FDVH WKH QHZFRPHU ZRXOG RXWVKLQH WKH RWKHUV LQ
WKH SK\VLFDO VWUHQJWK GLPHQVLRQ RI FRQWURO SRZHU DQG WKH RQFH PLJKW\ ORRNLQJ NLQJ
V IRUPHU FKDPSLRQV
ZRXOG FRPH WR ORRN OHVV IRUPLGDEOH WKDQ EHIRUH WKH QHZFRPHU
V DUULYDO HYHQ WKRXJK REMHFWLYHO\ VSHDNLQJ
QRQH KDG KDSSHQHG WR GHFUHDVH WKH SK\VLFDO VWUHQJWK RI HDFK RI WKHP $W WKH VDPH WLPH LW LV DOVR WR EH QRWHG
WKDW QR VLPLODU GHSUHFLDWLRQ RI SK\VLFDO SRZHU ZRXOG WDNH SODFH ZLWK DQ\ RI WKH PRUH RUGLQDU\ FRPPRQ
ZDUULRUV
7KH VDPH HIIHFW RI RXWVKLQLQJ WDNHV SODFH LQ RWKHU GLPHQVLRQV RI FRQWURO SRZHU :KHQ D \RXQJ
JHQLXV KDV HPHUJHG LQ DQ DUHD RI VFLHQFH DQG VKRZQ D UHDO H[FHOOHQFH PRVW RI WKH SUHYLRXV DXWKRULWLHV LQ WKH
ILHOG PLJKW ORRN D OLWWOH OHVV LQGRPLWDEOH HYHQ LI QRQH RI WKHP ZHUH IDLOLQJ LQ WKHLU WDVNV ,QWHUHVWLQJO\ D
VLPLODU HIIHFW KDV ORQJ EHHQ NQRZQ LQ VHQVRU\ SHUFHSWLRQ +HOVRQ GLVFRYHUHG WKDW KLV H[SHULPHQWDO
VXEMHFWV WHQGHG WR MXGJH WKH VDPH REMHFW OLJKWHU ZKHQ WKH\ KHOG D KHDY\ REMHFW LPPHGLDWHO\ EHIRUH WKH
H[SRVXUH WR WKH WDUJHW REMHFW WKDQ RWKHUZLVH %\ H[DPLQLQJ KLV H[SHULPHQWDO GDWD KH FRQFOXGHG WKDW RQH
V
VXEMHFWLYH ZHLJKW MXGJPHQW ZDV GRQH DJDLQVW D FHUWDLQ UHIHUHQFH YDOXH RI ZHLJKW FDOOHG WKH
DGDSWDWLRQ OHYHO
GHILQHG DV D VRUW RI PHDQ YDOXH RI DOO WKH ZHLJKWV WKH VXEMHFW ZDV H[SRVHG WR SULRU WR WKH WDUJHW REMHFW
,Q RWKHU ZRUGV DFFRUGLQJ WR WKH WKHRU\ D SHUVRQ MXGJHV D JLYHQ REMHFW KHDY\ RU OLJKW DQG KRZ
PXFK VR ZLWK UHIHUHQFH WR WKLV DGDSWDWLRQ OHYHO ZKLFK VXPV XS LQ D VHQVH DOO WKH ZHLJKWV WKDW WKH SHUVRQ
KDV HQFRXQWHUHG UHFHQWO\ 7KLV QDWXUDOO\ LPSOLHV DV D FRUROODU\ WKDW D SHUVRQ UHFHQWO\ H[SHULHQFHG D YHU\
KHDY\ ZHLJKW ZLOO WHQG WR MXGJH RWKHU REMHFWV UDWKHU OLJKW 7KLV LV WKHQ DQRWKHU RXWVKLQLQJ HIIHFW HQRXJK WR
PDNH XV VXVSHFW WKH H[LVWHQFH RI D VLPLODU XQGHUO\LQJ SULQFLSOH , DP QRW FODLPLQJ WKDW WKH DSSUDLVDO RI RWKHU
SHUVRQ
V FRQWURO SRZHUV LV DQRWKHU NLQG RI SV\FKRSK\VLFDO GLUHFW HYDOXDWLRQ RI H[WHUQDO VWLPXOL :KDW ,
LQWHQG WR FODLP LV WKDW VXFK D SURFHVV DV UHSUHVHQWHG E\ WKH XVH RI DGDSWDWLRQ OHYHO LV WKH EDVLF XQGHUO\LQJ
SULQFLSOH FRPPRQ WR PRVW RI WKH XQLSRODU LH QRQQHJDWLYH
TXDQWLWDWLYH MXGJPHQWV WKH KXPDQV PDNH
7KH JLVW RI WKH SULQFLSOH , SURSRVH PD\ EH H[SUHVVHG LQ WKH IROORZLQJ ZD\ $VVXPH ILUVW WKDW WKHUH LV
D VXEMHFWLYH PDJQLWXGH VFDOH RQ DQ\ GLPHQVLRQ VHQVRU\ RU RWKHUZLVH RQ ZKLFK RQH PDNHV D PDJQLWXGH
MXGJPHQW 7KH VFDOH LV IL[HG JLYHQ WKH SHUVRQ RQO\ XS WR D PXOWLSOLFDWLYH WUDQVIRUPDWLRQ LQ RWKHU ZRUGV
WKH VFDOH PD\ EH H[SDQGHG RU FRQWUDFWHG E\ PXOWLSO\LQJ D SRVLWLYH QXPEHU 7KLV WUDQVIRUPDWLRQ ZLOO EH
FRQGXFWHG ZKHQHYHU D QHZ VSHFLPHQ LV MXGJHG VR WKDW WKH PHDQ RI DOO WKH VSHFLPHQV MXGJHG LQ WKH SDVW RI
FRXUVH DOO WKRVH VWLOO UHPHPEHUHG LV DOZD\V NHSW DW VRPH FRQVWDQW VD\
PDJQLWXGHV LQ RQH
V H[SHULHQFH DUH DOZD\V
,Q RWKHU ZRUGV WKH VXEMHFWLYH
QRUPDOL]HG
7R JDLQ VRPH LQVLJKW IRU KRZ WKLV MXGJPHQWDO V\VWHP ZRUNV OHW XV IROORZ XS D SURFHVV ZKHQ D
SHUVRQ HQFRXQWHUHG D VSHFLPHQ ZKRVH VXEMHFWLYH PDJQLWXGH LQ WKH GLPHQVLRQ XQGHU FRQVLGHUDWLRQ EH LW WKH
ZHLJKW GLPHQVLRQ RU WKH SK\VLFDO VWUHQJWK GLPHQVLRQ LV H[WUDRUGLQDULO\ ODUJH LQ WKH FXUUHQW VXEMHFWLYH
PDJQLWXGH VFDOH FUHDWLQJ D UHVSRQVH VXFK DV :KDW D KHDY\ REMHFW RU +RZ DZHVRPH ORRNLQJ SHUVRQ WKLV
QHZFRPHU LV 7KHQ WKH QRUPDOL]DWLRQ SURFHVV ZLOO VHW LQ WR EULQJ EDFN WKH PHDQ YDOXH RI WKH VSHFLPHQV
LQFUHDVHG E\ WKH MRLQLQJ RI WKH QHZ VSHFLPHQ EDFN WR WKH VWDQGDUG YDOXH RI
/HW
Q
EH WKH QXPEHU RI VSHFLPHQV LQ WKH ROG SRSXODWLRQ WKH SRSXODWLRQ RI VSHFLPHQV DW WKH WLPH RI
LQFHSWLRQ RI WKH QHZ VSHFLPHQ /HW
DVVXPHG WR EH ODUJHU WKDQ
EULQJ WKH PHDQ EDFN WR
VFDOH
[
E\ WKH IDFWRU RI
[
−
Q
+
[
EH WKH VXEMHFWLYH YDOXH JLYHQ WR WKH QHZ VSHFLPHQ $V WKLV YDOXH LV
LWV DGGLWLRQ ZLOO LQFUHDVH WKH ROG SRSXODWLRQ PHDQ IURP
WR
Q[ Q
7R
WKH QHZ VFDOH VSHFLILHG E\ QRUPDOL]DWLRQ UHTXLUHV HYHU\ VXEMHFWLYH YDOXH LQ WKH ROG
QQ[
[
7KH DFWXDO DPRXQW RI UHGXFWLRQ IRU
[
LV WKHQ JLYHQ DV
[ =
Q + [
Q + [
[
1RZ ZKDW LV WKLV SRSXODWLRQ" ,Q WKH FDVH RI WKH VXEMHFWLYH ZHLJKW MXGJPHQW H[SHULPHQW LW PD\ EH
DVVXPHG WR EH WKH VDPSOH RI REMHFWV JLYHQ WR WKH VXEMHFW WR ZHLJK SULRU WR WKH REMHFW ZHLJKHG DV
[ %XW OHW
PH IRUJHW DERXW SV\FKRSK\VLFDO H[SHULPHQW DQG IURP QRZ RQ VWLFN WR WKH LVVXH RI SRZHU UHFRJQLWLRQ
WKH FDVH RI WKH SK\VLFDO SRZHU UHFRJQLWLRQ
Q
,Q
PD\ EH DEOH WR EH WDNHQ DV WKH SRSXODWLRQ RI WKH FRPPXQLW\
LWVHOI VLQFH LQ WKH WLPHV ZKHQ WKH FRPPXQLW\ ZDV UHODWLYHO\ VPDOO HYHU\ERG\ ZRXOG EH DZDUH RI WKH
SK\VLFDO SRZHU KHOG E\ HYHU\ERG\ HOVH LQ WKH FRPPXQLW\
6LQFH , DVVXPHG WKDW
[
LV H[WUDRUGLQDULO\ ODUJH LW PXVW EH ODUJHU WKDQ
WKH SRSXODWLRQ PHDQ LQ WKH
7KH SULQFLSOH PD\ EH H[WHQGHG WR LQFOXGH ELSRODU TXDQWLWDWLYH MXGJPHQWV OLNH WKRVH RQ WKH MR\VDGQHVV GLPHQVLRQ
DQG WKH DUJXPHQWV JLYHQ RQ WKLV VXEMHFW LQ &KDSWHU PD\ EH VHHQ LQ WKH OLJKW RI WKH FXUUHQW DUJXPHQW
7KH PRGHO , SUHVHQWHG KHUH LV GLIIHUHQW IURP +HOVRQ
V ZKR SURSRVHG JHRPHWULF PHDQ LQVWHDG RI RUGLQDU\ PHDQ WR
DFFRXQW IRU WKH DGDSWDWLRQ OHYHO 7KH YDULDEOHV +HOVRQ XVHG WR FDOFXODWH WKH JHRPHWULF PHDQ ZHUH DOO REMHFWLYH
ZHLJKWV
RI WKH REMHFWV XVHG LQ KLV H[SHULPHQW DQG IRU WKDW UHDVRQ KLV PRGHO FDQQRW EH DSSOLFDEOH WR RXU DUJXPHQW WKH
UHFRJQLWLRQ RI FRQWURO SRZHU IRU ZKLFK QR REMHFWLYH PHDVXUHV DUH XVXDOO\ DYDLODEOH FHUWDLQO\ QRW IRU WKH NLQGV RI SRZHU
EDVHV DV JRRG ORRNV OLQHDJH DQG FKDULVPD 6R P\ DUJXPHQWV EHJLQ ZLWK VXEMHFWLYH HYDOXDWLRQ DQG HQG ZLWK VXEMHFWLYH
MXGJPHQW DOWKRXJK , VKDOO WRXFK XSRQ VRPH REMHFWLYH VXEMHFWLYH UHODWLRQVKLSV FRQFHUQLQJ FRQWURO SRZHU ODWHU ZKHUH
VXFK DQ DUJXPHQW LV SRVVLEOH
ROG VFDOH WKH DPRXQW RI UHGXFWLRQ JLYHQ LQ LV SRVLWLYH DQG WKH DPRXQW RI UHGXFWLRQ ZLOO EH ODUJHU IRU
ODUJH
[
$V D PDWWHU RI IDFW LV JRRG IRU DQ\
EHFRPHV QHJDWLYH PHDQLQJ WKDW HYHU\
[
[
ODUJH RU VPDOO ,I LW LV OHVV WKDQ RQH WKH UHGXFWLRQ
LV LQFUHDVHG LQ WKH QHZ VFDOH UDWKHU WKDQ GHFUHDVHG %XW OHW PH VWLFN
WR WKLV DVVXPSWLRQ IRU WKH VDNH RI DUJXPHQW 1RWH WKDW WKLV UHGXFWLRQ DSSOLHV WR
[
DV ZHOO WKH QHZFRPHU
V
SRZHU UHFRJQLWLRQ EHLQJ DIIHFWHG WKH JUHDWHVW 6LQFH WKH SHUVRQ LV D QHZFRPHU KRZHYHU WKLV UHHYDOXDWLRQ
ZRXOG FRXQW OLWWOH WKH SHUVRQ PD\ QRZ ORRN PRUH QRUPDO WKDQ H[WUDRUGLQDU\ DIWHU WKH QRUPDOL]DWLRQ QR SXQ
LQWHQGHG &RPSDUHG WR WKH QHZFRPHU WKH UHGXFWLRQ LQ WKH UHFRJQL]HG SRZHU RI DOO WKH NLQJ
V IRUPHU
FKDPSLRQV ZRXOG EH SDOSDEOH WKH\ PLJKW QRW ORRN DV SRZHUIXO DV WKH\ RQFH ZHUH LQ IURQW RI WKLV QHZO\
DUULYHG PDJQLILFHQW ZDUULRU
1RZ OHW PH DVVXPH WKDW WKLV QRUPDOL]DWLRQ LV FRQGXFWHG VHSDUDWHO\ IRU HDFK FRQWURO SRZHU
GLPHQVLRQ EH WKH GLPHQVLRQ ZHDOWK JRRG ORRNV LQWHOOLJHQFH FKDULVPD DQG ZKDWHYHU DV ORQJ DV WKH
GLPHQVLRQV FRQFHUQHG FDQ EH DVVXPHG PXWXDOO\ LQGHSHQGHQW $ORQJ HDFK GLPHQVLRQ WKH XQLW RI WKH VFDOH LV
DOZD\V VHW DW WKH FRPPXQLW\ PHDQ 6R D SHUVRQ ZLWK
SV
DQG
LQW
ZLOO PHDQ WKDW WKH SHUVRQ LV MXVW
DERXW WKH FRPPXQLW\ DYHUDJH LQ WKH SHUVRQ
V SK\VLFDO SRZHU DQG LV D OLWWOH RQ WKH EULJKWHU VLGH RI WKH
FRPPXQLW\ DYHUDJH LQ LQWHOOLJHQFH
1RWH WKDW WKLV SRZHUGLPHQVLRQZLVH QRUPDOL]DWLRQ PRGHO LV RQH VWHS PRUH HODERUDWH WKDQ WKH
VLPSOHPLQGHG PRGHO SUHVHQWHG HDUOLHU WKH RQH LQ ZKLFK WKH PHDQ VRFLDO VWDWXV LV NHSW FRQVWDQW WKURXJK
QRUPDOL]DWLRQ ,Q WKH FXUUHQW PRGHO , DP GHVFULELQJ WKH PHDQ VRFLDO VWDWXV LV NHSW FRQVWDQW DV , VKDOO
GHPRQVWUDWH VKRUWO\ EXW QRUPDOL]DWLRQV DUH FRQGXFWHG VHSDUDWHO\ IRU HDFK SRZHU GLPHQVLRQ /HW XV VHH WKH
PHULW RI WKH QHZ PRGHO ZLWK WKH DERYH H[DPSOH RI D QHZ PLJKW\ ZDUULRU 6XFK D SHUVRQ LV TXLWH OLNHO\ EH
FRQIHUUHG D UDWKHU KLJK VRFLDO VWDWXV LQ WKH FRPPXQLW\ :LWK ROGHU PRGHO LQ ZKLFK WKH VRFLDO VWDWXV V\VWHP
ZLWKLQ D FRPPXQLW\ LV GLUHFWO\ QRUPDOL]HG KDYLQJ D KLJK VWDWXV QHZFRPHU DXWRPDWLFDOO\ LPSOLHG WKDW DOO WKH
IRUPHUO\ KLJK VWDWXV SHUVRQV LQ WKH FRPPXQLW\ OLNH WKH NLQJ DQG WKH KHDG RI WKH FOHUJ\ VKRXOG KDYH VXIIHUHG
IURP D FRQVLGHUDEOH UHGXFWLRQ LQ WKHLU VWDWXV ,Q WKDW FDVH WKH NLQJ PLJKW KDYH GHFOLQHG WR KLUH VXFK D SHUVRQ
IRUIHLWLQJ WKH FKDQFH RI ZLQQLQJ WKH ZDU :LWK WKH QHZ PRGHO KRZHYHU QR VXFK FRQWUDGLFWLRQ RFFXUV 7KRVH
ZKR VXIIHU LQ VWDWXV E\ MRLQLQJ VXFK D SHUVRQ ZRXOG EH RQO\ WKH NLQJ
V LOOXVWULRXV HPSOR\HHV ZKRVH SRZHU
EDVHV ZHUH SULPDULO\ RQ WKHLU VXSHULRU SK\VLFDO VWUHQJWK ,I WKH NLQJ
V SRZHU EDVH ZDV SULPDULO\ RQ KLV
OLQHDJH DQG WKH DUFKELVKRS RQ KLV FKDULVPD WKHLU SRZHUV ZRXOG KDYH UHPDLQHG XQWRXFKHG E\ WKLV QHZ
HPSOR\PHQW 7KH NLQJ PLJKW HYHQ KDYH LQFUHDVHG KLV VWDWXV E\ KDYLQJ WKLV PLJKW\ ZDUULRU DV RQH RI KLV
DOOLHV
3HUVRQDO DSSUDLVDO RI RWKHUV
PXOWLGLPHQVLRQDO SRZHU
$V D QHFHVVDU\ LQWHUPHGLDU\ VWHS WRZDUG UHDFKLQJ D PRGHO WKDW GLVFXVVHV KRZ D SHUVRQ
V PXOWL
GLPHQVLRQDO SRZHU LV FRQYHUWHG LQWR WKH SHUVRQ
V VRFLDO VWDWXV OHW PH ILUVW FRQVLGHU KRZ D SHUVRQ VD\
SHUVRQDOO\
.
V
DSSUDLVHV
.
WKH FRQWURO SRZHUV RI HYHU\ FRPPXQLW\ PHPEHU LQFOXGLQJ KLP RU KHUVHOI E\ XVLQJ
RZQ XQLGLPHQVLRQDO DSSUDLVDO VFDOH 1RZ VXSSRVH WKDW
UHSUHVHQWHG LQ VXFK D ZD\ DV
SV LQW ±±±
.
LV DSSUDLVLQJ D SHUVRQ
,
ZKRVH FRQWURO SRZHU LV
,W LV TXLWH SRVVLEOH WKDW VRPH RI WKH SRSXODUO\ XVHG SRZHU
GLPHQVLRQV DUH VWULFWO\ VSHDNLQJ QRW RUWKRJRQDO WR HDFK RWKHU EXW FRQVLGHULQJ WKH DSSUR[LPDWLYH QDWXUH RI
RXU OLQHDU PRGHO OLWWOH KDUP VHHPV WR EH GRQH E\ DVVXPLQJ IRU LQGLYLGXDO SRZHU FRPSRQHQWV ZH FRQVLGHU
DUH PXWXDOO\ LQGHSHQGHQW ZKLFK DPRXQWV WR DVVXPLQJ IRU LQVWDQFH NQRZLQJ WKH SHUVRQ
VWUHQJWK GRHV QRW PDNH
.
DQ\ ZLVHU DERXW ,
V LQWHOOLJHQFH
7KLV DVVXPSWLRQ DOORZV XV WR UHSUHVHQW
,
V
PXOWLGLPHQVLRQDO SRZHU DV D YHFWRU
,
LQ
,
V
SK\VLFDO
PGLPHQVLRQDO
YHFWRU VSDFH URRWHG DW WKH RULJLQ DQG SRLQWHG WRZDUG WKH VSDWLDO FRRUGLQDWHV FRUUHVSRQGLQJ WR
,
V
P
GLPHQVLRQDO RUWKRJRQDO SRZHU FRPSRQHQWV $V , DP DVVXPLQJ KHUH IRU DOO FRQWURO SRZHU FRPSRQHQWV WR EH
QRQQHJDWLYH
RQO\ WKH ILUVW TXDGUDQW RI WKLV VSDFH ZLOO EH XVHG LQ WKH IRUWKFRPLQJ DUJXPHQWV )RU WKH
FRQYHQLHQFH RI LOOXVWUDWLRQ OHW XV EHJLQ E\ FRQVLGHULQJ RQO\ WZR GLPHQVLRQV LQWHOOLJHQFH DQG SK\VLFDO
VWUHQJWK *HQHUDOL]LQJ WKH DUJXPHQWV IURP WZR GLPHQVLRQV WR
P
GLPHQVLRQV LV VWUDLJKWIRUZDUG DV ZLOO VRRQ
EH VKRZQ
,QVHUW )LJ DURXQG KHUH
,Q )LJ WKH
;D[LV
UHSUHVHQWV WKH QRUPDOL]HG VFDOH IRU LQWHOOLJHQFH DQG WKH
SK\VLFDO VWUHQJWK DQG WKH SRZHU FRPSRQHQWV SRVVHVVHG E\ WKH SHUVRQ
,Q WKH VDPH ILJXUH WKH SRZHUV RI DQRWKHU SHUVRQ
SRZHUIXO LQ SK\VLFDO VWUHQJWK WKDQ
KLJKO\ WKDQ
-
EHFDXVH
,
7KH SHUVRQ
.
V
SMN
DUH GHSLFWHG DV
\L
WKDW RI WKH
UHVSHFWLYHO\
REVHUYHV WKHVH WZR SHUVRQV DQG PD\ DSSUDLVH
.
SHUVRQDOO\ DSSUDLVHG VWDWXV
UHVSHFWLYHO\ 7KH SUHGLVSRVLWLRQ RI
.
ZLOO EH PRGHOL]HG E\ ZKDW LV WR EH FDOOHG
GLPHQVLRQ WKH PRUH LQFOLQHG ZRXOG
(N
PRUH
,
JLYHQ WR
LQ IDYRU RI LQWHOOLJHQFH PDNHV
,
DQG
.
V
-
E\
.
GHVLJQDWHG DV
SLN
SLN ! SMN
7KLV SUHGLVSRVLWLRQ RI
.
V SHUVRQDO VWDWXV DSSUDLVDO D[LV (N
D VWUDLJKW OLQH SDVVLQJ
.
LQ IDYRU RI HLWKHU SRZHU
EH WRZDUG WKH D[LV WKDW UHSUHVHQWV WKH IDYRUHG SRZHU GLPHQVLRQ
7KH SHUVRQDOO\ DSSUDLVHG VWDWXV RI
SRZHU YHFWRU RQWR
<D[LV
DQG
LV DOVR SUHVHQWHG OHVV SRZHUIXO LQ LQWHOOLJHQFH EXW PRUH
WKURXJK WKH RULJLQ DV VKRZQ LQ )LJ 7KH VWURQJHU WKH SUHGLVSRVLWLRQ RI
,
V
[L
LV SUHGLVSRVHG WR WDNH PRUH VWRFN E\ LQWHOOLJHQFH WKDQ E\ SK\VLFDO VWUHQJWK /HW PH
.
FDOO WKH RXWFRPHV RI VXFK DSSUDLVDO WKH
DQG
-
,
,
E\
.
ZLOO WKHQ EH UHSUHVHQWHG E\ WKH OHQJWK RI WKH SURMHFWLRQ RI
SHUVRQDO VWDWXVDSSUDLVDO D[LV
LH
,
RQWR
(N
1DPHO\ ,
V SRZHU DSSUDLVHG E\
. SLN
LV JLYHQ E\
S
ZKHUH
φLN
LN
= UL FRVφLN LV WKH DQJOH IRUPHG E\
,
DQG
(N
DQG
UL
GHVLJQDWHV WKH OHQJWK RI
RI WKDW LV DFWXDOO\ WKH VFDODU SURGXFW RI WZR YHFWRUV
( N
KROGV ZKHQ WKH ,
V SRZHU YHFWRU DQG
.
V
,
,
1RWH WKDW WKH ULJKW KDQG VLGH
DQG WKH XQLW YHFWRU D YHFWRU RI OHQJWK
SHUVRQDO DSSUDLVDO D[LV DUH ORFDWHG LQ
SULQFLSOH XQGHUO\LQJ WKLV JHQHUDOL]DELOLW\ LV LOOXVWUDWHG E\ )LJ 1RWH ILUVW WKDW
YHFWRULDO VXP RI WZR SRZHU FRPSRQHQW YHFWRUV RI
FRPSRQHQW YHFWRUV RQWR
LN
S
ZKHUH
θ
FRV
(N
LV HTXDO WR
L
,;
L
DQG
<
PGLPHQVLRQDO
,
V
SRZHU YHFWRU
θ
FRV
DORQJ
,
LV WKH
DQG WKH VXP RI WKH SURMHFWLRQV RI WKHVH WZR
L
φLN 1DPHO\
U FRV
= ; L FRVθ + <L FRVθ DQG
VSDFH 7KH
DUH WKH GLUHFWLRQ FRVLQHV RI
(N
DJDLQVW
;
DQG
<D[HV
UHVSHFWLYHO\
,Q WKLV IRUP LW LV FRQYHQLHQW WR REWDLQ DQ DOWHUQDWLYH JHQHUDO H[SUHVVLRQ RI ZKLFK H[SOLFLWO\
LQYROYHV
P
7KLV DVVXPSWLRQ PD\ EH UHPRYHG ZLWKRXW DQ\ HVVHQWLDO GLIILFXOW\ LI RQH ZLVKHV WR EXLOG D PRGHO RI JUHDWHU
JHQHUDOLW\
LN =
S
ZKHUH
[LV
P
∑
LV FRVθNV
[
V =
LV WKH VWK SRZHU FRPSRQHQW RI WKH SHUVRQ , DQG
VWDWXV DSSUDLVDO D[LV
LH ( N
θNV
FRV
WKH VWK GLUHFWLRQDO FRVLQH RI
7KH ULJKW KDQG VLGH RI LPSOLHV WKDW
DVVXPHGO\ GRQH E\ WDNLQJ D ZHLJKWHG VXP RI
GHWHUPLQHG E\ WKH LQFOLQDWLRQ RI
(
N
LQ WKH
,
V
PGLPHQVLRQDO
.
SHUVRQDO
SHUVRQDOO\ DSSUDLVHG VWDWXV RI
SRZHU FRPSRQHQWV ZKHUHE\ WKH ZHLJKWV
θNV FRV
,
LV
DUH
VSDFH
1RZ OHW PH FRQVLGHU WKH FRPPXQLW\ PHDQ RI WKH
FRPPXQLW\ PHPEHUV LQFOXGLQJ WKDW RI
.
V
.
V
.
V
SHUVRQDOO\ DSSUDLVHG VWDWXV RI
KLP RU KHUVHOI DOO DSSUDLVHG E\
.
/HW
&N
.
V
IHOORZ
GHQRWH WKLV FRPPXQLW\
PHDQ
&
N
=
Q
=
Q
∑
S
UN
U =
Q P
Q
=
∑∑
U = V =
P
∑
UV FRVθNV
[
 Q


θNV 
[
U
V

Q
 U =

FRV
V =
∑
1RWH WKDW WKH WHUP LQ SDUHQWKHVHV LQ LV QRQH EXW WKH FRPPXQLW\ PHDQ RI WKH PHPEHUV
SRZHUV
LQ WKH VWK GLPHQVLRQ ZKLFK LV DVVXPHG WR EH QRUPDOL]HG DQG WKXV HTXDO WR
&
N =
7KXV ZH KDYH
P
∑
V =
θNV FRV
7KLV LPSOLHV WKDW WKH PHDQ RI SHUVRQDOO\ DSSUDLVHG VWDWXV LV DXWRPDWLFDOO\ PDGH FRQVWDQW JLYHQ D
SHUVRQDO VWDWXVDSSUDLVDO D[LV DV ORQJ DV WKH SRZHUV DUH QRUPDOL]HG RQ DOO WKH SRZHU GLPHQVLRQV LUUHVSHFWLYH
RI WKH ZD[LQJ DQG ZDQLQJ RI FRPPXQLW\ PHPEHUV LQ WKHLU SRZHUV
7KLV LV WKH HQG RI WKH SUHVHQWDWLRQ RI WKH DSSUR[LPDWH OLQHDU PRGHO GHDOLQJ ZLWK WKH UHODWLRQV
EHWZHHQ PXOWLGLPHQVLRQDO SRZHU DQG VWDWXV 'HVSLWH LWV DSSUR[LPDWH QDWXUH LW VWLOO FDSWXUHV VRPH HVVHQWLDO
IHDWXUHV XQGHUO\LQJ WKH UHODWLRQV DQG OHW PH QRZ PDNH XVH RI VRPH RI WKHP
7KLV PHDQV WKDW WKH ZHLJKWV DUH FKRVHQ E\
.
XQGHU WKH FRQVWUDLQWV WKDW ≤ θ N V ≤ π IRU HYHU\ V DQG WKDW
P
∑ θ N V = (P − )π V =
&RPPXQLW\ QRUP D[LV DQG VRFLDO VWDWXV
&RQVLGHU
Q
GLIIHUHQW SHUVRQDO DSSUDLVDO D[HV HDFK FRUUHVSRQGLQJ WR HDFK RI WKH
Q
PHPEHUV RI D
FRPPXQLW\ &DQ WKHLU ORFDWLRQV EH PXWXDOO\ LQGHSHQGHQW" +DUGO\ VLQFH WKH\ DUH LQWHUDFWLQJ ZLWK HDFK RWKHU
7KH JURVV ORFDWLRQ RI RQH
V SHUVRQDO DSSUDLVDO D[LV GRHV VKRZ WKURXJK VXFK LQWHUDFWLRQV DV RQH
V DSSUDLVDO
D[LV LV DW OHDVW SDUWO\ WKH PDQLIHVWDWLRQ RI WKH EHOLHI V\VWHP RQH KROGV DQG DV PHQWLRQHG HDUOLHU D SHUVRQ
JHQHUDOO\ IHHOV XQFRPIRUWDEOH RU HYHQ WKUHDWHQHG ZLWK DQRWKHU RI WRR GLIIHUHQW D EHOLHI V\VWHP IURP RQH
V
RZQ 6R ZLWKLQ D FORVHNQLW FRPPXQLW\ DV KDV JHQHUDOO\ EHHQ WKH FDVH LQ WKH SDVW WKH RGG PDQRXW
SULQFLSOH HYRNHV D SUHVVXUH WRZDUG FRQIRUPLW\ RI EHOLHI V\VWHPV DPRQJ WKH PHPEHUV RI D FRPPXQLW\ 7KLV
SUHVVXUH PD\ DOVR EH PDQLIHVW RQ LQGLYLGXDO DSSUDLVDO D[HV SXOOLQJ WKHP WRJHWKHU WRZDUG VRPH FHQWHU RI
JUDYLW\
VR WR VSHDN 7KH\ ZLOO QRW PHUJH FRPSOHWHO\ KRZHYHU DV WKH QHHG WR FRQIRUP ZLOO ZHDNHQ DV WKH\
FRPH FORVH DQG SHRSOH DOVR ZRXOG ZDQW WR NHHS WKHLU LQGLYLGXDOLW\
6R PRUH RIWHQ WKDQ QRW WKHUH PD\ H[LVW D VLQJOH PDMRU FOXVWHU RI DSSUDLVDO D[HV IRU PHPEHUV RI D
FRPPXQLW\ ZKLFK PD\ EH UHSUHVHQWHG E\ D K\SRWKHWLFDO DSSUDLVDO D[LV DW WKHLU FHQWHU HYHQ WKRXJK WKHUH
PD\ EH QR SDUWLFXODU SHUVRQ ZKRVH DSSUDLVDO D[LV FRLQFLGHV ZLWK WKLV FHQWUDO D[LV /HW PH FDOO LW WKH
FRPPXQLW\
QRUP
D[LV
DQG RQH
V VRFLDO VWDWXV LV WKH SHUVRQ
V PXOWLGLPHQVLRQDO FRQWURO SRZHU DSSUDLVHG
DJDLQVW WKLV FRPPXQLW\ QRUP D[LV
7KH FRPPXQLW\ QRUP D[LV ZLOO WKXV FRUUHVSRQG WR WKH FRUH EHOLHIV VKDUHG E\ PDMRULW\ RI FRPPXQLW\
PHPEHUV FRQVLVWLQJ PDLQO\ RI WKH WUDGLWLRQDO EHOLHIV DQG DOVR RI WKH FRPPRQO\ FRQFHLYHG QHHGV RI WKH
FRPPXQLW\ 7KH IRUPHU LQFOXGH PRUDO FRGHV ERWK UHOLJLRXV DQG VHFXODU 7KLV SDUW RI VRFLDO QRUP JLYHV WKH
FRPPXQLW\ QRUP D[LV D VRUW RI LQHUWLD DQG VWDELOLW\ 7KH ODWWHU WKH SDUW RI WKH UHFRJQL]HG QHHG RI WKH
FRPPXQLW\ KRZHYHU PD\ RFFDVLRQDOO\ XQGHUJR D GUDVWLF FKDQJH &RQVLGHU IRU LQVWDQFH D QHLJKERULQJ
FRPPXQLW\ ZLWK ZKLFK WKH FRPPXQLW\ KDG EHHQ HQJDJHG LQ DQ LQWHUQHFLQH ZDU VRPHKRZ VWRSSHG WR EH D
WKUHDW DW DOO
:KHQ WKH PDMRULW\ RI WKH FRPPXQLW\ ZHUH ILQDOO\ FRQYLQFHG RI QR VWDQGLQJ FKDQFH RI DQ
H[WHUQDO WKUHDW WKH FRPPXQLW\ QRUP D[LV PD\ JR WKURXJK D VLJQLILFDQW VKLIW IURP WKH RQH WKDW DSSUDLVHG
KLJKO\ WKH NLQG RI SRZHU EDVHV XVHIXO IRU WKH DUW RI ZDU WR WKH RQH LQ IDYRU RI PRUH SHDFHIXO FRQWULEXWLRQV WR
WKH FRPPXQLW\ :KHQ VXFK D PDMRU WLOWLQJ RI WKH FRPPXQLW\ QRUP D[LV WDNHV SODFH WKH RUGHU RI VRFLDO VWDWXV
RI WKH PHPEHUV RI WKH FRPPXQLW\ PD\ EH VKDNHQ XS DV ZHOO WKH JORU\ RI ZDUWLPH KHURHV ZLOO IDGH DQG QHZ
VWDUV LQ WKH SHDFH WLPH PD\ ULVH DV LOOXVWUDWHG LQ )LJ ,QVHUW )LJ DURXQG KHUH
6WDWXV VWUXJJOHV ZLWKLQ VXEFRPPXQLWLHV
$V VHHQ LQ )LJ DQG DOVR LQGLFDWHG LQ RWKHU DUJXPHQWV LW LV WKH KLJKHU HFKHORQ PHPEHUV RI D
FRPPXQLW\ ZKRVH VWDWXV LV VHQVLWLYH WR YDULRXV HYHQWV WKDW WDNH SODFH ZLWKLQ WKH FRPPXQLW\ ,Q FRQWUDVW WKH
DPRXQW RI FRUUHVSRQGLQJ FKDQJHV LQ WKH VWDWXV RI ORZHU HFKHORQ FRPPXQLW\ PHPEHUV ZLOO EH PLQXVFXOH
HDVLO\ EXULHG XQQRWLFHG ZLWKLQ WKH FKDUDFWHULVWLF KD]LQHVV RI VRFLDO VWDWXV YDOXHV ,I WKLV LV DOO WKHUH LV WKHQ
WKH VWDWXV VWUXJJOH ZRXOG EH D IRUHLJQ FRQFHSW WR WKH SHRSOH RI ORZ VWDWXV H[FHSW IRU D YHU\ DPELWLRXV IHZ
7KLV VWDWHPHQW LV RQ WKH VDPH OHYHO RI DSSUR[LPDWLRQ , KDYH EHHQ HPSOR\LQJ IRU WKH PRPHQW
$ VLPLODU VLWXDWLRQ KDV WDNHQ SODFH LQ PDQ\ SDUWV RI WKH FRQWHPSRUDU\ ZRUOG ZKHQ WKH &ROG :DU ILQDOO\ HQGHG 7KLV
ZKR PLJKW WU\ WR DVFHQG WKH VWDWXV ODGGHU E\ DFFXPXODWLQJ SRZHU
7KLV LV KRZHYHU DJDLQVW WKH KLGGHQ SXUSRVH RI WKH XUJH V\VWHP IRU SURYLGLQJ WKHP ZLWK WKH VWDWXV
SURPRWLRQ XUJHV DQG WKDW SXUSRVH LV WR XUJH SHRSOH WR DXJPHQW WKHLU SRZHUV WKH
SRZHU DXJPHQWDWLRQ
XUJH
DQG WR GHPRQVWUDWH WKH DXJPHQWHG SRZHUV VR WKDW WKH FRPPXQLW\ FRXOG PDNH D JRRG XVH RI VXFK SRZHUV WKH
GHPRQVWUDWLRQ
XUJH 1RWH WKDW WKRVH ZKR QHHG PRVW RI WKHVH XUJHV DUH \RXQJ RQHV DQG VPDOO NLGV DV WKH
IDWH RI WKH FRPPXQLW\ YHU\ PXFK UHVWV XSRQ WKHLU EXUJHRQLQJ SRZHUV EXW WKHVH XUJHV ZRXOG QRW IXQFWLRQ
SURSHUO\ LI WKH FRPPXQLW\ QRUP D[LV LV WKH RQO\ VWDQGDUG DJDLQVW ZKLFK \RXQJVWHUV FRPSHWH LQVRIDU DV WKH\
EHORQJ WR WKH ORZHU HFKHORQV RI D FRPPXQLW\ ZKLFK WKH\ GR LQ PRVW RI WKH FRPPXQLWLHV 7KLV GLOHPPD
KRZHYHU FDQ HDVLO\ EH PLWLJDWHG E\ DOORZLQJ WKHP WR KDYH DQRWKHU VWDQGDUG D
VXEFRPPXQLW\ QRUP D[LV
ZKLFK DSSOLHV RQO\ WR WKH PHPEHUV RI D VXEFRPPXQLW\ RI \RXQJVWHUV 7KHUH LV D JRRG UHDVRQ WR FDOO JURXSV
RI \RXQJVWHUV RI D VLPLODU DJH DV WKH\ WHQG WR LQWHUDFW KHDYLO\ DPRQJ WKHPVHOYHV DQG ZKLOH GRLQJ LW WKH\
PD\ FRPSHWH IRU VXEFRPPXQLW\ VWDWXV ZKLFK ZLOO EH ILQHO\ JUDGHG HQRXJK WR PDNH WKH FRPSHWLWLRQ
ZRUWKZKLOH
7DNH JUDGH VFKRRO FKLOGUHQ DV DQ H[DPSOH :KHQ DGXOWV DUH DEVHQW DPRQJ WKHP WKH\ PD\ EHKDYH
ZLWKLQ WKH FRQWH[W RI WKHLU RZQ VXEFRPPXQLW\ ZKRVH VXEFRPPXQLW\ QRUP LV RIWHQ D KLJKO\ VLPSOLILHG
YHUVLRQ RI WKH FRPPXQLW\ QRUP 1RWH WKDW PDQ\ RI WKH SRZHU GLPHQVLRQV KLJKO\ UHJDUGHG DPRQJ WKH KLJK
HFKHORQ RI WKH FRPPXQLW\ WKH SRZHUV ZKLFK RQO\ JURZQ XS DGXOWV FDQ SRVVHVV OLNH VNLOOV DQG NQRZOHGJH
DUH LUUHOHYDQW WR FKLOGUHQ :KDW PDNH VHQVH WR WKHP DQG FUHDWH GLIIHUHQFHV DPRQJ WKHP DUH PRUH SULPDU\
VRUWV RI SRZHU OLNH WKRVH ZKLFK ZRXOG KDYH GRPLQDQWO\ RSHUDWHG LQ WKH XUEDQG WLPHV SK\VLFDO VWUHQJWK
LQWHOOLJHQFH DQG DOOLDQFH SRZHUV 7KRXJK WKHLU SK\VLFDO SRZHU LV VPDOO LQ WKH VFDOH RI PDJQLWXGH FRXQWLQJ
OLWWOH ZLWK WKH FRPPXQLW\ QRUP D[LV LW VWLOO PDNHV D ELJ GLIIHUHQFH DPRQJ WKH FKLOGUHQ
V VXEFRPPXQLW\
DOORZLQJ IRU LQVWDQFH WKH SK\VLFDOO\ VWURQJ WR EXOO\ WKH SK\VLFDOO\ ZHDN EXW YDULRXV DOOLDQFHV IRUPHG
DPRQJ WKHP FRPSOLFDWHV WKH VLWXDWLRQ 6XFK NLG SROLWLFV DUH RIWHQ EH\RQG WKH REVHUYDELOLW\ RI WHDFKHUV DQG
RWKHU DGXOWV DV FKLOGUHQ XVXDOO\ WKHLU UROHV ZHOO DV LQVLJQLILFDQW PHPEHUV RI WKH FRPPXQLW\ ZKHQ WKH\
UHFRJQL]H WKHPVHOYHV EHLQJ RXWVLGH WKH FRQWH[W RI WKHLU VXEFRPPXQLW\
%HVLGHV VXEFRPPXQLWLHV RI \RXQJVWHUV WKHUH DUH PDQ\ RWKHU W\SHV RI VXEFRPPXQLWLHV LQ ODUJH
FRPPXQLWLHV LQ FLYLOL]HG WLPHV ZLWK VXEFRPPXQLW\ QRUP D[HV RI WKHLU RZQ $V LWV PHPEHUV
VWDWXV JHW
KLJKHU LQ WKH ZKROH FRPPXQLW\ WKH VXEFRPPXQLW\ QRUP ZRXOG EHFRPH OHVV DQG OHVV LQGHSHQGHQW RI WKH
FRPPXQLW\ QRUP LWVHOI DQG LQ VXFK WLPHV ZKHQ WKH VXEFRPPXQLW\ RI WKH UXOLQJ FODVV H[LVWHG WKHLU
VXEFRPPXQLW\ QRUP ZRXOG KDYH EHHQ QHDUO\ LGHQWLFDO WR WKH FRPPXQLW\ QRUP DQG WKH VXEFRPPXQLW\
VWDWXV RI LWV PHPEHUV ZRXOG KDYH EHHQ FORVHO\ WLHG ZLWK WKHLU FRPPXQLW\ZLGH VRFLDO VWDWXV +RZHYHU LI
WKH\ IRUJRW DERXW WKH JHQHUDO SXEOLF RXWVLGH RI WKHLU VRFLHW\
E\ EHLQJ HQJURVVHG ZLWK WKHLU FRXUW LQWULJXHV
WKH SXEOLF PLJKW IRUVDNH WKHP DOWRJHWKHU E\ VKLIWLQJ WKH FRPPXQLW\ QRUP D[LV FDXVLQJ WKHLU MRLQW GRZQIDOO
DV WKH\ DOO QHHGHG WKH SXEOLF VXSSRUW DV WKH EDVLV IRU WKHLU SRZHU DQG ORIW\ VWDWXV
7KHUH DUH PXFK PRUH WR EH GLVFXVVHG DERXW WKH UXOLQJ FODVV EXW EHIRUH WDNLQJ XS VRFLHWDO LVVXHV
PRUH H[WHQVLYHO\ OHW PH ILUVW GHDO ZLWK WKH LVVXHV RI LQGLYLGXDOV LQ VRFLHW\ DQG RI WKH RSHUDWLRQV RI WKH XUJH
V\VWHP EHKLQG WKHP
3HUVRQDO VWDWXV DSSUDLVDOV DQG WKH HPRWLRQDO DWWLWXGH RI SD\LQJ UHVSHFW
*RLQJ D IHZ WRSLFV EDFN OHW PH UHH[DPLQH WKH SV\FKRORJLFDO LPSOLFDWLRQV RI WKH FRQFHSW RI SHUVRQDO
DSSUDLVDO $V WRXFKHG XSRQ WKHQ D SHUVRQ LV DVVXPHG WR PDNLQJ D SHUVRQDO DSSUDLVDO RI RQHVHOI DV ZHOO DV RI
FDVH ZLOO EH GLVFXVVHG FORVH WR WKH HQG RI WKLV FKDSWHU
RWKHU FRPPXQLW\ PHPEHUV /HW PH UHIHU WR WKH RXWFRPH RI WKLV VHOIDSSUDLVDO
SHUVRQ
V VHOIHVWHHP 1HHGOHVV WR VD\ RQH FDQ PD[LPL]H WKH VHOIHVWHHP JLYHQ RQH
V
YHFWRU
.
E\ VHWWLQJ XS RQH
V SHUVRQDO DSSUDLVDO D[LV
(N
WR OLH H[DFWO\ DORQJ ZLWK
S
NN
= UN FRV φN N PGLPHQVLRQDO
.
LH
WKH
SRZHU
FRV φ N N
= +RZHYHU RQH PD\ QRW EH DEOH WR LJQRUH WKH FRQIRUPLW\ SUHVVXUH WR WLOW WKH SHUVRQDO DSSUDLVDO D[LV WRZDUG WKH
FRPPXQLW\ QRUP D[LV
6R D SHUVRQ
V SHUVRQDO DSSUDLVDO D[LV ZLOO XVXDOO\ ORFDWH VRPHZKHUH EHWZHHQ RQH
V
RZQ SRZHU YHFWRU DQG WKH FRPPXQLW\ QRUP D[LV
,QVHUW )LJ DURXQG KHUH
2QH RI WKH FRQVHTXHQFHV RI WKLV SDUWLFXODU SRVLWLRQLQJ RI RQH
V SHUVRQDO DSSUDLVDO D[LV LV WKDW D
SHUVRQ
V VHOI HVWHHP WHQGV WR EH KLJKHU WKDQ WKH SHUVRQ
V VRFLDO VWDWXV DV LOOXVWUDWHG LQ )LJ WKH
UHFRJQLWLRQ RI ZKLFK ZLOO KHOS FUHDWH D QDJJLQJ IHHOLQJ WKDW RQH
V SRZHU LV XQGHUHVWLPDWHG E\ WKH VRFLHW\
7KH WZR ZD\V IRU GHDOLQJ ZLWK WKLV XQSOHDVDQWQHVV DUH ILUVW WR GHPRQVWUDWH DERXW RQH
V SRZHUV VR WKDW
RWKHUV PD\ DSSUDLVH WKH SHUVRQ
V SRZHU PRUH KLJKO\ WKDQ EHIRUH DQG VHFRQGO\ WR WLOW WKH SHUVRQ
V SHUVRQDO
DSSUDLVDO D[LV FORVHU WR WKH FRPPXQLW\ QRUP ZKLFK DPRXQWV WR GHFUHDVH RQH
V VHOI HVWHHP :KLFK RI WKHVH
WZR DOWHUQDWLYHV WKH VHOIDVVHUWLYH RQH DQG WKH VHOIHIIDFLQJ LV ODUJHO\ D PDWWHU RI SHUVRQDOLW\ DQG DOVR RI
FXOWXUH
,Q )LJ DUH VKRZQ SRZHU YHFWRUV RI WKUHH SHUVRQV
/HW
SLN SMN
DQG
EH WKH SHUVRQDO VWDWXV RI WKHP DSSUDLVHG E\
SNN
L N
S
, .
DQG
.
DQG
.
V
SHUVRQDO DSSUDLVDO D[LV
(N
UHVSHFWLYHO\ 6XSSRVH WKDW
> SN N > S M N
KROGV DV LOOXVWUDWHG LQ WKH ILJXUH 1RZ , VKDOO JLYH VRPH XUJH WKHRUHWLFDO VXEVWDQFH WR WKLV LQHTXDOLW\ UHODWLRQ
, DVVXPH WKDW LI
RI
UHVSHFW
SLN
WRZDUG
LV VLJQLILFDQWO\ JUHDWHU WKDQ
,
SNN LH .
V
VHOI HVWHHP
.
ZLOO GHYHORS DQ HPRWLRQDO DWWLWXGH
ZLWK DQ LQWHQVLW\ DSSUR[LPDWHO\ SURSRUWLRQDO WR WKH GLIIHUHQFH EHWZHHQ WKH WZR YDOXHV
7KH VLJQLILFDQFH PHDQV KHUH WKDW WKH GLIIHUHQFH H[FHHGV WKH DPELJXLW\ FDXVHG E\ WKH KD]LQHVV LQKHUHQW LQ
WKHVH DSSUDLVHG YDOXHV /LNHZLVH
VLJQLILFDQWO\ VPDOOHU WKDQ
.
PD\ GHYHORS DQ HPRWLRQDO DWWLWXGH RI
FRQWHPSW
WRZDUG
-
LI
SMN
LV
SNN
7KH IXQFWLRQ RI WKH HPRWLRQDO DWWLWXGH RI UHVSHFW LV WR DFWLYDWH LQ
.
WKH XUJH RI
UHVSHFWSD\PHQW
ZLWK
D SURSHU LQWHQVLW\ E\ PHHWLQJ VXFK D SHUVRQ DV , :KDW WKH XUJH FUHDWHV LV D IODPH RI PLQG ZKLFK PDNHV RQH
SURQH WR SD\ UHVSHFW WR WKH RWKHU WR EH DWWHQWLYH WR WKH RWKHU
V ZLVKHV DQG WR FRPSO\ ZLWK WKHP LI SRVVLEOH
1RZ QRWH WKDW WKLV LV D QDWXUDO LQFOLQDWLRQ SURPSWHG E\ WKH XUJH V\VWHP DQG WKDW PD\ QRW H[DFWO\ FRLQFLGH
ZLWK ZKDW WKH FRPPXQLW\ H[SHFWV WKH SHUVRQ WR GR $FFRUGLQJ WR WKH UXOHV RI WKH FRPPXQLW\ WKH SHUVRQ LV
H[SHFWHG WR GR WKH VDPH ZLWK WKH SHUVRQ ZKRVH VRFLDO VWDWXV LV WKDW PXFK VXSHULRU WR WKDW RI WKH SHUVRQ 7KLV
XVXDOO\ FUHDWHV OLWWOH GLOHPPD DV ORQJ DV WKH SHUVRQ
V SHUVRQDO DSSUDLVDO D[LV OLHV IDLUO\ FORVH WR WKH
FRPPXQLW\ QRUP D[LV 7KH GLOHPPD PD\ EHFRPH TXLWH VHULRXV LQ WKH FDVH RI D SHUVRQ ZKRVH SHUVRQDO
DSSUDLVDO D[LV OLHV UDWKHU IDU IURP WKH PDMRU FOXVWHU DURXQG WKH FRPPXQLW\ QRUP D[LV ,Q WKH ROG IHXGDOLVWLF
WLPHV VXFK DQ RXWOLHU ZRXOG KDYH KDG WR SUHWHQG WR EH D UXOH DELGLQJ RUGLQDU\ IRON E\ FRQVWDQWO\ FRQFHDOLQJ
RQH
V WUXH IHHOLQJV
)RU D SHUVRQ WR KDYLQJ DQ HPRWLRQDO DWWLWXGH RI FRQWHPSW WRZDUG DQRWKHU XVXDOO\ GRHV QRW OHDG WR
7KHUH PD\ EH D VWURQJHU SUHVVXUH WRZDUG WKH VXEFRPPXQLW\ QRUP D[LV EXW WKH GLVWLQFWLRQ EHWZHHQ FRPPXQLW\ DQG
VXEFRPPXQLW\ LV QRW HVVHQWLDO LQ WKH IROORZLQJ DUJXPHQWV
DQ\ SDUWLFXODU XUJH DFWLYDWLRQ ZKHQ D SHUVRQ IHHOV VXSHULRU WR DQRWKHU WKH VLWXDWLRQ LV UDUHO\ SUREOHPDWLF
HQRXJK WR FDOO IRU D VSHFLDO DFWLYLW\ 7KHUH DUH KRZHYHU PDQ\ H[FHSWLRQV 2QH RI WKH SRSXODU FDVHV RI VXFK
DQ H[FHSWLRQ PD\ REWDLQ ZKHQ WZR SHUVRQV PHHW RQH RI ZKRVH PDLQ SRZHU OLHV LQ RQH GLPHQVLRQ DQG
DQRWKHU RI D GLIIHUHQW GLPHQVLRQ $V GHSLFWHG LQ )LJ WKH\ DUH DVVXPHG WR KDYH VLPLODU VRFLDO VWDWXV
VXJJHVWLQJ WKDW WKH\ DUH LQ D ULYDOU\ UHODWLRQVKLS ZKLOH WKH SHUVRQDOO\ DSSUDLVHG VWDWXV RI WKH RWKHU LV LQIHULRU
WR RQH
V VHOIHVWHHP IRU ERWK RI WKHP
,QVHUW )LJ DURXQG KHUH
7KH SDLU VXFK DV
,
DQG
-
DV VKRZQ LQ )LJ PD\ RIWHQ EH LQ UDWKHU XQIULHQGO\ UHODWLRQV EXW WKDW LV
QR UXOH 7KRXJK UDUH DPRQJ FRPPRQ SHRSOH WKH\ PD\ ILQG WKHPVHOYHV PXWXDOO\ FRPSDWLEOH DQG IRUP D
FORVH FRDOLWLRQ RU DQ DOOLDQFH FRDOLWLRQ 7KH SRLQW
%
VKRZQ LQ WKH ILJXUH JLYHV RQO\ D KLQW RI KRZ KLJK WKH
FRDOLWLRQDO SRZHU WKXV FUHDWHG PD\ UHDFK 7KLV KRZHYHU LV QRW D SDUW RI P\ OLQHDU PRGHO DV FRDOLWLRQDO
SRZHUV DUH HYLGHQWO\ QRQ OLQHDU %HVLGHV FORVH FRDOLWLRQV H[FHSWHG DOOLDQFH FRDOLWLRQV DUH FRVWO\ WR
PDLQWDLQ DQG RUGLQDU\ SHRSOH XVXDOO\ KDYH OLWWOH QHHG WR IRUP RQH
, VKDOO FRPH EDFN ODWHU WR WKH WRSLF RI UHVSHFWSD\PHQW DQG DOOLDQFH FRDOLWLRQV ZKHQ , GLVFXVV WKH
LVVXH RI UXOLQJ FODVV )RU WKH PRPHQW OHW PH MXVW HPSKDVL]H WKH SRLQW WKDW D UHJXODUO\ SHUIRUPHG UHVSHFW
SD\PHQW DPRQJ LWV PHPEHUV LV WKH FXVWRP RI VWDWXV GHSHQGHQW FRPPXQLW\ RI WKH JUHDWHVW LPSRUWDQFH DQG
DV VXFK LW LV ZLGHO\ SUDFWLFHG ZKHWKHU EH LW D FRPPXQLW\ RI DQLPDOV RU KXPDQV 6R LW LV QR VXUSULVH WKDW WKH
UHVSHFWSD\PHQW KDG EHHQ RQH RI WKH PRVW VWULFWO\ HQIRUFHG VRFLDO UXOHV LQ WKH WLPHV ZKHQ HDFK FRPPXQLW\
QHHGHG WR NHHS D YHU\
ODUJH VWDWXV YDULDQFH
RQH RI WKH PDMRU WKHPHV WR EH WDNHQ XS LQ WKH QH[W VHFWLRQ
6RXUFHV RI SRZHU
$W WKLV MXQFWXUH OHW PH WDFNOH D IHZ EDVLF LVVXHV ZKLFK KDV EHHQ SDVVHG RYHU UDWKHU FXUVRULO\ 2QH RI
VXFK LVVXHV LV WKH VRXUFH RI SRZHU 8QOLNH SV\FKRSK\VLFDO MXGJPHQW GHDOW ZLWK +HOVRQ RQO\ D IHZ RI WKH
VRXUFHV RI SRZHU ZH DUH FRQFHUQHG UHQGHU WKHPVHOYHV XS WR HDV\ TXDQWLILFDWLRQ 7KH SURSULHWDU\ SRZHU WKH
SRZHU FUHDWHG E\ SRVVHVVLQJ D TXDQWLW\ RI PDWHULDO REMHFWV LV RQH RI WKHP $V PHQWLRQHG HDUOLHU WKH SRZHU
MXGJPHQW EHORQJV WR WKH FDWHJRU\ RI YDOXH MXGJPHQW 3RVVHVVLRQ RI D TXDQWLW\ RI D FHUWDLQ PDWHULDO REMHFW
JLYHV D SHUVRQ D SRZHU EHFDXVH WKH SRVVHVVLRQ PDNHV WKH SHUVRQ YDOXDEOH WR RWKHU SHRSOH +RZ PXFK YDOXH
D SRVVHVVLRQ FUHDWHV KRZHYHU GHSHQGV RQ WKH VRFLDO FRQWH[W WKH SHUVRQ LV LQ
/HW PH UHWXUQ WR WKH H[DPSOH RI WKH SHUVRQ PDURRQHG LQ D ZLOGQHVV DORQH 6XSSRVH WKDW KH IRXQG D
PXVKURRP DIWHU D GHVSHUDWH VHDUFK IRU IRRG 7KLV SLHFH RI PXVKURRP ZRXOG EH YHU\ YDOXDEOH IRU D KXQJU\
SHUVRQ 7KH VHFRQG PXVKURRP KH IRXQG ZRXOG EH DOVR YDOXDEOH WKRXJK QRW DV PXFK DV WKH ILUVW %XW ZKDW LI
KH IRXQG D ODUJH JURXS RI WKHP" 6R WKH YDOXH RI HDFK DGGLWLRQ RI DQ REMHFW JUDGXDOO\ GHFUHDVHV LWV YDOXH
GHSHQGLQJ RQ WKH DPRXQW RI WKH REMHFW WKH SHUVRQ DOUHDG\ SRVVHVVHV LQ WKLV FRQWH[W 7KLV LV WKH ZHOONQRZQ
ODZ RI GLPLQLVKLQJ PDUJLQDO UHWXUQ LQ HFRQRPLFV
7KLV ODZ LV LPSRUWDQW EHFDXVH LW LQLWLDWHV WKH PRWLYDWLRQ WR H[FKDQJH 6XSSRVH QRZ WKDW WKH SHUVRQ LV
QR ORQJHU DORQH DQG KDV D QHLJKERU 7KHQ KH PD\ JLYH WKH VXUSOXV PXVKURRP RI OLWWOH YDOXH WR KLPVHOI WR WKH
QHLJKERU ZKR PD\ JLYH KLP EDFN VRPHWKLQJ LQ UHWXUQ EHDQV VD\ ZKLFK WKH QHLJKERU KDV DSOHQW\ KH LV LQ
VKRUW VXSSO\ 6R WKH DFWLYLW\ RI H[FKDQJH FUHDWHV DQ DGGLWLRQDO YDOXH IRU WKH H[FKDQJHU ZKR JDLQV VRPHWKLQJ
PRUH YDOXDEOH DW WKH H[SHQVH RI VRPHWKLQJ RI D OHVV YDOXH %\ H[SDQGLQJ WKH H[FKDQJH UHODWLRQVKLS WR D
ZLGHU QHWZRUN OLNH D HFRQRPLF PDUNHW D JUHDW GHDO RI DGGLWLRQDO YDOXHV DUH FUHDWHG LQ WKLV ZD\
$Q LPSRUWDQW SRLQW WR EH QRWLFHG KHUH LV WKDW RQFH VXFK DQ DFFHVV WR WKH PDUNHW LV LQ D SHUVRQ
V PLQG
WKH REMHFWV LQ WKH SHUVRQ
V SRVVHVVLRQ DUH QR ORQJHU D VXUSOXV )RU RQH ZKR LV FROOHFWLQJ PXVKURRPV LQ
ZRRGV WR VHOO WKHP LQ WKH PDUNHW KLV RZQ FRQVXPSWLRQ RI WKHP ZRXOG EH RI OLWWOH FRQFHUQ DQG WKH PDUJLQDO
UHWXUQ RI PXVKURRPV ZLOO GLPLQLVK IDU VORZO\ WKDQ ZKHQ KH LV FROOHFWLQJ LW IRU KLV RZQ XVH 6R OHW PH
GLVWLQJXLVK WKHVH WZR NLQGV RI YDOXH FRPSRQHQWV 7KH ILUVW FRPSRQHQW WKH RQH WKDW DSSOLHV WR D VROLWDU\
SHUVRQ WKH
VWULFWO\ SHUVRQDO YDOXH FRPSRQHQW
HFRQRPLF PDUNHW WKH
DQG WKH VHFRQG FRPSRQHQW FUHDWHG E\ KDYLQJ DQ DFFHVV WR DQ
FRPPHUFLDO YDOXH FRPSRQHQW
1RWH WKDW HYHQ WKH FRPPHUFLDO YDOXH FRPSRQHQWV GLPLQLVK DV WKH DPRXQW RI WKH REMHFWV WR EH WUDGHG
LQFUHDVHV 7KH GLPLQLVKLQJ EHJLQV ZKHQ WKH DPRXQW QHDUV WKH OLPLW WKH PDUNHW FDQ KDQGOH ZKHUH WKH
PRXQWLQJ FRVW DQG WKH ORZHUHG SULFH HDW XS WKH PHUFKDQW
V EHQHILW 8S WR WKDW SRLQW WKH YDOXH RI SRVVHVVLRQ
VWHDGLO\ LQFUHDVHV ZLWK LWV DPRXQW DV LW FRUUHVSRQG WR WKH WRWDO QHHG RI WKH FRPPXQLW\ ZLWKLQ ZKLFK WKH
PDUNHW IXQFWLRQV DQW DV VXFK LW JRHV IDU EH\RQG WKH VWULFWO\ SHUVRQDO YDOXH FRPSRQHQW RI WKH FRPPRGLW\
FRPLQJ RXW RI WKH RZQHU
V RZQ FRQVXPSWLRQ
8VXDOO\ WKLV QHHG RI WKH FRPPXQLW\ LV GLOXWHG E\ WKH H[LVWHQFH RI RWKHU PHUFKDQW KDQGOLQJ WKH VDPH
FRPPRGLW\ :KLFK PHDQV WKDW D VWLOO KLJKHU YDOXH ZRXOG EH FUHDWHG LI WKLV PXOWLSOH SDUWLFLSDQW FRQGLWLRQ RI
RUGLQDU\ PDUNHW ZDV FRPSURPLVHG 7KDW LV WKH FDVH RI ROLJRSRO\ RU PRQRSRO\
,PDJLQH IRU LQVWDQFH D
IRRG PHUFKDQW RQO\ ZKR KRDUGV D ODUJH DPRXQW RI IRRG ZKLOH WKH FRPPXQLW\ LV LQ IDPLQH 7KLV LV W\SLFDOO\
ZKHUH WKH
SRZHU FRPSRQHQW RI YDOXH
FRPHV LQWR WKH SLFWXUH ,QGHHG WKHUH LV D UHDOO\ GHVSHUDWH QHHG RQ WKH
VLGH RI WKH FRPPXQLW\ DQG LW ZRXOG JLYH WKH PHUFKDQW DQ HQRUPRXV PHDQV WR FRQWURO RWKHU FRPPXQLW\
PHPEHUV IRU D VKDUH LQ WKH KRDUGHG KRRG 2I FRXUVH WKH PHUFKDQW KDV WR ZLHOG WKLV SRZHU PRVW MXGLFLRXVO\
,I KH LV RYHUO\ JUHHG\ WKH GHVSHUDWH SHRSOH PLJKW UHVRUW WR ZKDWHYHU PHDQV DYDLODEOH WR JHW WR WKH IRRG
LQFOXGLQJ D PRE DWWDFN WR WKH PHUFKDQW
V JUDQDU\ ,W VHHPV XQDYRLGDEOH IRU D ODUJH SRZHU WR DOZD\V
DFFRPSDQ\ D ODUJH ULVN DV ORQJ DV D ODUJH SRZHU VRXUFH LV D WKLQJ WKDW RWKHU SHRSOH FRYHW WR SDUWDNH RI
7KH SRLQW , DP PDNLQJ KHUH LV HVSHFLDOO\ WKDW WKH SRZHU RI D SHUVRQ LQFUHDVHV VRPHZKDW
H[SRQHQWLDOO\ DV VRPH SURSHUW\
FRQFHQWUDWHV
XSRQ WKH SHUVRQ WKH SURSHUW\ RZQHG E\ WKH SHUVRQ HLWKHU DV
WKH SHUVRQ
V DWWULEXWH RU WKH SHUVRQ
V SRVVHVVLRQ WKDW PDQ\ RWKHU SHUVRQV VWURQJO\ GHVLUH WR SDUWDNH RI RU WR
PDNH XVH RI :HDOWK LV D JRRG H[DPSOH RI VXFK FRQFHQWUDWHG SRZHU VRXUFH ,I D SHUVRQ RZQV D FRQFHQWUDWHG
IRUWXQH QRW MXVW DQ RUGLQDU\ VDYLQJV WKHQ WKH SHUVRQ LV SRZHUIXO LQGHHG 6XFK D SRWHQW SRZHU VRXUFH QHHG
QRW EH DV TXDQWLILDEOH DV PRQH\ $ ZRPDQ ZKR SRVVHVVHV JRRG ORRNV OLNH WKDW RI +HOHQ RI 7UR\ D
FRQFHQWUDWLRQ RI DWWULEXWHV FKDUDFWHUL]LQJ WKH IHPDOH EHDXW\ PD\ VKDNH WKH ZRUOG 2U LI WKH WLPH LV QRW ULJKW
IRU WKDW OLNH WRGD\ VKH FDQ DW OHDVW PDNH D UHQRZQHG 79 VWDU DQG DV VXFK FDQ ZLHOG D SRWHQW SRZHU 7KH
VDPH FDQ EH VDLG SUREDEO\ HYHU\ RWKHU VRXUFH RI VLJQLILFDQW SRZHU EH LW D EULOOLDQW LQWHOOLJHQFH JUHDW DUWLVWLF
DQG RWKHU WDOHQWV H[WUDRUGLQDU\ SK\VLFDO VWUHQJWK FKDULVPD RU ZKDWHYHU HOVH
0RVW RI WKHVH SRWHQW SRZHU VRXUFHV DUH YDOXDEOH DWWULEXWLYH SURSHUWLHV FRQFHQWUDWHG ZLWKLQ D SHUVRQ
DQG DV VXFK WKH\ FDQ KDUGO\ EH UHJDUGHG DV D PRQRSRO\ 1HYHUWKHOHVV WKH HIIHFW LV WKH VDPH 7KH PRUH
DWWUDFWLYH WKH SURSHUW\ DQG WKH UDUHU WKH FRQFHQWUDWLRQ WKH JUHDWHU ZRXOG EH WKH SRZHU YHVWHG XSRQ WKH
SHUVRQ DQG RQFH SURSHUO\ DSSUDLVHG WKH KLJKHU ZRXOG WKH VRFLDO VWDWXV RI WKH SHUVRQ EHFRPH 7KLV QHHG RI
SURSHU DSSUDLVDO KRZHYHU XVXDOO\ UHTXLUHV D FRPPXQLW\ ODUJH HQRXJK WR PDWFK WKH SRZHU +RZHYHU JUHDW
WKH WDOHQW RI D SHUVRQ WKH DSSUDLVDO GRQH LQ D VPDOO LVRODWHG FRPPXQLW\ FDQ KDUGO\ GR MXVWLFH WR LW VLQFH ILUVW
2OLJRSRO\ DQG PRQRSRO\ DUH WKXV DQ $FKLOOHV
KHHO WR WKH PDUNHW HFRQRP\ DQG JRYHUQPHQWV RI FDSLWDOLVWLF FRXQWULHV
WU\ KDUG WR SUHYHQW WKH LOOV WKURXJK VWDWXWH OLNH DQWLWUXVW ODZV $OWKRXJK WKH HIIHFWLYHQHVV RI VXFK SURKLELWLRQV LV DOZD\V
LQ GLVSXWH WKH UHODWLYH VXSHULRULW\ VHHPV WR KDYH EHHQ DPSO\ GHPRQVWUDWHG RI PDLQWDLQLQJ PDUNHW IXQFWLRQV E\
ZKDWHYHU PHDQV DYDLODEOH RYHU LWV H[WUHPH RSSRVLWH SROLF\ WKDW WKH JRYHUQPHQW PRQRSROL]HV DOO WKH PDMRU SRZHU
VRXUFHV DQG WULHV WR MXGLFLRXVO\ GLVWULEXWH WKHP RYHU WKH JHQHUDO SRSXODFH
WKH SRZHU YDOXH D FRPPXQLW\ RI SRSXODWLRQ
Q
FDQ JLYH WR WKH RZQHU RI WKH SRZHU KDV WKH XSSHU ERXQG RI
Q
WR NHHS WKH FRPPXQLW\ PHDQ RQ WKH SRZHU GLPHQVLRQ KDV WR EH QRUPDOL]HG WR RQH DQG PRUH SUDFWLFDOO\ LW
LV SUREDEOH WKDW WKH FRPPXQLW\ FDUHV OLWWOH RI WKDW SDUWLFXODU SRZHU GLPHQVLRQ ,PDJLQH D FKLOG RI D ODWHQW
DELOLW\ RI (LQVWHLQ RU RI D UHOLJLRXV YLVLRQ RI D JUHDW SURSKHW ERUQ LQ D GHVRODWH YLOODJH GHHS LQ WKH ZRRGV
7KH FKLOG PLJKW VSHQG WKH OLIH ZLWKRXW DQ DZDUHQHVV RI LWV SRWHQWLDO SRZHU %XW LI WKH FKLOG LV JLYHQ HYHQ D
VPDOO KLQW RI KLV RU KHU XQXVXDOQHVV WKH FKLOG ZRXOG EH XUJHG WR WDNH OHDYH RI WKH FRPPXQLW\ IRU D ODUJHU
FRPPXQLW\ ZKHUH WKH FKLOG PLJKW ILQG D EHWWHU FKDQFH WR QXUWXUH DQG GHPRQVWUDWH KLV RU KHU ODWHQW WDOHQW IRU
LW WR EH SURSHUO\ UHFRJQL]HG 7KH XUJH V\VWHP DSSDUHQWO\ FDQQRW DIIRUG WR ZDVWH SRWHQWLDO VRXUFHV RI SRZHU
ZKLFK VKRXOG EHORQJ LI WKH\ ZHUH UHDO WR WKH VKDUHG DVVHW RI WKH SHRSOH ZKR QHHG WKHP
7KH GHPRQVWUDWLRQ XUJH
'HPRQVWUDWLRQ XUJH LV D YHU\ SRSXODU XUJH RQH RI WKH PRVW GRPLQDQW XUJHV LQ WKH IDPLO\ RI VWDWXV
SURPRWLRQ XUJHV $V WKH PHPEHUV RI WKLV XUJH IDPLO\ ZKDW FRPHV ILUVW LV WKH
SRZHU DXJPHQWDWLRQ
XUJH
ZKLFK LV DFWLYDWHG ZKHQHYHU RQH UHFRJQL]HV D JRRG FKDQFH WR LQFUHDVH RQH
V SRZHU DOPRVW LQ ZKDWHYHU
GLPHQVLRQ 7KH DGYDQWDJH RI LQFUHDVLQJ RQH
V SRZHU LQ VXUYLYDO RI RQHVHOI DQG WKH FRPPXQLW\ RQH EHORQJV
WR LV XQTXHVWLRQDEOH %XW DV XVXDO DV LQ PDQ\ XUJHV WKH XUJH PDNHV RQH SXUVXH WKH JRDO ZLWKRXW SD\LQJ
DWWHQWLRQ WR LWV KLGGHQ SXUSRVHV WKH SRZHU DXJPHQWDWLRQ XUJH LV VHOIUHZDUGLQJ DQG LV YHU\ VWURQJ DW WKDW
7R VD\ VR GRHV QRW PHDQ WKDW HYHU\ERG\ LV D SRZHUPRQJHU (YHU\ERG\ PD\ EH DWWUDFWHG WR WKH
QRWLRQ RI KDYLQJ D JUHDW SRZHU WR ZLHOG EXW QRW HYHU\ERG\ GRHV VRPHWKLQJ VHULRXV WR REWDLQ D FRQVLGHUDEOH
DPRXQW RI SRZHU DQG WKDW LV SULPDULO\ EHFDXVH RI WKH ULVN DQG FRVW RI JDLQLQJ DQG PDLQWDLQLQJ D KLJK OHYHO
SRZHU WKH FRPPRQ IDFWRUV GHOLPLWLQJ WKH QXPEHU RI UHDOO\
DPELWLRXV
SHUVRQV UHODWLYHO\ VPDOO
$ SHUVRQ
V SRZHU PD\ LQFUHDVH VRPHWLPHV DV D FRQVHTXHQFH RI SRZHUDXJPHQWDWLRQ XUJH DFWLYLW\
VRPHWLPHV E\ IRUWXQH DQG RIWHQ DV DQ RXWFRPH RI QDWXUDO SURFHVV OLNH JURZLQJ XS :KDWHYHU WKH FDXVH WKH
UHFRJQLWLRQ RI RQH
V LQFUHDVHG SRZHU ZLOO DFWLYDWH WKH GHPRQVWUDWLRQ XUJH 7KH PDMRU KLGGHQ SXUSRVH RI WKH
GHPRQVWUDWLRQ XUJH LV WR OHW RWKHUV NQRZ RI WKH ULVH LQ RQH
V SRZHU 7KH VFKHPH RI WKH XUJH V\VWHP WKDW RI
EXLOGLQJ WKH VRFLDO RUGHU RQ WKH EDVLV RI VRFLDO VWDWXV KLQJHV XSRQ WKLV XUJH DFWLYLW\ $V XVXDO VXFK KLGGHQ
SXUSRVH RI WKH XUJH V\VWHP LV RXWVLGH RI WKH GHPRQVWUDWLQJ SHUVRQ ZKRVH JRDO LV WR QRWLI\ WKH RWKHUV RI WKH
SHUVRQ
V QHZ SRZHU +DG LW EHHQ SURSHUO\ DSSUDLVHG WKH RXWFRPH VKRXOG FRUUHFWO\ UHIOHFW LQ WKH SHUVRQ
V
HOHYDWHG VWDWXV
7KH DFWLRQ SODQ RI WKH GHPRQVWUDWLRQ XUJH FRPHV LQ YDULRXV IRUPV 7KH FRPPRQHVW LV VLPSOH
ERDVWLQJ ,PDJLQH D FKLOG JLYHQ D UDWKHU H[SHQVLYH WR\ DV VRPHERG\
V JLIW 6XFK D JLIW ZLOO RI FRXUVH KDV LWV
VWULFWO\ SHUVRQDO
YDOXH FRPSRQHQW
LH
DV WKH FKLOG
V SOD\WKLQJ %XW WKH FKLOG PD\ ILQG HYHQ D JUHDWHU
SOHDVXUH LQ VKRZLQJ LW RII WR IULHQGV 2EVHUYLQJ WKH IULHQGV
HQYLRXV DGPLUDWLRQ RI WKH H[SHQVLYH WR\ WKH
FKLOG PD\ SXII XS ZLWK VHOI LPSRUWDQFH $GXOWV DUH DOVR QR EHWWHU LQ UHVLVWLQJ WKH WHPSWDWLRQ RI ERDVWLQJ LQ D
VLPLODU VLWXDWLRQ
&RQVLGHU DQRWKHU HYHU\GD\ H[DPSOH ,PDJLQH DQ DGROHVFHQW ER\ ZKR KDV UHFHQWO\ GHYHORSHG D
FRQVLGHUDEOH SK\VLFDO VWUHQJWK ZKLFK FHUWDLQO\ GHVHUYHV D VHULRXV GHPRQVWUDWLRQ VR WKDW WKH FRPPXQLW\ ZLOO
DFFRUG KLP ZLWK D IXOO VWDWXV RI DGXOWKRRG 7KH PRVW GLUHFW DFWLYLW\ SODQ WR GHPRQVWUDWH RQH
V SK\VLFDO
VWUHQJWK LV WR DFW YLROHQWO\ DQG VXFK DQ DFW PLJKW JLYH VRPH SK\VLFDO KDUP WR RWKHU PHPEHUV RI WKH
FRPPXQLW\ ZKR KDSSHQHG WR EH DURXQG KLP 0DQ\ FRPPXQLWLHV LQ WKH SDVW ZKLFK GLG QRW ZDQW WR WROHUDWH
VXFK KDSKD]DUG YLROHQFH GHYHORSHG YDULRXV IRUPV RI ULWHV RI SDVVDJH
WR IDFLOLWDWH VPRRWK WUDQVLWLRQ IURP FKLOGKRRG WR DGXOWKRRG $PRQJ KXQWHUJDWKHUHU FRPPXQLWLHV WKH ULWH
RIWHQ WRRN WKH IROORZLQJ IRUP $GROHVFHQW ER\V ZKR FDPH RI DJH ZHUH FRQILQHG ZLWKLQ D IDFLOLW\ DQG JLYHQ
LQWHQVLYH WUDLQLQJ WR PDNH WKHP ILW WR EH UHVSRQVLEOH DGXOW KXQWHUV 7KHQ HDFK RI WKHP ZDV JLYHQ D WHVW VXFK
DV WR JR RXW LQWR ZLOGHUQHVV DORQH DQG NLOO D EHDVW VLQJOH KDQGHGO\
1RWH WKDW VXFK D SURFHGXUH VHUYHG
GRXEOH SXUSRVHV LW QRW RQO\ JDYH D FRPPXQLW\ WKH FKDQFH WR WUDLQ \RXQJVWHUV HIIHFWLYHO\ DQG SURSHUO\ EXW
DOVR UHVWUDLQHG WKH \RXQJVWHUV IURP SUHPDWXUH YLROHQW GHPRQVWUDWLRQV
1RW WKDW ULWHV RI SDVVDJH KDYH JRQH RXW RI SUDFWLFH LQ PRGHUQ WLPHV &RPSXOVRU\ PLOLWDU\ VHUYLFH
VWLOO VHUYHV LQ PDQ\ QDWLRQV D IXQFWLRQ VLPLODU WR WKH ULWH RI SDVVDJH $FDGHPLF WHVWV DOVR SOD\ VRPH WHVWLQJ
IXQFWLRQ DW
YDULRXV OHYHOV
RI
\RXWK VFKRROLQJ
7KHVH PRGHUQ
YHUVLRQ
VLPLOHV DUH
KRZHYHU
TXLWH
XQVDWLVIDFWRU\ DV WKH ULWH RI SDVVDJH EHFDXVH WKHVH SURFHGXUHV DUH VKDSHG DOPRVW H[FOXVLYHO\ IURP WKH QHHGV
RI DGXOW FRPPXQLW\ RIWHQ MXVW DV VFUHHQLQJ GHYLFHV IRU YDULRXV RUJDQL]DWLRQV WR JHW KROG RI SURSHU MRE
FDQGLGDWHV ZKHUHE\ WKH \RXQJVWHUV
QHHG WR GHPRQVWUDWH LV DOPRVW FRPSOHWHO\ QHJOHFWHG
'HVSLWH WKH PXFK OHVVHQHG LPSRUWDQFH RI SK\VLFDO VWUHQJWK LQ PRVW RI WKH FRQWHPSRUDU\ VRFLHWLHV
DGROHVFHQWV HVSHFLDOO\ ER\V IHHO WKH XUJH WR GHPRQVWUDWH WKHLU UDSLGO\ JURZQ SK\VLFDO VWUHQJWK DQG WKRVH
ZKR KDYH QRW JLIWHG HQRXJK WR GHPRQVWUDWH LW LQ WKLQJV OLNH VSRUWV PD\ EH WHPSWHG WR GR LW WKURXJK D VKRZ RI
YLROHQFH RI RQH NLQG RU DQRWKHU 0DNLQJ H[WUHPHO\ ORXG QRLVHV RU VRXQGV LV RQH RI WKH IHZ VRFLDOO\
VDQFWLRQHG WKRXJK EDUHO\ GHPRQVWUDWLRQ RI SK\VLFDO SRZHU :KHWKHU WKH\ GR VR E\ XVLQJ VRXQGPDNLQJ
WRROV OLNH HOHFWULF JXLWDUV RU PRWRUELNHV LV LPPDWHULDO WR WKH IDFW WKDW PDNLQJ ORXG VRXQGV LV WKHLU ZD\ RI
GHPRQVWUDWLQJ SK\VLFDO VWUHQJWK MXVW DV FKLPSDQ]HHV GR WKHLU SRZHU GLVSOD\V WKURXJK GUXPPLQJ ZKDWHYHU
SURGXFHV FDFRSKRQRXV QRLVHV
3ULGH DQG VKDPH
7KH GHPRQVWUDWLRQ XUJH PD\ EH DFWLYDWHG HYHQ LQ WKH DEVHQFH RI DQ\ UHFHQW DVFHQW LQ SRZHU 7KDW LV
PRVWO\ GXH WR WKH IDFW WKDW RQH
V VRFLDO VWDWXV LV JHQHUDOO\ ORZHU WKDQ RQH
V VHOI HVWHHP DV PHQWLRQHG HDUOLHU
1RWH WKDW ZKHQ RQH
V SRZHU LQFUHDVHV WKLV JDS LQFUHDVHV DV ZHOO VLQFH LQ FRQWUDVW WR WKH TXLFNQHVV RI VHOI
DSSUDLVDO RI WKLV LQFUHPHQWDO SRZHU DQG WKH HQVXLQJ UDLVH LQ VHOIHVWHHP WKH FRUUHVSRQGLQJ LQFUHDVH RI WKH
SHUVRQ
V VRFLDO VWDWXV GRQH WKURXJK RWKHUV
DSSUDLVDO RI WKH VDPH SRZHU LQFUHPHQW ZLOO JHQHUDOO\ FRPH
PXFK VORZHU LI LW FRPHV DW DOO
7KH WDUJHW RI GHPRQVWUDWLRQ ZLOO EH WKH LQFUHDVHG SRZHU ZKHQ WKDW LV WKH FDVH :KHQ RQH
GHPRQVWUDWHV ZLWKRXW DQ\ VXFK SDUWLFXODU FDXVH RQH XVXDOO\ GRHV VR DERXW WKH PRVW SRWHQW LQ WKH SHUVRQ
V
YLHZ SRZHU FRPSRQHQW LQ RQH
V SRVVHVVLRQ DV RQH PD\ DWWULEXWH WKH JDS EHWZHHQ WKH SHUVRQ
V VHOI HVWHHP
DQG VRFLDO VWDWXV WR EH PDLQO\ FDXVHG E\ LWV XQGHUDSSUHFLDWLRQ 7KH HPRWLRQDO DWWLWXGH RQH KROGV WRZDUG VXFK
IDYRULWH WDUJHW RI GHPRQVWUDWLRQ VHHPV WR FRUUHVSRQG WR ZKDW LV JHQHUDOO\ FDOOHG WKH
SULGH
RI WKH SHUVRQ
7KH WDUJHW RI SULGH PD\ EH DOPRVW DQ\WKLQJ HLWKHU DQ DWWULEXWH LQ D YHU\ EURDG VHQVH RU D
SRVVHVVLRQ RI RQHVHOI SUHIHUDEO\ VRPHWKLQJ WKDW LV PRUH RU OHVV FRQFHQWUDWHG UDUH DQG RI VRPH VRFLDO ZRUWK
DJDLQ LQ WKH SHUVRQ
V RZQ YLHZ 7KH WDUJHW RI SULGH RI D SHUVRQ PD\ EH RI DQ RUGLQDU\ NLQG WKH SHUVRQ
V
SK\VLFDO VWUHQJWK LQWHOOLJHQFH ZHDOWK DQG VR RQ %XW LW FRXOG EH VRPHWKLQJ PRUH WULYLDO OLNH KDYLQJ DQ
LQIOXHQWLDO UHODWLYH RU D IULHQG RU DQ DFTXDLQWDQFH KDYLQJ D EULJKW DQGRU ORYHO\ FKLOGUHQ SRVVHVVLQJ VRPH
SLHFH RI D UDUH REMHFW RU D NQRZOHGJH WKDW GHQLHG RWKHUV ,W PD\ DOVR EH WKH VRFLDO ZRUWKLQHVV RI RQH
V GHHG
OLNH FKDULW\ WKH VRFLDO LPSRUWDQFH RI RQH
V SURIHVVLRQ WKH UDUHQHVV RI RQH
V H[SHULHQFH DQG VR RQ ,W VHHPV DV
LI D SHUVRQ GLUHO\ QHHGV DW OHDVW VRPHWKLQJ WR KLQJH RQH
V SULGH RQ DQG LI RQH KDV QR REYLRXV FDQGLGDWH IRU
WKH WDUJHW RI SULGH RQH GRHV QRW KHVLWDWH WR IDEULFDWH D VWRU\ RI ZRUWKLQHVV XSRQ D WLQLHVW FOXH
*LUOV JR WKURXJK D VLPLODU SURFHGXUH WKRXJK WKH WHVW LV PXFK OHVV VHYHUH
7KLV VWURQJ QHHG IRU D SHUVRQ WR KDYH VRPH WDUJHW RI SULGH VHHPV WR EH UHODWHG WR WKH IDFW WKDW SULGH LV
FDWHJRULFDOO\ UHJDUGHG DV D SUDLVHZRUWK\ HPRWLRQ 7KH KLGGHQ SXUSRVH RI WKH XUJH V\VWHP FUHDWLQJ WKLV QHHG
DSSHDUV QRW WRR GLIILFXOW WR IDWKRP &RQVLGHU D SHUVRQ ZLWK D VWURQJ SULGH 6XFK D SHUVRQ ZRXOG QDWXUDOO\
GHPRQVWUDWH DERXW WKH SHUVRQ
V WDUJHW RI SULGH ZLWK DQ SURSRUWLRQDO ]HDO WR WKH LQWHQVLW\ RI WKH SULGH 7KH
DSSUDLVDO WKH RWKHUV JLYH LQ UHVSRQVH WR VXFK GHPRQVWUDWLRQ ZRXOG QRW KRZHYHU EH VDWLVIDFWRU\ WR WKH SHUVRQ
EHFDXVH WKDW LV ZKHUH WKH JDS H[LVWV :KDW WKH SHUVRQ FDQ GR WR FRQYLQFH WKH RWKHUV WR WKH SHUVRQ
V
VDWLVIDFWLRQ WKHQ ZRXOG WKHQ EH WR SURGXFH DQ XQGHQLDEOH HYLGHQFH RI ZKDW WKH SHUVRQ LV FODLPLQJ 1RWH WKDW
WKH WDUJHW RI WKH SULGH PXVW KDYH D SRWHQWLDO VRFLDO ZRUWK ZKHWKHU WKH VRFLHW\ KHUH LV WKH ZKROH FRPPXQLW\
RU VXEFRPPXQLW\ VLQFH RWKHUZLVH WKH GHPRQVWUDWLRQ LV PHDQLQJOHVV 6R LW ZRXOG EULQJ WKH FRPPXQLW\ D
JUHDW QHW EHQHILW LI PRVW RI LWV PHPEHUV WULHG WR SURYH WKH WKHLU ZRUWKLQHVV WR WKH FRPPXQLW\ E\ SURGXFLQJ
HYLGHQFH WR EDFN XS WKHLU SULGH
2I FRXUVH QRW HYHU\ERG\ LV DEOH WR VXEVWDQWLDWH KLV RU KHU FODLP RI ZRUWKLQHVV 6R IHZ SHRSOH FDQ
KHOS EXW JORULI\ RQH
V WDUJHW RI SULGH PRUH RU OHVV E\ IDEULFDWLQJ VRPH LPDJLQDWLYH VWRULHV WR JLYH RQH
V SURXG
GHPRQVWUDWLRQ VRPH FUHGLELOLW\ 7KLV FRQVFLRXV RU XQFRQVFLRXV JORULILFDWLRQ RI RQH
V WDUJHW RI SULGH KRZHYHU
PDNHV WKH SULGH UDWKHU HDV\ WR KXUW VLQFH LW LV RIWHQ QRW GLIILFXOW IRU RWKHU WR ILQG IODZV LQ VXFK JORULILHG
VWRULHV ,W LV WKHUHIRUH XVXDOO\ D SDUW RI WKH HWLTXHWWH LQ PRVW FXOWXUHV QRW WR EODWDQWO\ SRLQW RXW FRQWUDGLFWLRQV
LQ VRPHRQH
V SURXG FODLP HVSHFLDOO\ LQ D SXEOLF RFFDVLRQ 3HUKDSV WKH SHUVRQ KLP RU KHUVHOI NQRZV EHVW WKH
ZHDNQHVVHV LQ RQH
V FODLP EXW RQH FDQ KDUGO\ DIIRUG WR FRQFHGH WKH SRLQW LQ SXEOLF DV QRW MXVW WKH SHUVRQ
V
VHOI HVWHHP EXW WKH SHUVRQ
V VHOI HVWHHP DV ZHOO DUH DW VWDNH WKHQ OHDYLQJ WKH SHUVRQ QR DOWHUQDWLYH EXW WR
VKRZ D VWURQJ DQJHU DW WKH RQH ZKR GLVFODLPHG 7KH UROH RI HWLTXHWWH LV PRVWO\ WR SUHYHQW XQFDOOHG IRU
FRQIOLFWV DV PXFK DV SRVVLEOH
1RZ OHW XV WXUQ WKH IDFH RI WKH FRLQ DQG VHH WKH RWKHU VLGH RI SULGH DQG GHPRQVWUDWLRQ ZKLFK DUH
VKDPH
DQG
FRQFHDOPHQW
6KDPH LV DQ HPRWLRQDO DWWLWXGH GLUHFWHG WRZDUG VRPH RI RQH
V RZQ DWWULEXWH RU
RQH
V RZQ SDVW GHHGV IURP ZKLFK RWKHUV PD\ LQIHU DERXW WKH SHUVRQ
V DWWULEXWHV WKH NLQG WKDW ZRXOG PRVW
OLNHO\ LPSDLU RQH
V VRFLDO VWDWXV LI LW EHFDPH WKH ZLGH SXEOLF NQRZOHGJH %HFDXVH RI VXFK QDWXUH RI RQH
V
VKDPHIXO DWWULEXWH WKH FRQFHDOPHQW XUJH ZRXOG PDNH RQH KLGH LW IURP WKH SXEOLF H\H IRU RQH
V RZQ
SURWHFWLRQ
'HVSLWH WKH QDWXUH RI VKDPH DQG FRQFHDOPHQW EHLQJ QHDUO\ WKH FRPSOHWH RSSRVLWH RI SULGH DQG
GHPRQVWUDWLRQ UHVSHFWLYHO\ WKHUH LV VRPH IXQGDPHQWDO GLVWLQFWLRQ EHWZHHQ WKHVH WZR SDLUV RI XUJH DFWLYLWLHV
:KLOH SULGH DQG GHPRQVWUDWLRQ DUH PDMRU XUJH DFWLYLWLHV DOPRVW H[DFWO\ DORQJ WKH PDMRU VSLULW RI WKH XUJH
V\VWHP WKDW RI VKDULQJ WKH LQIRUPDWLRQ ZLWK RQH
V FRDOLWLRQ DQG FRPPXQLW\ PHPEHUV HVSHFLDOO\ DERXW WKH
ORFXV RI VRFLDOO\ XVHIXO SRZHU
WKH FRQFHDOPHQW XUJH LV D PHUH RIIVKRRW RI VHOISURWHFWLRQ XUJHV DQG JRHV HQWLUHO\ DJDLQVW WKH VSLULW RI
LQIRUPDWLRQ VKDULQJ &RQVHTXHQWO\ VKDPH DQG FRQFHDOPHQW DUH UDWKHU XQVHWWOLQJ XUJH DFWLYLWLHV FROOLGLQJ
TXLWH RIWHQ ZLWK RWKHU XUJH DFWLYLWLHV
7KH FRQFHDOLQJ XUJH DFWLYLW\ KRZHYHU LV ULVN\ DQG WURXEOHVRPH ERWK IURP VRFLDO DQG WKH SHUVRQDO
SRLQWV RI YLHZ ,W LV VRFLDOO\ ULVN\ EHFDXVH RQH KDV RIWHQ WR GHSHQG RQ WHOOLQJ OLHV WR FRQFHDO DQG OLHV QRW
RQO\ UHTXLUH D ODUJH FRJQLWLYH FRVW IRU PDLQWDLQLQJ WKHLU FRQVLVWHQF\ EXW DOVR DGG DQRWKHU SLHFH RI VKDPH
ZKHQ WKH WUXWK ZDV H[SRVHG
6PDOO VKDPHV KRZHYHU GR QRW FRXQW ZKHQ RQH NHHSV D ODUJH SLHFH RI VKDPH RU D
JXLOW
DV JXLOW DQG
VKDPH VKDUH PDQ\ FRPPRQ DVSHFWV &RQVLGHU JXLOW ILUVW ,PDJLQH D SHUVRQ ZKR IHHOV JXLOW\ EHFDXVH KH KDG
QRW LPPHGLDWHO\ H[WHQGHG WKH QHFHVVDU\ KHOS ZKHQ D KHOS ZDV DVNHG E\ D GHDU IULHQG DQG LW ZDV WRR ODWH
ZKHQ WKH SHUVRQ EHODWHGO\ GHFLGHG WR KHOS 7KLV LV JXLOW EHFDXVH WKH SHUVRQ EURXJKW D KDUP WR D FORVH IULHQG
LQ YLRODWLRQ RI WKH FRDOLWLRQDO UXOHV $Q H[DPSOH RI VKDPH PD\ EH JLYHQ E\ D \RXWK ZKR KDELWXDOO\ ERDVWHG
RI KLV EUDYHU\ EXW FKLFNHQHG RXW DW D EDWWOHILHOG DQG VHFUHWO\ IOHG ZLWKRXW EHLQJ QRWLFHG E\ RWKHUV
1RWH WKDW LQ ERWK FDVHV WKH DFWRU KDV D JRRG UHDVRQ WKH H[WHUQDO H\HV DQG VR WKH FRQFHDOPHQW XUJH
ZRXOG EH
DFWLYDWHG
$
JXLOW\
SHUVRQ
LV
WKHUHIRUH VKDPHIXO
DV
ZHOO
%\
UHDOL]LQJ
KLV
SURXG
SDVW
GHPRQVWUDWLRQV WR EH IDOVH DQG KLGLQJ WKH HYLGHQFH RI WKLV IDOVHKRRG WKH VKDPHIXO \RXWK ZRXOG DFTXLUH
VRPH IHHOLQJV RI JXLOW WRR
(YHQ ZKHQ WKH\ VXFFHHGHG LQ KLGLQJ WKH IDFWV IURP WKH H[WHUQDO H\HV WKH\ ZRXOG SUREDEO\ KDYH WR
IHDU PRUH WKHLU LQQHU H\HV DV WKH PHPRULHV RI WKHVH GHHGV ZLOO VWDQG RXW LQ WKH PLQG GXH WR WKHLU
LQFRQVLVWHQF\ ZLWK RWKHU FRUH EHOLHIV DERXW WKHPVHOYHV DQG WKH FRQVLVWHQF\ PDLQWHQDQFH XUJH ZLOO LQVLVW
WKHP WR GR VRPHWKLQJ DERXW WKH LQFRQVLVWHQF\ 6LQFH LW LV LPSRVVLEOH WR IRUJHW VXFK RXWVWDQGLQJ HYHQWV ZKDW
D SHUVRQ LQ VXFK D VLWXDWLRQ ZRXOG EH DEOH WR GR LV WR SXW LQ D VRUW RI FRJQLWLYH FRFRRQ LQ RWKHU ZRUGV WR
GHYHORS DQ LQWHUQDO GHIHQVH PHFKDQLVP ZKLFK VHPLDXWRPDWLFDOO\ GHIOHFWV WKH WKRXJKW SURFHVV WKDW PD\
RWKHUZLVH UHDZDNHQ WKH PHPRU\ 7KLV LV D SDUW RI WKH KHDOLQJ SURFHVV IRU PHQWDO ZRXQGV GLVFXVVHG HDUOLHU
DQG VXFK D PHQWDO FRFRRQ PD\ EH ODEHOHG DV WKH
)UHXGLDQ
GHIHQVH
PHFKDQLVP
)UHXG 7RGD +LJXFKL 1RWH WKDW WKH RSHUDWLRQ RI WKH )UHXGLDQ GHIHQVH PHFKDQLVP PXVW EH DVVLVWHG E\ WKH
FRUUHVSRQGLQJ )HVWLQJHULDQ GHIHQVH $V LV ZHOO NQRZQ D SHUVRQ KLGLQJ D VKDPH RU JXLOW LV SHUKDSV PRUH
WRXFK\ WKDQ D SHUVRQ RI KLJK SULGH
.HHSLQJ D )UHXGLDQ GHIHQVH PHFKDQLVP LQ DGGLWLRQ WR D )HVWLQJHULDQ WKH PDMRU LQWHUQDO DQG H[WHUQDO
GHIHQVH PHFKDQLVPV LV FRVWO\ DQG GLVWXUELQJ WR QRUPDO FRJQLWLYH IXQFWLRQV VR PXFK WKDW VRPH ZKR VXIIHU
PD\ DFWLYDWH WKH
FRQIHVVLRQ
XUJH 7KH IXQFWLRQ RI WKH FRQIHVVLRQ XUJH LV VRPHZKDW OLNH D PHQWDO VXUJHU\
ZKLFK SXQFWXUHV WKH ZDOO RI GHIHQVH E\ WHOOLQJ VRPHERG\ SUHIHUDEO\ D SHUVRQ RI GLVFUHWLRQ DERXW RQH
V JXLOW
RU VKDPH +RZHYHU GLVFUHWH WKH FRQILGDQW PLJKW EH FRQIHVVLRQ LV D ULVN\ DFWLRQ WKH LQIRUPDWLRQ PD\ VSUHDG
DQG WKH SHUVRQ
V VWDWXV PD\ EH VHYHUHO\ LPSDLUHG %XW WKH LPSRUWDQFH RI D SHDFH RI PLQG WKXV REWDLQHG PD\
ZHOO RYHUZKHOP WKH ULVN DV WKHQ DQG RQO\ WKHQ RQH PD\ EH DEOH WR VWDUW WR UHEXLOG RQH
V EHOLHI V\VWHP XSRQ D
VRXQG JURXQG
%HIRUH WHPSRUDULO\ OHDYLQJ WKH LVVXH RI WKH FRQFHDOPHQW XUJH OHW PH DGG WKDW WKH FRQFHDOPHQW
DFWLRQ SODQ LV RIWHQ XVHG XQGHU RWKHU XUJHV 7KH PRVW LPSRUWDQW XVH RI FRQFHDOPHQW RI WKLV NLQG LV VHHQ LQ
NHHSLQJ WKH PRQRSRO\ RI D FHUWDLQ LQIRUPDWLRQ :KHQ WKLV LV GRQH LQ D UDWKHU ODUJH VFDOH LW PD\ SURYLGH WKH
RZQHU RI VHFUHW LQIRUPDWLRQ ZLWK D VWURQJ SRZHU EDVH , VKDOO FRPH EDFN WR WKLV WRSLF VKRUWO\ DV WKH
PRQRSRO\ RI NQRZOHGJH
KDV RIWHQ VHUYHG DV WKH PRVW SRWHQW SRZHU EDVH IRU WKH UXOLQJ FODVV
6WDWXV PDUNHW
, KDYH DVVXPHG LQ WKH OLQHDU PRGHO RI SRZHU DQG VWDWXV GLVFXVVHG DERYH WKDW WKH SRZHUV RI
FRPPXQLW\ PHPEHUV DUH DSSUDLVHG E\ HDFK RWKHU ZKHUHE\ HDFK SHUVRQ XVHV KLV RU KHU RZQ SHUVRQDO
DSSUDLVDO D[LV DQG DOVR WKDW VXFK DSSUDLVHG SRZHUV DUH QRUPDOL]HG IRU HDFK SRZHU GLPHQVLRQ DQG WKH VWDWXV
GLVWULEXWLRQ ZLWKLQ WKH FRPPXQLW\ DXWRPDWLFDOO\ PDLQWDLQV LWV PHDQ DW D FRQVWDQW YDOXH :KHQ D FRPPXQLW\
LV ODUJH LW ZLOO QRW EH SRVVLEOH IRU DOO VXFK SHUVRQDO DSSUDLVDOV WR EH GRQH WKURXJK GLUHFW HQFRXQWHUV 'LUHFW
DSSUDLVDOV PD\ LQGHHG EH UDWKHU OLPLWHG GRQH RQO\ ZKHQ RSSRUWXQLWLHV SUHVHQW WKHPVHOYHV 6R WKH TXHVWLRQ
LV KRZ D FRPPXQLW\ZLGH SRZHU QRUPDOL]DWLRQ SURFHVV FDQ HYHU EHHQ WDNHQ SODFH ZLWKLQ D FRPPXQLW\
ZKRVH SRSXODWLRQ JRHV IDU EH\RQG WKH VL]H RI XUEDQGV
7KH UHVW RI WKH DSSUDLVDOV WKHQ KDYH WR EH PDGH LQGLUHFWO\ EDVHG XSRQ WKH LQIRUPDWLRQ DQG JRVVLSV
DERXW HDFK SHUVRQ WKDW DUH FDUULHG WKURXJK WKH FRPPXQLW\ LQIRUPDWLRQ QHWZRUNV 2I FRXUVH WKH SHUVRQDO
LQIRUPDWLRQ H[FKDQJHG DV JRVVLSV DQG UXPRUV LV RIWHQ TXLWH LQDFFXUDWH DQG ELDVHG DV JRVVLSHUV WKHPVHOYHV
DUH DOVR FRPSHWLWRUV Y\LQJ IRU VWDWXV ZKLOH JRVVLSLQJ WKH\ PD\ DOVR GHPRQVWUDWH WKHLU RZQ SRZHUV VODQGHU
RWKHUV DQG RFFDVLRQDOO\ WHOO KRQHVW RSLQLRQV VSXUUHG E\ WKH WHDFKLQJ XUJH 1HYHUWKHOHVV WKH DJJUHJDWH
RXWFRPHV RI VXFK FKDRWLF H[FKDQJH RI RSLQLRQV WHQGV WR FRPH RXW IDLUO\ FORVH WR WKH WUXWK DW OHDVW IDU PRUH
RIWHQ WKDQ RWKHUZLVH SUREDEO\ EHFDXVH GLVWRUWLRQV JHQHUDOO\ FDQFHO RXW OHDYLQJ RQO\ WKH FRPPRQ IDFWXDO
FRPSRQHQW LQWDFW
7KH XQGHUO\LQJ RSLQLRQIRUPLQJ PHFKDQLVP RI WKLV PDVV JRVVLSLQJ SURFHVV VHHPV VRPHZKDW VLPLODU
WR WKH LQIRUPDWLRQ QHWZRUN WKDW ZRUNV DPRQJ FXVWRPHUV RI D VWRFN PDUNHW 5XPRUV QDWXUDOO\ UXQ DPRN LQ
VWRFN PDUNHW DQG VRPH VWRFN SULFHV PD\ EH GHOLEHUDWHO\ PDQLSXODWHG RQ WKH EDVLV RI VRPH IDOVH LQIRUPDWLRQ
EXW HIIHFWV RI VXFK DUWLILFLDO PDQLSXODWLRQ ZLOO ZHDU RXW LQ UHODWLYHO\ D VKRUW WLPH DQG WKH VWRFN SULFHV ZLOO
FRPH WR VHWWOH RQ D UHDVRQDEOH OHYHO VRRQHU RU ODWHU DOEHLW LW LV RQO\ DIWHU VRPH VKUHZG VWRFN EURNHUV KDYH
JOHDQHG D ODUJH SURILW 1RWH WKH QHJDWLYH IHHGEDFN PHFKDQLVP ZRUNLQJ DV WKH EDVLF VWDELOL]LQJ IRUFH LQ DQ\
PDUNHW EH LW D VWRFN PDUNHW RU PRUH JHQHUDO FRPPHUFLDO PDUNHW FXVWRPHUV VHOO ZKHQ WKH SULFH LV KLJKHU
WKDQ UHDOLW\ DQG EX\ ZKHQ LW LV ORZHU
$SSDUHQWO\ D YHU\ VLPLODU SURFHVV JRHV RQ LQ WKH JRVVLSLQJ QHWZRUN WKHUH PD\ EH GLVFODLPHUV ZKHQ
D SHUVRQ VHHPV WR NHHS WRR KLJK D VRFLDO VWDWXV WKDQ WKH SHUVRQ LV ZRUWK\ DQG WKHUH PD\ EH PRUH DFFRODGHV
IRU WKH SHUVRQ LQ WKH RSSRVLWH FDVH 6R WKH FRPPXQLW\ZLGH JRVVLSLQJ QHWZRUN LQGHHG GHVHUYHV WR EH FDOOHG
WKH
VWDWXV PDUNHW
PDUULDJH PDUNHW GLVFXVVHG LQ &KDSWHU EHLQJ RQH RI LWV VXEPDUNHWV ZLWKLQ ZKLFK WKH
VRFLDO VWDWXV RI HDFK SHUVRQ LQ WKH FRPPXQLW\ LV G\QDPLFDOO\ PROGHG WKURXJK WKH RSHUDWLRQV RI WKH FKDWWLQJ
XUJH
$Q DVSHFW RI WKH VWDWXV PDUNHW WR EH QRWHG LV WKDW LW XVXDOO\ FRQVLVWV RI TXLWH D IHZ RYHUODSSLQJ
VXEPDUNHWV
FRDOLWLRQV
FRUUHVSRQGLQJ
:KDW
SHRSOH
WR
RYHUODSSLQJ
PRVW
HDUQHVWO\
VXEFRPPXQLWLHV
JRVVLS
DPRQJ
OLNH
VRFLDO
WKHPVHOYHV
VXEFRPPXQLW\ RQH EHORQJV WR DQG DOVR DERXW UHQRZQHG SHRSOH
LH
RUJDQL]DWLRQV
DUH
DERXW
WKH
QHLJKERUV
PHPEHUV
RI
DQG
WKH
WKH SHRSOH RI JHQHUDOO\ KLJK VWDWXV LQ
WKH ZKROH FRPPXQLW\ 2EYLRXVO\ LW PDNHV VHQVH WKDW D SHUVRQ LV LQWHUHVWHG LQ WKH VXEFRPPXQLW\ VWDWXV RI
RWKHUV LQ WKH VDPH VXEFRPPXQLW\ DV RQH
V RZQ EXW QRW LQWHUHVWHG LQ VRPH DOPRVW QRERG\ LQ RWKHU
VXEFRPPXQLWLHV $ SRLQW WR EH UHFRJQL]HG KHUH LV WKDW LQ D UDWKHU ODUJH FRPPXQLW\ WKH WDSHULQJ S\UDPLGDO
VWDWXV FRQVWLWXWLRQ WKDW VXFK D FRPPXQLW\ VKRXOG KDYH KROG LPSOLHV WKDW WKH VDPH FRPPXQLW\ZLGH VRFLDO
VWDWXV ZRXOG KDYH EHHQ VKDUHG E\ D YHU\ ODUJH QXPEHU RI FRPPXQLW\ PHPEHUV H[FHSW IRU D UHODWLYHO\ KLJK
VWDWXV IHZ 7KHUHIRUH DV IDU DV WKH FRPPXQLW\ ZLGH VWDWXV LV FRQFHUQHG ZKDWHYHU XSV DQG GRZQV LQ VWDWXV D
SHUVRQ H[SHULHQFHV VKRXOG QRW FRQFHUQ RWKHUV LQ RWKHU VXEFRPPXQLWLHV ZKR DUH PRVW RI WKH WLPHV HQJURVVHG
LQ WKH LVVXHV RI WKHLU VXEFRPPXQLW\ DORQH
7KH VWDWXV RI WKRVH ZKRVH VWDWXV DUH KLJKHU WKDQ WKH JHQHUDO SRSXODFH KRZHYHU VKRXOG KDYH EHHQ
WKH FRQFHUQ RI DOO WKH PHPEHUV RI WKH FRPPXQLW\ DV WKH SRZHUV WKH\ ZLHOG PD\ DOWHU WKH GHVWLQ\ RI WKH
ZKROH FRPPXQLW\ 6R LW KDV EHHQ WKH UXOH WKDW DOPRVW DOO WKH SHRSOH LQ D FRPPXQLW\ DUH LQWHUHVWHG LQ
DSSUDLVLQJ WKH SRZHUV RI KLJKHUXSV LQ WKHLU FRPPXQLW\ DQG WKH ODWWHU DUH RIWHQ FDUHIXOO\ ZDWFKLQJ RIWHQ
ZLWK GUHDG ZKHWKHU WKH\ DUH QRW ORVLQJ WKHLU VWDWXV LQ WKH RSLQLRQV RI WKH JHQHUDO SXEOLF
0HQWDO GHYHORSPHQW DQG HGXFDWLRQ RI QRUPV
$W WKLV MXQFWXUH OHW PH EULHIO\ VNHWFK WKH JURZLQJ XS SURFHVV RI FKLOGUHQ LQ UHODWLRQ WR WKH OHDUQLQJ
RI SRZHUV DQG VWDWXV ZLWKLQ WKHLU FRPPXQLW\ $ FKLOG RI D JUDGH VFKRRO DJH XVXDOO\ OLYH DW OHDVW LQ WZR
VXEFRPPXQLWLHV 2QH LV WKH IDPLO\ DQG WKH RWKHU LV D VXEFRPPXQLW\ RI FKLOGUHQ 7KH ODWWHU LV W\SLFDOO\ WKDW
RI FODVVPDWHV DW VFKRRO LQ FRQWHPSRUDU\ FRPPXQLWLHV 6FKRROV IRU \RXQJ FKLOGUHQ DUH UDWKHU D UHFHQW VRFLDO
LQQRYDWLRQ VWDUWHG LQ (XURSH DURXQG WKH HQG RI WKH WK &HQWXU\ :KHWKHU UHODWHG WR VFKRROV RU RWKHUZLVH
KRZHYHU \RXQJ FKLOGUHQ DOZD\V KDYH KDG WKHLU VXEFRPPXQLWLHV 7KH VXEFRPPXQLW\ QRUPV RI IDPLO\ DQG RI
WKH SHHU JURXS DUH ERWK UHODWHG WR WKH JHQHUDO FRPPXQLW\ QRUP WKRXJK WKH GHYLDWLRQ IURP WKH IRUPHU ZLOO EH
PRUH SURQRXQFHG ZLWK WKH
SHHU JURXS FORVHU WR WKDW RI WKH XUEDQGV VR WR VSHDN DQG WKH FKLOGUHQ DUH VXSSRVHG WR OHDUQ YDULRXV
VXUYLYDO WHFKQLTXHV LQ EDVLF KXPDQ UHODWLRQV
,W LV WKHUHIRUH PDLQO\ LQ WKH IDPLO\ VXEFRPPXQLW\ ZKHUH FKLOGUHQ DUH WDXJKW DERXW WUDGLWLRQDO EHOLHIV
FRQVWLWXWLQJ WKH FRPPXQLW\ QRUP HVSHFLDO PRUDO FRGHV SUHYDOHQW LQ WKH FRPPXQLW\ DQG D URXJK LGHD DERXW
WKH VRFLDO VWDWXV V\VWHP FXUUHQWO\ PDLQWDLQHG ZLWKLQ WKH FRPPXQLW\ ZKRP WR UHVSHFW DQG KRZ PXFK VR LQ
DGGLWLRQ WR ZKDW W\SH RI SHRSOH WKH\ PD\ GLVGDLQ
7KH UXOLQJ FODVV RI WKH FRPPXQLW\ ZKHQ VXFK H[LVWHG ZRXOG QDWXUDOO\ KDYH ZHOFRPHG WKH \RXWKV
RI WKH FRPPXQLW\ DEVRUELQJ WUDGLWLRQDO EHOLHIV DV WKH KLJK VWDWXV RI WKH UXOLQJ FODVV PHPEHUV JHQHUDOO\
VWURQJO\ GHSHQGHG RQ WKH VWDELOLW\ RI WKH FRPPXQLW\ QRUP 2QH RI WKH SRSXODU WHFKQLTXHV HPSOR\HG E\ WKH
UXOLQJ FODVV WR VWDELOL]H WKH FRPPXQLW\ QRUP LV WR HQFRXUDJH WKH \RXWK WR VKDSH WKHLU EHOLHI V\VWHPV LQ
DFFRUGDQFH ZLWK VRPH OHJHQGDU\ KHURLF SHUVRQV
WKH\ SURYLGHG
+HUR ZRUVKLS LV DQ RXWFRPH RI WKH GHYRWLRQ XUJH WKH KLGGHQ SXUSRVH RI ZKLFK LV WR FUHDWH D
SRZHUIXO JURXS D FRDOLWLRQ RU D FRPPXQLW\ E\ SURYLGLQJ IDLWKIXO GHYRWHHV WR D YHU\ DEOH OHDGHU 7KRXJK D
KHUR LQ OHJHQG FDQQRW DFWXDOO\ OHDG WKH LPDJH RI VXFK D SHUVRQ FDQ VWLOO VWLU XS \RXQJ PLQGV DQG ZKDW VXLWV
WKH UXOLQJ FODVV LV WKDW WKH\ FDQ PRGLI\ OHJHQGV VR WKDW OHJHQGDU\ KHURHV FDQ VHUYH DV SRLQWHUV VKRZLQJ WKH
FRUUHFW GLUHFWLRQ
LH
WKH FXUUHQW FRPPXQLW\ QRUP DORQJ ZKLFK WKH \RXQJVWHUV DUH WR PROG WKHLU EHOLHI
V\VWHP
+HUR ZRUVKLS KRZHYHU LV D GRXEOH HGJHG VZRUG IRU WKH UXOHUV DV WKH JHQHUDO SXEOLF PD\ ILQG WKHLU
RZQ KHURHV RWKHU WKDQ WKH UXOLQJ FODVVPDQXIDFWXUHG PRGHO SHUVRQV ,I WKH DWWULEXWHV RI VXFK D VSRQWDQHRXVO\
SURGXFHG KHUR VLJQLILFDQWO\ GHYLDWHV IURP WKH FXUUHQW QRUP WKH KHUR ZRUVKLS PD\ HDVLO\ WXUQ WKH GLUHFWLRQ
RI WKH FRPPXQLW\ QRUP D[LV VR WKDW LW SRLQWV WR WKLV QHZ KHUR ILJXUH WRSSOLQJ WKH FXUUHQW UXOHUV IURP LWV KLJK
GDLV 6R UXOHUV DUH DOPRVW DOZD\V ZDU\ DERXW WKH HPHUJHQFH RI QHZ KHUR ILJXUHV KRZHYHU ODUJH WKH SHUVRQ
V
SDVW FRQWULEXWLRQ WR WKH ZHOIDUH RI FRPPXQLW\ KDV EHHQ
1RZ OHW PH JHW EDFN WR WKH WRSLF RI JURZLQJ XS FKLOGUHQ $W DQ FHUWDLQ DJH VRPH RI WKHP PD\ EHJLQ
WR UHDOL]H WKH LQQDWH SRZHU EDVH RI WKHLU RZQ DQG EHJLQ WR FRQVROLGDWH WKHLU RZQ SHUVRQDO DSSUDLVDO D[LV
FORVHU WR WKHLU RZQ SRZHU EDVH PRUH RU OHVV LQGHSHQGHQWO\ RI WKH FRPPXQLW\ QRUP JHQHUDOO\ IUHHG IURP
WKHLU MXYHQLOH KHUR ZRUVKLS ,I WKH SRZHU EDVH WKH\ UHDOL]HG DV WKHLU RZQ LV WKH NLQG WKDW LV JLYHQ D UHODWLYHO\
KLJKO\ DSSUDLVDO E\ WKH FXUUHQW FRPPXQLW\ QRUP WKH\ PD\ WU\ WR SURPRWH WKHLU VWDWXV ZLWKLQ WKH FRPPXQLW\
E\ GHPRQVWUDWLQJ WKHLU ,I WKHLU SHUVRQDO DSSUDLVDO D[LV LV WRR PXFK WLOWHG IURP WKH FRPPXQLW\ QRUP QRW RQO\
WKH\ KDYH OLWWOH KRSH LQ SURPRWLQJ WKHLU VWDWXV E\ GHPRQVWUDWLQJ WKHLU SRZHUV EXW DOVR ZLOO IHHO UDWKHU
XQSOHDVDQW E\ WKH QHFHVVLW\ LQ FRQIRUPLQJ WR WKH FRPPXQLW\ QRUP 7KH\ ZLOO WKHQ KDYH WR FRQIURQW WKH WKUHH
FKRLFHV HLWKHU WR FXUE WKHLU RZQ LQFOLQDWLRQ WR FRQIRUP WR WKH QRUP RU WR MRLQ VRPH VSHFLDO VXEFRPPXQLW\
ZKRVH VXEFRPPXQLW\ QRUP LV DW OHDVW FORVHU WR WKHLU SHUVRQDO DSSUDLVDO D[HV VXFK VXEFRPPXQLWLHV WHQG WR
EH PRUH RU OHVV DQWLVRFLDO RU WR OHDYH WKH FRPPXQLW\ DQG VHDUFK IRU D FRPPXQLW\ ZKHUH WKHLU SRZHUV DUH
PRUH SURSHUO\ DSSUHFLDWHG
7KH ILUVW JUDQG WUDQVLWLRQ
7KH DJULFXOWXUDO UHYROXWLRQ WKDW VHW XS WKH ILUVW JUDQG WUDQVLWLRQ LQ WKH KXPDQ KLVWRU\
, DVVXPH WKDW WKHUH KDYH EH WZR RXWVWDQGLQJ SHULRGV RI FXOWXUDO WUDQVLWLRQ LQ WKH KLVWRU\ RI WKH
FRQWHPSRUDU\ KXPDQ VSHFLHV +RPR VDSLHQFH VDSLHQFH 7KH ILUVW WKH SHULRG IROORZLQJ WKH DJULFXOWXUDO
UHYROXWLRQ LQ DURXQG WKRXVDQG \HDUV %3 ZKHQ DV IDU DV WKH KXPDQ OLIH LV FRQFHUQHG DUWLILFLDO HYROXWLRQ
GHILQLWHO\ WRRN RYHU ELRORJLFDO HYROXWLRQ DQG WKH KXPDQ VRFLHWLHV VWDUWHG WKHLU ORQJ PDUFKHV WRZDUG WKHLU
FLYLOL]DWLRQV
,W LV RI FRXUVH QRW WKDW DOO WKH WHFKQRORJLFDO LQQRYDWLRQV VXFK DV DJULFXOWXUH VXGGHQO\ VWDUWHG WR
HPHUJH LQ WKLV SHULRG $V 7XGJH DUJXHV WKH UHDO HYROXWLRQDU\ LQQRYDWLRQV ELRORJLFDO RU DUWLILFLDO
JHQHUDOO\ EHJLQ VLOHQWO\ ZLWKRXW OHDYLQJ DUFKHRORJLFDO HYLGHQFH $UFKHRORJLFDO HYLGHQFH EHFRPHV DYDLODEOH
RQO\ ZKHQ WKH H[WHUQDO FRQGLWLRQV HVSHFLDOO\ IDYRUDEOH WR WKH LQQRYDWLRQV FRPH WR SDVV ZKLFK PDNH WKHP
PXOWLSO\ DQG IORXULVK 6R 7XGJH
V VSHFXODWLRQ VHHPV UHDVRQDEOH WKDW WKH RULJLQ RI IDUPLQJ FRXOG KDYH VWDUWHG
DV D SULPLWLYH KRUWLFXOWXUH DW DURXQG WKRXVDQG \HDUV %3 WKH WLPH RI XUEDQGV 3UREDEO\ QRW MXVW
DJULFXOWXUH 7KH VHHGV RI VRFLDO LQQRYDWLRQV VXFK DV WKH XVH RI VRFLDO UXOHV DV D PHDQV RI JRYHUQDQFH DV ZHOO
DV DUWLILFLDO FRDOLWLRQV DV VRFLDO RUJDQL]DWLRQDO XQLWV PLJKW KDYH H[LVWHG LQ WKH WLPH RI XUEDQGV EXW XU
EDQGHUV GLG QRW KDYH PXFK QHHG IRU WKHP WKHQ DV WKH JURXS PDQDJHPHQW FDSDELOLW\ RI WKH XUJH V\VWHP DORQH
ZRXOG KDYH VXIILFHG IRU FRPPXQLWLHV RI WKH XUEDQG VL]H
%XW VRPHWKLQJ KDSSHQHG DW DURXQG WKRXVDQG \HDUV
%3
DQG DOWHUHG WKH H[WHUQDO FRQGLWLRQV VR WKDW
D VWURQJ QHHG ZDV FUHDWHG WR SUDFWLFH WKH DJULFXOWXUDO WHFKQRORJ\ RQ D ODUJH VFDOH :KDW ZRUNHG DV WKH
FULWLFDO IDFWRU LV KDUG WR NQRZ 2QH FDQ KRZHYHU PDNH D UHDVRQDEOH JXHVV 1RWH WKDW LQ WKH HUD MXVW
SUHFHGLQJ WKH DJULFXOWXUDO UHYROXWLRQ WKH ZRUOG KDG EHHQ JUDGXDOO\ FRQYDOHVFLQJ IURP WKH VFRXUJH RI WKH ODVW
JODFLDO DJH (DUWK KDG JRQH WKURXJK
LH
:UP JODFLDO VWDJH WKDW SXW WKH WHUUHVWULDO FOLPDWH XQGHU LWV \RNH IRU
WHQV RI WKRXVDQG \HDUV 7KH ZHDWKHU HYHU WXUQLQJ FOHPHQW WKHQ ZRXOG SUREDEO\ KDYH FDXVHG D VLJQLILFDQW
LQFUHDVH LQ WKH KXPDQ SRSXODWLRQ LQ JHQHUDO ZKHQ D EULHI PHDQLQJ MXVW D IHZ KXQGUHG \HDUV UHWXUQ RI
JODFLDO FOLPDWH KLW WKHP :KHQ WKHUH ZDV QR SODFH IRU WKH RYHUSRSXODWHG XUEDQGV VWLOO ZLWKLQ WKH XSSHU
OLPLW RI XUEDQGV WR JR ZKHUH WKH QDWXUDO UHVRXUFHV ZHUH ULFK HQRXJK WR VXVWDLQ WKHP VRPH RI WKHP ZRXOG
KDYH FRQVLGHUHG WR FXOWLYDWH WKH DJULFXOWXUDO WHFKQRORJ\ WKH\ DOUHDG\ KDG LQ D SULPLWLYH OHYHO 7KLV
K\SRWKHVLV LV QRW PLQH EXW , WKLQN LW LV UHDVRQDEOH EHFDXVH LW LV H[DFWO\ ZKDW DFWLYH FRSHUV VKRXOG GR JLYHQ
WKDW NLQG RI VLWXDWLRQV
$V DUFKHRORJLFDO HYLGHQFH VKRZ WKH RULJLQDO IDUPLQJ DWWHPSWV ZHUH DSSDUHQWO\ H[WUHPHO\ ODERU
LQWHQVLYH DQG FRVWLQHIIHFWLYH YHQWXUHV )HVWLQJHU 7XGJH 1HYHUWKHOHVV DV WKHLU UHPRWH
DQFHVWRUV KDG GHPRQVWUDWHG LQ FRQWUROOLQJ ILUH WKH KXPDQV DV DFWLYH FRSHUV ZHUH D SHUVHYHULQJ ORW DQG VRPH
RI WKHP HYHQWXDOO\ VXFFHHGHG LQ SURGXFLQJ D UDWKHU ODUJH DPRXQW RI JUDLQV 7KH VXFFHVV PXVW KDYH VSUHDG
RYHU PDQ\ FRPPXQLWLHV RI WKH WLPH PDNLQJ WKHP FKRRVH PRUH RU OHVV VHGHQWDU\ OLIH VW\OH HQDEOLQJ WKHP WR
FRQFHQWUDWH RQ SURGXFLQJ PRUH H[WUD IRRG DOORZLQJ WKHP WR LQFUHDVH WKHLU SRSXODWLRQV EH\RQG WKH OLPLW RI
XU EDQGV DV WKH RQH RI WKH OLPLWLQJ IDFWRUV LPSRVHG XSRQ WKH XU EDQG VL]H WKH DYDLODEOH QDWXUDO IRRG
UHVRXUFHV ZDV WKXV HIIHFWLYHO\ UHPRYHG
7KDW KRZHYHU ZDV QRW WKH RQO\ OLPLWDWLRQ DOEHLW WKH PRVW EDVLF RQH ([FHVV IRRG FRXOG KDYH IHHG
WKH LQFUHDVHG SRSXODWLRQ EXW WKH XUJH V\VWHP DORQH ZRXOG QRW KDYH EHHQ HQRXJK WR UHJXODWH DQ RYHUVL]HG
FRPPXQLW\ PDQ\ RI ZKRVH PHPEHUV ZHUH PXWXDO VWUDQJHUV 6R D VWURQJ QHHG VKRXOG KDYH DURVH IRU VRPH
SHRSOH WR DFWLYHO\ JRYHUQ WKH FRPPXQLW\ DQG LW ZDV QRW MXVW IRU PDLQWDLQLQJ JHQHUDO SHDFH DQG RUGHU ZLWKLQ
WKH FRPPXQLW\ EXW DOVR IRU RUJDQL]LQJ SHRSOH DV ZRUN IRUFH VLQFH DJULFXOWXUH ZDV D ODERU LQWHQVLYH
HQWHUSULVH
2UJDQL]LQJ D FRPPXQLW\ FRQWDLQLQJ VWUDQJHUV VKRXOG KDYH QHHGHG D UDWKHU OLEHUDO XVH RI YHUEDOO\
VWDWHG VRFLDO UXOHV VSHFLI\LQJ IRU WKH FRPPXQLW\ PHPEHUV ZKDW WR GR XQGHU ZKDW RFFDVLRQV 7KLV GLG QRW
PHDQ KRZHYHU WKDW WKHVH VRFLDO UXOHV GLVSODFHG RSHUDWLRQV RI WKH XUJH V\VWHP DOWRJHWKHU 2Q WKH FRQWUDU\
VRFLDO UXOHV DUH XVHIXO RQO\ EHFDXVH WKH\ DUH VXSSRUWHG E\ XUJH RSHUDWLRQV 1HHGOHVV WR VD\ VRFLDO UXOHV DUH
XVHIXO RQO\ DV ORQJ DV SHRSOH JHQHUDOO\ DELGH E\ WKHP ZLOOLQJO\ 1R UXOHUV KRZHYHU SRZHUIXO IRUFH UXOHV
XSRQ XQZLOOLQJ SHRSOH MXVW E\ SXQLVKLQJ DURXQG UXOHEUHDNHUV 7KH ZRUNDELOLW\ RI VRFLDO UXOHV RULJLQDWH LQ
WKH ILUVW SODFH IURP WKH HPRWLRQDO DWWLWXGH RI
UXOH REVHUYDQFH
WKDW SHRSOH WHQG WR GHYHORS IRU PRVW RI VRFLDO
UXOHV RQO\ LQDVPXFK DV WKH\ EHOLHYH RI WKHLU QHFHVVLW\ IRU WKH EHQHILW RI WKH FRPPXQLW\ DQG RQFH WKH
PDMRULW\ RI FRPPXQLW\ PHPEHUV KROG WKLV DWWLWXGH WRZDUG PRVW RI WKH PDMRU VRFLDO UXOHV WKH QHHG WR SURG
SHRSOH WKURXJK WKH IHDU RI SXQLVKPHQW PD\ EH PLQLPL]HG
7KH UXOHREVHUYDQFH XUJH ZDV QRW WKH RQO\ XUJH V\VWHP RSHUDWLRQ VXSSRUWLQJ VRFLDO UXOHV ZKRVH
QXPEHU PXVW KDYH PXOWLSOLHG LQ WKH EXUJHRQLQJ VWDJH RI FLYLOL]DWLRQ $QJHU RI YLFWLPL]HG DJDLQVW UXOH
EUHDNHUV DQG JXLOW IHOW E\ ODWWHU ZRXOG KDYH ZRUNHG DV DQ HIIHFWLYH GHWHUUHQW HTXDOO\ ZHOO DPRQJ ZHOO
DFTXDLQWHG 6R VRFLDO UXOHV SDWFKHG XS WKH JDSV LQ XUJH V\VWHP RSHUDWLRQV ZKHUH WKHLU HIIHFWLYHQHVV ZDV
GHWUDFWHG E\ WKH SUHVHQFH RI PDQ\ PXWXDO VWUDQJHUV
7KDW GRHV QRW KRZHYHU PHDQ WKDW VRFLDO UXOHV DUH MXVW JDS ILOOHUV $ EHWWHU DQDORJ\ PD\ EH JLYHQ DV
WKH IROORZLQJ 1RWH WKDW WKH XUJH V\VWHP LV WKH YHU\ DJHQW WKDW PDNHV SHRSOH GR WKLQJV ,I ZH FRQVLGHU SHRSOH
DV LI WKH\ ZHUH IORZV RI ZDWHU HQHUJL]HG E\ WKH G\QDPLFV RI WKH XUJH V\VWHP 7KHQ VRFLDO UXOHV PD\ EH
FRPSDUHG WR FDQDOV DQG EDQNV ZKLFK UHJXODWH WKLV IORZ E\ LQGXFLQJ DQG UHVWULFWLQJ WKH FXUUHQWV 6R E\ EHLQJ
MXGLFLRXVO\ XVHG VRFLDO UXOHV PD\ IXQFWLRQ DV K\GURG\QDPLF FRQWUDSWLRQ IRU FRQWUROOLQJ WKH IORZ RI WKH PDVV
RSHUDWLRQ RI WKH XUJH V\VWHP ,I FOHYHUO\ FRQVWUXFWHG WKHUHIRUH D V\VWHP RI VRFLDO UXOHV PLJKW HYHQ FUHDWH D
JUHDW VRFLDO SRZHU WKDW WKH XQFRQVWUDLQHG XUJH V\VWHP RSHUDWLRQV FRXOG KDYH QHYHU DFKLHYHG $QG WKLV LV
ZKDW WKH KXPDQV KDYH EHHQ GRLQJ WKURXJK WULDO DQG HUURU HYHU VLQFH DJULFXOWXUDO UHYROXWLRQ ,W KDG WR EH WULDO
DQG HUURU VLQFH QR RQH DFWXDOO\ NQHZ HQRXJK DERXW WKH RSHUDWLRQV RI WKH XUJH V\VWHP DQG WKH HUURU
SDUWV RI
WKH SURFHVV RFFDVLRQDOO\ EURXJKW JUHDW WUDJHGLHV WR WKH KXPDQNLQG $QG , KDYH WR HPSKDVL]H WKDW ZH WKH
FRQWHPSRUDU\ KXPDQV DUH DJDLQ IDFLQJ VHULRXV LVVXHV RI ZKDW NLQG RI VRFLDO UXOHV ZH VKRXOG KDYH LQ WKH
QHZ VHW RI FRQGLWLRQV JLYHQ WR XV WKURXJK WKH VHFRQG JUDQG WUDQVLWLRQ DQG ZH DUH DERXW WR GR LW DJDLQ LQ D
WULDO DQG HUURU IDVKLRQ DV ZH DUH VWLOO TXLWH DW D ORVV LQ LQIHUULQJ KRZ SHRSOH ZRXOG UHDFW WR WKH QHZ
FRQGLWLRQV DQG QHZ UXOHV 7KHVH DUH WKH SUREOHPV WR EH DGGUHVVHG DW WKH ODVW SDUW RI WKLV ERRN
/RRNLQJ DW WKH LVVXHV RI VRFLDO UXOHV IURP WKH VLGH RI LQGLYLGXDOV WKH LPSRVHG UXOHV FDOO IRU HYHU\RQH
WR
VHOIFRQWURO
WKHLU QDWXUDO XUJH DFWLYLWLHV VR DV QRW WR LQIULQJH WKHP 7KH QHYHULQDQJHU
UXOH RI &DQDGLDQ
,QXLWV GHVFULEHG E\ %ULJJV LV D JRRG FDVH LQ SRLQW ZKLFK VWURQJO\ IRUELG FRPPXQLW\ PHPEHUV WR
H[SUHVV
DQJHU DQG DFW LPSXOVLYHO\
1RZ DV H[WUHPH DV LQ WKLV FDVH PDQ\ FRPPXQLW\ QRUPV FRQWDLQ VLPLODU
LQWHUGLFWLRQV DQG RQHV ZKR RFFDVLRQDOO\ IDLO WR IROORZ WKHP DUH LI QRW SXQLVKHG RXWULJKW VHHQ ZLWK VFRUQ
DQG IURP WKLV FRPHV WKH H[WUHPHO\ ZURQJ YLHZ RI HPRWLRQV DV EHLQJ LUUDWLRQDO DQG VLOO\ 2Q WKH FRQWUDU\
1RWH DOVR WKDW WKH LQWHQVLW\ RI WKH UXOH REVHUYDQFH DWWLWXGH FDQ YDU\ IURP RQH UXOH WR DQRWKHU GHSHQGLQJ XSRQ WKH
SHRSOH
V DSSUDLVDO RI WKH LPSRUWDQFH RI HDFK UXOH 6WDQGDUGV IRU VXFK DSSUDLVDOV DUH DOVR JLYHQ DV D FULWLFDO SDUW RI WKH
FRPPXQLW\ QRUP
%ULJJV FRPPHQWV WKDW ,QXLWV DW WKH WLPH RI KHU ILHOG ZRUN DSSDUHQWO\ WKRXJKW WKDW ZKLWH SHRSOH ZHUH FKLOGLVK EHFDXVH
DSSDUHQWO\ WKH\ FRXOG QRW VHOIFRQWURO WKHVH GLVSRVLWLRQV
XUJHV DUH WKH YHU\ HQJLQHV WKDW PDNH DOO WKH KXPDQV PRYH DQG EODPHV DUH WR EH PRUH RQ WKH VLGH RI
LPSHUIHFW UXOHV WKDW FDQQRW FKDQQHO WKH KXPDQ XUJH DFWLYLWLHV LQ PRUH FRQVWUXFWLYH GLUHFWLRQ
/HW PH JHW EDFN WR WKH RULJLQDO FRQWH[W $V KDV EHHQ GLVFXVVHG LW ZDV WKH JUHDW QHHG RI
RYHUSRSXODWHG FRPPXQLWLHV WKDW PDGH WKH SHRSOH LQ WKH DJH RI DJULFXOWXUH WR LQWURGXFH VRFLDO UXOHV DV D WRRO
WR UHJXODWH WKHPVHOYHV &UHDWLQJ VXFK D WRRO ZDV DQRWKHU PDQLIHVWDWLRQ RI DUWLILFLDO HYROXWLRQ DQG VLQFH WKLV
WLPH RQ DUWLILFLDO HYROXWLRQ RYHUWRRN ELRORJLFDO HYROXWLRQ WR VHUYH WKH EDVLF QHHGV RI WKH KXPDQV DV DFWLYH
FRSHUV
7KH UXOLQJ ERG\ DV DQ DUWLILFLDO FRDOLWLRQ
7KH HQIRUFHPHQW RI VRFLDO UXOHV HVSHFLDOO\ RUJDQL]LQJ JURXS ZRUNV DQG SXQLVKLQJ UXOHEUHDNHUV
VKRXOG XQGRXEWHGO\ KDYH UHTXLUHG D JUHDW GHDO RI SRZHU IRU WKRVH ZKR VSHFLDOL]HG LQ PDQDJLQJ WKHVH HDUO\
IDUPLQJ FRPPXQLWLHV 7KHVH SHRSOH ZRXOG KDYH WDFNOHG WKLV GLIILFXOW LVVXH RI PDQDJLQJ DQ RYHUSRSXODWHG
FRPPXQLW\ E\ JUDGXDOO\ WUDQVIRUPLQJ WKH RIILFH
RI WKH FKLHI WKDW KDG DOUHDG\ H[LVWHG LQ WKH XUEDQG WLPHV
LQWR PRUH HODERUDWHO\ VWUXFWXUHG PRUH RU OHVV UXOHERXQG V\VWHP RI WKH
UXOLQJ ERG\
DQ LQFLSLHQW IRUP RI
JRYHUQPHQW 6XFK D UXOLQJ ERG\ ZRXOG KDYH PXFK UHVHPEOHG WR DQ DOOLDQFH FRDOLWLRQ RI SRZHUIXO PHPEHUV
RI WKH FRPPXQLW\ 7KH FULWLFDO WUDQVIRUPDWLRQ WKDW ZRXOG KDYH KDSSHQHG ZLWK WKH UXOLQJ DOOLDQFH DW VRPH
SRLQW RI WLPH ZDV FDXVHG E\ WKH QHHG RI WKH RYHUJURZQ FRPPXQLW\ WR KDYH D VWDEOH WRS PDQDJHPHQW ZKLFK
FRXOG QRW EH H[SHFWHG RI D QDWXUDO DOOLDQFH FRDOLWLRQ $ QDWXUDO FRDOLWLRQ LV D FRDOLWLRQ RI LQGLYLGXDOV DQG DV
VXFK WHQGV WR EH VZD\HG E\ YDJDULHV RI LQGLYLGXDO IRUWXQHV RQFH D NH\ SHUVRQ GLHG RU GLVDEOHG WKH DOOLDQFH
PLJKW ORVH LWV SRZHU RI JRYHUQDQFH
$Q DUWLILFLDO FRDOLWLRQ LV QRW D FRDOLWLRQ RI LQGLYLGXDOV 5DWKHU LW LV D V\VWHP RI SRVLWLRQV ZKLFK
ZKHQ XQRFFXSLHG PD\ EH ILOOHG E\ DQ\ERG\ TXDOLILHG 7KLV
LPSHUVRQDOL]DWLRQ
RI VRFLDO V\VWHPV LV WKH VSLULW
RI UXOHERXQG VRFLHWLHV WKDW WKH ILUVW JUDQG WUDQVLWLRQ FUHDWHG 1RWH WKDW UXOHV DSSO\ DV IDU DV WKHLU SULQFLSOHV
JR WR HYHU\ERG\ ZLWKRXW FDULQJ ZKR LW LV ZKLOH XQFRQVWUDLQHG XUJHV RSHUDWH DOZD\V RQ WKH EDVLV RI ZKR LW LV
RQH LV GHDOLQJ ZLWK
7KH UXOLQJ ERG\ DV DQ DUWLILFLDO FRDOLWLRQ ZRXOG KDYH JUDGXDOO\ GHYHORSHG LQWR D V\VWHP WKDW ZRUNHG
RQ WKH GLYLVLRQ RI ODERU SULQFLSOH FRQVLVWLQJ RI SRVLWLRQV ZLWK GLIIHUHQW MXULVGLFWLRQV URXJKO\ FRUUHVSRQGLQJ
WR WKH ODWHU GD\ KHDG RI ODZ HQIRUFHUV WKH KHDG RI LQWHUQDO DIIDLUV WKH KHDG VKDPDQ DQG WKH FKLHI
LH
WKH
KHDG RI DOO RWKHU KHDGV ZKRVH SULQFLSDO IXQFWLRQ ZDV WR FUHDWH DQG UHYLVH VRFLDO UXOHV 7KHVH SRVLWLRQV
ZRXOG JHQHUDOO\ KDYH EHHQ RFFXSLHG E\ VXLWDEO\ TXDOLILHG SHRSOH DV IHZ FRXOG UHIXVH QRPLQDWLRQ MRLQLQJ
WKH UXOLQJ ERG\ ZDV WKH VXUHVW ZD\ WR SURPRWH RQH
V VRFLDO VWDWXV
7KH UXOLQJ ERG\ QHHGHG KLJK VWDWXV WR IDFLOLWDWH WKH SHRSOH
V ZLOOLQJ FRPSOLDQFH WR WKH UXOHV WKH\
PDNH 5HPHPEHU DW WKLV SRLQW WKH HDUO\ DUJXPHQW WKDW WKH XSSHU ERXQG IRU WKH KLJK VWDWXV LQFUHDVHV OLQHDUO\
DV WKH SRSXODWLRQ RI WKH FRPPXQLW\ XQGHU WKH FRQVWDQW VWDWXV PHDQ DVVXPSWLRQ 7KRXJK WKLV XSSHU ERXQG
VWDWXV LV XQDWWDLQDEOH E\ DQ\ DFWXDO SHUVRQ LWV LQFUHDVH HDVHV WKH ZD\ IRU DWWDLQLQJ D VWDWXV PXFK KLJKHU WKDQ
SRVVLEOH LQ WKH SDVW 6R WKH UXOLQJ ERG\ PHPEHUV RI D FRPPXQLW\ LQ WKH DJH RI DJULFXOWXUH ZRXOG KDYH
JUDGXDOO\ DFKLHYHG HYHU KLJKHU VWDWXV EDFNHG XS E\ WKHLU KLJK DOOLDQFH SRZHU DQG FRQVROLGDWHG E\ WKH DPSOH
FKDQFH RI GHPRQVWUDWLRQ WKH\ PXVW KDYH KDG WKURXJK WKHLU SRVLWLRQV
3RVLWLRQV DORQH FRXOG QRW LQVXUH WKHP WR NHHS WKHLU KLJK VWDWXV KRZHYHU DW OHDVW LQ WKH HDUO\ VWDJHV
RI UXOHERXQG FRPPXQLWLHV &RPPXQLWLHV ZHUH VWLOO UHODWLYHO\ VPDOO DQG WKH JHQHUDO SXEOLF FRXOG NHHS D
FORVH ZDWFK RYHU WKH TXDOLWLHV RI WKH ZRUNV GRQH E\ KLJKHUXSV DQG LI WKH\ PLVPDQDJHG VHULRXVO\ WKH\
PLJKW KDYH ORVW WKHLU VWDWXV E\ WKH ZLWKGUDZDO RI SXEOLF VXSSRUW IRU WKHP DQG FRQVHTXHQWO\ WKH PHPEHUV RI
WKH UXOLQJ ERG\ PLJKW KDYH EHHQ UHIUHVKHG ZLWKRXW WKH UXOLQJ ERG\ DV DQ DUWLILFLDO FRDOLWLRQ ORVLQJ LWV
VWUXFWXUH
7KH VWUXFWXUH DQG WKH SULQFLSOHV RI DUWLILFLDO FRDOLWLRQV
/HW PH QRZ GLVFXVV WKH EDVLF VWUXFWXUH RI DUWLILFLDO FRDOLWLRQV $V WKH FRQFHSWXDO PRGHO IRU WKH
IROORZLQJ DUJXPHQW , VKDOO XVH D PRGHUQ VRFLDO RUJDQL]DWLRQ UDWKHU WKDQ WKH UXOLQJ ERG\ LQ WKH HDUO\
FLYLOL]DWLRQ VLQFH ZH NQRZ PXFK EHWWHU RI WKH IRUPHU DQG DOPRVW QRQH RI WKH ODWWHU DQG , EHOLHYH WKDW WKH\
VKDUH WKH VDPH VWUXFWXUDO SULQFLSOHV 7KH EDVLF VWUXFWXUDO SULQFLSOHV WKDW JRYHUQ DUWLILFLDO FRDOLWLRQV DUH UDWKHU
VXUSULVLQJO\ VLPSOH VWUXFWXUDOO\ WKH\ DUH MXVW D
QHVWHG
YHUVLRQ RI WKH NHUQHOOHG FRDOLWLRQ PHDQLQJ WKDW
NHUQHOOHG FRDOLWLRQDO VWUXFWXUHV DUH HPEHGGHG ZLWKLQ D ODUJHU NHUQHOOHG FRDOLWLRQDO VWUXFWXUH
$V VWDWHG HDUOLHU DQ DUWLILFLDO FRDOLWLRQ LV D V\VWHP RI SRVLWLRQV DQG QRW D V\VWHP RI SHUVRQV DQG LWV
VWUXFWXUDO IUDPHZRUN LV FRQVWUXFWHG DV VRFLDO UXOHV 5HPHPEHU WKH UHDVRQ JLYHQ LQ WKH SUHYLRXV FKDSWHU IRU
ZK\ WKH VL]H RI D QDWXUDO NHUQHOOHG FRDOLWLRQ FDQQRW LQFUHDVH EH\RQG D FHUWDLQ OLPLW WKH OLPLW FDXVHG E\ WKH
FRQWURO RYHUORDG WKDW WKH NHUQHOOHG PHPEHU RI DQ RYHUVL]HG NHUQHOOHG FRDOLWLRQ PXVW VXIIHU 7KLV FRQWURO
RYHUORDG SUREOHP FDQQRW EH UHVROYHG E\ HPSOR\LQJ D QHVWHG NHUQHO VWUXFWXUH VXFK DV E\ DVVLJQLQJ
VXEOHDGHUV WR VKDUH WKH OHDGHU
V EXUGHQ 1RWH WKDW QRQNHUQHO PHPEHUV RI D NHUQHOOHG FORVH FRDOLWLRQ MRLQHG
WKH FRDOLWLRQ DV WKH\ ZHUH GUDZQ WR WKH SHUVRQDO DWWUDFWLYHQHVV RI WKH OHDGHU LQ WKH ILUVW SODFH DQG LW ZRXOG EH
GLIILFXOW WR PDNH WKHP UHIUDLQ IURP VROLFLWLQJ D GLUHFW LQWHUDFWLRQ ZLWK WKH OHDGHU ,I WKH DQQR\HG OHDGHU
IRUEDGH VRPH QRQNHUQHO PHPEHUV WR DFFRVW KLP RU KHU E\ VRPH ULJLG UXOH LW PHDQV WKH FRDOLWLRQ LV QR
ORQJHU VWULFWO\ QDWXUDO
2QH ZD\ RI SXWWLQJ WKH VSLULW RI DUWLILFLDO FRDOLWLRQV LV WKDW LW LV D PDNHEHOLHYH NHUQHOOHG FORVH
FRDOLWLRQ ,PDJLQH WKDW VRPHRQH FOHYHU LQ WKH ROG WLPHV PDGH D SURSRVDO WR WKH RWKHUV DURXQG ZKLFK LQ
HVVHQFH ZDV WKH IROORZLQJ :K\ GRQ
W ZH IRUP D PDNHEHOLHYH NHUQHOOHG FRDOLWLRQ" <RX EH WKH OHDGHU DV
\RX OLNH PDNLQJ GHFLVLRQV WKRXJK \RX KDYH OLWWOH FKDULVPD 7KHQ WKH UHVW RI XV ZLOO EHKDYH DV LI ZH ZHUH
\RXU WUXH IROORZHUV LQVRIDU DV \RX WKH OHDGHU RI RXU RZQ PDNHEHOLHYH NHUQHOOHG FRDOLWLRQ DQG ZKDWHYHU ZH
GR ZLWK RXU PDNHEHOLHYH IROORZHUV DUH RXU RZQ EXVLQHVV ZLWK ZKLFK \RX DUH QRW VXSSRVHG WR LQWHUIHUH
,PDJLQH ZKDW D JUHDW FRDOLWLRQDO SRZHU ZH ZRXOG FUHDWH WKDW ZD\ LI ZH DOO IROORZ WKH UXOHV DQG ZH PD\
HQMR\ WKH EHQHILW WKDW FRPH RII WKH SRZHU WKRURXJKO\ 2I FRXUVH WKH EHQHILW HQMR\PHQW ZLOO EH VKDUHG
DPRQJ XV DOVR DFFRUGLQJ WR WKH UXOHV <RX DV WKH VXSSRVHG OHDGHU ZLOO WDNH WKH EHVW :H VXEOHDGHUV WKH
VHFRQG EHVWV DQG VR RQ
7KDW LV DERXW WKH JLVW RI WKH EDVLF VSLULW RI DQ DUWLILFLDO FRDOLWLRQ 1RWH WKH SDUW WKDW HDFK PHPEHU RI
VXFK D FRDOLWLRQ FDQ EH WKH KHDG RI KLV RU KHU RZQ DUWLILFLDO NHUQHOOHG FRDOLWLRQ DV LW HQDEOHV WKH ZKROH
FRDOLWLRQ WR WDNH D
KLHUDUFKLFDO
VWUXFWXUH ZKRVH VL]H FDQ JURZ DW OHDVW WKHRUHWLFDOO\ LQGHILQLWHO\ DV WKH QRQ
LQWHUIHUHQFH UXOH LQWR WKH EXVLQHVV RI RWKHU VXEFRDOLWLRQ ZKLFK KHQFHIRUWK ZLOO EH UHIHUUHG WR DV
VHFWRU
WR
ZKLFK RQH GRHV QRW EHORQJ UHPRYHV WKH VL]H OLPLWDWLRQ FDXVHG E\ FRQWURO RYHUORDG /HW PH WDNH D VLPSOH
FRXQW 6XSSRVH WKDW WKH KHDG RI DQ DUWLILFLDO FRDOLWLRQ KDV WHQ GLUHFW VXERUGLQDWHV ZHOO ZLWKLQ WKH UDQJH RI
FRQWURO RI RQH SHUVRQ 1RZ OHW HDFK RI WKHVH VXERUGLQDWHV KDV KLV RU KHU RZQ WHQ VXERUGLQDWHV DQG HDFK RI
WKH ODWWHU KDV KLV RU KHU RZQ WHQ $GGLQJ RQH PRUH OHYHO WKH VL]H RI WKH ZKROH FRDOLWLRQ DGGV XS WR 7KLV LV LQGHHG D YHU\ ODUJH QXPEHU $QG QRWH WKH HIILFLHQF\ VXFK D FRDOLWLRQ REWDLQHG :LWK D
6XFK DQ DUWLILFLDO FRDOLWLRQ FRXOG ZHOO KDYH H[LVWHG LQ WKH XUFRPPXQLW\ WLPHV EXW ZKDW FDXVHG LWV PXOWLSOLFDWLRQ LQ
WKH ILUVW JUDQG WUDQVLWLRQ WLPHV ZDV WKH QHFHVVLW\ RI KDYLQJ D FRDOLWLRQDO VWUXFWXUH ZLWK D ODUJH FRDOLWLRQDO SRZHU VXFK DV
WKH UXOLQJ ERG\
FRPPDQG JLYHQ E\ WKH KHDG RI WKH FRDOLWLRQ WKH ZKROH FRDOLWLRQ PD\ DFW LPPHGLDWHO\ ZLWK RQO\ WKUHH OHYHOV
RI UHOD\LQJ WKH FRPPDQG DV LQ WKH ZD\ D PLOLWDU\ FRDOLWLRQ RIWHQ DFWV ,W LV WUXH WKDW D JUHDW HIILFLHQF\ DOZD\V
DFFRPSDQ\ D ZHDNQHVV 7KH ZHDNQHVV RI D KLHUDUFKLFDO DUWLILFLDO FRDOLWLRQ OLHV LQ SDUW LQ LWV YXOQHUDELOLW\ WR
WKH LQFRPSHWHQFH RI VRPH RI LWV KLJK SRVLWLRQ PHPEHUV 6XSSRVH WKDW MXVW RQH RI WKH WHQ VXERUGLQDWHV RI WKH
KHDG RI WKH FRDOLWLRQ QHJOHFWV UHOD\LQJ WKH FRPPDQG RI WKH KHDG 7KHQ DERXW WHQ SHUFHQW RI WKH ZKROH
FRDOLWLRQ SDUDO\VHV 7KLV LV D FRPPRQ ZHDNQHVV RI DOO KLHUDUFKLFDO V\VWHPV 7KH ERGLO\ QHXUDO QHWZRUN RI
DGYDQFHG DQLPDOV LV D W\SLFDO H[DPSOH RI KLHUDUFKLFDO V\VWHP DQG D ODUJH SDUW RI WKH ERG\ LV SDUDO\]HG ZKHQ
WKH QHWZRUN ZDV VHYHUHG QHDU WKH WRS RI WKH KLHUDUFK\
7KHUH DUH KRZHYHU ZD\V DQG PHDQV WR RYHUFRPH WKLV ZHDNQHVV LQ WKH FDVH RI DUWLILFLDO FRDOLWLRQV
2QFH DQ DUWLILFLDO FRDOLWLRQ VXFFHVVIXOO\ WXUQHG LW LQWR D V\VWHP RI SRVLWLRQV IRU LQVWDQFH ZURQJGRHUV DQG
PLVPDQDJHUV FDQ EH UHSODFHG E\ EHWWHU TXDOLILHG QHZ RQHV (YHQ WKH KHDG RI D FRDOLWLRQ FDQ EH UHSODFHG LI
WKH FRDOLWLRQ VXUYLYHG WKH PHVV FUHDWHG E\ D ZURQJ KHDG 6R WKLV LPSHUVRQDOL]DWLRQ LPSOHPHQWHG E\ DUWLILFLDO
FRDOLWLRQV KDV FRQWULEXWHG LQ LPSURYLQJ WKH YLDELOLW\ RI DUWLILFLDO FRDOLWLRQV VRPH RI ZKLFK KDYH VXFFHHGHG
LQ VXUYLYLQJ RYHU FRXQWOHVV JHQHUDWLRQV
7R UHLWHUDWH WKLV LPSHUVRQDOL]DWLRQ RI DUWLILFLDO FRDOLWLRQV LV DFKLHYHG E\ GHILQLQJ WKH ULJKWV DQG
GXWLHV RI WKH SHUVRQ RFFXS\LQJ HDFK SRVLWLRQ LQ WHUPV RI VRFLDO UXOHV LQFOXGLQJ ZKR DUH XQGHU WKH GLUHFW
FRPPDQG RI D SHUVRQ DQG ZKDW RQH FDQ FRPPDQG 6R WKH KHDG RI D PLOLWDU\ RUJDQL]DWLRQ PD\ JLYH D
FRPPDQG WR ILJKW WKH HQHP\ EXW WKH KHDG RI D EXVLQHVV FRUSRUDWLRQ LV QRW DOORZHG WR FRPPDQG WKH
HPSOR\HHV RI WKH FRUSRUDWLRQ WR WDNH DUPV DQG DWWDFN WKH ULYDO FRUSRUDWLRQ
$W WKLV SRLQW OHW PH HPSKDVL]H WKH FULWLFDO UROH RI WKH QRQLQWHUIHUHQFH UXOH WKH RQH WKDW HQDEOHG WKH
HPHUJHQFH RI DUWLILFLDO FRDOLWLRQV LQ WKH ILUVW SODFH E\ UHPRYLQJ WKH FRQWURO RYHUORDG SUREOHP IURP WKRVH LQ
KLJK SRVLWLRQV RI DQ DUWLILFLDO FRDOLWLRQ 7R GLVFXVV WKLV LVVXH D OLWWOH PRUH GHWDLO DQ H[DPSOH GLDJUDP RI WKH
VWUXFWXUH RI DUWLILFLDO FRDOLWLRQ LV JLYHQ LQ )LJ ,QVHUW )LJ DURXQG KHUH
,Q WKLV ILJXUH RQO\ D SDUW RI D PXFK ODUJHU KLHUDUFKLFDO DUWLILFLDO FRDOLWLRQ LV SUHVHQWHG (DFK KROORZ
FLUFOH GHVLJQDWH D SRVLWLRQ RU D
SRVW
/LQH VHJPHQWV FRQQHFWLQJ FLUFOHV UHSUHVHQW DGPLVVLEOH GLUHFW
FRQQHFWLRQ RI SRVWV DORQJ ZKLFK PRVW RI WKH GLUHFW LQWHUDFWLRQV W\SLFDOO\ JLYLQJ FRPPDQGV DQG VHQGLQJ
DQG UHFHLYLQJ LQIRUPDWLRQ EHWZHHQ FRDOLWLRQ PHPEHUV ZLOO WDNH SODFH (DFK FLUFXPVFULEHG DUHD FRUUHVSRQGV
WR D VHFWRU DQG LQWHUDFWLRQ OLQHV UXQ RQO\ ZLWKLQ D VLQJOH VHFWRU
$ VHFWRU JHQHUDOO\ FRQVLVWV RI WKH SRVW RI D VHFWRU KHDG DQG WKRVH VXERUGLQDWH WR WKH KHDG VKRZLQJ D
W\SLFDO NHUQHOOHG FRDOLWLRQ SDWWHUQ 7KH QXPEHU RI VXERUGLQDWHV FRQWDLQHG LQ D VHFWRU PD\ EH ODUJHU WKDQ WKH
OLPLW RI NHUQHOOHG FORVH FRDOLWLRQ DV WKH UXOHFRQVWUDLQHG QDWXUH RI WKH LQWUDVHFWRU LQWHUDFWLRQV PD\ DOOHYLDWH
WKH ORDG RI FRQWURO IRU WKH VHFWRU KHDG DQG WKH QXPEHU PD\ EH IXUWKHU LQFUHDVHG LI QHFHVVDU\ E\ VHWWLQJ XS D
SRVW OLNH WKH VXEVHFWRUKHDG DV VKRZQ LQ 6HFWRU
(
LQ WKH ILJXUH /LNH LQ D NHUQHOOHG FORVH FRDOLWLRQ RQO\
VHFWRU KHDG RU VXEKHDG FDQ JLYH D FRPPDQG WR WKH UHVW RI WKH VHFWRU PHPEHUV DQG WKH ODWWHU DUH VXSSRVHG
WR REH\ VXFK FRPPDQGV LQVRIDU DV JLYLQJ WKDW FRPPDQG LV ZLWKLQ WKH VHFWRU KHDG
V MXULVGLFWLRQ
1RZ OHW PH GLVFXVV WKH QRQLQWHUIHUHQFH UXOH D OLWWOH PRUH LQ GHWDLO $V PHQWLRQHG HDUOLHU WKLV UXOH LV
WKH FULWLFDO FRUQHUVWRQH XSRQ ZKLFK DUWLILFLDO FRDOLWLRQV VWDQG 'HVSLWH LWV LPSRUWDQFH KRZHYHU QRWH WKDW LW LV
VHOGRP H[SOLFLWO\ VWDWHG DW OHDVW DV D ZULWWHQ GRFXPHQW LQ WKH UXOHV RI DUWLILFLDO FRDOLWLRQV 7KH UHDVRQ VHHPV
WR EH WKDW LW LV SHUYDVLYH HQRXJK WR EH WDNHQ IRU JUDQWHG IRU WKH PHPEHUV RI DQ DUWLILFLDO FRDOLWLRQ MXVW LQ WKH
VDPH ZD\ DV WKH SOHGJHV RI QDWXUDO FRDOLWLRQV WKRVH RI WUXVWZRUWKLQHVV DQG RI IDLUQHVV DUH VHOGRP LQ WKH
FRQVFLRXV DZDUHQHVV RI QDWXUDO FRDOLWLRQ PHPEHUV
)XUWKHUPRUH H[DFWO\ OLNH WKH SOHGJHV RI QDWXUDO FRDOLWLRQV H[FHSWLRQV DUH DOORZHG WR WKLV UXOH RQH
PD\ DWWHPSW WR LQWHUDFW ZLWK D SHUVRQ DFURVV VHFWRU ERDUGHUV LI WKH VLWXDWLRQ LV JUDYH HQRXJK WR MXVWLI\ WKH
DWWHPSW ,W LV RI FRXUVH YHU\ GLIILFXOW WR HQXPHUDWH DOO HPHUJHQFLHV DQG WKDW PD\ EH FRXQWHG DV RQH RI WKH
UHDVRQV ZK\ WKH UXOH RI QRQLQWHUIHUHQFH LV VHOGRP H[SOLFLWO\ VWDWHG 7KHUH DUH KRZHYHU QXPHURXV
H[DPSOHV LQ KLVWRU\ LQ ZKLFK QRQLQWHUIHUHQFH ZDV PDGH ODZ HVSHFLDOO\ DJDLQVW DFFRVWLQJ WKH KHDG RI D
PLJKW\ FRDOLWLRQ ZKR DV WKH PDMRU SROLF\ PDNHU ZRXOG VXIIHU WKH PRVW LI WKH UXOH ZDV QHJOHFWHG /HW PH WHOO
DQ H[DPSOH ,Q WKH WLPHV RI -DSDQHVH 6KRJXQDWH RQH RI WKH W\SLFDO IHXGDOLVWLF HUD WKH SHQDOW\ ZDV GHDWK IRU
SHDVDQWV WR WU\ WR DSSHDO WR WKHLU ORUG HYHQ ZKHQ WKH\ ZHUH RQ WKH YHUJH RI VWDUYDWLRQ E\ PLVPDQDJHPHQW RI
WKHLU ORFDO JRYHUQRU ,QWHUHVWLQJ WKLQJ LV WKDW WKHUH ZDV D VSHFLDO E\ODZ WR WKLV UXOH LI D SHWLWLRQLQJ SHDVDQW
VXFFHHGHG LQ UHDFKLQJ WKH ORUG
V SDODQTXLQ XQVWRSSHG E\ JXDUGLQJ VROGLHUV WKH ORUG ZRXOG DW OHDVW UHDG WKH
SHWLWLRQ HYHQ WKRXJK WKH SHQDOW\ ZDV GHDWK WR WKH SHWLWLRQHU
9LHZLQJ IURP WKH PDMRU IXQFWLRQ RI WKH QRQLQWHUIHUHQFH UXOH WKDW RI UHPRYLQJ FRQWURO RYHUORDG
IURP WKH GXWLHV RI KLJK HFKHORQ FRDOLWLRQ PHPEHUV WKH LQWHUGLFWLRQ RI RIIOLQH LQWHUDFWLRQ VHHPV QHFHVVDU\
RQO\ IRU WKRVH DLPHG DW D KLJK SRVW SHUVRQ E\ RQH LQ D ORZ SRVW 1HYHUWKHOHVV DQ RIIOLQH LQWHUDFWLRQ LV
JHQHUDOO\ IURZQHG DW DOEHLW OHVV LQWHQVH HLWKHU EH LW IURP KLJK WR ORZ RU VLGHZD\V DFURVV GLIIHUHQW
KLHUDUFKLFDO EUDQFKHV 7KLV LQGLFDWHV WKH H[LVWHQFH RI DQRWKHU UHDVRQ IRU WKH SURKLELWLRQ RI RIIOLQH
LQWHUDFWLRQV $QG WKDW UHDVRQ REYLRXVO\ UHODWHG WR WKH HPHUJHQFH RI XQRIILFLDO LQWHUDFWLRQ FKDQQHOV WKDW
PLJKW LPSDLU WKH V\VWHPLF LQWHJULW\ RI WKH DUWLILFLDO FRDOLWLRQ
2Q WKH EDFNJURXQG RI XQRIILFLDO LQWHUDFWLRQ FKDQQHOV WKHUH RIWHQ LV WKH LVVXH RI IRUPDWLRQ RI QDWXUDO
FRDOLWLRQV 1RW WKDW QDWXUDO FRDOLWLRQV DOZD\V GLVWXUE QRUPDO RSHUDWLRQV RI DQ DUWLILFLDO FRDOLWLRQ WR ZKLFK WKH
QDWXUDO FRDOLWLRQ PHPEHUV EHORQJ WR %XW IRUPLQJ D QDWXUDO FRDOLWLRQ HVSHFLDOO\ D FORVH FRDOLWLRQ LV D EDVLF
FRQFHUQ RI WKH XUJH V\VWHP DQG LWV PHPEHUV DUH FKRVHQ RQ WKH EDVLV RI WKHLU PXWXDO FRPSDWLELOLW\ ZLWK D
FRPSOHWH GLVUHJDUG WR RIILFLDO VWUXFWXUH RI WKH DUWLILFLDO FRDOLWLRQ WKH\ EHORQJ WR 0HPEHUV RI D QDWXUDO
FRDOLWLRQ PD\ EHORQJ WR GLIIHUHQW DUWLILFLDO FRDOLWLRQV DQG WKDW FUHDWHV VLPLODU SUREOHPV
7KH PHDVXUHV WDNHQ E\ DQ DUWLILFLDO FRDOLWLRQ WR FRXQWHU XQGHVLUDEOH QDWXUDO FRDOLWLRQ YDU\ D JUHDW
GHDO FRQWLQJHQW XSRQ WKH SXUSRVH RI WKH DUWLILFLDO FRDOLWLRQ DQG WKH FXOWXUH RI WKH FRPPXQLW\ ZLWKLQ ZKLFK LW
RSHUDWHV 7KHUH DUH YDULRXV SURKLELWLRQV DJDLQVW IRUPLQJ FORVH FRDOLWLRQV VXFK DV LQKRXVH PDUULDJHV
IUHTXHQW VKLIWV RI HPSOR\HHV
SRVWV WR VTXDVK SRVVLEOH QDWXUDO FRDOLWLRQV LQ EXGV EXW RI FRXUVH WKHUH H[LVWV QR
SDQDFHD IRU WKLV SUREOHP $Q HQWLUHO\ GLIIHUHQW DSSURDFK LV RIWHQ HPSOR\HG IUHTXHQWO\ WKH RQH WKDW LV FDOOHG
SDWHUQDOLVP 3DWHUQDOLVP HQFRXUDJHV VHFWRU PHPEHUV WR IHHO DV LI WKH\ ZHUH D VRUW RI D IDPLO\ PHPEHUV ZLWK
WKH VHFWRU KHDG DV WKH PDNHEHOLHYH IDPLO\ KHDG 1HHGOHVV WR VD\ D IDPLO\ ZDV RULJLQDOO\ D QDWXUDO FRDOLWLRQ
EXW DFTXLUHG D JUHDW GHDO RI DUWLILFLDO QDWXUH ODWHU RQ DQG DV VXFK LW RIWHQ KDV VHUYHG DV D SDUDGLJP RI
VXFFHVVIXO PHUJHU RI QDWXUDO DQG DUWLILFLDO FRDOLWLRQV
3DWHUQDOLVP DV WKH VSLULW RI DUWLILFLDO FRDOLWLRQ PDQDJHPHQW KDV EHHQ DGRSWHG LQ YDULRXV WLPHV DQG LQ
PDQ\ FXOWXUHV $V ZLOO EH GLVFXVVHG VKRUWO\ LW ZDV WKH HWKRV RI IHXGDOLVWLF WLPHV $PRQJ WKH FRQWHPSRUDU\
EXVLQHVV ZRUOGV -DSDQ LV RQH RI WKH PDQ\ ZKLFK HVSHFLDOO\ IDYRU SDWHUQDOLVP DV WKH LPSOLFLW PDQDJHPHQW
VWUDWHJ\ IRU WKH UHDVRQ WKDW D VXFFHVVIXO SDWHUQDOLVP KHLJKWHQV WKH FRKHUHQFH RI FRUSRUDWLRQV LI LW ZRUNHG 7R
PDNH LW ZRUN KRZHYHU LW DOVR UHYLYHV WKH LVVXH RI FRQWURO RYHUORDG DQ H[WUD ZRUN RQ WKH VKRXOGHU RI VHFWRU
KHDGV HVSHFLDOO\ WKRVH RI PLGGOH PDQDJHPHQW HDFK RI ZKRP KDV FRQVWDQWO\ WR VKRZ FRQFHUQV RQ SULYDWH
SUREOHPV RI VXERUGLQDWHV LQ RUGHU WR ORRN DV LI KH RU VKH ZHUH WKHLU ELJ IDWKHU RU PRWKHU
7KLV SDWHUQDOLVWLF WHQGHQF\ LQ -DSDQHVH PDQDJHPHQW KRZHYHU VHHPV WR EH GHFOLQLQJ SHUKDSV SDUWO\
GXH WR WKH IDFW WKH SDUDGLJPDWLF IDPLO\ PRGHO DV DQ DPDOJDPDWLRQ RI QDWXUDO DQG DUWLILFLDO FRDOLWLRQV LV
TXLFNO\ GLVDSSHDULQJ IURP WKH FXOWXUDO VFHQHV RI -DSDQHVH
$UWLILFLDO FRDOLWLRQ DV D YHUVDWLOH V\VWHP
7KHUH DUH WZR PRUH LVVXHV RI DUWLILFLDO FRDOLWLRQ WR EH DGGUHVVHG DW WKLV SRLQW 7KH ILUVW LV DERXW WKH
ODUJH SRWHQWLDO RI DQ DUWLILFLDO FRDOLWLRQ DV D YHUVDWLOH V\VWHP 7KH VHFRQG LV WKH DUWLILFLDO FRDOLWLRQ DV D VRXUFH
RI SRZHU IRU WKRVH ZKR RFFXS\ KLJK SRVWV RI D ODUJH DUWLILFLDO FRDOLWLRQ
7KH FKDUDFWHULVWLFV RI YHUVDWLOH V\VWHPV ZHUH GLVFXVVHG LQ &KDSWHU LQ UHODWLRQ WR WKH RSHUDWLRQDO
PRGH RI WKH PLQG ZKHQ LW VHHNV DQ DSSURSULDWH DFWLRQ SODQ WR SXUVXH WKH JRDO VHW E\ DQ DFWLYDWHG XUJH 7KH
DFWLRQ DJHQWV
GHVFULEHG WKHUH LQ D PRGH RI YHUVDWLOH RSHUDWLRQ JLYHQ PD\ EH PRUH VXEVWDQWLDWHG E\ G\QDPLF
VFKHPDV DQG DFWLRQ VFKHPDV GLVFXVVHG LQ WKH SUHYLRXV FKDSWHU 2QFH WKH JLYHQ VLWXDWLRQ LV UHFRQVWUXFWHG LQ
WKH ,7 :LQGRZ RI WKH PLQG E\ DSSURSULDWH G\VFV DQG DFWLRQ VFKHPDV YDULRXV G\VFV UHSUHVHQWLQJ WKH
SHUVRQ
V RZQ DFWLRQ SODQ PD\ WDNH WXUQV LQ WKH :LQGRZ WR WU\ RXW LWV LQWHUDFWLRQV ZLWK WKH VFKHPDV
UHSUHVHQWLQJ RWKHU DJHQWV LQ WKH JLYHQ VLWXDWLRQ QHDUO\ DXWRQRPRXVO\ XQGHU WKH VXSHUYLVLRQ RI WKH DSSUDLVDO
PRQLWRU :KHQHYHU WKH DSSUDLVDO JLYHQ E\ WKH DSSUDLVDO PRQLWRU ZDV UDWKHU QHJDWLYH DERXW WKH RXWFRPH RI
VLPXODWLRQ SOD\HG RXW E\ RQH RI WKH DFWLRQ SODQ G\VFV DQRWKHU DFWLRQ SODQ G\VF ZLOO WDNH RYHU RU WKH ILUVW
RQH ZLOO PRGLI\ LWVHOI WKURXJK WKH XVH RI DSSURSULDWH DFWLRQ VFKHPDV
7KH ZKROH SURFHVV LV OLNHO\ WR EH HQRUPRXVO\ FRPSOH[ 7KH VSLULW RI YHUVDWLOLW\ KRZHYHU LV VLPSOH
UHSUHVHQWHG E\ WKH SUHVHQFH RI D VXIILFLHQWO\ ODUJH QXPEHU RI DOWHUQDWLYH DFWLRQ DJHQWV DW OHDVW RQH RI ZKLFK
PD\ ILW WKH JLYHQ VLWXDWLRQ D SHUVRQ ZRXOG QRUPDOO\ HQFRXQWHU $QG LI QR ILW DFWLRQ DJHQW LV IRXQG
LPPHGLDWHO\ WKH\ PD\ PRGLI\ WKHPVHOYHV RIWHQ DXWRQRPRXVO\ E\ PHUJLQJ ZLWK RWKHU G\VFV RU WKURXJK
DSSOLFDWLRQ RI VXLWDEOH DFWLRQ VFKHPDV 'XULQJ WKH ZKROH SURFHVV LQKRXVH LQWHUDFWLRQV ZLOO JR RQ DPRQJ
VFKHPDV VRPH RI ZKLFK DUH KLJKO\ SROLF\ RULHQWHG DQG VRPH PRUH GHWDLORULHQWHG
$QDORJRXV YHUVDWLOH IHDWXUHV DUH HDVLO\ VHHQ ZLWK WKH PRGH RI RSHUDWLRQ RI D ODUJH DUWLILFLDO FRDOLWLRQ
OLNH D PRGHUQ EXVLQHVV FRUSRUDWLRQ ,Q WKH ILUVW SODFH VXFK D FRUSRUDWLRQ KDV PDQ\ HPSOR\HHV (DFK RI WKHP
LV QRW RQO\ HQGRZHG ZLWK D YHUVDWLOH PLQG PRUH RU OHVV EXW DOVR VSHFLDOL]HG LQ LVVXHV RI GLIIHUHQW GRPDLQV
6R LQ PRVW FDVHV ZLWK PRVW RI JOREDO JRDOV WKH FRUSRUDWLRQ ZLOO VHW XS WKH FRUSRUDWLRQ PD\ EH DEOH WR ILQG
VSHFLDOLVWV DPRQJ LWV HPSOR\HHV ZKR FDQ GHDO ZLWK RU LI LW GRHV QRW LW ZRXOG EH DEOH WR KLUH WKRVH ZKR
TXDOLI\ RU WUDLQ VRPH RI LWV HPSOR\HHV WR VXLW WKH MRE
/HW PH GHVFULEH WKH PRGH RI RSHUDWLRQ RI D FRUSRUDWLRQ LQ D OLWWOH PRUH GHWDLO :KHQ D FRUSRUDWLRQ
IDFHV D SUREOHP WKHUH ZLOO EH D PHHWLQJ ZLWK WRS OHYHO H[HFXWLYHV ZKR LQWHUDFW YHUEDOO\ H[FKDQJLQJ LGHDV
DQG PDNLQJ SURSRVDOV :KHQ D SROLF\ LV FKRVHQ DQG UHVSRQVLEOH GHSDUWPHQWV HVWDEOLVKHG WKH SROLF\ ZLOO EH
EURXJKW GRZQ WKH KLHUDUFKLFDO FKDQQHOV DSSURSULDWH FRPPDQGV JLYHQ DQG WKHUH ZLOO EH LQWHUDFWLRQV XS DQG
GRZQ DQG VLGHZD\V RQ DOO OHYHOV RI WKH KLHUDUFK\ FRQFHUQHG $QG WKURXJK DOO WKHVH SURFHVVHV HDFK
HPSOR\HH ZLOO RSHUDWH PRUH RU OHVV DV DQ DXWRQRPRXV DJHQW
(YHQ WKLV YHU\ EULHI VNHWFK RI WKH PRGH RI RSHUDWLRQ RI D ODUJH DUWLILFLDO FRDOLWLRQ ZLOO EH HQRXJK WR
GHPRQVWUDWH WKH WUHPHQGRXV SRWHQWLDO YHUVDWLOLW\ LW SRVVHVVHV DQG WKDW LV QR ZRQGHU EHFDXVH LW LV D YHUVDWLOH
V\VWHP RI YHUVDWLOH VXEV\VWHPV
LH
SHUVRQV ZLWK YHUVDWLOH PLQGV 7KH WUXWK LV KRZHYHU WKDW RQO\ D WULFNOH
RI WKLV HQRUPRXV SRWHQWLDO YHUVDWLOLW\ LV DFWXDOO\ LQ XVH DV HDFK HPSOR\HH
V FRQWULEXWLRQ WR WKH FRDOLWLRQ LV
VHYHUHO\ OLPLWHG E\ WKH UXOHV WKH FRUSRUDWLRQ LPSRVHV XSRQ WKHP 7KHVH UXOHV LQ XVH LQ WRGD\
V FRUSRUDWLRQV
DUH WR NHHS WKH FRUSRUDWH DFWLYLWLHV LQ RUGHU DSSHDU WR EH IDU IURP RSWLPDO DV PRVW RI WKHP DUH OLWWOH PRUH
WKDQ OHJDFLHV RI WKH ROG WLPHV GHYHORSHG XQGHU DQ HQWLUHO\ GLIIHUHQW VHW RI VRFLDO FRQGLWLRQV IURP ZKDW ZH
KDYH WRGD\ 7KLV LV D PDUNHG LQGLFDWLRQ RI VOXJJLVKQHVV RI DUWLILFLDO HYROXWLRQ LQ WKH DUHDV RI VRFLDO VFLHQFHV
DQG WHFKQRORJLHV FRPSDUHG WR RWKHU DUHDV WKH LVVXH WR EH GLVFXVVHG DW WKH HQG RI WKLV ERRN
%HFDXVH RI WKLV QRW YHU\ DGHTXDWH UXOHV XQGHU ZKLFK WKH FXUUHQW FRUSRUDWLRQV RSHUDWH RQO\ D UDWKHU
VPDOO SRUWLRQ RI WKH SRWHQWLDO FRDOLWLRQDO FRQWURO SRZHU RI ODUJH DUWLILFLDO FRDOLWLRQV KDV EHHQ FXOWLYDWHG (YHQ
WKLV VPDOO SRUWLRQ KRZHYHU FDQ EH TXLWH ODUJH ZLWK D ODUJH VL]HG FRDOLWLRQ DQG RQFH WKH DJULFXOWXUDO
UHYROXWLRQ RSHQHG WKH ZD\ WR LQFUHDVH FRPPXQLW\ SRSXODWLRQV ODUJH VFDOH DUWLILFLDO FRDOLWLRQV SROLWLFDO
HFRQRPLFDO DQG PLOLWDULVWLF RQHV RSHUDWHG DV SURWDJRQLVWV LQ WKH XQIROGLQJ GUDPD RI WKH KXPDQ KLVWRU\
&RPPXQLWLHV DV VHPLQDWXUDO DUWLILFLDO FRDOLWLRQV
:KHQ WKH SRSXODWLRQ RI FRPPXQLWLHV KDG JRQH EH\RQG WKH OLPLW RI D QDWXUDO FRDOLWLRQ DIWHU WKH
DJULFXOWXUDO UHYROXWLRQ D FRPPXQLW\ KDG EHFRPH DUWLILFLDO VLQFH LW FRXOG KDYH EHHQ PDQDJHG RQO\ ZLWK WKH
DLG RI VRFLDO UXOHV 2Q WRS RI VXFK DUWLILFLDO FRPPXQLW\ WKHUH ZRXOG KDYH EHHQ D UXOLQJ ERG\ DQ DUWLILFLDO
FRDOLWLRQ RI D KLHUDUFKLFDO W\SH DV VXJJHVWHG HDUOLHU 7KH FRPPXQLW\ KRZHYHU KDV QHYHU OHW LWVHOI EH
RUJDQL]HG FRPSOHWHO\ LQ D KLHUDUFKLFDO IDVKLRQ EHFDXVH LW KDV WR VHUYH LWV RZQ IXQFWLRQV GLIIHUHQW IURP
KLHUDUFKLFDO W\SH DUWLILFLDO FRDOLWLRQV 3UREDEO\ WKH PRVW LPSRUWDQW IXQFWLRQ RI WKH FRPPXQLW\ LV WR VHUYH DV D
SRRO RI SRWHQWLDO PHPEHU FDQGLGDWHV IRU RWKHU W\SHV RI FRDOLWLRQV QDWXUDO RU KLHUDUFKLFDOO\ DUWLILFLDO WKDW
H[LVW RU PD\ EH IRUPHG ZLWKLQ WKH FRPPXQLW\ 6R D FRPPXQLW\ PD\ EH PHWDSKRULFDOO\ WKRXJKW DV VRPH
VRUW RI IOXLG ZKHUHLQ IORDW YDULRXV UHODWLYHO\ WLJKWO\ RUJDQL]HG PDVVHV RFFDVLRQDOO\ H[FKDQJLQJ ELWV DQG
SLHFHV ZLWK WKH DPELHQW IOXLG ZKLOH QHZ PDVVHV EHLQJ IRUPHG DQG ROG RQHV GLVLQWHJUDWHG
8VXDOO\ D FRPPXQLW\ FRQWDLQV D UDWKHU ODUJH QXPEHU RI DUWLILFLDO KLHUDUFKLFDO FRDOLWLRQV DQG
HIIHFWLYHO\ HYHU\ FRPPXQLW\ PHPEHU EHORQJV WR RQH RU PRUH RI WKH ODWWHU 7KHUH LV KRZHYHU RQO\ RQH
FRDOLWLRQ WKDW HYHU\ FRPPXQLW\ PHPEHU EHORQJV WR DQG WKDW LV WKH FRPPXQLW\ FRDOLWLRQ DQG DV VXFK WKH
FRPPXQLW\ SHUIRUPV DQRWKHU RI LWV LPSRUWDQW IXQFWLRQ WKH DSSUDLVDO RI SRZHUV RI DOO RI LWV PHPEHUV WR DIIL[
DQ DSSURSULDWH VRFLDO VWDWXV XSRQ HDFK RI WKHP
:LWK UHJDUG WR WKLV VWDWXVDSSUDLVDO SURFHVV QRWH WKDW EHLQJ LQ D KLJK SRVW DW VRPH PLJKW\ DUWLILFLDO
FRDOLWLRQ ZLOO EHVWRZ RQH ZLWK D ODUJH FRQWURO SRZHU $QG QRWH DOVR WKDW WKLV FRDOLWLRQEDVHG FRQWURO SRZHU
QHDUO\ H[SRQHQWLDOO\ LQFUHDVH DV WKH SHUVRQ
V SRVW JRHV KLJKHU ZLWKLQ WKH FRDOLWLRQDO KLHUDUFK\ -XVW FRPSDUH
WKH QXPEHU RI SHUVRQV XQGHU GLUHFW DQG LQGLUHFW FRQWURO RI WKH SHUVRQ RQ WRS RI WKH KLHUDUFK\ ZLWK WKH
QXPEHU RI WKH VDPH XQGHU WKH FRQWURO RI RQH RI WKH VHFRQG OHYHO SRVW RI WKH VDPH KLHUDUFK\ 7KH ODWWHU LV
RQO\ D IUDFWLRQ RI WKH IRUPHU ,Q WKH VLPSOLILHG QXPHULFDO H[DPSOH JLYHQ DERYH WKH KHDG RI WKH FRDOLWLRQ FDQ
FRQWURO FRDOLWLRQ PHPEHUV ZKLOH RQO\ DUH XQGHU WKH FRQWURO RI D SHUVRQ RQ WKH VHFRQG OHYHO RI WKH
KLHUDUFK\
,W LV QRW MXVW WKH QXPEHU RI VXERUGLQDWHV WKDW FRXQWV LQ WKH FRQWURO SRZHU DFFUXLQJ IURP RQH
V
FRDOLWLRQDO DIILOLDWLRQ ,W LV DOVR WKH TXDOLW\ RI WKHVH VXERUGLQDWHV
LH
WKH SRZHUV WKHVH VXERUGLQDWHV RZQ WKDW
LV LPSRUWDQW DV ZHOO DV KRZ PXFK FRPPDQG SULYLOHJHV WKH SHUVRQ KDV RYHU WKH VXERUGLQDWHV +RZHYHU LI
RWKHU WKLQJV DUH DSSUR[LPDWHO\ HTXDO WKHQ WKH QXPEHU RI VXERUGLQDWHV EHFRPHV FULWLFDO LQ GHWHUPLQLQJ RQH
V
FRDOLWLRQEDVHG FRQWURO SRZHU ,Q WKDW FDVH LW LV WR EH QRWLFHG WKDW D ODUJH DUWLILFLDO FRDOLWLRQ WHQG WR SURGXFH
D W\SLFDO WDSHULQJ S\UDPLGDO W\SH SRZHU FRQVWLWXWLRQ 6LQFH D ODUJH DUWLILFLDO FRDOLWLRQ XVXDOO\ IXQFWLRQV DV D
VXEFRPPXQLW\
WKLV
WDSHULQJ
S\UDPLGDO
SRZHU
FRQVWLWXWLRQ
ZLOO
UHIOHFW
LQ
LWV
VXEFRPPXQLW\
VWDWXV
FRQVWLWXWLRQ
+RZ WKLV VXEFRPPXQLW\ VWDWXV LV WUDQVIHUUHG WR WKH VWDWXV LQ WKH ZKROH FRPPXQLW\ GHSHQGV XSRQ
KRZ WKH FRDOLWLRQDO SRZHU RI WKH DUWLILFLDO FRDOLWLRQ LV DSSUDLVHG ZLWKLQ WKH FRPPXQLW\ 7KH VWDWXV RI D
JHQHUDO RI D PLOLWDU\ RUJDQL]DWLRQ ZLOO EH YHU\ KLJK ZLWKLQ WKH RUJDQL]DWLRQ EXW KRZ KLJK KLV VWDWXV LQ WKH
FRPPXQLW\ GHSHQGV XSRQ KRZ KLJK WKH PLOLWDU\ SRZHU LV DSSUDLVHG DFFRUGLQJ WR WKH FRPPXQLW\ QRUP
,QFLSLHQW ODUJH VWDWXV YDULDQFH FRPPXQLWLHV
/HW PH QRZ UHWXUQ WR WKH LQFLSLHQW DUWLILFLDO FRPPXQLW\ ZKRVH SRSXODWLRQ KDG JRQH EH\RQG WKH OLPLW
RI XUFRPPXQLW\ QRW E\ GHVLJQ EXW E\ FRQYHQLHQFH RI KDYLQJ PRUH KDQGV LQ IDUPLQJ DQG E\ WKH DYDLODELOLW\
RI IRRG WR IHHG WKHP DOO 6XFK DQ RYHUVL]HG FRPPXQLW\ ZRXOG KDYH QHHGHG VRFLDO UXOHV IRU JRYHUQDQFH DQG
D UXOLQJ ERG\ DV D SRZHUIXO DUWLILFLDO FRDOLWLRQ WR HQIRUFH UXOHV
7KHVH VRFLDO FKDQJHV ZRXOG KDYH EHHQ YHU\ VORZ LQ WKH EHJLQQLQJ QRWKLQJ OLNH WKH ULVH RI D PLJKW\
NLQJGRP ZRXOG KDYH WDNHQ SODFH LQ WKRXVDQGV RI \HDUV VLQFH WKH DJULFXOWXUDO HYROXWLRQ $W ILUVW WKH ODFN RI
HIILFLHQF\ LQ WKH EXUJHRQLQJ IDUPLQJ WHFKQRORJ\ VKRXOG KDYH SURGXFHG OLWWOH H[FHVV IRRG WR VSHDN RI 7KH
DUWLILFLDO HYROXWLRQ KRZHYHU QHYHU IDLOHG WR DFFHOHUDWH DQG WKH SHUVLVWHQW KXPDQV RQFH VWDUWHG FRXOG ZDLW
RXW ORQJ KDUG WLPHV RI WKH LQLWLDO VWDJH RI KDUG ODERU DQG OLWWOH UHWXUQ 6R HYHQWXDOO\ WKH SHUVLVWHQFH SDLG RII WKH IDUPLQJ WHFKQRORJ\ LPSURYHG FRPPXQLW\ SRSXODWLRQ NHSW LQFUHDVLQJ VR PXFK VR WKDW VRPH RI WKH
FRPPXQLW\ PHPEHUV FRXOG KDYH VSHFLDOL]HG LQ MREV QRW GLUHFWO\ LQYROYHG LQ IRRG SURGXFWLRQ VXFK DV PDVRQV
FDUSHQWHUV ZHDYHUV VPLWKV DQG YDULRXV RWKHU DUWLILFHUV
2QH RI WKH PRVW UHPDUNDEOH RXWFRPHV RI WKHVH QHZ LQGXVWULHV ZDV WKDW WKH\ SURGXFHG
YDOXDEOH
REMHFWV
LQKHULWDQFH
ZKLFK SHRSOH FRXOG KDYH
RZQHG
GXUDEOH
DV SHUVRQDO SRVVHVVLRQV DQG DOVR KDQGHG GRZQ DV
WR WKHLU UHVSHFWLYH RIIVSULQJV 1HHGOHVV WR VD\ WKH SURSULHW\ ULJKWV DQG LQKHULWDQFH ULJKWV VKRXOG
KDYH EHHQ SURWHFWHG E\ DSSURSULDWH VRFLDO UXOHV SULPDULO\ EHFDXVH WKH\ ZHUH LQ IDYRU RI WKH FRQWLQXDWLRQ RI
WKH H[LVWLQJ RUGHU
7KURXJK WKH ZRUNV GRQH LQ WKH SULPDU\ LQGXVWULHV VXFK DV IDUPLQJ ILVKHU\ DQG DQLPDO KHUGLQJ WKH
KXPDQV SURGXFHG D ODUJH DPRXQW RI IRRG WR VXVWDLQ ODUJH FRPPXQLWLHV DQG WKURXJK WKH ZRUNV RI RWKHU W\SHV
RI LQGXVWULHV WKH\ SURGXFHG REMHFWV DV WKH EDVLF PDWHULDOV RI
ZHDOWK
WR EH RZQHG DFFXPXODWHG DQG LQKHULWHG
DQG DOVR SOXQGHUHG 1RWH WKDW WKHVH REMHFWV WKDW FRQVWLWXWH ZHDOWK LQFOXGHG EHVLGHV GLUHFWO\ XVHIXO REMHFWV
VXFK DV KRXVHV RUGLQDU\ FORWKHV KRXVHKROG XWHQVLOV DOVR REMHFWV ZKRVH SULPDU\ YDOXH VRXUFH FRXOG QRW EH
GLUHFWO\ DVFULEHG WR WKHLU SUDFWLFDO XVHV VXFK DV WKRVH PDGH RI SUHFLRXV PHWDOV OLNH JROG DQG VLOYHU DQG DOVR
SUHFLRXV VWRQHV 7KH\ KDYH KRZHYHU LPSRUWDQW XVHV RI DQRWKHU NLQG
LH
DV
VWDWXV V\PEROV
DV ZLOO EH
GLVFXVVHG VKRUWO\
$W WKLV MXQFWXUH OHW PH DGGUHVV WKH LVVXH RI WKH
VWDWXV YDULDQFH
ZLWKLQ D FRPPXQLW\ , KDYH DOUHDG\
DVVXPHG WKDW WKH FRPPXQLW\ PHDQ VWDWXV ZLOO JHQHUDOO\ EH NHSW FRQVWDQW DQG WKDW DVVXPSWLRQ VWLOO OHDYHV WKH
YDULDQFH RI WKH VWDWXV GLVWULEXWLRQ RYHU WKH FRPPXQLW\ PHPEHUV IUHH , KDYH DOVR PHQWLRQHG WKDW WKH XSSHU
ERXQG RI WKH SHDN VWDWXV LQFUHDVHV ZLWK WKH FRPPXQLW\ SRSXODWLRQ 7KH FRPPXQLW\ ZLWK DQ LQFUHDVHG
SRSXODWLRQ PXVW KDYH EHHQ FRQWUROOHG E\ DSSURSULDWH UXOHV DQG WKH HQIRUFHPHQW RI UXOHV UHTXLUHG D FRQWURO
SRZHU EH\RQG D VLQJOH SHUVRQ 6R D UXOLQJ ERG\ ZRXOG KDYH RULJLQDOO\ VWDUWHG DV DQ DOOLDQFH FRDOLWLRQ RI
SRZHUIXO FRPPXQLW\ PHPEHUV ZKLFK ZRXOG JUDGXDOO\ KDYH EHHQ HVWDEOLVKHG DV WKH UXOLQJ ERG\ DV DQ
DUWLILFLDO FRDOLWLRQ $V WKH FRPPXQLW\ LQFUHDVHG LWV SRSXODWLRQ DQG WKH XSSHU ERXQG RI WKH SHDN VWDWXV KLNHG
XS WKH UXOLQJ ERG\ PHPEHUV QDWXUDOO\ WULHG WR FXOWLYDWH WKH SRVVLELOLW\ RI HOHYDWLQJ WKHLU RZQ VWDWXV PRUH E\
WKH QHFHVVLW\ WKDQ E\ SHUVRQDO DPELWLRQV VLQFH WKH JUHDWHU WKH VWDWXV GLIIHUHQWLDO EHWZHHQ WKHPVHOYHV DQG
WKH JHQHUDO SRSXODFH WKH HDVLHU ZRXOG KDYH EHFRPH WKHLU FRPPXQLW\ PDQDJHPHQW WDVNV 1RWH WKDW WKH VWDWXV
YDULDQFH ZLWKLQ D FRPPXQLW\ ZRXOG DXWRPDWLFDOO\ LQFUHDVH LQVRIDU DV WKH FRPPXQLW\ PHDQ VWDWXV UHPDLQHG
FRQVWDQW ZKLOH WKH VWDWXV FRQVWLWXWLRQ ZLWKLQ WKH FRPPXQLW\ ZDV JHQHUDOO\ NHSW LWV WDSHULQJ S\UDPLGDO VKDSH
6R WKH LQLWLDO VWDJH WKDW KXPDQ FRPPXQLWLHV JRQH WKURXJK DIWHU WKH DJULFXOWXUDO UHYROXWLRQ PD\ EH
FKDUDFWHUL]HG DV D UHODWLYHO\ SHDFHIXO SHULRG RI EXLOGLQJ XS RI FRPPXQLW\ SRSXODWLRQV DQG D JUDGXDO
RUJDQL]DWLRQV RI WKHP LQWR ODUJH YDULDQFH VRFLHWLHV 7KLV SURFHVV RFFXSLHG WKH SHULRG UXQQLQJ DSSUR[LPDWHO\
IURP WKRXVDQG %3 WKURXJK WKRXVDQG %3 ,W PXVW KDYH EHHQ D UHODWLYHO\ SHDFHIXO WLPH XQWLO WKRXVDQG
%3 ZKHQ WKH ILUVW DUFKHRORJLFDO HYLGHQFH RI D ODUJH VFDOH SLOODJH DQG EXUQLQJ ZDV IRXQG LQ ZHVWHUQ $VLD
3UREDEO\ VRPH FRPPXQLWLHV FRXOG VWRUH HQRXJK DPRXQW RI IRRG WR WHPSW VRPH QRPDGLF FRPPXQLW\ WR JHW
LW LQ DQ HDV\ ZD\ ,W WRRN KRZHYHU DQRWKHU WKRXVDQG \HDUV EHIRUH ZDUV VWDUWHG LQ HDUQHVW )HVWLQJHU
PRVW OLNHO\ FRLQFLGHQWDO WR WKH DFFXPXODWLRQ RI
ZHDOWK
LQ FRPPXQLWLHV
'XULQJ WKLV ILYH WKRXVDQG \HDUV RI UHODWLYH SLHFH DUWLILFLDO HYROXWLRQ PXVW KDYH EHHQ VWHDGLO\ JRLQJ
RQ LQ PDQ\ DUHDV LPSURYLQJ IDUPLQJ DQG RWKHU WHFKQRORJLHV SURGXFLQJ YDULRXV XVHIXO DQG DUWLVWLF REMHFWV
RUJDQL]LQJ FRPPXQLWLHV ZLWK IXUWKHU DQG IXUWKHU DUWLFXODWHG GLYLVLRQV RI ODERU DFFRPSDQLHG E\ VXLWDEOH
H[FKDQJH FKDQQHOV DPRQJ VXFK GLYLVLRQV $V RUGLQDULO\ EHLQJ WKH FDVH ZLWK DFFHOHUDWHG DUWLILFLDO HYROXWLRQ
ZKRVH QHZ SURGXFWV RIWHQ VXGGHQO\ LQXQGDWH WKH PDUNHW VRPH RI WKH FRPPXQLWLHV IORXULVKHG ZLWK PDWHULDO
ZHDOWK QHDUO\ DW WKH HQG RI WKLV SHULRG HVSHFLDOO\ WKRVH FRPPXQLWLHV ZKLFK ZHUH ORFDWHG LQ IHUWLOH ODQGV OLNH
YLFLQLWLHV RI ODUJH ULYHUV ZKHUH DEXQGDQW ZDWHU DQG ULFK WRSVRLO ZHUH DYDLODEOH IRU IDUPLQJ 6XFK SURVSHULW\
VKRXOG QDWXUDOO\ KDYH DWWUDFWHG SHRSOH WR MRLQ WKH FRPPXQLWLHV SURYLGLQJ WKH EDVLV IRU SURGXFLQJ IXUWKHU
ZHDOWK
/HW PH DGGUHVV WKH QDWXUH RI ZHDOWK DW WKLV SRLQW :HDOWK LV D FRQFHQWUDWLRQ RI REMHFWV ZKLFK PRVW
SHRSOH GHVLUH WR SRVVHVV RU WR SDUWDNH RI WKH PHULW WKH\ SUHVHQW 7KH IXQGDPHQWDO UHDVRQ ZK\ SHRSOH GHVLUH
WR SRVVHVV WKHP LV REYLRXV ZLWK VRPH RI WKH REMHFWV WKDW FRQVWLWXWH ZHDOWK DQG WKDW LV WKHLU EDVLF
LV WUXH RI WKHVH REMHFWV OLNH IRRG FORWKHV KRXVH DQG ODQG 7KH UHDVRQ IRU PRVW RI WKH UHVW LV
XWLOLW\
EHDXW\
7KLV
RU PRUH
LQ JHQHUDO WKH HVWKHWLF YDOXH WKH REMHFWV SUHVHQW WKHPVHOYHV $V DWWHPSWHG HDUOLHU LW VHHPV LPSRVVLEOH WR
GHILQH EHDXW\ LQ JHQHUDO WHUPV EXW DW OHDVW REMHFWV OLNH SUHFLRXV PHWDOV DQG VWRQHV JLYH XV VRPH KLQWV
$OWKRXJK D SDUW RI WKHP GR KDYH VRPH SUDFWLFDO XWLOLW\ EXW WKH HVVHQWLDO SDUW RI WKHLU YDOXH VHHPV WR FRPH
IURP WKH IDFW WKDW WKH\ UHSUHVHQW D UDUH FRQFHQWUDWLRQ RI DGPLUDEOH TXDOLW\ QRW RQO\ WKH\ DUH SOHDVLQJ WR WKH
H\H EXW DOVR WKHLU TXDOLW\ DSSHDUV WR VWD\ SHUPDQHQWO\ XQEOHPLVKHG LI KDQGOHG FDUHIXOO\ 6R WKHUH DUH
VRPHWKLQJ LQ WKH EDVLF SURJUDPPLQJ RI WKH XUJH V\VWHP WKDW LQH[RUDEO\ DWWUDFWV SHRSOH WR DSSURDFK WKHP WKH
PRUH VR LI WKHVH REMHFWV DUH JHQHUDOO\ KDUG WR FRPH E\
1RWH WKDW WKH DFWXDO YDOXHV RI WKHVH REMHFWV FRQVWLWXWLQJ ZHDOWK DUH EXLOW XSRQ WKHVH FRUH YDOXHV 7KH
PRVW HVVHQWLDO RI WKHVH DGGLWLRQDO YDOXHV FRPHV IURP WKH IDFW WKDW WKH RZQHU RI WKHP FDQ XVH WKHP DV D
SRWHQW VRXUFH RI SRZHU EHFDXVH SHRSOH GHVLUH WR KDYH WKHP 6R E\ JRLQJ EDFN WR WKH FRQWH[W RI DQ HDUO\
DUWLILFLDO FRPPXQLW\ ZKLFK EHFDPH SURVSHURXV LWV UXOLQJ ERG\ ZRXOG KDYH ZDQWHG D ODUJH VKDUH RI WKH
ZHDOWK E\ WKHPVHOYHV ZKR ZHUH WU\LQJ KDUG WR EXLOG XS WKHLU KLJK VWDWXV $QG PRVW OLNHO\ WKH\ ZRXOG KDYH
VXFFHHGHG DV WKH\ ZHUH DOUHDG\ SRZHUIXO PRUH SRZHUIXO WKDQ WKH UHVW RI WKH FRPPXQLW\ DQG D JUHDWHU
FRQWURO SRZHU DOZD\V PHDQV D JUHDWHU PDQHXYHUDELOLW\ RI DIIDLUV RI WKH FRPPXQLW\
7KLV GRHV QRW KRZHYHU PHDQ WKH SRZHUV WR EH DW WKH WLPH RU DQ\ RWKHU WLPH ZDQWHG WR PRQRSROL]H
YLUWXDOO\ DOO WKH ZHDOWK ZLWKLQ WKH FRPPXQLW\ )RU LW ZRXOG KDYH EHHQ WKHLU RZQ GRZQIDOO LI WKH\ GLG DV WKH
PDMRULW\ RI WKH FRPPXQLW\ VTXHH]HG WR XWWHU SRYHUW\ ZRXOG KDYH SUHVHQWHG QR DWWUDFWLRQ WR WKRVH RXWVLGH WR
MRLQ WKH FRPPXQLW\ $OVR D UXOLQJ ERG\ WKDW JUHHG\ ZRXOG FHUWDLQO\ ORVH WKH VXSSRUW RI LWV SHRSOH DQG
ZLWKRXW WKH VXSSRUW WKH UXOLQJ ERG\ FRXOG QRW KDYH VXVWDLQHG LWV KLJK VWDWXV GHVSLWH RI WKHLU DFFXPXODWHG
ZHDOWK $QG PRVW LPSRUWDQWO\ D ZHDOWK FOHYHUO\ LQYHVWHG ZRXOG KDYH FUHDWHG PRUH ZHDOWK DQG ZKHUH HOVH D
UXOLQJ ERG\ FRXOG KDYH LQYHVWHG LWV ZHDOWK EXW LQ WKH FRPPXQLW\ LW JRYHUQV" ,I WKH JHQHUDO SXEOLF ZHUH
9HU\ RIWHQ WKHVH WZR W\SHV RI FRUH YDOXHV DUH DPDOJDPDWHG ZLWKLQ VLQJOH REMHFWV OLNH EHDXWLIXO DWWLUHV DQG DZH
LQVSLULQJ HGLILFHV
DOORZHG WR SRVVHVV VRPH ZHDOWK LQ WKHLU QDPH SRVVLELOLWLHV RI RZQLQJ IXUWKHU ZHDOWK ZRXOG KDYH FUHDWHG
LQFHQWLYHV IRU H[FKDQJH DQG WKDW LV E\ GHILQLWLRQ YDOXHJHQHUDWLQJ HFRQRPLF DFWLYLW\ *ROG DQG VLOYHU FRLQV
LQYHQWHG DV WRROV WR IDFLOLWDWH H[FKDQJHV DOEHLW LQ PXFK ODWHU WLPH ZHUH H[DFWO\ LQ OLQH ZLWK WKLV SULQFLSOH
WKH\ ZHUH SUHFLRXV PHWDOV ZLWK KLJK FRUH EHDXW\ YDOXHV UDUH EXW QRW SURKLELWLYHO\ UDUH IRU EHLQJ FLUFXODWHG
DPRQJ WKH SHRSOH 6R HYHQ WKRXJK WKH KLJK VWDWXV SHUVRQV VXFNHG XS PXFK RI WKH ZHDOWK ZLWKLQ WKH
FRPPXQLW\ WKH\ KDG DOVR VSHQG D SDUW RI LW WR WKH HIIHFW RI UHGLVWULEXWLQJ ZHDOWK ZLWKLQ WKH FRPPXQLW\ DQG
WKLV ZHDOWK GLVWULEXWLRQ SURFHVV ZRXOG XVXDOO\ KDYH HQGHG XS LQ D VRUW RI RSWLPDO EDODQFH WKDW DSSUR[LPDWHO\
PD[LPL]HG WKH SURGXFWLRQ RI ZHDOWK ZLWKLQ WKH FRPPXQLW\ JLYHQ WKH H[WHUQDO FRQGLWLRQV :KHQ WKDW LV WKH
FDVH SHRSOH ZRXOG JHQHUDOO\ IHOW LW DV D
IDLU
GLVWULEXWLRQ
7KH 7LPHV RI :DU
7KH DGYHQW RI WKH 7LPHV RI :DU
:KHQ ZDUV VWDUWHG LQ DURXQG WKRXVDQG \HDUV %3 WKH\ VSUHDG QHDUO\ DOO RYHU WKH ZRUOG ZKHUH
VRPH KXPDQ FLYLOL]DWLRQ H[LVWHG OLNH D ZLOG ILUH DQG VLQFH WKHQ WKH KXPDQV KDYH EHHQ FRQVWDQWO\ DW LW WLOO WKH
ILUVW KDOI RI WKH WK &HQWXU\ ZKHQ WZR PDMRU :RUOG :DUV IODUHG XS 7KHQ LQ WKH ODWWHU KDOI RI WKH FHQWXU\
WKH ZRUOG KDV VHWWOHG LQWR D VHPEODQFH RI UHODWLYH SHDFH DIWHU JRLQJ WKURXJK WKH DIWHUPDWK RI WKH 6HFRQG
:RUOG :DU FDOOHG WKH &ROG :DU DQG WKH SHDFH DQG WKH DFFXPXODWHG HIIHFW RI WKH DUWLILFLDO HYROXWLRQ WKHQ
WRXFKHG RII WKH VHFRQG JUDQG WUDQVLWLRQ RI WKH KXPDQ VRFLHWDO SURFHVVHV ZH DUH H[SHULHQFLQJ WRGD\
/HW PH FDOO WKLV SHULRG RI KXPDQ KLVWRU\ IURP WKRXVDQG \HDUV %3 WR WKH PLGGOH RI WKH WK
&HQWXU\
WKH 7LPHV RI :DU
DV ZDUV QHYHU FRPSOHWHO\ FHDVHG GXULQJ WKLV SHULRG 7KH WLPH RI WKRXVDQG \HDUV
%3 ZRXOG KDYH EHHQ WKH SHULRG ZKHQ WKH ULVN\ YHQWXUH RI VDFNLQJ WKH ZHDOWK KRDUGHG LQ RWKHU FRPPXQLWLHV
EHFDPH MXVW FRVWHIIHFWLYH 7KH UHFRJQLWLRQ RI ZDJLQJ ZDUV DV D UHDVRQDEOH KLJKULVN KLJKUHWXUQ DOWHUQDWLYH
IRU FRPPXQLW\ DFWLRQ VKRXOG KDYH VSUHDG ZLGHO\ DQG TXLFNO\ ,W ZDV SUREDEO\ ILUVW VWDUWHG E\ QRPDGLF
KXQWHUDQLPDOKHUGHU FRPPXQLWLHV E\ ULFK IDUPLQJ FRPPXQLWLHV ZLWK D FRQVHTXHQFH RI PDNLQJ WKH ODWWHU WR
GHYHORS WKHLU GHIHQVHV WKH\ FRXOG QRW DIIRUG WR IOHH OLNH XU EDQGHUV VXSSRVHGO\ GLG ZKHQ DWWDFNHG DV PRVW
RI WKH WKLQJV WKHVH VHGHQWDU\ SHRSOH YDOXHG ZHUH FRQQHFWHG ZLWK WKH ODQG WKH\ OLYHG 7KRVH ZKR VXFFHHGHG
LQ EXLOGLQJ XS D IDLUO\ PLJKW\ GHIHQVLYH PLOLWDU\ IRUFHV E\ XWLOL]LQJ WKHLU DFFXPXODWHG ZHDOWK PLJKW WKHQ
KDYH WDNHQ D QHZ YLHZ RI WKHLU PLOLWDU\ SRZHU RIIHQVLYH DV ZHOO DV GHIHQVLYH :K\ QRW LQYDGH QHLJKERULQJ
FRPPXQLWLHV RI OHVVHU PLOLWDU\ SRZHU DQG PDNH D TXLFN DFTXLVLWLRQ RI PRUH ZHDOWK" 7KLV SRVVLELOLW\ PLJKW
WKHQ KDYH VWLPXODWHG WKH QHLJKERULQJ FRPPXQLWLHV WR IRUP DQ DOOLDQFH IRU D MRLQW GHIHQVH $ FKDLQ UHDFWLRQ
ZDV WKXV WULJJHUHG DQG WKH KXPDQ FLYLOL]DWLRQ KDG EHHQ VWXFN ZLWKLQ WKH GHDGO\ WUDS RI HQGOHVV ZDUULQJ HYHU
VLQFH
7KLV SHUVLVWHQW ZDUULQJ VKRXOG KDYH FUHDWHG D VWURQJ VHOHFWLRQ SUHVVXUH IRU FRPPXQLWLHV
WKDQ IRU
LQGLYLGXDOV DQG WKH DJHQW WKDW UHVSRQGHG WR WKLV VHOHFWLRQ SUHVVXUH ZDV DUWLILFLDO HYROXWLRQ LQVWHDG RI
ELRORJLFDO HYROXWLRQ 7KH ZRUNLQJV RI DUWLILFLDO HYROXWLRQ PD\ EH YLHZHG LQ WKH IROORZLQJ ZD\ 1RWH ILUVW
WKDW WKH SHUVLVWHQW ZDUULQJ DW WKH 7LPHV RI :DU GRHV QRW LPSO\ WKDW FRPPXQLWLHV ZHUH FRQVWDQWO\ HQJDJHG LQ
DFWXDO ILJKWLQJ $FWXDO ILJKWLQJ LV JHQHUDOO\ D ZDVWLQJ DFWLYLW\ 6R XQOHVV WKH H[SHFWHG JDLQ E\ VXFFHVVIXOO\
ZLQQLQJ D PDMRU EDWWOH ZDV KLJKHU WKDQ WKH H[SHFWHG FRVW DQG ORVV WKH\ ZRXOG UDWKHU KDYH SUHIHUUHG WR NHHS
D UDWKHU XQHDV\ VWDOHPDWH DPRQJ WKHPVHOYHV RU HYHQ DQ XQHDV\ DOOLDQFH :KHWKHU LQ SHDFH RU DW ZDU WKH
7LPHV RI :DU ZDV WKH 7LPHV RI :DU EHFDXVH WKH SRVVLELOLW\ RI ZDUV VKRXOG KDYH EHHQ DOZD\V LQ WKH IRUHIURQW
RI WKH PLQGV RI SHRSOH HVSHFLDOO\ RI WKRVH RI WKH UXOLQJ ERGLHV RI FRPPXQLWLHV
6R ZKDW HDFK RI WKHP WKH UXOLQJ ERGLHV ZDV PRVW VWURQJO\ ZRUULHG VKRXOG KDYH EHHQ WR VKRZ
ZHDNQHVV
LQ WKHLU FRPPXQLWLHV FRDOLWLRQDO SRZHU ZKLFK ZRXOG KDYH LQYLWHG LQYDVLRQV DQG LQYDVLRQV ZRXOG
FDXVH D IXUWKHU ZHDNHQLQJ RI WKHLU FRDOLWLRQDO SRZHU HYHQ LI WKH\ FRXOG GHIHQG WKHPVHOYHV 7KH PRVW SRSXODU
FRXUVH WKH\ WRRN IRU QRW VKRZLQJ ZHDNQHVV ZRXOG KDYH EHHQ WR LPLWDWH WKH SULQFLSOHV HPSOR\HG E\ UHODWLYHO\
VWURQJHU RQHV DPRQJ WKH FRPSHWLQJ FRPPXQLWLHV
PXWDWLYH
PXWDQGLV
WKH SULQFLSOHV LQ RUJDQL]LQJ WKHLU
FRPPXQLWLHV WKHLU DUPLHV DUPRULHV FRPEDW WDFWLFV DV ZHOO DV LQ PRUH FLYLF VLGHV RI WKHLU DGPLQLVWUDWLRQ WR
PDNH WKHLU FRPPXQLWLHV DV UHVRXUFHIXO DV SRVVLEOH 6LQFH DUWLILFLDO HYROXWLRQ LV PRUH /DPDUFNLDQ WKDQ
'DUZLQLDQ WKLV LPLWDWLRQ FRXOG KDYH EHHQ FDUULHG RXW UHODWLYHO\ HDVLO\ RIWHQ PDNLQJ QHLJKERULQJ
FRPPXQLWLHV FORVHO\ UHVHPEOH HDFK RWKHU ERWK LQ WKHLU VRFLHWDO VWUXFWXUH DQG WKH PLOLWDU\ PLJKW
7KLV GRHV QRW PHDQ KRZHYHU WKDW WKH\ ZHUH DOVR LQQRYDWLYH LQ HPSOR\LQJ QHZ SURGXFWV RI DUWLILFLDO
HYROXWLRQ 0RVW RI WKHP ZHUH UDWKHU WUDGLWLRQDOLVWV PRVW RI WKH WLPH UHOXFWDQW LQ LQWURGXFLQJ FKDQJHV WKH\
PLJKW KDYH KHVLWDWHG HYHQ ZKHQ D QHZ LGHD GHVSLWH RI LWV DSSDUHQW DGYDQWDJH ZKHWKHU WKH LGHD ZDV DERXW D
PDWHULDO WRRO RU D QHZ FRPEDW WDFWLFV EHFDXVH RI WKH SRWHQWLDO GHVWDELOL]DWLRQ HIIHFW WKH FKDQJH PLJKW
LQWURGXFH LQWR WKH HVWDEOLVKHG ZD\ RI WKHLU FRPPXQLW\ XSRQ ZKLFK WKHLU HQHP\ PLJKW SRXQFH
,Q VSLWH RI WKLV JHQHUDO UHOXFWDQFH WR FKDQJHV DUWLILFLDO HYROXWLRQ GLG NHHS LWV VWHDG\ SURJUHVV GXULQJ
WKH 7LPHV RI :DU DQG ZKHQ LW RFFDVLRQDOO\ EURXJKW D ZHDOWK DQG SRZHU WR VRPH FRPPXQLW\ VXFK D VXFFHVV
ZRXOG YHU\ TXLFNO\ SLFNHG XS DQG HPXODWHG E\ RWKHU FRPPXQLWLHV WR DYRLG EHDWHQ GRZQ E\ WKH VXFFHVVIXO
FRPPXQLW\ 6R LW FDQQRW EH GHQLHG WKDW HYHQ FRQVHUYDWLYH UXOLQJ ERGLHV RI FRPPXQLWLHV LQ WKH 7LPHV RI :DU
KDG WKHLU IXQFWLRQ LQ WKH SURJUHVV RI DUWLILFLDO HYROXWLRQ WKH IXQFWLRQ RI SOD\LQJ WKH UROH RI D UDWFKHW LQ WKH
SURFHVV WR PDNH LW JR RQO\ RQH ZD\
/DUJH VWDWXV YDULDQFH FRPPXQLWLHV LQ WKH 7LPHV RI :DU
7KH FRPPRQ GHQRPLQDWRU RI YLUWXDOO\ DOO PDMRU FRPPXQLWLHV LQ WKH 7LPHV RI :DU ZDV WKDW WKHLU
UXOLQJ ERGLHV WULHG KDUG WR PDLQWDLQ WKH VWDWXV YDULDQFH ZLWKLQ WKHLU FRPPXQLWLHV ODUJH DQG WR PDNH LW HYHQ
ODUJHU LI LW ZDV SRVVLEOH WR GR VR ZLWKRXW GLVWXUELQJ WKH FXUUHQW RUGHU 7KH PHULW RI KDYLQJ D ODUJH VWDWXV
YDULDQFH ZLWKLQ D FRPPXQLW\ LQ WKH 7LPHV RI :DU REYLRXVO\ FDPH IURP WKH QHHG RI TXLFN RUJDQL]DWLRQ DQG
TXLFN DFWLRQV RI YDULRXV NLQGV RI JURXS DFWLRQV HVSHFLDOO\ PLOLWDU\ DQG D ODUJH VWDWXV YDULDQFH KHOSHG REWDLQ
WKHVH SURSHUWLHV RI JURXS DFWLRQV VLQFH WKH XUJH V\VWHP JXDUDQWHHG WKDW SHRSOH ZRXOG REH\ FRPPDQGV
LVVXHG IURP WKH KLJKHU VWDWXV SHUVRQV DOPRVW DXWRPDWLFDOO\
1RW WKDW YLFWRU\ LQ LQWHUFRPPXQLW\ FRQIOLFWV ZDV QRW ZDUUDQWHG E\ D KLJK VWDWXV YDULDQFH DORQH
:KDW FRXQWHG PRVW LQ DFKLHYLQJ YLFWRU\ ZDV DOZD\V WKH FRDOLWLRQDO SRZHU LWVHOI DQG WKH FRDOLWLRQDO SRZHU RI
D FRPPXQLW\ GHSHQGHG XSRQ PDQ\ IDFWRUV VXFK DV WKH PDWHULDO UHVRXUFHV DQG KXPDQ UHVRXUFHV WKH
FRPPXQLW\ KDG UHFRXUVH WR %XW DV PHQWLRQHG HDUOLHU DGMDFHQW FRPPXQLWLHV RIWHQ IRXQG WKHPVHOYHV EHLQJ
QHDUO\ EDODQFHG LQ WKHVH DVSHFWV DQG ZKHQ RWKHU WKLQJV ZHUH QHDUO\ HTXDO FRPPDQGV LQ KLJK VWDWXV KHOSHG
LQ PDQ\ ZD\V WR WXUQ WKH WLGH LQ WKHLU IDYRU FRQVLGHU WKH DGYDQWDJH RI KDYLQJ VROGLHUV ZKR EHOLHYHG D
PLJKW\ VRPHWLPHV DOPRVW GLYLQH V\PERO RI DXWKRULW\ EHKLQG WKHLU EDFN
,W KDV WR HPSKDVL]HG KHUH WKDW LW ZRXOG KDYH EHHQ QR HDV\ WDVN IRU WKH UXOLQJ ERG\ RI WKH 7LPHV RI
:DU FRPPXQLWLHV WR MXVW PDLQWDLQ D YHU\ KLJK SHDN VWDWXV RI WKH UXOHU ZKLFK ZDV DWWDLQDEOH RQO\ E\ NHHSLQJ
WKH VWDWXV RI WKH PDMRULW\ RI FRPPXQLW\ PHPEHUV UDWKHU ORZ ,Q WKH ILUVW SODFH WKHUH KDG WR EH D JHQHUDO
SXEOLF VXSSRUW IRU KDYLQJ VXFK DQ H[WUHPH IRUP RI SLQQDFOHV S\UDPLGDO VWDWXV FRQVWLWXWLRQ 2QO\ WKH
SUHYDLOLQJ FRQGLWLRQV LQ WKH 7LPH RI :DU FRXOG KDYH HQDEOHG IRU WKH WR SXEOLF VZDOORZ VXFK D FKRLFH RI
FRPPXQLW\ VWUXFWXUH EHFDXVH WKH VXUYLYDO RI WKHLU FRPPXQLW\ ZDV WKH VXUYLYDO RI WKHPVHOYHV DQG SHRSOH
ZRXOG QRW HYHQ EHHQ DZDUH RI WKH FKRLFH VHHLQJ ODUJH VWDWXV YDULDQFH KRVWLOH FRPPXQLWLHV DOO DURXQG WKHP
2QFH D UXOLQJ ERG\ VXFFHHGHG LQ EXLOGLQJ HQRXJK KLJK VWDWXV IRU WKHPVHOYHV WKH\ ZRXOG KDYH
FRQFHUQHG PRVW VHULRXVO\ ZLWK KRZ WR SUHVHUYH WKH JDLQHG KLJK VWDWXV RI WKHLUV )RU WKH SXUSRVH WKH\ VKRXOG
KDYH ZHDWKHUHG IUHTXHQWO\ RFFXUUHG FULVHV SRVHG E\ WKH GHPLVH RI VRPH LPSRUWDQW PHPEHU RI WKH UXOLQJ
ERG\ HVSHFLDOO\ WKH UXOHU ,I WKH UHPDLQLQJ SRZHUIXO PHPEHUV RI WKH UXOLQJ ERG\ VWDUWHG YLFLRXV FRQIOLFWV
DERXW WKH VXFFHVVLRQ ZRXOG FRQVLGHUDEO\ KDUP WKH LQWHJULW\ RI WKH UXOLQJ ERG\ DQG FRQVHTXHQWO\ RI WKH
FRPPXQLW\ D ZHDNQHVV ZKLFK QHLJKERULQJ FRPPXQLWLHV ZRXOG QRW PLVV WR WDNH DQ LPPHGLDWH DGYDQWDJH RI
7KH
KHUHGLWDU\
ULJKWV
RI VXFFHVVLRQ ZDV D VROXWLRQ ZLGHO\ HPSOR\HG E\ WKH 7LPHV RI :DU
FRPPXQLWLHV VWLSXODWLQJ E\ UXOHV WKDW RQO\ NLQ RI WKH GLVHDVHG UXOHU KDG WKH ULJKWV WR VXFFHHG DQG WKH FORVHU
WKH NLQVKLS WKH KLJKHU WKH ULJKWV (YHQ WKRXJK WKLV GLG QRW FRPSOHWHO\ HOLPLQDWH VXFFHVVLRQ FRQIOLFWV LW DW
OHDVW FRQWDLQHG WKH OLVW RI VXFFHVVRU FDQGLGDWHV ZLWKLQ WKH UHODWLYHO\ VPDOO PHPEHUV RI WKH OR\DO IDPLO\ 7KH
UHPDLQLQJ XQFHUWDLQW\ FRXOG DOVR EH UHPRYHG E\ DQ DGGLWLRQDO UXOH VSHFLI\LQJ WKH SULRULW\ RUGHU IRU WKH KHLU
OLNH WKH RQH EHJLQQLQJ ZLWK WKH HOGHVW VRQ DQG VR RQ 1RWH KRZHYHU WKDW E\ PDNLQJ WKH UXOHV RI VXFFHVVLRQ
PRUH UHVWULFWLYH RQH LV DOVR LQFUHDVLQJ WKH ULVN RI HQGLQJ XS ZLWK D YHU\ XQVXLWDEOH UXOHU 7KH DFWXDO
VXFFHVVLRQ UXOHV ZRXOG WKHUHIRUH KDYH EHHQ GHWHUPLQHG E\ WKH EDODQFH RI WZR NLQGV RI ULVNV WKH ULVN RI
KDYLQJ VXFFHVVLRQ WURXEOHV DQG WKH ULVN RI KDYLQJ DQ XQVXLWDEOH KHLU 2QFH WKH UXOHV ZHUH VHW KRZHYHU ODWHU
JHQHUDWLRQV LQ WKH 7LPHV RI :DU JHQHUDOO\ NHSW WKHP DV D SDUW RI WKHLU WUDGLWLRQ ZKLFK RIWHQ OHG WKHP WR D
FULVLV RI RQH W\SH RU DQRWKHU
6RFLDO FODVVHV DQG VWDWXV V\PEROV
&RQILQLQJ E\ UXOHV WKH VXFFHVVRU FDQGLGDWHV RI WKH UXOHU
V SRVLWLRQ ZLWKLQ WKH FORVH NLQ RI WKH
GHFHDVHG ZRXOG JLYH HDFK RI WKHVH NLQ D VLJQLILFDQW FRQWURO SRZHU WKH NLQG RI SRZHU , KDYH EHHQ FDOOLQJ WKH
OLQHDJH SRZHU 6LQFH D KLJK VWDWXV JHQHUDOO\ DFFRPSDQLHG VXFK D SRZHU WKH VXFFHVVLRQ UXOHV SUDFWLFDOO\
UHQGHUHG VWDWXV DQ LQKHULWDEOH FRPPRGLW\ 2QFH VXFK DQ LQKHULWDQFH ZDV DOORZHG WR UXOHU
V NLQ WKHUH ZDV QR
UHDVRQ QRW WR DOORZ WKH VDPH SUDFWLFH WR OHVVHU SRVLWLRQV LQ WKH FRPPXQLW\ EHVWRZLQJ KLJKERUQ FKLOGUHQ
KLJK VWDWXV DV WKHLU EORRG ULJKWV DV ZHOO 7KHQ DOPRVW DV D QDWXUDO FRQVHTXHQFH RI VXFK D SUDFWLFH D KLJK
ERUQ PDUULHG ZLWK D KLJKERUQ HQWDLOLQJ VWDWXVZLVH KRUL]RQWDOO\ OD\HUHG VWUXFWXUH WR EH EXLOW LQWR D
FRPPXQLW\ PDGH RI
VRFLDO FODVVHV
WKH WRS OD\HU RI ZKLFK PD\ EH OHJLWLPDWHO\ FDOOHG WKH
WKH VRFLDO FODVV V\VWHP IDFLOLWDWHG WKH SUHVHUYDWLRQ RI
VWDWXV
TXR
UXOLQJ FODVV
6LQFH
VRFLDO V\VWHP LW DSSHDOHG D UDWKHU
FRQVHUYDWLYHO\ LQFOLQHG DGPLQLVWUDWLRQ ZKLFK HQIRUFHG LW UDWKHU YLJRURXVO\ RQO\ KLJKERUQV FRXOG NHHS D
KLJK VWDWXV ORZERUQV ZHUH QRW WR DVSLUH WR DFKLHYH KLJK VWDWXV DQG PDUULDJHV ZHUH JHQHUDOO\ FRQILQHG
ZLWKLQ WKH PHPEHUV RI WKH VDPH FODVV
$V PHQWLRQHG DERYH LQ UHODWLRQ WR VXFFHVVLRQ UXOHV DOO WKHVH PHDVXUHV RI FRQVHUYLQJ
VWDWXV TXR
WKURXJK LQKHULWDQFH UXOHV FRQWDLQ WKH ULVN RI SRRU XWLOL]DWLRQ RI KXPDQ UHVRXUFHV 7KLV OLDELOLW\ LV TXLWH
REYLRXV ZLWK VWULFWO\ HQIRUFHG VRFLDO FODVV V\VWHP 1RW RQO\ WKHUH LV QR JXDUDQWHH WKDW RIIVSULQJV RI JUHDW
SHUVRQV DUH DOVR JUHDW DQG SRWHQWLDO SRZHUV DQG WDOHQWV RI ORZ ERUQV ZLOO EH ZDVWHG ZLWKRXW EHLQJ XVHG IRU
WKH EHQHILW RI WKH FRPPXQLW\ 6R WKH VRFLDO FODVV V\VWHP XVXDOO\ SURYLGHG VRPH ORRSKROHV WKURXJK ZKLFK
VRPH H[FHSWLRQDO WDOHQWV LQ ORZHU FODVVHV FRXOG EH VFRRSHG XS WR D KLJKHU FODVV DQG LI WKDW ZDV QRW HQRXJK
HVSHFLDOO\ XQGHU FULVHV RI WKH FRPPXQLW\ GUDVWLF VKXIIOLQJ RI FODVV PHPEHUV FRXOG KDYH WDNHQ SODFH HLWKHU
E\ DQ LQWHUQDOO\ LQVWLJDWHG FKDQJH RI UHJLPH RU XQGHU RFFXSDWLRQ RI DQ H[WHUQDO IRUFH
$W WKLV MXQFWXUH OHW PH SD\ DWWHQWLRQ WR WKH LVVXH RI
VWDWXV V\PEROV
6WDWXV V\PEROV FRXOG KDYH
H[LVWHG HYHQ LQ WKH XU EDQG WLPHV EXW WKH\ EHJDQ WR SOD\ LPSRUWDQW VRFLDO IXQFWLRQV ZKHQ FRPPXQLWLHV
JUHZ EH\RQG WKH VL]H OLPLW RI XUEDQGV ZKHQ PDQ\ RI FRPPXQLW\ PHPEHUV EHFDPH PXWXDO VWUDQJHUV 7KH
VRFLDO VWDWXV V\VWHP DQG WKH SD\LQJUHVSHFW XUJH IXQFWLRQV XQGHUSLQQLQJ LW FRXOG QRW RSHUDWH SURSHUO\ LI RQH
GLG QRW UHFRJQL]H WKH VWDWXV RI WKH SHUVRQ RQH PHW 6R LW ZDV QDWXUDO WKDW SHRSOH WHQGHG WR FDUU\ DURXQG NLQGV
RI REMHFWV WKDW ZRUNHG DV VWDWXV LGHQWLILFDWLRQ DLGV
7KH QHHG IRU VWDWXV V\PEROV ZRXOG KDYH LQWHQVLILHG ZKHQ WKH VRFLDO FODVV V\VWHP ZDV LPSOHPHQWHG
DV ZLWKRXW VWDWXV V\PEROV WKHUH ZRXOG EH OLWWOH IRU GLVWLQJXLVKLQJ KLJKERUQV ZKR JRW WKHLU KLJK VWDWXV E\
LQKHULWDQFH
6WDWXV V\PEROV DUH QRW DOZD\V REMHFWV RQH FDUULHV %XW SHUVRQDO DGRUQPHQWV HVSHFLDOO\ WKRVH PDGH
RI SUHFLRXV PHWDOV DQG VWRQHV DUH LGHDO IRU KLJKERUQV VLQFH WKH\ DUH LQDFFHVVLEOH WR SRRU FRPPRQHUV 6R DUH
ULFK DQG HODERUDWHO\ HPEURLGHUHG JDUPHQWV PDGH RI SUHFLRXV IDEULF ,I D SHUVRQ LQ ROG WLPHV GUHVVHG XS WKDW
ZD\ ULGLQJ D PDJQLILFHQW KRUVH RU D SDODQTXLQ DFFRPSDQLHG E\ D IHZ VWRXW ZDUULRU JXDUGV HQWHULQJ RU
FRPLQJ RXW D JRUJHRXV PDQVLRQ WKHUH ZRXOG KDYH EHHQ QR H[FXVH IRU DQ\ FRPPRQHU
V QHJOLJHQFH LQ SD\LQJ
D SURSHU UHVSHFW WR WKH SHUVRQ
7KHUH DUH RWKHU W\SHV RI VWDWXV V\PEROV WKDQ SHUVRQDO DGRUQPHQWV ZKLFK DUH RIWHQ PRUH HIIHFWLYH
EHFDXVH WKH\ DUH KDUG WR IDNH VSHFLDO ZD\V RI FRPSRVLQJ RQH
V SRVWXUH DQG EHDULQJ VSHFLDO VW\OHV RI VSHHFK
VRSKLVWLFDWLRQV RI YDULRXV NLQGV DQG VR RQ DQ\ SURSHUWLHV ZRXOG KDYH ZRUNHG DV D V\PERO RI KLJKERUQ LI
DFTXLULQJ VXFK SURSHUWLHV WRRN D ORQJ WLPH DQG VSHFLDO HQYLURQPHQW ZKLFK RQO\ KLJKERUQV FRXOG DIIRUG
$V , VKDOO GLVFXVV ODWHU LW LV WKH FRQVSLFXRXV DEVHQFH RI WKHVH VWDWXV V\PEROV WRGD\ WKDW WHOOV PRVW
HORTXHQWO\ KRZ ORZ WKH VWDWXV YDULDQFHV DUH LQ WKH FRQWHPSRUDU\ VRFLHWLHV
$Q DGPLVVLYHO\ IDLU DOORFDWLRQ VFKHPH SUDFWLFHG LQ KLHUDUFKLFDO DUWLILFLDO FRDOLWLRQV
/HW PH WXUQ RXU DWWHQWLRQ KHUH EDFN WR DUWLILFLDO FRDOLWLRQV RQFH PRUH $V DUWLILFLDO FRDOLWLRQV DUH
H[WHQGHG IRUPV RI QDWXUDO FRDOLWLRQV WKH VSLULW RI WKH SOHGJHV RI WUXVWZRUWKLQHVV DQG IDLUQHVV WKDW ELQG WKH
PHPEHUV RI WKH ODWWHU VKRXOG EH WUDQVIHUUHG WR WKH IRUPHU DV ZHOO DW OHDVW WR VRPH H[WHQW VLQFH ZLWKRXW LW
DUWLILFLDO FRDOLWLRQV GR QRW GHVHUYH WKH QDPH RI FRDOLWLRQV
/HW PH EHJLQ E\ GLVFXVVLQJ WKH SULQFLSOH RI IDLUQHVV DSSOLHG LQ WKH FRQWH[W RI DUWLILFLDO FRDOLWLRQV
VSRWOLJKWLQJ PDLQO\ KRZ WKH FRDOLWLRQDO MRLQW JDLQ LV GLVWULEXWHG RYHU LWV PHPEHUV $V PHQWLRQHG LQ WKH
&KDSWHU IDLU GLVWULEXWLRQ LV RIWHQ D VHULRXV LVVXH HYHQ RI D QDWXUDO FRDOLWLRQ DQG LW LV QR ZRQGHU WKDW LW KDV
UHPDLQHG WR EH D GLIILFXOW LVVXH ZLWK DUWLILFLDO FRDOLWLRQV
&RQVLGHULQJ WKH QDWXUH RI WKH LVVXH DQG WKH ODFN RI DQ\ H[SOLFLWO\ VWDWHG SULQFLSOH RI IDLU GLVWULEXWLRQ
LW LV UDWKHU VXUSULVLQJ WKDW DUWLILFLDO FRDOLWLRQV UDQJLQJ ZLGHO\ LQ WKHLU W\SHV IURP PLOLWDU\ RUJDQL]DWLRQV DW WKH
7LPHV RI :DU WR PRGHUQ EXVLQHVV FRUSRUDWLRQV KDYH PDQDJHG WKHLU GLVWULEXWLRQ SUREOHPV ZLWKRXW FDXVLQJ
WRR PXFK GLVWXUEDQFHV DQG SURWHVWV IDU PRUH RIWHQ WKDQ QRW 7KLV PHDQV WKDW WKHUH H[LVWV D SULQFLSOH RI IDLU
DOORFDWLRQ ZKLFK WKH KHDGV RI DUWLILFLDO FRDOLWLRQV LQWXLWLYHO\ IROORZHG DQG WKHUH VKRXOG KDYH EHHQ D UDWKHU
ODUJH PDUJLQ LQ ZKDW SHRSOH EHOLHYHG DV D WROHUDEO\ IDLU DOORFDWLRQ DV ORQJ DV LW GLG QRW YLRODWH D FHUWDLQ VHW RI
FRQGLWLRQV 7KH SULQFLSOH , DP VXJJHVWLQJ WR EH LW PD\ EH FDOOHG D
/HW PH VWDUW P\ DUJXPHQW RQ WKH ZHOONQRZQ $GDPV
V
PRGLILDEOH VWDWXVGHSHQGHQW DOORFDWLRQ
HTXLW\ SULQFLSOH
7KH HVVHQFH RI KLV
DUJXPHQW PD\ EH VWDWHG LQ WKH WHUPV , DP FXUUHQWO\ XVLQJ LQ WKH IROORZLQJ ZD\ $ PHPEHU RI DQ DUWLILFLDO
$ ZRUG PD\ EH DGGHG KHUH DERXW SURIHVVLRQ V\PEROV REMHFWV FDUULHG E\ SHRSOH RI D FHUWDLQ SURIHVVLRQ VSHFLDOO\
GHVLJQHG JDUPHQWV OLNH XQLIRUPV VZRUGV FDUULHG E\ SURIHVVLRQDO ZDUULRUV DQG VR RQ 7KHVH SURIHVVLRQ V\PEROV RIWHQ
GRXEOHG DV VWDWXV V\PEROV DV SURIHVVLRQDO VXEFRPPXQLWLHV WHQGHG WR OD\ ZLWKLQ D FHUWDLQ OD\HU RI VRFLDO FODVV :KHQ
VXFK FRPSDUWPHQWDOL]DWLRQ RI FRPPXQLW\ VWUXFWXUH ZHQW YHU\ IDU PDNLQJ HYHQ RQH
V SURIHVVLRQ DQ LQKHULWDEOH
FRPPRGLW\ D VRFLDO V\VWHP OLNH ,QGLDQ FDVWH V\VWHP ZRXOG UHVXOW ZKLFK LV KDUG WR VKDNH RQFH HVWDEOLVKHG
FRDOLWLRQ SHUVRQ IHHO KLV RU KHU VKDUH RI WKH FRDOLWLRQ
V JDLQ RXWFRPH
LQ KLV WHUPLQRORJ\ HTXLWDEOH RU IDLU
LI WKH SHUVRQ SHUFHLYHV WKDW WKH LW LV
SURSRUWLRQDO
WR WKH SHUVRQ
V LQSXW
FRQWULEXWLRQ WR WKH FRDOLWLRQDO
HQGHDYRU LI WKH\ DUH FRPSDUHG ZLWK WKH RWKHUV
LQSXWV DQG WKH VKDUHV WKH\ DUH JHWWLQJ $GDPV FDXWLRQV WKDW
KLV VWDWHPHQWV DUH FRQILQHG WR KRZ RQH IHHOV DERXW HTXLW\ DQG OLWWOH PRUH
/HW PH YHQWXUH D OLWWOH PRUH DQG FRQVLGHU DQ DOORFDWLRQ VFKHPH WKDW PRVW KLHUDUFKLFDOO\ RUJDQL]HG
DUWLILFLDO FRDOLWLRQV KDYH XWLOL]HG WKH RQH ZKRVH IDLUQHVV LV UHDVRQDEOH HQRXJK QRW WR HYRNH WRR PXFK
LQHTXLW\ IHHOLQJV DQG DFFRPSDQ\LQJ UHVHQWPHQWV DPRQJ WKH PHPEHUV RI D FRDOLWLRQ 1RWH ILUVW WKDW WKHUH LV
QR RSWLPDO VROXWLRQ WKDW VDWLVILHV HYHU\ERG\ DV FRQWULEXWLRQV PDGH E\ PHPEHUV LQ GLIIHUHQW GHSDUWPHQWV RI
WKH FRDOLWLRQDO RSHUDWLRQ DUH EDVLFDOO\ LQFRPPHQVXUDEOH H[FHSW IRU VRPH RXWVWDQGLQJ FRQWULEXWLRQV DQG
RXWVWDQGLQJ
GLVFRQWULEXWLRQV
/HW PH ILUVW DGGUHVV RUGLQDU\ FRQWULEXWLRQV 0RVW RI WKH ZRUNV GRQH E\ PHPEHUV RI D ODUJH DUWLILFLDO
FRDOLWLRQ DUH RUGLQDU\ DQG WKHUH DUH FROOHDJXHV GRLQJ VLPLODUO\ RUGLQDU\ ZRUNV 6LQFH WKRVH ZRUNLQJ LQ WKH
VDPH GHSDUWPHQW RQ WKH VDPH OHYHO RI KLHUDUFK\ XVXDOO\ IRUP D FLUFOH RI PXWXDO VRFLDO FRPSDULVRQV DQ\
FRQVSLFXRXVO\ XQHTXDO VKDUH GLVWULEXWLRQ RYHU WKHP ZLOO DURXVH DFXWH PLVJLYLQJV LQ WKRVH XQGHUSDLG
)HHOLQJV DUH LPSRUWDQW %XW VLQFH WKHUH FRXOG EH QR DOORFDWLRQ VFKHPH WKDW VDWLVILHV HYHU\ERG\
V IHHOLQJV
ZKDW WKH DGPLQLVWUDWLRQ RI D KLHUDUFKLFDO W\SH DUWLILFLDO FRDOLWLRQ VKRXOG WDNH D VSHFLDO FDUH LV WR DYRLG DFXWH
PLVJLYLQJV WKH NLQG RI PLVJLYLQJV ZKLFK ZLOO FHUWDLQO\ WDNH SODFH ZKHQ FROOHDJXHV RI WKH VDPH GHSDUWPHQW
DUH UHZDUGHG XQHTXDOO\ GHVSLWH WKH REYLRXV DSSUR[LPDWH HTXDOLW\ RI WKHLU FRQWULEXWLRQV WR WKH FRDOLWLRQDO
HIIRUW 1RWH WKDW WKLV NLQG RI LQHTXLWLHV DUH HDVLO\ GHWHFWHG EHFDXVH FROOHDJXHV LQ WKH VDPH GHSDUWPHQW
XVXDOO\ EHORQJ WR WKH VDPH VRFLDO FRPSDULVRQ FLUFOH 6R WKH ERWWRP OLQH RI D IDLU DOORFDWLRQ LV WR PDLQWDLQ WKH
EDVLF HTXDOLW\ LQ DOORFDWLRQ IRU WKRVH HQJDJHG LQ VLPLODU ZRUNV LQ VLPLODU ZD\V HLWKHU WKH SHUVRQ UHZDUG EH D
FOHUN LQ D FRQWHPSRUDU\ FRUSRUDWLRQ ZKR SURFHVV SDSHUV RU D VROGLHU ILJKWLQJ DW D EDWWOHILHOG LQ WKH 7LPHV RI
:DU
7KH QH[W LVVXH RI IDLU DOORFDWLRQ LV DERXW VKDUHV WR EH JLYHQ WR WKH SHUVRQV DW GLIIHUHQW SRVWV 7KRXJK
FRQWULEXWLRQV GRQH E\ SHUVRQ LQ GLIIHUHQW SRVWV DUH LQFRPPHQVXUDEOH LW LV QDWXUDO WR DVVXPH WKDW D SHUVRQ DW
D KLJKHU SRVW LQ WKH FRDOLWLRQDO KLHUDUFK\ FRQWULEXWHV WR WKH FRDOLWLRQDO HQGHDYRU WKDW PXFK PRUH WKDQ D
SHUVRQ DW D ORZHU SRVW VLQFH WKH IRUPHU FDQ ZLHOG D JUHDWHU FRDOLWLRQDO SRZHU WKDQ WKH ODWWHU 7R EH H[DFW
WKHVH FRDOLWLRQDO SRZHUV YHVWHG LQ D SHUVRQ DW D FHUWDLQ SRVW ZLOO EH DSSUDLVHG DV WKH ORFDO VWDWXV RI WKH SHUVRQ
LQ WKH VXEFRPPXQLW\ RI WKH FRDOLWLRQ DQ DOORFDWLRQ VFKHPH WKDW GLVWULEXWHV WKH FRDOLWLRQDO MRLQW JDLQ PRUH RU
OHVV SURSRUWLRQDOO\ WR WKH ORFDO VWDWXV RI HDFK SHUVRQ ZLWKLQ WKH FRDOLWLRQ PD\ EH GHIHQGDEOH DV HTXLWDEOH
$ FRUROODU\ WR WKLV UHDVRQLQJ LV DERXW WKH DOORFDWLRQ RI WKH FRDOLWLRQDO MRLQW ORVV $UWLILFLDO FRDOLWLRQV
DUH IRUPHG WR PDNH JDLQV E\ WKH XVH RI WKHLU FRDOLWLRQDO SRZHUV 6R WKH\ ZLOO EH GLVEDQGHG LI WKH\ IDLO WR GR
VR %XW HYHQ D FRDOLWLRQ ZKLFK PDNHV JDLQV PRVW RI WKH WLPH ZLOO H[SHULHQFH RFFDVLRQDO VHWEDFN DQG LI WKHUH
LV QR SDUWLFXODU SHUVRQ WR SODFH WKH EODPH RQ WKH UHVSRQVLELOLW\ RI WKH IDLOXUH VKRXOG IDOO PRUH KHDYLO\ XSRQ
KLJKHU SRVWHG SHUVRQ WKDQ ORZHU IRU WKH VDPH UHDVRQ RI WKH JUHDWHU SRZHU RI WKH IRUPHU $QG LI SHUVRQV LQ
KLJKHU SRVWV WU\ WR HYDGH WDNLQJ WKH SURSHU UHVSRQVLELOLW\ WKURXJK WKH XVH RI WKHLU SRZHUV RI LQIOXHQFH LW
ZRXOG FHUWDLQO\ EH SHUFHLYHG DV XQIDLU E\ WKH RWKHUV
1RZ OHW PH FRPH WR RXWVWDQGLQJ FRQWULEXWLRQV DQG GLVFRQWULEXWLRQV $Q\ RXWVWDQGLQJ FRQWULEXWLRQ
DV PDQ\ RWKHUV FHUWDLQO\ VHH DV VXFK KDV WR EH UHZDUGHG VSHFLDOO\ PDLQO\ EHFDXVH LI RWKHUZLVH LW ZLOO EH
SHUFHLYHG DV DQ XQIDLU WUHDWPHQW E\ PDQ\ QRW MXVW E\ WKH FRQWULEXWRU KLP RU KHUVHOI DQG ZLOO ORZHU WKHLU
PRUDOH 7KH UHZDUG PD\ EH RI D IRUP RI VSHFLDO ERQXV EXW PRUH LPSRUWDQW IRUP RI UHZDUG ZLOO EH
SURPRWLRQ WR D KLJKHU SRVW LQ WKH FRDOLWLRQDO KLHUDUFK\ $ KLJKHU SRVW PHDQV D KLJKHU ORFDO VWDWXV PHDQLQJ D
KLJKHU DQG PRUH SHUPDQHQW LQFUHDVH LQ RQH
V LQFRPH :KHQ WKHUH LV QR DYDLODEOH KLJKHU SRVW LQ YDFDQF\ WKH
RXWVWDQGLQJ FRQWULEXWRU DOZD\V UHFHLYHV D VL]DEOH
PHULW
IRU WKH SHUVRQ
V GHHGV 7KRXJK PHULWV PD\ KDYH QR
FRUSRUHDO IRUP DQG PD\ H[LVW RQO\ LQ WKH SHUVRQ
V UHSXWDWLRQ DQ DFFXPXODWHG PHULW ZLOO PDNH WKH SHUVRQ
SULRULW\ LQ SURPRWLRQ ZKHQ FKDQFH DULVHV 1RWH WKDW WKLV PHULWVWDWXV OLQN JLYHV D PRUH VROLG UDWLRQDOH IRU WKH
ORFDOVWDWXV GHSHQGHQW DOORFDWLRQ VFKHPH 1RWH DOVR WKDW WKLV PHULW V\VWHP JRHV ZLWK QLFHO\ ZLWK WKH VWDWXV
DVDQDSSUDLVHG SRZHU RI WKH SHUVRQ WKHRU\ VWDWHG HDUOLHU VLQFH WKH RXWVWDQGLQJ FRQWULEXWLRQ D SHUVRQ PDGH
LV QRWKLQJ EXW D VXFFHVVIXO GHPRQVWUDWLRQ RI WKH SHUVRQ
V SRWHQWLDO SRZHU
$Q RXWVWDQGLQJ GLVFRQWULEXWLRQ RI D SHUVRQ WR FRDOLWLRQDO HQGHDYRU ZLOO DOVR EH SHQDOL]HG
DSSURSULDWHO\ 7KH VHYHULW\ RI WKH SHQDOW\ ZLOO GHSHQG XSRQ WKH QDWXUH RI GLVFRQWULEXWLRQ :KHQ LW LV WDNHQ DV
DQ HYLGHQFH RI LQFRPSHWHQFH WKH SHUVRQ PD\ MXVW EH JLYHQ D GHPHULW E\ GLVFRXQWLQJ WKH SHUVRQ
V
DFFXPXODWHG PHULW RU GHPRWHG IURP WKH FXUUHQW SRVW RU RXVWHG IURP WKH FRDOLWLRQ 7KH SHQDOW\ ZLOO EH
VHYHUHU RIWHQ LPPHGLDWH H[HFXWLRQ LQ WKH 7LPHV RI :DU ZKHQ WKH GLVFRQWULEXWLRQ LV SHUFHLYHG DV HYLGHQFH
RI WKH SHUVRQ
V GLVOR\DOW\ WR WKH FRDOLWLRQ
/R\DOW\
WR WKH FRDOLWLRQ RU WR WKH KHDG RI WKH FRDOLWLRQ LV
REYLRXVO\ WKH DUWLILFLDO YHUVLRQ RI WUXVWZRUWKLQHVV LQ QDWXUDO FRDOLWLRQV 8QOLNH WUXVWZRUWKLQHVV OR\DOW\ LV
RIWHQ QHFHVVDU\ WR EH LQFXOFDWHG LQ WKH PLQG RI DUWLILFLDO FRDOLWLRQ PHPEHUV DV RQH RI LPSRUWDQW PRUDO FRGHV
DQG LWV LQWHQVLW\ RIWHQ SRVLWLYHO\ FRUUHODWHG ZLWK KRZ IDLU RQH EHOLHYHV RQHVHOI EHLQJ WUHDWHG LQ WKH FRDOLWLRQ
6WULFWO\ VSHDNLQJ WKH DUJXPHQWV JLYHQ DERYH DERXW WKH DOORFDWLRQ RI MRLQW JDLQ DSSOLHV RQO\ WR
KLHUDUFKLFDO DUWLILFLDO FRDOLWLRQV +RZ WR GHDO ZLWK DQ RXWVWDQGLQJ FRQWULEXWLRQ RU GLVFRQWULEXWLRQ WR WKH
FRPPXQLW\ UHTXLUHV VRPH DGGLWLRQDO FRQVLGHUDWLRQV DV D FRPPXQLW\ DV VXFK ODFNV KLHUDUFKLFDO VWUXFWXUH
ZLWKRXW SRVWV WR RIIHU RU IRUIHLW %HIRUH JRLQJ LQWR WKDW PDWWHU OHW PH GLVFXVV D OLWWOH DERXW WKH PDMRU SROLWLFDO
V\VWHPV SUDFWLFHG LQ WKH 7LPHV RI :DU
)HXGDOLVWLF NLQJGRPV
/RRNLQJ DW DOO WKH SROLWLFDO V\VWHPV UHDOL]HG GXULQJ WKH 7LPHV RI :DU DW VRPH WLPH DQG LQ VRPH
SODFH WKHUH VHHP WR H[LVW WZR PDMRU FOXVWHUV ZKLFK , VKDOO FDOO
NLQJGRPV
DQG
HPSLUHV
.HHS LQ PLQG WKDW WKH
WHUPLQRORJ\ HPSOR\HG LQ WKLV VXEVHFWLRQ LV P\ RZQ DQG GRHV QRW FRUUHVSRQG WR PRUH ULJRURXVO\ GHILQHG
WHUPLQRORJ\ HPSOR\HG LQ UHOHYDQW DUHDV VXFK DV KLVWRU\ VRFLRORJ\ DQG SROLWLFDO VFLHQFH , HPSOR\HG LW RQO\
EHFDXVH , QHHGHG VLPSOH WHUPV WR H[SODLQ P\ LGHDV LQ UHODWLYHO\ VKRUW SKUDVHV .LQJGRPV DQG HPSLUHV DUH
ERWK YHU\ ODUJH VWDWXV YDULDQFH FRPPXQLWLHV ZLWK WDSHUHG S\UDPLGDO VWDWXV FRQVWLWXWLRQ ZKRVH KLJKHVW VWDWXV
SRVW PD\ EH UHIHUUHG WR DV WKH NLQJ DQG WKH HPSHURU UHVSHFWLYHO\ 2I FRXUVH , DP XVLQJ WKHVH WHUPV KHUH DV
DEVWUDFWLRQV UHIHUULQJ QR VSHFLILF NLQJGRPV DQG HPSLUHV ZKRVH KLVWRULFDOO\ NQRZQ GHWDLOV DUH IDU EH\RQG
WKH VFRSH RI P\ DUJXPHQW 0\ LQWHUHVWV OLH PDLQO\ LQ VNHWFKLQJ SROLWLFDO VWUXFWXUHV LPSOHPHQWHG E\ WKH
7LPHV RI :DU KXPDQV IRU WKH SXUSRVH RI XSKROGLQJ D ODUJH VWDWXV YDULDQFH FRPPXQLW\
7KH GLVWLQFWLRQ , DP PDNLQJ EHWZHHQ NLQJGRPV DQG HPSLUHV OLHV PDLQO\ LQ WKH DELOLW\ RI JRYHUQDQFH
RI WKHLU UXOLQJ ERGLHV (PSLUHV DUH LQ P\ GHILQLWLRQ LV D YHU\ ODUJH VLQJOH FRPPXQLW\ JRYHUQHG E\ PRUH RU
OHVV LQWHJUDWHG VLQJOH KLHUDUFKLFDO DUWLILFLDO FRDOLWLRQ GHVLJQHG IRU WKH SXUSRVH RI JRYHUQDQFH ZLWK WKH
HPSHURU RQ WRS /HW PH FDOO WKLV RUJDQL]DWLRQ JHQHULFDOO\ WKH
EXUHDXFUDF\
,Q FRQWUDVW WR WKLV UDWKHU XQLWDU\ VWUXFWXUH RI DQ HPSLUH WKH W\SLFDO VWUXFWXUH RI NLQJGRPV , DP
FRQVLGHULQJ KHUH PD\ EH PRUH DSWO\ FDOOHG IUDFWDO
DV D NLQJGRP HVSHFLDOO\ WKRVH LQ D IHXGDOLVWLF HUD
FRQVLVWV RI UDWKHU ODUJH QXPEHU RI PXFK VPDOOHU XQLWV WKDW , VKDOO FDOO
KRXVHV
LQ WKH SUHVHQW DUJXPHQWV $V
VFKHPDWLFDOO\ LOOXVWUDWHG LQ )LJ HDFK RI WKH WULDQJXODU IRUPV LQ WKH ILJXUH UHSUHVHQWV D KRXVH ZKLFK DW
OHDVW LQ VSLULW DQ H[WHQGHG IDPLO\ W\SH DUWLILFLDO FRDOLWLRQ 7KH ZKROH WULDQJOH UHSUHVHQWV WKH NLQJ
V KRXVH
KHDGHG E\ WKH NLQJ DW WKH WRS 7KH NLQJ
V GLUHFW FRQWURO KRZHYHU FRYHUV RQO\ WKH KDWFKHG DUHD FRQVLVWLQJ RI
WKH NLQJ
V KRXVH LQ D QDUURZ VHQVH LQ DGGLWLRQ WR WKH WZR ORUGV
DXWRQRPRXV KRXVHV
$
DQG
%
ZKR DUH DOVR KHDGV RI WKHLU RZQ
(YHQ WKRXJK WKHVH WZR ORUGV GHSLFWHG LQ WKLV ILJXUH PD\ EH LQ DOOHJLDQFH ZLWK WKH NLQJ
WKH\ DQG WKH NLQJ DUH MXVW LQ D VRUW RI SROLWLFDO DOOLDQFH DQG WKH NLQJ LV QRW VXSSRVHG WR LQWHUIHUH ZLWK LQWHUQDO
DIIDLUV RI WKHVH ORUGV
KRXVHV 6R IRU H[DPSOH ZKHQ WKH NLQJGRP LV DW ZDU ZLWK DQRWKHU WKH NLQJ PD\ MXVW
UHTXHVW WKHVH ORUGV WR MRLQ WKHLU DUPLHV ZLWK WKH NLQJ
V DW WKH EDWWOHILHOG ZLWKRXW VSHFLI\LQJ DQ\ H[HFXWLYH
GHWDLOV VLQFH WKHVH ZHUH ZLWKLQ WKH SUHURJDWLYHV RI HDFK RI WKH ORUGV
$SSUR[LPDWHO\ WKH VDPH VWUXFWXUH ZLOO EH UHSHDWHG LQ WKH KRXVH RI HDFK RI WKH ORUGV $FWXDOO\ DQ\
XQGHUOLQJ RI WKH NLQJ RU D ORUG H[FHSW IRU WKRVH YHU\ ORZ LQ WKH KLHUDUFK\ RI D KRXVH FDQ EH WKH KHDG RI KLV
RZQ KRXVH 7KLV QDWXUDOO\ PDNHV WKH ZKROH SLFWXUH RI DQ DFWXDO V\VWHP RI KRXVHV H[WUHPHO\ FRPSOH[ IDU
PRUH VR WKDQ WKH VLPSOLILHG GLDJUDP VKRZQ LQ )LJ VXJJHVWV +LVWRULDQV VHHP WR DSSO\ WKH WHUP
IHXGDOLVP
RQO\ WR H[WUHPH FDVHV ZKHQ WKH ZKROH ODQG RI WKH NLQJGRP WRJHWKHU ZLWK WKH SHDVDQWV ZKR IDUPHG LW ZDV
VSOLW XS LQWR ILHIV
HDFK RI ZKLFK ZDV FRQWUROOHG E\ ZKDWHYHU D KRXVH ELJ RU VPDOO WR ZKLFK WKH ILHI ZDV
ILQDOO\ DVVLJQHG 7KH JHQXLQH IHXGDO V\VWHPV RSHUDWHG LQ WKLV PDQQHU DUH UDWKHU UDUH WKH HDUO\ SHULRG RI
&KRX G\QDVW\ LQ &KLQD VWDUWHG DURXQG WK &HQWXU\
WKH PHGLHYDO (XURSH DURXQG WK WKURXJK WK
%&
&HQWXU\ DQG WKH UHODWLYHO\ UHFHQW SHULRG RI -DSDQHVH SROLWLFDO V\VWHP ZKRVH KH\GD\ ZDV 7RNXJDZD
VKRJXQDWH IURP WKH WK WR WKH WK &HQWXULHV
7KHVH DUH REYLRXVO\ RQO\ WKH ZDYHIURQWV LQ ZKLFK WKH
IHXGDOLVWLF SROLWLFDO V\VWHP ZDV SUDFWLFHG LQ LWV PRVW H[WUHPH IRUP %\ UHOD[LQJ WKH GHILQLQJ FKDUDFWHULVWLFV D
OLWWOH ZH ZRXOG VHH WKDW PRVW RI WKH FRPPXQLWLHV LQ WKH 7LPHV RI :DU ZHUH JRYHUQHG E\ VHPLIHXGDO
SROLWLFDO V\VWHPV RI RQH NLQG RU DQRWKHU ,Q RWKHU ZRUGV WKH IHXGDO V\VWHP LQ WKLV ORRVH VHQVH ZKLFK , VKDOO
XVH LQ WKH UHVW RI P\ DUJXPHQWV KDG EHHQ D GHIDXOW SROLWLFDO V\VWHP ZKLFK RWKHU V\VWHPV UHYHUWHG WR ZKHQ
WKH\ IDLOHG WR IXQFWLRQ
7KH IXQGDPHQWDO UHDVRQ IRU WKLV SRSXODULW\ RI WKH IHXGDO V\VWHP PD\ EH IRXQG LQ WKH IROORZLQJ WZR
SRLQWV )LUVW D FRPPXQLW\ PD\ DFTXLUH D YHU\ KLJK SHDN VWDWXV E\ EXLOGLQJ KRXVHV XSRQ KRXVHV KLJK
HQRXJK WR JRYHUQ D ODUJH FRPPXQLW\ ZKRVH FRDOLWLRQDO SRZHU PD\ PDWFK WKRVH RI WKH FRPSHWLQJ SRZHUIXO
FRPPXQLWLHV 2Q WKH RWKHU KDQG D IHXGDO V\VWHP UHTXLUHV WKH NLQJ RU ZKRHYHU RQ WRS UHODWLYHO\ OLWWOH
JRYHUQLQJ FDSDELOLW\ 1RWH WKDW WKH NLQJ QHHGV WR GLUHFWO\ FRQWURO RQO\ WKH SHUVRQV ZLWKLQ WKH KDWFKHG DUHD
LQGLFDWHG LQ )LJ D WDVN WKDW PD\ QRW GHPDQG DQ HODERUDWHO\ GHVLJQHG EXUHDXFUDWLF RUJDQL]DWLRQ WR
DFFRPSOLVK
7KHVH DGYDQWDJHV RI WKH IHXGDO V\VWHP DUH DOVR LWV ZHDNQHVVHV LI YLHZHG IURP WKH RSSRVLWH VLGH 7KH
UHODWLRQVKLS KROGLQJ DPRQJ WKH NLQJ DQG KLV ORUGV ZDV XVXDOO\ QR PRUH WKDQ D EDVLFDOO\ XQHDV\ SROLWLFDO
DOOLDQFH 7KH FRPPXQLW\ RI D NLQJGRP PLJKW KDYH QHHG D YHU\ KLJK VWDWXV NLQJ EXW LW GLG QRW QHHG D
SDUWLFXODU SHUVRQ IRU WKH NLQJ 6R ORUGV PLJKW KDYH EHHQ ZLOOLQJ DOOLHV RI WKH NLQJ RQO\ IRU RIIHQVLYH RU
GHIHQVLYH DFWLRQV RI WKH NLQJGRP EXW WKH\ ZHUH FRPSHWLWRUV IRU WKH WKURQH DOO WKH VDPH DQG FRPSHWLWRUV
DPRQJ WKHPVHOYHV DV ZHOO ,W ZDV WKHUHIRUH RQO\ WKH UHODWLYHO\ VXSHULRU SRZHU RI WKH NLQJ
V KRXVH RYHU
WKRVH RI WKH ORUGV WKDW FRXOG KDYH NHSW D UHODWLYH LQWHUQDO SHDFH JLYLQJ WKH NLQJ D KDUG WDVN DOO WKH WLPH +H
KDG QRW RQO\ WR NHHS KLV KRXVH UHODWLYHO\ WKH PLJKWLHVW EXW DOVR KDG WR EH HQJDJHG LQ SROLWLFNLQJ EURZ
EHDWLQJ FDMROLQJ WKH ORUGV WR SXW GRZQ WKHLU DPELWLRQV DQG WR VWRS WKHLU PXWXDO VTXDEEOHV 1RWH WKDW WKLV
SUREOHP ZDV QRW UHVWULFWHG WR WKH NLQJ
V KRXVH DORQH DOO WKH KRXVHV KDG WKH VDPH SUREOHP WKRXJK PD\EH OHVV
LQ VFDOH
2QO\ WZR ORUGV DUH VKRZQ LQ WKLV ILJXUH MXVW IRU FRQYHQLHQFH 7KH QXPEHU RI ORUGV LQ DOOHJLDQFH ZLWK WKH NLQJ ZRXOG
JHQHUDOO\ EH PRUH WKDQ WZR
,Q -DSDQHVH WKLV FRDOLWLRQDO RUJDQL]DWLRQDO XQLW , DP FDOOLQJ WKH KRXVH
LV FDOOHG L\H
ZKRVH OLWHUDO ILUVW PHDQLQJ LV WKH
VDPH DV KRXVH LH D GZHOOLQJ $Q HODERUDWH HOXFLGDWLRQ RI -DSDQHVH L\HV\VWHP LV JLYHQ HJ LQ 0XUDNDPL 6R JHQHUDOO\ VSHDNLQJ IHXGDOLVWLF WLPHV ZHUH XQHDV\ WLPHV EHVHW E\ IUHTXHQW ZDUV LQWULJXHV DQG
EHWUD\DOV ROG KRXVHV IHOO QHZ KRXVHV DURVH ZKLOH DOOLDQFHV RQ YDULRXV OHYHOV IRUPHG DQG EURNHQ ,W LV RQ
WKLV EDFNJURXQG RI XQHDV\ SROLWLFDO VLWXDWLRQV WKDW WKRVH SHRSOH KLJK LQ VWDWXV WULHG HVSHFLDOO\ KDUG WR
VWDELOL]H WKH
VWDWXV TXR
UHJLPH FRQVWDQWO\ GHPRQVWUDWLQJ WKHLU SRZHUV DQG HPSKDVL]LQJ WKHLU EORRG ULJKWV
ZKLOH FDPSDLJQLQJ RQ PRUDOH YLUWXHV VXFK DV OR\DOW\ DQG KRQRU DV WKH PDMRU LQJUHGLHQWV RI WKH FRPPXQLW\
QRUP
7KH OR\DOW\ RI D SHUVRQ LQ IHXGDO WLPHV ZHUH SULPDULO\ WDUJHWHG DW WKH KRXVH RQH EHORQJHG WR DQG WKH
KHDG RI WKH KRXVH DQG GLG QRW H[WHQG PXFK IXUWKHU EH\RQG DQG WKDW ZDV IRU D JRRG UHDVRQ ,I PHPEHUV RI D
ORUG
V KRXVH ZHUH SULPDULO\ OR\DO WR WKH NLQJ IRU LQVWDQFH WKHQ WKH NLQJ ZRXOG KDYH D VWURQJ FRQWURO SRZHU
RYHU WKH LQWHUQDO DIIDLUV RI WKH ORUG
V KRXVH DQG VXFK D EUHDFK RI KRXVH DXWRQRP\ ZDV KDUGO\ WROHUDWHG E\
WKH ORUG
&RPPXQLW\ LQ WKH 7LPHV RI :DU
$W WKLV MXQFWXUH OHW PH WRXFK XSRQ WKH FKDUDFWHULVWLFV RI FRPPXQLW\ LQ WKH 7LPHV RI :DU DV DQ
DUWLILFLDO FRDOLWLRQ 8QOLNH KLHUDUFKLFDOO\ RUJDQL]HG DUWLILFLDO FRDOLWLRQV RI ZKLFK WKH KRXVH LQ D IHXGDO
V\VWHP LV D JRRG H[DPSOH D FRPPXQLW\ FRQVLVWHG RI D PDVV RI SHRSOH LQ UHVLGHQFH RI D NLQJGRP RU DQ
HPSLUH VRPH RI ZKRP ZHUH KRXVH PHPEHUV EXW PRVW RWKHUV ZHUH VLPSO\ WKH JHQHUDO SRSXODFH SXW XQGHU
WKH UHLJQ RI KRXVHV RU DQ HPSLUH $ FRPPXQLW\ DV D ZKROH ZDV VHOGRP KLHUDUFKLFDOO\ RUJDQL]HG HYHQ
WKRXJK D VRFLDO FODVV VWUXFWXUH FRXOG KDYH EHHQ LPSRVHG XSRQ WKHP :KHQ VRPH DUWLILFLDO FRDOLWLRQV LQ WKH
FRPPXQLW\ OLNH LWV PLOLWDU\ REWDLQHG D MRLQW JDLQ VXFK DV ZDU VSRLOV WKH JDLQ ZDV QRW GLUHFWO\ DOORFDWHG WR
WKH JHQHUDO SRSXODFH 2Q WKH FRQWUDU\ WKH JHQHUDO SRSXODFH ZHUH WKH PDMRU SURYLGHUV IRU WKH FRPPXQLW\
H[SHQGLWXUHV OLNH WKH ZDJHV SDLG WR UHWDLQHUV RI UXOLQJ KRXVHV DQG WKH FRVWV IRU WKHLU PLOLWDU\ H[SHGLWLRQV
ZKLFK WKH\ KDG WR SD\ XQGHU YDULRXV QDPHV VXFK DV WD[HV OHYLHV DQG WLWKHV
7KLV GLG QRW PHDQ WKDW WKH JHQHUDO SRSXODFH ZHUH DOZD\V RQ WKH ZURQJ VLGH RI WKH EDUJDLQ DQG WKHUH
DOZD\V ZDV VRPH NLQG RI D EDUJDLQ EHWZHHQ WKHP DQG WKH UXOLQJ FODVV 1RWH ILUVW WKDW SHRSOH KDG WR OLYH LQ
VRPH FRPPXQLW\ WR LQWHUDFW ZLWK RWKHUV SO\ WKHLU WUDGHV DQG PDNH SURILWV 6R LI D FRPPXQLW\ FRXOG SURYLGH
WKHP ZLWK JHQHUDO SHDFH DQG SURVSHULW\ ZLWK FRPSDUDWLYHO\ UHDVRQDEOH WD[HV DQG OHYLHV SHRSOH ZRXOG QRW
JUXGJH WKHLU VXSSRUW WR WKH UXOLQJ FODVV ZKR FRXOG SURYLGH WKHP ZLWK WKHVH TXDOLWLHV (YHQ LI WKH\ FRXOG QRW
JHW WKHLU VKDUHV RI WKH FRDOLWLRQDO MRLQW JDLQ GLUHFWO\ LW FRXOG VWLOO EH D IDLU EDUJDLQ DV WKH\ FRXOG JHW WKHLU
VKDUH LQGLUHFWO\ WKURXJK WKH SHDFH DQG SURVSHULW\ RI WKH FRPPXQLW\ ZKLFK D VXFFHVVIXO UXOLQJ FODVV FRXOG
EULQJ WR LW
2Q WKH RWKHU KDQG LI WKH UXOLQJ FODVV ZDV WRR JUHHG\ LQ DFFXPXODWLQJ WKHLU ZHDOWK DQG H[SORLWHG WKH
JHQHUDO SRSXODFH ZLWK KHDY\ WD[HV RU IDLOHG WR SURWHFW WKHP IURP YDULRXV KDUPV RULJLQDWLQJ HLWKHU IURP
H[WHUQDO VRXUFHV OLNH HQHP\ LQFXUVLRQV RU LQWHUQDO VRXUFHV OLNH WKLHYHV DQG EDQGLWV WKH UHVLGHQWV RI WKH
FRPPXQLW\ ZRXOG ILUVW ZLWKGUDZ WKHLU VXSSRUWV IURP WKH FXUUHQW UXOHUV GHSULYLQJ WKH ODWWHU RW WKHLU YHU\
SRZHU IRXQGDWLRQ :KHQ WKLQJV JRW ZRUVH WKHUH PLJKW EH UHEHOOLRQV RU PDVV H[RGXV RI SHRSOH IURP ZKLFK
ZRXOG FRPH QRQH EXW WKH GRZQIDOO RI WKH FXUUHQW UXOLQJ FODVV
6R WKH WDVNV WKH UXOHU RI D KLJK YDULDQFH FRPPXQLW\ LQ WKH 7LPHV RI :DU VKRXOG KDYH GHDOW ZLWK
ZHUH LQGHHG IRUPLGDEOH 7KH NLQJ RU WKH 4XHHQ KDG WR NHHS D YHU\ KLJK SHDN VWDWXV ZKLFK OLNH WKH FHQWUDO
SROH RI D KXJH WHQW FRXOG VXSSRUW HLWKHU DQ HODERUDWH KRXVH V\VWHP RU D EXUHDXFUDWLF DGPLQLVWUDWLYH PDFKLQH
)DPLOLHV ZHUH DOVR VKDSHG OLNH D PLQLKRXVH HVSHFLDOO\ LQ IHXGDO WLPHV DQG WKH ILOLDO SLHW\ DGGUHVVHG DW WKH KHDG RI
WKH IDPLO\ XVXDOO\ WKH IDWKHU ZDV RIWHQ RQH RI WKH PRVW VWURQJO\ GHPDQGHG PRUDO FRGHV RI WKH FKLOGUHQ WR IROORZ
DV ZHOO DV D PLOLWDU\ PLJKW VR WKDW WKH FRDOLWLRQDO SRZHU RI WKH FRPPXQLW\ ZDV DW OHDVW QHDUO\ RQ WKH SDU
ZLWK QHLJKERULQJ FRPPXQLWLHV ,Q RUGHU WR NHHS WKDW KLJK D VWDWXV WKH UXOHU QHHGHG WKH SRZHU WKDW
VXEVWDQWLDWHG WKH VWDWXV EXLOW XSRQ DOO NLQGV RI SRZHU EDVHV DYDLODEOH 0XFK RI WKHVH SRZHU EDVHV ZRXOG EH
WKRVH WKH UXOHU LQKHULWHG IURP WKH SUHGHFHVVRU EXW DV WKH LQKHULWHG SRZHU ZRXOG KDYH GLVFRXQWHG VRPHZKDW
WKH UXOHU ZRXOG WU\ WR EXLOG LW XS IXUWKHU IRU KLPVHOI DEVRUELQJ ZHDOWK IURP WKH SRSXODFH ZKLOH MXGLFLRXVO\
UHGLVWULEXWLQJ LW EDFN WR WKH FRPPXQLW\ WR PDNH LW SURVSHU 7KH SURVSHULW\ RI WKH FRPPXQLW\ LQ JHQHUDO ZDV
DOZD\V WKH PRVW SRWHQW IDFWRU IRU WKH UXOHU WR JDLQ WKH SHRSOH
V VXSSRUW DV WKH LQGLVSHQVDEOH JURXQG IRU KLV
SRZHU DQG VWDWXV )XUWKHUPRUH WKH SURVSHULW\ RI WKH FRPPXQLW\ ZRXOG KDYH DWWUDFWHG PRUH SHRSOH WR MRLQ LW
DQG D ODUJHU SRSXODWLRQ JHQHUDOO\ PHDQW D JUHDWHU SRZHU EDVH IRU WKH UXOHU
2Q WKH RWKHU KDQG WKH PRUH SURVSHURXV D FRPPXQLW\ WKH PRUH WHPSWLQJ WDUJHW RI LQYDVLRQ LW ZRXOG
KDYH ORRNHG WR WKH QHLJKERULQJ SRZHUV 6R WKH UXOHU ZRXOG KDYH KDG WR NHHS XS LWV PLOLWDU\ SRZHU ZKLOH
IRUWLI\LQJ LWV GHIHQVHV ZKLOH FRQILUPLQJ WKH OR\DOW\ RI WKH ORUGV LQ DOOLDQFH ZLWK KLP DV PLJKW\ DOOLHV ZHUH
DOVR PLJKW\ ULYDOV 7KHVH DUH KRZHYHU KDUGO\ DQ H[KDXVWLYH OLVW RI ZKDW UXOHUV ZHUH VXSSRVHG WR GR 6RPH
RI WKH UHVW ZLOO EH GLVFXVVHG EHORZ
+RQRU DQG GLVKRQRU
7KH QH[W LVVXH WR EH GLVFXVVHG LV WKDW RI
KRQRU
DQG WKH UHDVRQ ZK\ KRQRU ZDV RIWHQ FRQVLGHUHG DV
DQ H[HPSODU\ YLUWXH LQ PDQ\ FXOWXUHV RI WKH 7LPHV RI :DU /HW PH EHJLQ ZLWK WKH VRXUFH RI WKH FRQFHSW RI
KRQRU 5HPHPEHU WKDW DQ RXWVWDQGLQJ GHHG GRQH E\ D PHPEHU RI D KLHUDUFKLFDO FRDOLWLRQ ZRXOG EH DZDUGHG
E\ D PHULW DVVLJQHG WR WKH SHUVRQ E\ WKH FRDOLWLRQ DV D WRNHQ WR WHVWLI\ WKH SRZHU RI WKH SHUVRQ DQG E\
DFFXPXODWLQJ VXFK PHULWV D SHUVRQ ZLOO XVXDOO\ EH SURPRWHG WR D KLJKHU SRVW ZLWKLQ WKH FRDOLWLRQ SURPLVLQJ
WKH SHUVRQ D FRPSDUDEO\ KLJK ORFDO VWDWXV DQG FRUUHVSRQGLQJO\ ODUJHU VKDUH RI WKH MRLQW JDLQ RI WKH FRDOLWLRQ
:KHQ LW LV WKH ZKROH FRPPXQLW\ WKDW LV EHQHILWHG E\ VRPH SHUVRQ
V RXWVWDQGLQJ FRQWULEXWLRQ D
VRPHZKDW GLIIHUHQW SURFHGXUH LV QHHGHG WR UHZDUG WKH SHUVRQ DV WKH FRPPXQLW\ DV D ZKROH LV QRW
KLHUDUFKLFDOO\ RUJDQL]HG %XW WKH SURFHGXUH PXVW EH VRPHWKLQJ WKDW DVVXUHV IRU WKH SHUVRQ
V WKH FRPPXQLW\
ZLGH VRFLDO VWDWXV WR WKH OHYHO ZKLFK WKH SHUVRQ KDV SURYHQ KLP RU KHUVHOI WR GHVHUYH E\ WKH SHUVRQ
V
RXWVWDQGLQJ SURVRFLDO GHHG 7KLV LV ZKHUH WKH FRQFHSW RI KRQRU DQG D SURSHU KRQRUEHVWRZLQJ FHUHPRQLHV
VSRQVRUHG E\ WKH FRPPXQLW\ YHU\ RIWHQ UHSUHVHQWHG E\ LWV UXOLQJ FODVV FRPH LQWR WKH VFHQH
,Q WKH 7LPHV RI :DU VXFK RXWVWDQGLQJ FRQWULEXWLRQV WR WKH FRPPXQLW\ ZRXOG W\SLFDOO\ KDYH EHHQ
WKRVH GRQH DW EDWWOHILHOG HLWKHU E\ D FRPPDQGLQJ JHQHUDO DQ RIILFHU RU HYHQ D SODLQ VROGLHU WKH
FRQWULEXWLRQV WKDW ZHUH VXSSRVHGO\ GHFLVLYH LQ VHFXULQJ WKH YLFWRU\ %XW PLOLWDU\ FRQWULEXWLRQV DUH QRW WKH
RQO\ NLQG RI GHHGV WR EH KRQRUHG $V VHHQ PRUH IUHTXHQWO\ LQ WKH FRQWHPSRUDU\ VRFLHWLHV KRQRUV DUH
DFFRUGHG WR D ODUJH YDULHW\ RI DFKLHYHPHQWV
HJ
WR ZLQQHUV RI LPSRUWDQW VSRUWV FRQWHVWV WR WKRVH ZKR GLG
UHPDUNDEOH ZRUNV LQ VFLHQFH RU OLWHUDOO\ ILHOGV OLNH LQ WKH FDVH RI 2O\PSLFV RU 1REHO 3UL]H DQG VR RQ DQG
WKH VSLULW RI KRQRUDFFRUGLQJ FHUHPRQLHV UHPDLQ DOZD\V WKH VDPH $QG WKH VSLULW LV WR OHW WKH FRQWULEXWRU
V
RXWVWDQGLQJ SRZHU EH
RIILFLDOO\ GHPRQVWUDWHG
RYHU WKH ZLGH SXEOLF QRW RQO\ WR WKRVH ZKR DWWHQGHG WKH
FHUHPRQLHV LQ SHUVRQ EXW DOVR WKRVH ZKR KHDUG RI WKHP LQ PRGHUQ WLPHV WKRVH ZKR ZDWFKHG WKH
FHUHPRQLHV RQ 79 6LQFH WKHUH DUH DOZD\V D ODUJH QXPEHU RI SHRSOH ZKR ORYH KHURHV RU KHURLQHV DV WDUJHWV
RI WKHLU DGPLUDWLRQ XUJH WKH VWDWXV RI WKH KRQRUHG SHUVRQ ZLOO EH VLJQLILFDQWO\ HOHYDWHG HVSHFLDOO\ EHFDXVH
WKH SHRSOH ZKR DUH DFFODLPLQJ WKH SHUVRQ
V KRQRU ZRXOG XQGRXEWHGO\ JLYH D KLJK DSSUDLVDO WR WKH KRQRUHG
SHUVRQ
V FRQWURO SRZHU
6RPH RI WKH UXOLQJ FODVV PHPEHUV PLJKW KDYH IHOW D OLWWOH UHOXFWDQW LQ FUHDWLQJ D QHZ KHUR ZKR PLJKW
EHFRPH D FRPSHWLWRU IRU KLV VWDWXV %XW RIWHQ WKHUH ZDV QR FKRLFH RQFH D VWRU\ RI VRPHRQH
V KHURLF DFW ZDV
RXW SHRSOH ZRXOG FODPRU IRU WKH SHUVRQ
V KRQRU DQG H[SHFW D IDLU GHDO RI WKH UXOLQJ FODVV ,I WKHUH ZDV QR
FKRLFH WKH UHOXFWDQW RQHV PLJKW WKLQN ZK\ QRW XVH WKH RFFDVLRQ IRU WKHLU RZQ GHPRQVWUDWLRQ" 6R WKHUH
ZRXOG EH DOO WKH GLJQLWDULHV RI WKH FRPPXQLWLHV DWWHQGLQJ WKH FHUHPRQ\ ZLWK IXOO SRPS RFFDVLRQDOO\
JULQQLQJ ZLGHO\ DV LI WKH KRQRU ZDV SDUWO\ RI WKHLU RZQ :KHQ WKH KRQRUHG SHUVRQ
V JUHDW GHHG ZDV ORXGO\
SURFODLPHG LW ZDV RIWHQ VXJJHVWHG HLWKHU H[SOLFLWO\ RU LPSOLFLWO\ WKDW WKH YLUWXHV RI WKH NLQJ DQG RWKHU
GLJQLWDULHV LQVSLUHG WKH SHUVRQ WR FRQGXFW WKH JUHDW DFW WKDW ZDV WR WKH EHQHILW RI DOO WKH SHRSOH LQ WKH
FRPPXQLW\ $IWHU WKH SURFODPDWLRQ WKH SHUVRQ ZRXOG UHFHLYH VRPH WRNHQ REMHFW VXFK DV D PHGDO D FXS D
VZRUG RU ZKDWHYHU WKDW FRXOG EH XVHG E\ WKH SHUVRQ WKHQFHIRUWK DV WKH V\PERO RI KLV RU KHU JUHDWO\
HQKDQFHG VWDWXV 7KHUH PLJKW EH VRPH PDWHULDO UHZDUG DFFRPSDQ\LQJ WKH KRQRU DV ZHOO DV D WRNHQ RI
JUDWLWXGH RI WKH FRPPXQLW\ WR WKH SHUVRQ WKH YDOXH RI ZKLFK IRU WKH SHUVRQ KRZHYHU ZRXOG XVXDOO\ EH IDU
OHVV WKDQ WKH YDOXH RI VWDWXV HOHYDWLRQ
1RZ OHW PH WXUQ WR WKH LVVXH RI KRQRU DV D YLUWXH HVSHFLDOO\ FRQFHUQLQJ WKH TXHVWLRQ RI ZK\
PHPEHUV RI WKH XSSHU ZDUULRU FODVV LQ WKH IHXGDO WLPHV VXFK DV NQLJKWV DQG VDPXUDL
V ZHUH DOPRVW FUD]LO\
VHQVLWLYH DERXW WKH LVVXHV RI WKHLU RZQ KRQRU 7KH IHXGDOLVWLF HUDV ZHUH WLPHV ZKHQ KRXVHV ZHUH EDVLF
VWUXFWXUDO XQLWV LQ WKH UXOLQJ FODVV 6R LW ZDV QDWXUDO WKDW D KRQRU DFFRUGHG WR D PHPEHU RI D KRXVH HVSHFLDOO\
WR WKH KHDG RI D KRXVH ZDV DOVR FRQVLGHUHG DV WKH KRXVH
V KRQRU DQG DV VXFK ZDV LQKHULWHG DV D SDUW RI WKH
KRXVH
V SDWULPRQ\ 'XH WR WKH VWDWXV HOHYDWLRQ IXQFWLRQ RI KRQRU WKRVH KRXVHV ZRXOG KDYH SURVSHUHG ZKLFK
VXFFHHGHG LQ DFFXPXODWLQJ KRQRU DIWHU KRQRU RYHU JHQHUDWLRQV DQG WKRVH ZKLFK IDLOHG LQ GRLQJ VR ZRXOG
KDYH GHFOLQHG
,QGHHG WKLV DFFXPXODWHG DQG LQKHULWHG KRQRU E\ RQH
V OLQHDJH ZDV WR EH FRQVLGHUHG DV WKH UHDO
VXEVWDQFH WKDW OHJLWLPDWL]H WKH ELUWK ULJKWV RI KLJK VWDWXV IRU KLJKERUQV $ KLJKERUQ GLG QRW GLUHFWO\
LQKHULWHG D KLJK VWDWXV EXW LW ZDV WKH ODUJH DPRXQW RI KRQRU DFFXPXODWHG LQ WKH SHUVRQ
V KRXVH WKDW PDGH WKH
SHUVRQ DSSUDLVHG DV KLJK VWDWXV 7KHUH ZDV KRZHYHU DQ LPSOLFLW FRQGLWLRQ WR PDNH WKH LQKHULWDQFH YDOLG
WKDW WKH SHUVRQ KDG WR OLYH XS WR VXFK D PRXQWLQJ KRQRU 7KH SHUVRQ KDG WR ILJKW YDOLDQWO\ DW D EDWWOHILHOG VR
DV WR GHPRQVWUDWH RWKHUV WKDW KH GHVHUYHG KLV KRXVH
V QDPH DQG DOVR GHIHQG WKH KRXVH
V KRQRU DQ\ WLPH
ZKHQ VRPHRQH DSSDUHQWO\ WULHG WR EHOLWWOH LW
7KH KRXVH
V KRQRU WKHUHIRUH QDWXUDOO\ EHFDPH WKH SRLJQDQW WDUJHW RI LQWHQVH SULGH RI PRVW PHPEHUV
RI D KRXVH HDVLO\ ZRXQGHG E\ VRPHRQH
V VODQGHU RU E\ RQH
V RZQ IRROLVK
LH
GLVKRQRUDEOH DFW 0DQ\
SHRSOH VDFULILFHG RQH
V RZQ OLIH LQ GHIHQGLQJ WKH KRQRU RI RQH
V KRXVH WKURXJK VXFK DFWV DV GXHOLQJ RU
KDUDNLUL DV LW ZDV QRW RQO\ D SHUVRQ
V RZQ VWDWXV WKDW ZDV DW VWDNH LQ VXFK RFFDVLRQV EXW RQH LPSOLFDWHG
RWKHU PHPEHUV RI WKH KRXVH E\ RQH
V GLVKRQRUDEOH DFW RU IDLOXUH LQ GHIHQGLQJ WKH KRXVH
V KRQRU LQ D SURSHU
IDVKLRQ 7KHUH LV PRUH WKDQ WKDW 6XSSRVH WKDW WKH PRUDO FRGH ELQGLQJ WKH KLJKERUQV WR GHIHQG WKHLU KRQRUV
DQG OHVV DQG OHVV RI WKHP EHFDPH UHOXFWDQW WR ULVN WKHLU OLYHV E\ GHIHQGLQJ WKHLU KRQRUV 7KHQ WKH RQO\
VXEVWDQFH WKDW VXSSRUWHG WKH LQKHULWDQFH RI DQFHVWRUV
KRQRUV ZRXOG EH JRQH DQG ZLWK LW JRQH VR ZRXOG WKH
VRFLDO FODVV V\VWHP ,Q UHDOLW\ KRZHYHU D VXEVWDQWLDO DEROLVKPHQW RI VRFLDO FODVV V\VWHP FDPH WR SDVV RQO\
YHU\ UHFHQWO\ LQ PDQ\ SDUWV RI WKH ZRUOG IROORZLQJ WKH FRQVSLFXRXV UHGXFWLRQ RI WKH VWDWXV YDULDQFH ZLWKLQ
FXUUHQW FRPPXQLWLHV
$ ZRUG PD\ EH DGGHG KHUH DERXW GLVKRQRU $V WKH DQWLWKHVLV WR KRQRU GLVKRQRU ZRXOG EH LPSRVHG
XSRQ D SHUVRQ ZKR GLG DQ RXWVWDQGLQJ GLVFRQWULEXWLRQ WR WKH ZHOIDUH RI RQH
V FRPPXQLW\ DQG WKH GLVKRQRUHG
SHUVRQ
V VWDWXV ZRXOG KDYH JRQH GRZQ VLJQLILFDQWO\ RQFH WKH IDFW EHFDPH D SXEOLF NQRZOHGJH ,Q WKH WLPHV
ZKHQ SHUVRQDO KRQRUV ZHUH FORVHO\ OLQNHG ZLWK WKH KRQRUV DFFXPXODWHG E\ WKH KRXVH D GLVKRQRU RI D
PHPEHU ZRXOG EH D GLVKRQRU RI WKH KRXVH DV ZHOO 1RWH DW WKLV SRLQW WKDW WKRXJK DQ KRQRU FRXOG EH
DFFRUGHG WR D FRPPRQHU D GLVKRQRU DSSOLHG RQO\ WR WKRVH RI KLJK VRFLDO VWDWXV DV FRPPRQHUV KDG YLUWXDOO\
OLWWOH VWDWXV WR ORVH 6R D FRPPRQHU ZKR GLG VRPH RXWVWDQGLQJ GLVFRQWULEXWLRQ WR WKH FRPPXQLW\ OLNH
FRPPLWWLQJ D FULPH ZRXOG EH VLPSO\ SHQDOL]HG IRU WKH DFW $Q XSSHU FODVV PHPEHU ZRXOG KDYH EHHQ
HTXDOO\ SHQDOL]HG GHSHQGLQJ XSRQ WKH OHJDO V\VWHP SUDFWLFHG LQ WKH FRPPXQLW\ EXW RIWHQ WKH GHFODUDWLRQ RI
GLVKRQRU ZDV WKRXJKW WR EH SHQDOW\ HQRXJK IRU KRQRUERXQG QREOHV DV VXFK D SHUVRQ RIWHQ FKRVH WR NLOO
RQHVHOI RU WR SXW RQHVHOI LQ VHOIH[LOH UDWKHU OLYLQJ ZLWK WKH VKDPH DQG HQGXUH UHSURDFKHV
$QRWKHU DVSHFW RI GLVKRQRU WR EH PHQWLRQHG LV WKDW WKH LQIOLFWLRQ RI GLVKRQRU XSRQ D SHUVRQ ZDV
XVXDOO\ GRQH ZLWKRXW FHUHPRQLHV $SDUW IURP WKH IDFW WKDW VXFK D GLVKRQRU ZRXOG VRRQ KDYH EHFRPH D SXEOLF
NQRZOHGJH VLQFH WKH SHUVRQ PXVW EH RI D KLJK FODVV WKHUH DSSDUHQWO\ ZHUH QRWKLQJ IRU WKH KLJK FODVV
PHPEHUV WR GHPRQVWUDWH DERXW WKH GLVKRQRU EHIDOOHQ XSRQ RQH RI WKHLU FODVV SHHUV
7KH SULQFLSOHV RI PRGLILDEOH VWDWXVGHSHQGHQW DOORFDWLRQ
$W WKLV MXQFWXUH OHW PH UHFDSLWXODWH WKH PDMRU UDWLRQDOH XQGHUO\LQJ WKH PRGLILDEOH VWDWXVGHSHQGHQW
DOORFDWLRQ RI FRDOLWLRQDO MRLQW JDLQV WKDW VHHPV WR KDYH EHHQ HPSOR\HG LQ PRVW RI KLHUDUFKLFDOO\ RUJDQL]HG
DUWLILFLDO FRDOLWLRQV ERWK KLVWRULFDO DQG FRQWHPSRUDU\ ,WV SULPDU\ DGYDQWDJH OLHV LQ LWV EDVLF MXVWLILDELOLW\
1RWH WKDW D KLJK VWDWXV SHUVRQ JHQHUDOO\ SRVVHVVHV D ODUJH FRQWURO SRZHU WR PDWFK DQG VXFK D SHUVRQ LV
H[SHFWHG WR PDNH D FRUUHVSRQGLQJO\ ODUJH FRQWULEXWLRQ WR FRDOLWLRQDO HQGHDYRUV DQG WKXV ZRXOG GHVHUYH D
KLJKHU VKDUH RI WKH FRDOLWLRQDO JDLQ WKDQ ORZHU VWDWXV SHUVRQV ,I VXFK DQ H[SHFWDWLRQ EHOLHV WKH SHUVRQ
V
DFWXDO OHYHO RI FRQWULEXWLRQ WR WKH FRDOLWLRQDO HIIRUWV RU WKH SHUVRQ KDV FRPPLWWHG VRPH REYLRXV
GLVFRQWULEXWLRQ RU GLVOR\DOW\ FRUUHVSRQGLQJ GHPHULWV ZRXOG DFFXPXODWH RQ WKH SHUVRQ
V ILOH OHDGLQJ
HYHQWXDOO\ WR WKH SHUVRQ
V HYLFWLRQ IURP WKH FRDOLWLRQ RU DW OHDVW D GHPRWLRQ WR DQRWKHU SRVW RI ORZHU VWDWXV
2Q WKH RWKHU KDQG LI WKH SHUVRQ GLG EHWWHU WKDQ WKH H[SHFWDWLRQ FRUUHVSRQGLQJ PHULWV JLYHQ WR WKH SHUVRQ
ZRXOG OHDG WR WKH SHUVRQ
V SURPRWLRQ 6R ZLWK WKLV DGGLWLRQ RI WKH PHULWGHPHULW DGMXVWPHQW SURFHGXUH WKH
PRGLILDEOH VWDWXVGHSHQGHQW DOORFDWLRQ FDQ EH RSHUDWHG JHQHUDOO\ VSHDNLQJ LQ D MXVWLILDEOH IDVKLRQ E\ WKH
FRDOLWLRQDO DGPLQLVWUDWLRQ
,W LV QRW MXVW WKLV PHULWGHPHULW DGMXVWPHQW SURFHGXUH WKDW LV PHDQW E\ PRGLILDELOLW\
RI WKH V\VWHP
0RGLILDELOLW\ LV WKH LQKHUHQW FKDUDFWHULVWLF RI D VWDWXVGHSHQGHQW DOORFDWLRQ VFKHPH EDVHG RQ WKH EDVLF
LQGHWHUPLQDF\ LQ WKH YDOXH RI VRFLDO VWDWXV ZKLFK DOORZV D IDLUO\ EURDG URRP IRU PDQLSXODWLRQ LQ
GHWHUPLQLQJ WKH H[DFW DPRXQW RI VKDUH D SHUVRQ RI D FHUWDLQ VWDWXV LV JHWWLQJ )RU LQVWDQFH WKHUH ZRXOG
DOZD\V KDYH EHHQ D VWURQJ WHPSWDWLRQ IRU KLJKHU UDQNLQJ RIILFHUV RI WKH FRDOLWLRQ WR JHW D JUHDWHU VKDUH IRU
WKHPVHOYHV DW WKH H[SHQVH RI ORZ VWDWXV PHPEHUV (YHQ EHIRUH WKH DGYHQW RI V\VWHPV OLNH ODERU XQLRQV
KRZHYHU ZLVH PDQDJHUV RI DUWLILFLDO FRDOLWLRQV ZRXOG KDYH UHIUDLQHG IURP GRLQJ VR DW OHDVW WULHG WR UHIUDLQ
IURP EHLQJ RYHUO\ JUHHG\ DV WKH IHHOLQJ RI XQIDLUQHVV DPRQJ ORZHU VWDWXV PHPEHUV ZRXOG GHFUHDVH WKH
FRDOLWLRQDO MRLQW JDLQ HLWKHU E\ ORZHULQJ WKHLU ZRUN PRWLYDWLRQ RU HYHQ ORVLQJ WKHP WR RWKHU FRDOLWLRQV
6R D ZLVH PDQDJHPHQW RI DQ DUWLILFLDO FRDOLWLRQ ZRXOG KDYH EHHQ WKH NLQG ZKLFK XWLOL]HG WKLV PDUJLQ
IRU PDQHXYHU LQKHUHQW LQ WKH DOORFDWLRQ V\VWHP WR PLQLPL]H WKH FRPSODLQWV RI XQIDLUQHVV ZLWK D JRRG HDU WR
OLVWHQ WR YRLFHV RI FRDOLWLRQ PHPEHUV 7KH HTXDOLW\ SULQFLSOH GLVFXVVHG LQ &KDSWHU ZLOO EH HPSOR\HG DV DQ
6XFK DQ DFW LWVHOI ZDV RIWHQ FRQVLGHUHG KRQRUDEOH DQG ZRXOG KDYH PLWLJDWHG WKH GDPDJH GRQH RQ WKH KRQRUV RI WKH
SHUVRQ
V KRXVH PHPEHUV
3XEOLF H[HFXWLRQV ZHUH GRQH DV D GHPRQVWUDWLRQ RI WKH SRZHUV RI WKH UXOLQJ FODVV LOOXVWUDWLQJ WKH SXEOLF KRZ VHYHUH
ZRXOG EH WKH SXQLVKPHQW WR SHUSHWUDWRUV RI FDSLWDO RIIHQVH $V VXFK LW RIWHQ KDG OLWWOH WR GR ZLWK GLVKRQRU GLVFXVVHG
KHUH
DX[LOLDU\ DOORFDWLRQ SULQFLSOH WR WKRVH ZKR DOO GR VLPLODU ZRUNV DQG ZKR DUH VLPLODU LQ DJH DQG H[SHULHQFH
WKH HTXDOLW\ RI WKHLU VKDUHV ZLOO PLQLPL]H FRPSODLQWV RI XQIDLUQHVV IURP WKHP DV WKH\ DUH TXLWH OLNHO\ WR EH
PXWXDO VRFLDO FRPSDULVRQ UHIHUHQWV 2FFDVLRQDOO\ D ZLVH PDQDJHPHQW DOVR ZRXOG KDYH HPSOR\HG D
GHSHQGHQW
QHHG
VKDULQJ DV DQRWKHU DX[LOLDU\ DOORFDWLRQ VFKHPH DVVLJQLQJ D OLWWOH H[WUD KHOS WR WKRVH ZKR
GHVSHUDWHO\ QHHGHG WKHP OLNH WKRVH ZKR ZHUH GLVDEOHG VLFN RU UHWLUHG (YHQ GXULQJ WKH 7LPHV RI :DU D
MXGLFLRXV XVH RI VXFK DQ DOWUXLVWLF DOORFDWLRQ HVSHFLDOO\ DW WKH H[SHQVH RI KLJK VWDWXV PHPEHUV
SXUVHV ZRXOG
KDYH ZHOFRPHG E\ WKH FRDOLWLRQ PHPEHUV DQG PLJKW KDYH FRQWULEXWHG WR LQFUHDVLQJ WKHLU OR\DOW\
7KH IRFXV RI P\ DUJXPHQWV PDGH VR IDU RQ WKH LVVXH RI DOORFDWLRQ KDV EHHQ WR GHPRQVWUDWH WKDW WKH
DOORFDWLRQ VFKHPHV DFWXDOO\ LPSOHPHQWHG E\ DUWLILFLDO FRDOLWLRQV HVSHFLDOO\ WKRVH KLHUDUFKLFDOO\ RUJDQL]HG
KDYH EHHQ DQG VWLOO DUH LQ OLQH ZLWK $GDP
V HTXLW\ SULQFLSOH QDPHO\ WR PDNH WKH DOORFDWLRQ MXVWLILDEOH DV
FRQWULEXWLRQGHSHQGHQW IRU HDFK PHPEHU DW OHDVW RQ WKH ORQJ UXQ )URP WKDW YLHZSRLQW LW VHHPV REYLRXV
WKDW WKH DOWHUQDWLYH DOORFDWLRQ VFKHPHV VXFK DV HTXDOLW\ DQG QHHGGHSHQGHQW FDQ QHYHU ZRUN DV WKH SULQFLSDO
DOORFDWLRQ VFKHPH GHVSLWH WKHLU XVHIXOQHVV DV DX[LOLDU\ VFKHPHV , VKDOO UHYLVLW WKLV SRLQW ODWHU DQG GLVFXVV
ZK\ VLQFH ZKHQ WKH ODUJH VWDWXV YDULDQFH VRFLHWLHV LQ WKH 7LPHV RI :DU EHJDQ WR VKRZ VLJQV RI
GLVLQWHJUDWLRQ DW DURXQG WKH WK &HQWXU\ YLJRURXV FODLPV KDYH EHHQ PDGH WR SXW WKHP DV WKH PDMRU
DOORFDWLRQ VFKHPH IRU WKH VRFLDO ZHDOWK DQG DOVR ZK\ DFWXDO DWWHPSWV WR FRQVWUXFW WKLV XWRSLDQ VRFLDOLVP
ZHUH GHVWLQHG WR IDLO
)RU WKH WLPH EHLQJ OHW PH KDUN EDFN WR WKH ROG 7LPHV RI :DU DJDLQ
(PSHURUV DQG EXUHDXFUDWV
1RZ OHW PH LQWURGXFH DQRWKHU JURVV FDWHJRU\ RI
FRPPXQLW\ RU
VWDWH
HPSLUH
KHUH ZKLFK DSSOLHV IRU D YHU\ ODUJH
LQ WKH 7LPHV RI :DU ZKRVH VRFLRSROLWLFDO V\VWHP VKRZHG D VWURQJ FRQWUDVW WR WKDW RI
NLQJGRP VR IDU GLVFXVVHG :KDW , KDYH EHHQ FDOOLQJ D NLQJGRP PD\ DOVR KDYH UXOHG RYHU D ODUJH FRPPXQLW\
EXW LW ZDV JHQHUDOO\ GLYLGHG LQWR VHPLDXWRQRPRXV VXEFRPPXQLWLHV FDOOHG WKH KRXVHV DQG WKH KHDG RI D
NLQJGRP JHQHULFDOO\ FDOOHG WKH NLQJ KHUH ZDV QR PRUH WKDQ WKH KHDG RI WKH DOOLDQFH FRDOLWLRQ RI PDMRU
KRXVHV
:KLOH WKH KRXVH V\VWHP SXW UHODWLYHO\ OLWWOH GHPDQG RI WKH FDSDELOLW\ RI GLUHFW JRYHUQDQFH RQ WKH
NLQJ DQG RWKHU PDMRU KRXVH KHDGV EHFDXVH PXFK RI LW ZDV UHOHJDWHG WKH VPDOOHU KRXVHV QHVWHG LQ PDMRU
KRXVHV D NLQJGRP ZDV RIWHQ EXUGHQHG ZLWK LQWHUQDO VWULIHV DQG ZDUV DV KRXVH KHDGV ZHUH RIWHQ ULYDOV DV
ZHOO DV DOOLHV 2FFDVLRQDOO\ LW RFFXUUHG WKDW RQH RI WKH UHVRXUFHIXO PDMRU KRXVHV OHG E\ WKH KHDG ZKR ZDV D
JHQLXV RI PLOLWDU\ DQGRU GLSORPDWLF VWUDWHJLHV VXFFHHGHG LQ VXEMXJDWLQJ QHLJKERULQJ FRPPXQLWLHV DQG
XQLILHG WKHP LQWR D VLQJOH FRPPXQLW\ WR ZKLFK WKH WHUP HPSLUH
PD\ EH DSSOLHG
7KH SHUVRQ ZKR EXLOW VXFK DQ HPSLUH WKH
HPSHURU
FRPPDQGHG D JUHDW SRZHU DQG D YHU\ KLJK SHDN
VWDWXV WR PDWFK DV WKH VXFFHVVLYH FRQTXHVWV RI QHLJKERULQJ FRPPXQLWLHV KHDSHG XS KRQRU DIWHU KRQRU XSRQ
WKH SHUVRQ ZLWK WKH JUHDWO\ HQODUJHG FRPPXQLW\ LQ VXSSRUW RI KLP DV DQ H[WUD SRZHU EDVH 7KH WRS RI WKH
WDSHUHG S\UDPLGDO VWDWXV FRQVWLWXWLRQ ZLWKLQ DQ HPSLUH ZRXOG EH PRUH VKDUSO\ SRLQWHG WKDQ ZLWKLQ D
NLQJGRP HVSHFLDOO\ EHFDXVH WKH HPSHURU ZRXOG DEKRU FRPSHWLWRUV 6R HYHQ ZKHQ VRPH RI WKH KRXVHV PLJKW
EH DOORZHG WR UHPDLQ WKH VWDWXV RI WKHLU KHDGV ZRXOG EH JUHDWO\ UHGXFHG
7KH RWKHU VLGH RI WKH FRLQ RI WKLV UHLJQ LPSHULDO VW\OH ZDV WKDW WKH HPSHURU FRXOG QR ORQJHU UHOHJDWH
WKH WDVN RI JRYHUQDQFH WR PRUH RU OHVV DXWRQRPRXV KRXVHV 6LQFH LW ZDV EH\RQG TXHVWLRQ IRU WKH HPSHURU
KLPVHOI WR JRYHUQ VR YDVW D FRPPXQLW\ KH QHHGHG D YHU\ HIILFLHQW WRRO IRU JRYHUQDQFH D ZHOO RUJDQL]HG
DUWLILFLDO FRDOLWLRQ VSHFLDOL]HG IRU JRYHUQDQFH DQG DGPLQLVWUDWLRQ
LH
D OR\DO
EXUHDXFUDF\
KHDGHG E\ WKH
HPSHURU
%XUHDXFUDWLF RUJDQL]DWLRQV FRXOG KDYH H[LVWHG LQ PDMRU KRXVHV HYHQ LQ IHXGDOLVWLF WLPHV EXW LW ZDV
HPSLUHV ZKLFK EDGO\ QHHGHG DQ HIILFLHQW SURIHVVLRQDO EXUHDXFUDF\ DQG RQFH VXFK D EXUHDXFUDF\ ZDV
HVWDEOLVKHG LW IDU RXWOLYHG DV DQ DUWLILFLDO FRDOLWLRQ LQGLYLGXDO HPSHURUV DQG RIWHQ EURXJKW D JUHDW
SURVSHULW\ WR WKH HPSLUH 1RWH WKDW WKH ILUVW HPSHURU ZKR IRXQGHG WKH HPSLUH ZDV XVXDOO\ D SHUVRQ RI D JUHDW
FRPSHWHQFH EXW KH ZDV VWLOO PRUWDO ,Q RUGHU WR DYRLG WKH FULVHV WR WKH LQWHJULW\ RI WKH HPSLUH WKH IRXQGLQJ
HPSHURU ZDV DOPRVW ERXQG WR VWDUW D G\QDVW\ ZLWK D JHQHUDOO\ ZHOO GHILQHG VXFFHVVLRQ UXOHV :LWKRXW
VXFFHVVLRQ WURXEOHV KRZHYHU WKH FKDQFHV ZHUH WKDW KLV VXFFHVVRUV ZHUH OHVV FRPSHWHQW WKDQ KH DQG FRXOG
QRW UXOH DV ZHOO DV KH 6WLOO PDQ\ HPSLUHV VXUYLYHG TXLWH D ORQJ WLPH GHVSLWH RFFDVLRQDO PLVHUDEO\ SDPSHUHG
HPSHURUV ZKRVH PLQGV ZHUH HQWLUHO\ HOVHZKHUH WKDQ ZLVH JRYHUQDQFH DV D ZHOO HVWDEOLVKHG EXUHDXFUDF\ ZDV
DOPRVW VHOIVXIILFLHQW 7KH\ MXVW JRYHUQHG XQGHU WKH QDPH RI WKH HPSHURU DQG WKH SHRSOH RI WKH HPSLUH
ZRXOG QRW KDYH FDUHG HLWKHU ZD\ DV ORQJ DV WKH EXUHDXFUDWV GLG WKHLU MREV ULJKW
/HW PH PDNH D IHZ FRQMHFWXUHV DERXW WKLV DSSDUHQW VHOI VXIILFLHQF\ RI LPSHULDO EXUHDXFUDF\ RQ WKH
EDVLV RI VRPH SHUYDVLYH FKDUDFWHULVWLFV ZH REVHUYH RI FRQWHPSRUDU\ EXUHDXFUDWV LQ WKH ZRUOG WRGD\ :KDW
PDNHV EXUHDXFUDWLF JRYHUQLQJ RUJDQL]DWLRQ RI FRPPXQLWLHV FRQVSLFXRXVO\ GLVWLQFW IURP RWKHU W\SHV RI
DUWLILFLDO FRDOLWLRQV VXFK DV EXVLQHVV FRUSRUDWLRQV LV WKDW WKH IRUPHU KDV QR FRPSHWLWRU ZKLOH WKH ODWWHU DUH
DOZD\V EHVHW ZLWK FRPSHWLWRUV &RPSHWLWRUV FUHDWH QHHGV IRU DQ DUWLILFLDO FRDOLWLRQ WR NHHS LWV FRDOLWLRQDO
HIIHFWLYHQHVV ZKLFK RIWHQ IRUFH LW WR UHRUJDQL]H LWV FRDOLWLRQDO VWUXFWXUH ,Q RUGHU WR EH DEOH WR GR LW WKH WRS
PDQDJHPHQW RI D EXVLQHVV FRUSRUDWLRQV KDV WR KDYH D JRRG LPDJH RI ZKDW WKH FRUSRUDWLRQ DV D ZKROH LV
IXQFWLRQLQJ DQG LW PD\ DOVR HQFRXUDJH DW OHDVW WR D FHUWDLQ GHJUHH IRU HDFK RI LWV HPSOR\HHV WR WDNH DQ
LQLWLDWLYH IRU ZLQQLQJ WKH FRPSHWLWLRQ DQG ZLOO QRW JUXGJH LQ JLYLQJ D ODUJH PHULW ZKR KDV GRQH VRPH
RXWVWDQGLQJ FRQWULEXWLRQ WR WKH RSHUDWLRQ RI WKH FRUSRUDWLRQ DQG WKH SHUVRQ WKXV PHULWHG PD\ EH SURPRWHG
YHU\ TXLFNO\
7KH RSHUDWLRQDO PRGH RI D EXUHDXFUDF\ PD\ EH FKDUDFWHUL]HG E\ WKH QHJDWLRQ RI DOO WKHVH IHDWXUHV RI
KLJKO\ FRPSHWLWLYH EXVLQHVV FRUSRUDWLRQV 2QFH D ZHOO IXQFWLRQLQJ EXUHDXFUDF\ ZDV HVWDEOLVKHG DOO WKDW LV
UHTXLUHG RI WKHP LV WR SHUIRUP LWV IXQFWLRQV DV LW KDV EHHQ 8QGHU WKDW UHTXLUHPHQW LW LV QR ZRQGHU WKDW
EXUHDXFUDWV EHFRPH WUDGLWLRQDOLVWV ,Q D ZD\ D EXUHDXFUDF\ LV VRPHZKDW OLNH D KXJH PDFKLQHU\ OLNH VRPH
ROG PHFKDQLFDO FORFN PDGH RI WKRXVDQGV RI VWXUG\ SLHFHV DV ORQJ DV WKHVH SLHFHV NHHS IXQFWLRQLQJ WKH FORFN
ZRXOG FRQWLQXH NHHSLQJ WLPH ZLWKRXW UHTXLULQJ LWV XVHU
V NQRZOHGJH DERXW LWV VHFUHWV LI QR RQH PHGGOHV ZLWK
LW VR FKLOGUHQ DUH IRUELGGHQ WR SU\ LQWR WKH LQVLGH RI WKH PDFKLQH RXW RI FXULRVLW\
3UREDEO\ WKDW ZDV ZK\ HYHQ DQ LQFRPSHWHQW HPSHURU FRXOG FRPIRUWDEO\ VLW RQ WKH LPSHULDO
EXUHDXFUDF\ GRLQJ QRWKLQJ DQG FRQWHPSRUDU\ SROLWLFLDQV ZKR KHDG YDULRXV JRYHUQPHQWDO EXUHDXV DV
PLQLVWHUV GR OLWWOH PRUH WKDQ DVVLJQLQJ WDVNV WR RIILFLDOV ZLWKRXW PXFK FRQFHUQ DERXW KRZ WKH\ GR WKHP 6R
HPSHURUV DQG PLQLVWHUV FRPH DQG JR WKH EXUHDXFUDF\ DV D ZKROH RXWOLYHV WKHP YLUWXDOO\ XQFKDQJHG
7KLV DOVR H[SODLQV ZK\ SURPRWLRQV LQ D EXUHDXFUDF\ DSSHDU WR EH GHFLGHG PRUH RQ WKH EDVLV RI
IHZQHVV RI D SHUVRQ
V GHPHULWV UDWKHU WKDQ WKH PHULWV DFKLHYHG ,W ZRXOG EH YHU\ GLIILFXOW WR GR VRPH
RXWVWDQGLQJ
FRQWULEXWLRQ WR D WUDGLWLRQERXQG RUJDQL]DWLRQ ZKLOH LW LV HQWLUHO\ SRVVLEOH IRU D SHUVRQ WR GR
VRPH RXWVWDQGLQJ GLVFRQWULEXWLRQ 6R ZKHQ VRPH SRVW LQ EXUHDXFUDF\ QHHGHG WR EH ILOOHG WKH FDQGLGDWH
ZRXOG EH ORRNHG IRU ZKR KDV DFFXPXODWHG WKH OHDVW GHPHULW
LH
WKH RQH ZKR KDV EHHQ PRVW IDLWKIXO WR
WUDGLWLRQDO ZD\V
7KLV GHPHULWGHSHQGHQW SURPRWLRQ SULQFLSOH KRZHYHU LV QRW WR EH WKRXJKW DV WKH ZKROH WUXWK
7KLV GRHV QRW PHDQ WKDW DOO EXVLQHVV FRUSRUDWLRQV RSHUDWH LQ WKLV ZD\ ,W LV ZHOONQRZQ WKDW VRPH WHQGV WR RSHUDWH LQ D
YHU\ VLPLODU ZD\ WR EXUHDXFUDF\ HVSHFLDOO\ WKRVH ZKLFK DUH YHU\ ELJ LQ VL]H DQG QHDUO\ PRQRSROL]LQJ WKH PDUNHW
WKRXJK QRW ZURQJ HLWKHU 5HPHPEHU WKDW WKH LPSHULDO EXUHDXFUDF\ DQG OLNHZLVH RWKHU EXUHDXFUDFLHV RI D
ODUJH VFDOH RIWHQ YLUWXDOO\ JRYHUQHG D ODUJH FRPPXQLW\ ZKLFK LV ERXQG WR SUHVHQW WKHP ZLWK QXPHURXV
H[WUHPHO\ FRPSOLFDWHG LVVXHV 7DVN RI VROYLQJ WKHP ZLWKRXW RYHUWO\ VWHSSLQJ RXW RI WUDGLWLRQDO ZD\V ZRXOG
EH H[WUHPHO\ WRXJK MREV UHTXLULQJ WRS RIILFLDOV RI WKH EXUHDXFUDF\ H[FOXGLQJ WKHLU QRPLQDOO\ DSSRLQWHG
KHDGV WR EH H[FHHGLQJ UHVRXUFHIXO ZLWK YDULRXV NLQGV RI SRZHU EDVHV 6R D ODUJH EXUHDXFUDF\ ZRXOG DOZD\V
KDYH QHHGHG WR UHFUXLW UHDOO\ FDSDEOH \RXQJVWHUV UHJDUGOHVV RI WKHLU VRFLDO FODVVHV 6R LPSHULDO EXUHDXFUDFLHV
ZRXOG KDYH RSHUDWHG DV D VRUW RI IXQQHO WR DWWUDFW DEOH FRPPRQHUV IRU ZKRP WKH LPSHULDO EXUHDXFUDF\
RIIHUHG QHDUO\ WKH RQO\ FKDQFH IRU WKHP WR JHW OLWHUDWH DQG HYHQWXDOO\ UDLVH WKHLU VRFLDO VWDWXV ZLWKRXW
KLQGHUHG E\ VRFLDO FODVV ERUGHUV
,Q RUGHU WR EH DEOH WR JRYHUQ QHDUO\ LQGHSHQGHQW RI WKH HPSHURU WKH LPSHULDO EXUHDXFUDF\ VKRXOG
KDYH QHHGHG HYHU\ VFUDS RI SRZHU WR DXWKRUL]H WKHPVHOYHV DQG WKH PRVW SRWHQW VRXUFH IRU VXFK D SRZHU
PXVW KDYH EHHQ LQIRUPDWLRQ -XVW E\ WKH QDWXUH RI WKHLU ZRUNV RI JRYHUQDQFH RYHU WKH ZKROH WHUULWRU\ RI DQ
HPSLUH WKH\ ZRXOG KDYH D FRQYHQLHQW DFFHVV WR DOO NLQGV RI LQIRUPDWLRQ DQG WKH\ PLJKW KDYH SDVVHG RQ MXVW
WKH PLQLPXP QHFHVVDU\ WR WKH HPSHURU DQG WKH QRPLQDO KHDGV RI WKHLUV $OO WKH UHVW WKH\ JHQHUDOO\ NHSW
VHFUHW HVSHFLDOO\ DERXW WKLQJV JRLQJ RQ LQVLGH WKH EXUHDXFUDF\ LWVHOI ,I WKH RXWVLGH ZRUOG LV NHSW LJQRUDQW
DERXW WKH LQVLGH LVVXHV LW ZRXOG HIIHFWLYHO\ SUHYHQW XQZHOFRPH PHGGOLQJ IURP RXWVLGH VRXUFHV 1RW WKDW
HYHU\WKLQJ JRHV VPRRWKO\ LQVLGH WKHUH ZRXOG ERXQG WR EH ILHUFH SRZHU VWUXJJOHV DPRQJ KLJKHU HFKHORQ
EXUHDXFUDWV EXW HYHQ WKH\ ZRXOG XVXDOO\ UHIUDLQ IURP PDNLQJ DQ\ SXEOLF GHPRQVWUDWLRQV $ PRQROLWKLF
DSSHDUDQFH RI WKH ZKROH EXUHDXFUDF\ LV DQ LPSRUWDQW NH\ WR JRYHUQ WKH ZKROH FRPPXQLW\ HIIHFWLYHO\
6R RQFH DQ HIIHFWLYH EXUHDXFUDWLF RUJDQL]DWLRQ ZDV HVWDEOLVKHG XQGHU D FRPSHWHQW HPSHURU D
UHODWLYH SHDFH FRXOG EH PDLQWDLQHG LQ WKH GRPDLQ RI DQ HPSLUH IRU TXLWH D ORQJ WLPH OLNH LQ WKH FDVH RI 3D[
5RPDQD HYHQ UHJDUGOHVV RI WKH DELOLW\ RI HDFK HPSHURU WKH FRPPXQLW\ KDG 1R V\VWHP KRZHYHU FRXOG
NHHS LWV HIIHFWLYHQHVV HQGOHVVO\ HVSHFLDOO\ D V\VWHP DV VWLIIO\ RUJDQL]HG V\VWHP OLNH EXUHDXFUDF\ 1RWH WKDW
E\ LWV VWULFW WUDGLWLRQDOLVP EXUHDXFUDF\ IRUIHLWHG PXFK RI LWV YHUVDWLOLW\ 1RWH WKDW HYHQ XQGHU D SURORQJHG
SHDFH WKH SUHYDLOLQJ FRQGLWLRQ LQ WKH FRPPXQLW\ ZRXOG JUDGXDOO\ XQGHUJR VXEWOH FKDQJHV FUHDWLQJ QHZ
SUREOHPV ZKLFK FRXOG QRW EH KDQGOHG ZLWK WKH WUDGLWLRQERXQG ZD\V 6R ZKDW EXUHDXFUDF\ W\SLFDOO\ GRHV WR
FRSH ZLWK VXFK SUREOHPV LV VWDUW D QHZ EXUHDX DQG DGG ZKDWHYHU VROXWLRQV WKH QHZ EXUHDX HPSOR\HG WR WKH
ROG VHW RI WUDGLWLRQV ,Q WKLV ZD\ D EXUHDXFUDF\ NHHSV JURZLQJ IRU D WLPH EXW VRRQHU RU ODWHU WKHUH ZRXOG
FRPH D WLPH ZKHQ WKH RYHUJURZQ EXUHDXFUDF\ EHFRPHV VR FXPEHUVRPH DQG FRVW LQHIIHFWLYH WKDW LW VWUDQJOHV
LWVHOI YHU\ OLNHO\ WULJJHULQJ WKH GRZQIDOO RI WKH HPSLUH
$W WKLV SRLQW OHW PH DGG D ZRUG DERXW WKH LPSHULDO PLOLWDU\ 7KH LPSHULDO PLOLWDU\ PD\ EH
FRQVLGHUHG DOPRVW DV D SDUW RI WKH LPSHULDO EXUHDXFUDF\ DV WKH PRVW RI WKH SULQFLSOHV XQGHU ZKLFK WKH
LPSHULDO EXUHDXFUDF\ ZDV UXQ DSSOLHG WR WKH LPSHULDO PLOLWDU\ DV ZHOO 7KH EHWWHU WUDLQHG WKH\ ZHUH DV
SURIHVVLRQDOV WKH FORVHU WKH UHVHPEODQFH EHFDPH WKH VROGLHUV VWULFWO\ IROORZHG JLYHQ FRPPDQGV DQG ZRXOG
QRW KDYH VRXJKW SHUVRQDO JORU\ 7KHUH ZDV KRZHYHU RQH FULWLFDO GLIIHUHQFH 7KH JDUULVRQV RI WKH PLOLWDU\
HVSHFLDOO\ WKRVH VWDWLRQHG DW WKH ERUGHUV RI WKH HPSLUH KDG FRPSHWLWRUV
LH
WKH HQHPLHV EH\RQG WKH ERUGHUV
WKH\ KDG WR ILJKW :KHQ VRPH HQHP\ JUHZ LWV SRZHU WKH LPSHULDO PLOLWDU\ FRXOG QRW DIIRUG WR VWD\ VWLFNOHU WR
ROG WUDGLWLRQV $Q\ VROGLHU RU RIILFHU ZKR GHPRQVWUDWHG WKHLU RXWVWDQGLQJ ILJKWLQJ DELOLW\ KDG WR EH KRQRUHG
DQG SURPRWHG 6R E\ QHFHVVLW\ VRPH RI WKHVH JDUULVRQV RIWHQ PDLQWDLQHG WKHLU HIIHFWLYHQHVV EHWWHU WKDQ WKH
FHQWUDO JRYHUQPHQW DQG RIWHQ EHFDPH FULWLFDO SOD\HUV LQ WKH SROLWLFDO JDPH ZKHQ WKH FHQWUDO JRYHUQPHQW
ZDV ZHDNHQHG
%XLOGLQJXS WKH SHDN VWDWXV IRU WKH UXOHU
$V WKH UHLJQ RI D UXOHU EHFDPH ODUJH ZKHWKHU EH WKH UXOHU D NLQJ RU DQ HPSHURU WKH UXOHU QHHGHG WR
UDLVH DQG NHHS KLV RU KHU VWDWXV WKDW PXFK KLJKHU 7KLV ZDV QRW MXVW WKH UXOHU
V VWDWXV SURPRWLRQ XUJHEDVHG
DPELWLRQ LW ZDV PRUH IRU WKH QHHG WR NHHS D SURSHU WDSHUHG S\UDPLGDO VKDSH RI VWDWXV FRQVWLWXWLRQ RYHU WKH
YDVW SRSXODWLRQ XQGHU WKH UXOHU
V UHLJQ 2QO\ XQGHU D VWDWXV FRQVWLWXWLRQ ZLWK D YHU\ KLJK SHDN VWDWXV FRXOG EH
KRXVHG YDULRXV DUWLILFLDO FRDOLWLRQV RI WKH 7LPHV RI :DU VW\OH ZKLFK RSHUDWHG PRVWO\ E\ D VXSHULRU
V
FRPPDQGV ZHUH XVXDOO\ DXWRPDWLFDOO\ REH\HG E\ VXERUGLQDWHV RXW RI WKH UHVSHFW WR WKH IRUPHU ,Q WKH SDVW D
JUHDW UXOHU ZDV RIWHQ OLNHQHG WR WKH VXQ DQG WKLV LV D UDWKHU DSW PHWDSKRU DV WKH UXOHU VKRXOG VWD\ KLJK DQG
VKLQH JORULRXVO\ VR WKDW HYHQ UHEHOOLRXV EDUEDULF
SHRSOH OLYLQJ QHDU WKH ERUGHU ZRXOG EH DZHVWUXFN E\ WKH
DXWKRULW\ RI WKH UXOHU
&DHVDU WKH 5RPDQ ZRXOG EH D JRRG H[DPSOH LQ SRLQW +H PLJKW QRW KDYH ZDQWHG WR EHFRPH DQ
HPSHURU LI KH GLG QRW H[SDQG WKH 5RPDQ WHUULWRU\ VR ODUJH E\ FRQTXHULQJ WKH YDVW ODQGV RI *DXO +H
REYLRXVO\ NQHZ WKDW 5RPH FRXOG QRW NHHS RQ UHLJQLQJ RYHU WKH KXJHO\ H[SDQGHG WHUULWRU\ ZLWK LWV WUDGLWLRQDO
ROLJDUFK\ 5RPH QHHGHG WR WUDQVIRUP LWVHOI LQWR DQ HPSLUH DQG KH KLPVHOI FRXOG EH WKH RQO\ FDQGLGDWH IRU
WKH HPSHURU ZLWK KLV PRXQWHG KRQRUV WKURXJK KLV UHSHDWHG YLFWRULHV SURSHUO\ GHPRQVWUDWHG E\ WKH YLFWRU\
SDUDGHV ZKLFK SXW DOO 5RPDQ FLWL]HQV LQ IXURU H[FHSW IRU D IHZ FRQVHUYDWLYH VHQDWRUV 'HVSLWH KLV
DVVDVVLQDWLRQ &DHVDU
V SODQ ZDV LPSHULDOL]DWLRQ RI 5RPH ZDV YLUWXDOO\ DFFRPSOLVKHG E\ $XJXVWXV FRPSOHWH
ZLWK SURIHVVLRQDOL]HG DUP\ DQG EXUHDXFUDF\ .XQR ,W LV UHDOO\ QRWHZRUWK\ WKDW ,PSHULDO 5RPH
WKULYHG RQ VLQFH WKHQ HYHQ GHVSLWH FUD]\ HPSHURUV 5RPH VRPHWLPHV KDG %\]DQWLQH 5RPH HYHQ VXUYLYHG WLOO
WKH WK &HQWXU\ DOWKRXJK DW WKH HQG LW ZDV QR PRUH WKDQ DQRWKHU IHXGDOLVWLF NLQJGRP
%H WKH\ NLQJV RU HPSHURUV WKH KLJK DXWKRULW\ RI UXOHUV KDG WR EH PDLQWDLQHG RIWHQ ZLWK D
WUHPHQGRXV HIIRUW RQ WKHLU VLGH 6RPHWLPHV WKH\ ZHQW RQ PLOLWDU\ FDPSDLJQV VROHO\ WR DFTXLUH PRUH KRQRUV
WR FRQVROLGDWH WKHLU DXWKRULW\ 6RPH RI WKHP WULHG WR GHLI\ WKHPVHOYHV RU GHLILHG WKHLU IRUHEHDUV ,Q 5RPH
HYHU\ HPSHURU ZDV GHLILHG SRVWKXPRXVO\ /RXLV ;,9 SURFODLPHG KLPVHOI WKH SUR[\ RI *RG DV WKH
PRQRWKHLVWLF &KULVWLDQLW\ DV WKH QDWLRQDO UHOLJLRQ IRUEDGH KLV VHOIGHLILFDWLRQ 7KHVH GHLILFDWLRQV ZHUH
XQGRXEWHGO\ DWWHPSWV WR YHVW WKHPVHOYHV ZLWK VRPH FKDULVPD DV WKHLU VWDWXV ZDV FORVHVW WR KHDYHQ RU
2O\PSXV DPRQJ DOO WKH SHRSOH LQ WKH ZRUOG ZKR ZRXOG EH VXUSULVHG LI WKH\ FODLPHG WR SDUWDNH LQ VRPH
VXSHUQDWXUDO SRZHUV RI WKH GHQL]HQV RI KHDYHQ"
:LWK DWWHPSWV RI VHOIGHLILFDWLRQ RU ZLWKRXW UXOHUV QHHGHG WR GHPRQVWUDWH WKHLU VXSHULRU SRZHUV WR
NHHS XS WKHLU VWDWXV DQG QHDUO\ FRQVWDQWO\ VR DV RWKHUZLVH WKH FDSULFLRXV SXEOLF PLJKW VXVSHFW WKH\ ZHUH
KLGLQJ WKHLU IODJJLQJ SRZHU 2QH RI WKH SRSXODU PHWKRG HPSOR\HG IRU GHPRQVWUDWLRQ RI WKHLU SRZHUV ZDV WR
HUHFW KXJH DQG PDJQLILFHQW HGLILFHV S\UDPLGV FDWKHGUDOV DQG SDODFHV DV ZHOO DV KXJH VWDWXHV DQG SRUWUDLWV
RI WKHPVHOYHV D WUDGLWLRQ IROORZHG E\ VRPH UXOHUV HYHQ WRGD\ $OVR WKHUH ZHUH PRQXPHQWV LQ ZKLFK WKHLU
KRQRUV ZHUH GHHSO\ HQJUDYHG VR WKDW WKH FRPPXQLW\ PHPEHUV DQG WKHLU GHVFHQGDQWV ZRXOG QHYHU WR IRUJHW
WKHP 6RPH RI WKHP DOVR RUJDQL]HG FHUHPRQLHV VSRQVRUHG SXEOLF HQWHUWDLQPHQWV DQG VR RQ ,I WKHVH
GHPRQVWUDWLYH DFWLYLWLHV RI WKHLUV VWLOO DSSHDUHG LQVXIILFLHQW IRU PDLQWDLQLQJ WKHLU KLJK VWDWXV WKH\ PLJKW
RIWHQ IHOW FRPSHOOHG WR ULVN DQRWKHU ZDU WKXV IXHOLQJ ZDU IUHQ]\ WKURXJKRXW WKH 7LPHV RI :DU
0RQRSRO\ RI NQRZOHGJH DV D VRXUFH RI SRZHU
7KH KLVWRU\ GXULQJ WKH 7LPHV RI :DU WKH KLVWRU\ PD\ ORRN D OLWWOH UHSHWLWLRXV DV IDU DV WKH SROLWLFDO
VW\OHV HPSOR\HG IRU JRYHUQLQJ FRPPXQLWLHV DUH FRQFHUQHG $ PLJKW\ NLQJ RIWHQ WXUQHG LQWR DQ HPSHURU E\
FRQTXHULQJ RU LQWLPLGDWLQJ QHDUE\ FRPPXQLWLHV 7KH JORU\ RI VXFK DQ HPSLUH ZRXOG XVXDOO\ GZLQGOHG LQ WKH
VXFFHHGLQJ HPSHURUV
WLPH LQYLWLQJ LWV FRQTXHVW E\ DQRWKHU HPSLUH RU UHHVWDEOLVKHG LWVHOI LQ DQRWKHU IRUP RI
IHXGDOLVWLF KRXVH V\VWHP 2WKHU SROLWLFDO V\VWHPV OLNH UHSXEOLFV ROLJDUFKLHV DQG PL[WXUHV RI DOO WKHVH ZHUH
DOVR WULHG 6WLOO HPSLUHV DQG IHXGDOLVWLF KRXVH V\VWHPV UHPDLQHG WR EH WKH PRVW SRSXODU SHUKDSV EHFDXVH
WKH\ ZHUH WKH PRVW FRQYHQLHQW SROLWLFDO V\VWHPV WR PDLQWDLQ D KLJK SHDN VWDWXV IRU WKH UXOHU WKH SUHUHTXLVLWH
IRU 7LPHV RI :DU FRPPXQLWLHV WR UHPDLQ D YLDEOH WKURXJK D ODUJH FRDOLWLRQDO SRZHU VXFK D V\VWHP FRXOG
KDYH SURGXFHG
%\ VD\LQJ VR , GR QRW PHDQ WKDW WKH KLVWRULFDO SURFHVVHV RI WKH 7LPHV RI :DU ZHUH DQ\WKLQJ OLNH
FLUFXODU RU RVFLOODWLQJ EHWZHHQ WZR SROHV VLQFH RQH PDMRU DVSHFW RI WKH KXPDQ FLYLOL]DWLRQ WKH DUWLILFLDO
HYROXWLRQ LQH[RUDEO\ ZHQW RQ LQ WKH VLQJOH GLUHFWLRQ )RU RQH WKLQJ WKH LQFHVVDQW ZDUULQJ DPRQJ
FRPPXQLWLHV SURYLGHG D VWURQJ VHOHFWLRQ SUHVVXUH XSRQ WKH ILJKWLQJ WHFKQRORJ\ OLNH WKH ZHDSRQU\ DQG LWV
XVH DV EHWWHU DUPHG WURRSV ZRXOG KDYH KDG D GHILQLWH DGYDQWDJH RYHU WKH HQHP\ ZKHQ WKH\ ZHUH QHDUO\
PDWFKHG LQ RWKHU DVSHFWV 6XFK DGYDQFHPHQWV LQ PDNLQJ EHWWHU WRROV ZHUH QDWXUDOO\ QRW FRQILQHG LQ WKH
GRPDLQ RI ZHDSRQULHV DQ\ LQQRYDWLRQ LQ WRROPDNLQJ KDV WR EH EDFNHG XS E\ UHOHYDQW NQRZOHGJH DV PHWD
WRROV DQG WKH NQRZOHGJH WKDW KDV VXSSRUWHG DQ LQQRYDWLRQ LQ RQH DUHD PD\ EH DSSOLHG LQ RWKHU DUHDV 6R
LPSURYHPHQWV RI ZHDSRQULHV LQ WKH 7LPHV RI :DU ZRXOG XVXDOO\ KDG VWLPXODWHG LPSURYHPHQWV RI
HJ
IDUPLQJ WRROV DQG PRUH JHQHUDOO\ WRROPDQXIDFWXULQJ WHFKQRORJLHV LQ PXFK KLJKHU OHYHOV DV ZHOO
7KLV DGYDQFHPHQW RI DUWLILFLDO HYROXWLRQ JHQHUDOO\ FRQWULEXWHG LQ PDNLQJ FRPPXQLWLHV PRUH
SURVSHURXV LQFUHDVLQJ WKHLU SRSXODWLRQV DQG WKH UXOLQJ FODVV RI VXFK D FRPPXQLW\ FRXOG KDYH EXLOW D
PLJKWLHU SRZHU EDVH DQG KLJKHU VWDWXV WKDQ EHIRUH E\ DEVRUELQJ PXFK RI WKH ZHDOWK WKXV SURGXFHG 7KLV
DGYDQFHPHQW RI DUWLILFLDO HYROXWLRQ KRZHYHU ZRXOG KDYH PDGH WKH UXOLQJ FODVV IDFH D VRUW RI GLOHPPD KHUH
,Q RUGHU WR FUHDWH WKH ZHDOWK DV WKH ERRQ RI DUWLILFLDO HYROXWLRQ WKH\ KDG WR DOORZ WKH FRPPRQ SHRSOH EH
WKHP IDUPHUV RU VROGLHUV XVH WKHVH QHZO\ DYDLODEOH PDWHULDO WRROV ZKLFK ZRXOG LQHYLWDEO\ KDYH PDGH WKH
FRPPRQ LQGLYLGXDOV WKDW PXFK SRZHUIXO WKDQ EHIRUH 2Q WKH RWKHU KDQG LQ FRPSOLDQFH ZLWK WKH FRQVWDQW
FRPPXQLW\ PHDQ VWDWXV DVVXPSWLRQ WKH WDSHUHG S\UDPLGDO VWDWXV FRQVWLWXWLRQ ZLWKLQ WKH FRPPXQLW\ ZLWK D
YHU\ KLJK SHDN VWDWXV FRXOG KDYH EHHQ PDLQWDLQHG RQO\ E\ WKH H[LVWHQFH RI D YHU\ ODUJH QXPEHU RI ORZ VWDWXV
FRPPRQ SHRSOH
$SSDUHQWO\ WKH\ UHVROYHG WKLV GLOHPPD E\ GHQ\LQJ WKH FRPPRQ SHRSOH DFFHVV WR NQRZOHGJH DQ\
OHYHO KLJKHU WKDQ DERXW WKH GLUHFW XVHV RI WKHVH DGYDQFHG WRROV 7KLV FRXOG KDYH HDVLO\ EHHQ GRQH E\ NHHSLQJ
WKHP LOOLWHUDWH E\ GHSULYLQJ WKHP RI FKDQFHV RI JHWWLQJ HGXFDWHG 6LQFH WKH NLQG RI DGYDQFHG NQRZOHGJH
SURYLGHG E\ DUWLILFLDO HYROXWLRQ FRXOG EH SUHVHUYHG RQO\ WKURXJK ZULWWHQ GRFXPHQWV RQO\ WKRVH ZKR KDG
OHDUQHG WR EH DEOH WR UHDG DQG ZULWH FRXOG KDYH DFFHVV WR WKH DGYDQFHG SLHFHV RI NQRZOHGJH VXFK DV WKRVH
VWRUHG LQ UR\DO DUFKLYHV DQG OLEUDULHV 6R E\ PRQRSROL]LQJ WKH FKDQFHV RI EHLQJ HGXFDWHG RQO\ WR WKHPVHOYHV
WKH UXOLQJ FODVV FRXOG KDYH VHFXUHG WKH VXEVWDQWLYH SRZHU EDVH SURYLGHG E\ WKH SRVVHVVLRQ RI NQRZOHGJH
HQDEOLQJ WKHP WR NHHS WKHLU VWDWXV GLVWLQFWO\ KLJKHU WKDQ WKRVH RI FRPPRQ SHRSOHV
7KLV GRHV QRW PHDQ WKDW HPSHURUV DQG NLQJV DQG RWKHU PHPEHUV RI WKH UXOLQJ FODVV ZHUH DOO YHU\
NQRZOHGJHDEOH 7KH DFWXDO KDQGOLQJ RI NQRZOHGJH ZRXOG PRVWO\ EH GRQH E\ SURIHVVLRQDO LQWHOOHFWXDOV LQ WKH
HPSOR\PHQW RI UXOLQJ FODVV PHPEHUV DQG DOO WKDW ZDV UHTXLUHG RI WKH ODWWHU ZDV WR SRVVHVV KLJK HQRXJK
LQWHOOLJHQFH WR EH DEOH WR JLYH SURSHU FRPPDQGV DQG SURSHU TXHVWLRQV WR WKHVH SURIHVVLRQDOV LQ WKH OLJKW RI
WKH JLYHQ VLWXDWLRQ 1RWH KHUH DOVR WKH IDFW WKDW VRPH QREOH FODVV SHUVRQV DFTXLUHG WKHLU KRQRU DOPRVW DV
JRRG D RQH DV D PLOLWDU\ NXGRV E\ GHPRQVWUDWLQJ WKHLU SURZHVV LQ DUWLVWLF XVH RI ZRUGV OLNH ZULWLQJ ILQH
SRHWULHV
,VVXHV RI WKH ULVLQJ PLGGOH FODVV
'XULQJ DOO WKURXJK WKHVH SHULRGV RI YLROHQW SROLWLFDO HYHQWV DQG ZDUV DUWLILFLDO HYROXWLRQ PDUFKHG RQ
DQG PRVW LPSRUWDQWO\ FUHDWHG VR PXFK NQRZOHGJH WKDW LW FRXOG QR ORQJHU NHSW LQ WKH PRQRSRO\ RI WKH UXOLQJ
FODVV 6RPH RI WKH DGYDQFHG NQRZOHGJH LQHYLWDEO\ VSLOOHG RYHU WR WKH SHRSOH ZKR GLG QRW EHORQJ WR WKH
UXOLQJ FODVV WKH NLQG RI SHRSOH ZKR PD\ EH EURDGO\ FDWHJRUL]HG DV
LQWHOOHFWXDOV
ZKR SXUVXHG NQRZOHGJH
IRU WKH VDNH RI JDLQLQJ NQRZOHGJH UDWKHU WKDQ EHLQJ RUGHUHG WR GR VR 6RPH LQWHOOHFWXDOV ZHUH XQGHU WKH
SDWURQDJH RI RQH QREOH RU DQRWKHU EXW WKH\ FRXOG DOVR PDNH WKHLU OLYLQJ E\ WHDFKLQJ RWKHUV ZKR VRXJKW
NQRZOHGJH DV ZHOO ,Q HLWKHU FDVH WKH NQRZOHGJH VXFK D SHUVRQ DFFXPXODWHG YHVWHG WKH SHUVRQ ZLWK D
FRQVLGHUDEOH SRZHU RI KLV RZQ $OVR DV FRPPXQLWLHV EHFDPH ELJJHU DQG PRUH SURVSHURXV WKHUH PLJKW KDYH
DSSHDUHG D IDLUO\ ZHDOWK\ EUHHG RI
PHUFKDQWV
ZKR GLG WKHLU EXVLQHVV RI WUDGLQJ DFURVV ERUGHUV RI
FRPPXQLWLHV DQG WKHUHIRUH PLJKW QRW EH HQWLUHO\ OR\DO WR WKH UXOLQJ FODVV RI WKH FRPPXQLW\ WR ZKLFK WKH\
ZHUH DIILOLDWHG 0HUFKDQWV ZRXOG QDWXUDOO\ KDYH DFTXLUHG NQRZOHGJH WKURXJK WKHLU LQWHUFRPPXQLW\
WUDQVDFWLRQV WKH NLQG RI NQRZOHGJH QRW HYHQ SRVVHVVHG E\ WKH UXOLQJ FODVV $GG WR WKHP DQRWKHU W\SHV RI
SHRSOH ZKR PD\ EH JHQHULFDOO\ FDOOHG
HQWUHSUHQHXUV
RUJDQL]HG IDVKLRQ ZH KDYH UHSUHVHQWDWLYHV RI WKH
ZKR SURGXFHG D FHUWDLQ VSHFLILHG NLQGV RI JRRGV LQ DQ
PLGGOH FODVV
ZKLFK KDG JUDGXDOO\ URVH LQ WKHLU RZQ SRZHU
PRUH RU OHVV LQGHSHQGHQW RI WKH SRZHUV RI WKH UXOLQJ FODVV
7KH HPHUJHQFH DQG ULVH RI WKH PLGGOH FODVV ZHUH DQ LQHYLWDEOH FRQVHTXHQFH RI RYHUJURZQ
FRPPXQLWLHV ZKLFK UHTXLUHG VRPH NLQG RI VRFLDO VWUXFWXUH IRU WKH FRPPRQ SHRSOH DQG KLHUDUFKLFDOO\
RUJDQL]HG DUWLILFLDO FRDOLWLRQV ZHUH SHUKDSV WKH RQO\ HIIHFWLYH PHDQV DYDLODEOH WR DFKLHYH VXFK D VRFLDO
VWUXFWXUH 6LQFH D KLHUDUFKLFDO DUWLILFLDO FRDOLWLRQ JHQHUDOO\ QHHGHG ORFDO VWDWXV GLIIHUHQWLDOV IRU LWV PHPEHUV
WKRVH KLJK RQ WKH KLHUDUFKLFDO ODGGHU ZRXOG EH SXVKHG XS DERYH WKRVH RQ ORZ DOVR LQ WKH FRPPXQLW\ZLGH
VWDWXV EHFDXVH RI WKH SRZHU WKH\ FRXOG KDYH ZLHOGHG WKURXJK WKHLU FRDOLWLRQV 7KH\ ZHUH RI WKH PLGGOH FODVV
RQO\ EHFDXVH WKH\ GLG QRW EHORQJ WR WKH UXOLQJ FODVV EXW WKH SRZHUV RI VRPH RI WKHP FRXOG HDVLO\ KDYH
VXUSDVVHG WKRVH RI PLQRU PHPEHUV RI WKH UXOLQJ FODVV
7KH HPHUJHQFH RI WKH PLGGOH FODVV FRXOG KDYH EHHQ HLWKHU ZHOFRPHG RU IURZQHG DW E\ WKH UXOLQJ
FODVV ,W ZDV D ERRQ IRU WKHP LQ WKH VHQVH WKDW WKH PLGGOH FODVV SHRSOH FRQWULEXWHG JUHDWO\ QHZ SRZHUV ZLWKLQ
WKHLU FRPPXQLWLHV ZKLFK WKH\ FRXOG HDVLO\ WDS )RU LQVWDQFH OHWWLQJ PHUFKDQWV PDNH WKHLU ZHDOWK ILUVW DQG
WKHQ FROOHFW D VLJQLILFDQW SRUWLRQ RI WKH ZHDOWK LQ VRPH IRUP RI WD[DWLRQ ZRXOG KDYH EHHQ PXFK HDVLHU WKDQ
FROOHFWLQJ WKH VDPH IURP WKH ODUJH PDVV RI FRPPRQ SRSXODFH
2Q WKH RWKHU KDQG WKH PLGGOH FODVV HYHU JDLQLQJ LWV SRZHU ZRXOG KDYH EHHQ UDWKHU LUNVRPH WR UXOHUV
HVSHFLDOO\ WKRVH ZKR ZHUH PRVW HDJHU LQ HOHYDWLQJ WKHLU SHDN VWDWXV ,PDJLQH D WDSHUHG S\UDPLGDO IRUP RI
FRPPXQLW\ VWDWXV FRQVWLWXWLRQ ZKRVH PLGGOH LV IDWWHQHG 8QGHU WKH FRQVWDQW PHDQ VWDWXV DVVXPSWLRQ WKH
VWDWXV WKDW ILOOV WKLV IDW PLGGOH KDV WR FRPH IURP VRPHZKHUH DQG WKH PRVW OLNHO\ VRXUFH RI WKLV IDWWHQLQJ
VWDWXV LV WKH KLJKHU SRUWLRQ RI WKH S\UDPLG ,I VR WKH JURZWK RI WKH PLGGOH FODVV LPSOLHV WKH SXOOLQJ GRZQ RI
WKH XSSHU SRUWLRQ RI WKH VWDWXV S\UDPLG
1RWH WKDW WKH RSSRVLWH LV DOVR WUXH 6XSSRVH WKDW WKH UXOLQJ FODVV RI D FRPPXQLW\ SHUVHFXWHG PLGGOH
FODVV SHRSOH DQG VXFFHHGHG LQ GHSULYLQJ RI WKHLU SRZHU DQG WKHUHE\ RI WKHLU VWDWXV DV ZHOO IRUFLQJ WKHP WR
MRLQ WKH ORZHU FODVV 7KH VWDWXV WKH\ ORVW WKURXJK VXFK SHUVHFXWLRQ VKRXOG JR VRPHZKHUH DV SUHGLFDWHG E\ WKH
SUHVHUYDWLRQ RI WKH FRPPXQLW\ PHDQ VWDWXV 6RPH RI LW PD\ JR GRZQZDUG WR UDLVH WKH VWDWXV RI FRPPRQ
SHRSOH SURYLGLQJ VRPH FRPPRQ SHRSOH WKH UHDVRQ WR MRLQ VXFK D SHUVHFXWLRQ LI JLYHQ WKH FKDQFH EXW WKH
HIIHFW RI VWDWXV HOHYDWLRQ IRU FRPPRQ SHRSOH ZRXOG EH PLQXVFXOH EHFDXVH WKH HIIHFW ZRXOG EH GLOXWHG RYHU
WKH VKHHU QXPEHU RI WKHP 2Q WKH RWKHU KDQG WKH HIIHFW PLJKW ZRUN GUDPDWLFDOO\ IRU WKH UXOLQJ FODVV
FRQVLVWLQJ RI D IDU IHZHU SHRSOH VKRRWLQJ XS WKH SHDN KHLJKW RI WKH VWDWXV S\UDPLG
$V GLVFXVVHG HDUOLHU VRPH UXOHUV ZHUH DQ[LRXV LQ UDLVLQJ WKHLU VWDWXV E\ XVLQJ QHDUO\ DOO SRVVLEOH
PHDQV 'LG WKH\ DOVR SHUVHFXWHG WKH PLGGOH FODVV" $ IHZ GLG EXW RWKHUV GLG QRW HYHQ WKRXJK PRVW RI WKHP
ZHUH HDJHU WR
HJ
VLSKRQ XS D SDUW RI WKH ZHDOWK RI WKH PLGGOH FODVV ZKLFK VHUYHG IRU WKH UXOLQJ FODVV WKH
GXDO SXUSRVH RI JUDEELQJ PRUH SRZHU LQWR WKHLU KDQGV ZKLOH SDULQJ RII WKH SRZHU FDFKHG E\ WKH PLGGOH FODVV
%XW WKH\ ZHUH XVXDOO\ FDUHIXO LQ QRW RYHUGRLQJ LW RU H[SOLFLWO\ SHUVHFXWLQJ WKH PLGGOH FODVV EHFDXVH WKH DFW
ZDV HTXLYDOHQW WR NLOOLQJ WKH JRRVH WKDW ODLG WKH JROGHQ HJJV (YHQ LI WKH DFW PLJKW WHPSRUDULO\ VKRRW XS WKH
SHDN VWDWXV RI WKH UXOHU WKH SHUVHFXWLRQ RI WKH PLGGOH FODVV HYHQ D SDUW RI LW ZRXOG EULQJ D VHULRXV GDPDJH
WR WKH QRUPDO IXQFWLRQLQJ RI WKH FRPPXQLW\ EULQJLQJ GRZQ WKH FRDOLWLRQDO SRZHU RI WKH FRPPXQLW\ 1RWH
WKDW VRFLDO VWDWXV LV D UHODWLYH PHDVXUH QRUPDOL]HG ZLWKLQ D FRPPXQLW\ 6R KRZHYHU KLJK WKH SHDN VWDWXV RI
WKH UXOHU RI D FRPPXQLW\ PLJKW EH WKH FRPPXQLW\ ZRXOG EHFRPH D IDLU SUH\ LQ WKH H\H RI QHLJKERULQJ
FRPPXQLWLHV LI LWV UXOHU VDFULILFHG LWV FRDOLWLRQDO SRZHU MXVW WR DFKLHYH WKH UXOHU
V KLJK SHDN VWDWXV 6R WKH
SHUVHFXWLRQ RI PLGGOH FODVV VHHPV WR EH WKH ODVW GHVSHUDWH PHDVXUH ZKHQ WKH UXOHU KDG D SDUDPRXQW QHHG WR
HOHYDWH WKH SHDN VWDWXV DQG PD\ EH XVHG DV VXFK RQO\ XQGHU FHUWDLQ VSHFLDO FRQGLWLRQV
$V ZLOO EH
GLVFXVVHG VKRUWO\ VXFK FRQGLWLRQV WRRN SODFH RQO\ YHU\ UHFHQWO\ DW WKH HQG RI WKH 7LPHV RI :DU
LH
WKH
HDUO\ KDOI RI WKH WK &HQWXU\
/HW PH EULHIO\ WRXFK XSRQ KHUH DERXW WKH ULVH RI EUHHG RI LQWHOOHFWXDOV RU IUHHWKLQNHUV ZKLFK
IORXULVKHG DOPRVW VLPXOWDQHRXVO\ URXJKO\ LQ WKH WK DQG WK &HQWXU\ %& LQ TXLWH GLVSDUDWH SDUWV RI WKH ZRUOG
UHSUHVHQWHG E\ VXFK ILJXUHV DV *DXWDPD LQ ,QGLD &RQIXFLXV DQG /DRWVH LQ &KLQD DQG 6RFUDWHV DQG 3ODWR LQ
*UHHFH ZKRVH WHDFKLQJV KDYH PRYHG WKH ZRUOG KLVWRU\ DV PDMRU EHOLHIV RI SHRSOHV VLQFH WKHQ VLJQLI\LQJ
HVSHFLDOO\ WKDW DUWLILFLDO HYROXWLRQ KDG PDGH JUHDW VWULGHV DW DERXW WKDW WLPH LQ SURYLGLQJ DEVWUDFW FRQFHSWV LQ
YHU\ KLJK OHYHO HQDEOLQJ VRPH LQWHOOHFWXDOV WR HQYLVLRQ ZRUOG PRGHOV LQ XQSUHFHGHQWHG VFDOHV ,W ZRXOG QRW
EH FRLQFLGHQWDO WKDW WKH HPHUJHQFH HPSLUHEXLOGHUV OLNH $OH[DQGHU WKH *UHDW WKH WK &HQWXU\ %& 6KL
+XDQWL WKH UG F %& DQG &DHVDU WKH VW F %& IROORZHG WKLV SHULRG WKRVH ZKR XQGRXEWHGO\ KDG
XQSUHFHGHQWHGO\ ODUJH VFDOH YLVLRQV RI WKH FRPPXQLWLHV WKH\ ZHUH FUHDWLQJ LUUHVSHFWLYH RI VRPHZKDW FULWLFDO
HYDOXDWLRQV PDGH DERXW WKHLU GHHGV E\ ODWWHU GD\ KLVWRULDQV
6KL +XDQWL LV NQRZQ DV WKH ERRNEXUQHU DV KH NLOOHG WKH IROORZHUV RI &RQIXFLXV RSSRVLQJ KLV ZD\
RI UXOLQJ DQG EXUQHG WKH ERRNV WKH\ XVHG 7KLV LV SUREDEO\ WKH ILUVW ZHOONQRZQ H[DPSOH RI SHUVHFXWLRQ RI
LQWHOOHFWXDOV HYHQ WKRXJK DSSDUHQWO\ KH GLG LW IRU KLV LUULWDWLRQ RI WKHP ZLWKRXW DQ LQWHQWLRQ RI HOHYDWLQJ KLV
HVWHHP WKURXJK WKH SHUVHFXWLRQ 7KLV HYHQW KRZHYHU LV UHPDUNDEOH GXH WR WKH VKDUS FRQWUDVW LW PDNHV WR WKH
ZD\ LQWHOOHFWXDOV ZHUH WUHDWHG LQ WKH HUD SUHFHGLQJ KLP ,W ZDV RQH RI WKH W\SLFDO IHXGDOLVWLF WLPHV LQ ZKLFK
TXLWH D IHZ IHXGDOLVWLF VWDWHV ZHUH HQJDJHG LQ ZDUIDUH FRQVWDQWO\ VKLIWLQJ WKHLU DOOLDQFHV DPRQJ WKHPVHOYHV
ZKLOH PRVW RI WKH PDMRU KRXVHV ZHOFRPHG WR KDYH LQWHOOHFWXDOV DV WKHLU
JXHVWV
DFWXDOO\ JXHVWV LQFOXGHG
WDOHQWHG QRQLQWHOOHFWXDOV DV ZHOO ZKR ZHUH IUHH WR OHDYH WKH KRVW KRXVH DQ\ WLPH WKH\ ZDQWHG 6RPH
KRXVHV ZHUH UHQRZQHG E\ WKHLU KRVSLWDOLW\ WR JXHVWV DQG LQWHOOHFWXDO JXHVWV DQVZHUHG WR WKH KRVSLWDOLW\ E\
JLYLQJ DGYLFH WR WKH KHDG RI WKH KRVW KRXVH RU H[WHQGHG VHUYLFHV LQ WKH DUW WKH\ ZHUH WDOHQWHG 6R KRZ PDQ\
DEOH JXHVWV D KRXVH KDG ZDV RIWHQ XVHG DV GHPRQVWUDWLRQ IRU WKH SRZHU RI WKH KRXVH 8QGHU VXFK
FLUFXPVWDQFHV SHUVHFXWLRQ RI LQWHOOHFWXDOV ZHUH DSSDUHQWO\ XQWKLQNDEOH ZKLFK RQO\ ZRXOG KDYH PDGH WKH
KRXVH OHVV LQ SRZHU ZKLOH PDNLQJ LWV FRPSHWLWRUV JDLQ LQ SRZHU DV SHUVHFXWHG JXHVWV ZRXOG IOHH WR WKH PRUH
KRVSLWDEOH KRXVHV 6R 6KL +XDQWL FRXOG KDYH SHUVHFXWHG VRPH LQWHOOHFWXDOV ZLWK LPSXQLW\ RQO\ EHFDXVH
WKHUH ZDV QR SODFH IRU WKHP WR IOHH WR LQ WKH XQLWHG HPSLUH RI &K
LQ '\QDVW\
, DP H[FOXGLQJ IURP P\ DUJXPHQWV RWKHU H[DPSOHV RI OHVVHU KLVWRULFDO LPSRUWDQFH WKRVH RI VRPH UXOHUV ZKR
LQFLGHQWDOO\ NLOOHG WKH JRRVH LQ GHVSHUDWLRQ RU IRU JUHHG
7KH DUW RI UXOLQJ
$W WKLV MXQFWXUH OHW PH EULHIO\ WRXFK XSRQ WKH IXQGDPHQWDO TXHVWLRQ RI ZKDW FRQVWLWXWHV WKH DFW RI
UXOLQJ
3XWWLQJ DVLGH LQILQLWH GHWDLOV RI DFWXDO DFW RI UXOLQJ WKH PRVW HVVHQWLDO FRPSRQHQW RI UXOLQJ PD\ EH
FRQVLGHUHG WR UHVLGH LQ WKH DFW RI WKH UXOLQJ ERG\ UHJDUGOHVV RI LWV SROLWLFDO VWUXFWXUH RI VHWWLQJ DQG UHYLVLQJ
VRFLDO UXOHV RU
ODZV
WKDW FRQVWUDLQ DFWLYLWLHV RI FRPPXQLW\ PHPEHUV $V VXFK WKH V\VWHP RI ODZV HQIRUFHG
E\ WKH UXOLQJ ERG\ JLYHV D FHUWDLQ VHPLSHUPDQHQW VWUXFWXUH WR WKH DFWLYLWLHV GRQH ZLWKLQ WKH FRPPXQLW\
7KH UXOLQJ ERG\ RI D FRPPXQLW\ FDQ DOVR LVVXH RIILFLDO FRPPDQGV WR FHUWDLQ PHPEHUV RI WKH
FRPPXQLW\ OLNH FRPPDQGLQJ LWV PLOLWDU\ IRUFHV WR DWWDFN D FHUWDLQ QHLJKERULQJ FRPPXQLW\ $V LQ WKLV FDVH
FRPPDQGV XVXDOO\ SXW VRPH FRPPXQLW\ PHPEHUV RQ VRPH VSHFLILF WDVN E\ FRQVWUDLQLQJ WKHLU DFWLYLWLHV
PRUH VWURQJO\ LI RQO\ WHPSRUDULO\
$QDORJLFDOO\ VSHDNLQJ WKH UXOLQJ ERG\ RI D FRPPXQLW\ PD\ EH YLHZHG DV D GHVLJQHU DQG RSHUDWRU RI
WKH V\VWHP FDOOHG FRPPXQLW\
,I LW GRHV JRRG ZRUNV RQ ERWK RI WKHVH UROHV WKLV V\VWHP ZLOO IXQFWLRQ
VPRRWKO\ DQG HIILFLHQWO\ DQG PD\ EH DEOH WR VDWLVI\ WKH QHHGV RI WKH FRPPXQLW\ ,Q UHDOLW\ IHZ UXOLQJ ERGLHV
ZRXOG KDYH HYHU EHHQ VR OXFN\ DQG FUDIW\ DV WR GHVHUYH VXFK D SUDLVLQJ SKUDVH VLQFH WKHUH DUH LQQXPHUDEOH
GLIILFXOWLHV LQKHUHQW LQ GHVLJQLQJ DQG RSHUDWLQJ D ODUJH FRPPXQLW\ V\VWHP /HW PH FRQILQH P\ DUJXPHQWV WR
WKH LVVXHV RI GHVLJQ DV VLPLODU DUJXPHQWV FDQ XVXDOO\ EH PDGH RI LVVXHV RI FRPPDQG DV ZHOO
1RWH ILUVW WKDW SHRSOH ZRXOG QRUPDOO\ REH\ QHZ ODZV WKURXJK WKHLU UXOHREVHUYDQFH HPRWLRQDO
DWWLWXGH E\ OHWWLQJ WKHP NQRZ WKH QHZ ODZV 2I FRXUVH WKHUH DUH VRPH H[FHSWLRQDO SHRSOH ZKR DUH ZLOOLQJ WR
EUHDN ODZV ZKHQ PRVW SHRSOH UHIUDLQ IURP GRLQJ FHUWDLQ WKLQJV EHFDXVH RI WKH ODZ DJDLQVW LW WKHUH XVXDOO\
DUH FKDQFH RI PDNLQJ PXFK SURILWV E\ EUHDNLQJ WKHP 7KLV LV WKH QRUPDO VWDWH RI DIIDLUV LQ DQ\ FRPPXQLW\
DQG LW LV WKH WDVN RI WKH SROLFLQJ DJHQF\ FRPPDQGHG E\ WKH UXOLQJ ERG\ WR ILQG DQG DUUHVW ODZ EUHDNHUV IRU
SURSHU SXQLVKPHQW DFFRUGLQJ WR WKH ODZ
7KH UXOLQJ ERG\ ZRXOG EH LQ WURXEOH KRZHYHU ZKHQ D ODUJH QXPEHU RI FRPPRQ SHRSOH DUH DJDLQVW
WKH ODZV LW KDV LPSRVHG XSRQ WKHP 7KHUH DUH VHYHUDO FDVHV IRU WKLV WR KDSSHQ 7KH ILUVW FDVH LV WKDW WKH QHZ
ODZV LQFOXGLQJ ROG ODZV WXUQHG VRXU E\ FKDQJLQJ QDWXUDO FRQGLWLRQV OLNH IDPLQH LPSDLU WRR PXFK RI WKH
SHRSOH
V EDVLF ULJKWV VXFK DV WKH ULJKW RI VXEVLVWHQFH DQG WKH SHRSOH UHVLVW WR WKHLU HQIRUFHPHQW 7KLV LV WKH
REYLRXV FDVH RI EDG GHVLJQ DQG WKH UXOLQJ ERG\ KDV WZR FKRLFHV LQ WKH IDFH RI VXFK D UHVLVWDQFH RI SHRSOH WR
FKDQJH WKH ODZV RU WR HQIRUFH WKHP E\ D EUXWH VKRZ RI LWV SRZHU WKURXJK WKH WKUHDW RI VHYHUH SXQLVKPHQW IRU
ODZEUHDNHUV 7KH IRUPHU LV WKH HDVLHVW EXW LWV WURXEOH LV LW ZRXOG EH KDUPIXO IRU WKH VWDWXV RI WKH UXOLQJ FODVV
LI GRQH WRR RIWHQ 7KH ODWWHU DOWHUQDWLYH PD\ ZRUN IRU D ZKLOH EXW QRW YHU\ ORQJ DV LW LV WKH VXUHVW ZD\ IRU WKH
UXOLQJ FODVV WR ORVH WKH VXSSRUW RI WKH SHRSOH
7KH VHYHUHO\ GLVFRQWHQWHG SHRSOH PLJKW WU\ WR OHDYH WKH FRPPXQLW\ LI WKDW DOWHUQDWLYH LV DYDLODEOH
2U WKH\ PD\ WXUQ LQWR D SURWHVWLQJ PRE 1RWH WKDW WKH FRPPRQ SHRSOH DUH RI OLWWOH SRZHU LQGLYLGXDOO\ LQ WKH
7LPHV RI :DU EXW D PRE FRXOG EHFRPH D WUHPHQGRXVO\ SRZHUIXO JURXS E\ WKHLU VKHHU QXPEHU D UHDO WKUHDW
WR WKH UXOLQJ ERG\ ,I WKHUH ZDV VRPHRQH RU VRPH RUJDQL]DWLRQ WR SURYLGH D VRUW RI OHDGHUVKLS VXFK D PRE
FRXOG WXUQ LQWR D UHYROW RU UHEHOOLRQ ,Q &KLQD PDQ\ G\QDVWLHV IHOO GXH WR VXFK PDVV UHEHOOLRQ RIWHQ ZLWK RYHU
D PLOOLRQ PHPEHUV OHG E\ UHOLJLRXV FXOW OHDGHUV RI RQH NLQG RU DQRWKHU :KHQ VXFK D UHEHOOLRQ VXFFHHGHG
KRZHYHU WKH UHVXOWDQW UXOHV RI UHEHOV VHOGRP ODVWHG ORQJ EHFDXVH WKH OHDGHUV GLG QRW KDYH WKH NQRZKRZV IRU
UXOLQJ D YDVW UHDOP RI WKH IRUPHU HPSLUH
6XFK LV ZKDW LV H[SHFWHG RI D EDG GHVLJQ IRU UXOH 1RWH WKDW HYHQ D JRRG GHVLJQ FRXOG DOVR PHHW D
VLPLODU UHVSRQVH IURP WKH SRSXODFH DV LW LV QRW MXVW ODZV WKDW FRQVWUDLQ SHRSOH
V EHKDYLRU 7UDGLWLRQV DUH
RIWHQ DV ELQGLQJ DV ODZV DV WKH\ DUH D SDUW RI WKH EHOLHI V\VWHPV RI WKH SHRSOH 7KH\ PD\ FKRRVH WKHLU EHOLHIV
RYHU WKH ODZV ZKHQ WKH\ FRQWUDGLFW HVSHFLDOO\ LI WKHLU UHVSHFW WR WKH UXOHU LV QRW KLJK HQRXJK 7KRXJK LW LV
GLIILFXOW WR VD\ ZKHWKHU D VHW RI ODZV UHSUHVHQWLQJ D VRFLDO GHVLJQ LV REMHFWLYHO\ JRRG RU EDG H[FHSW IRU VRPH
UHDOO\ EDG RQHV D UXOHU ZKR EHOLHYHV KLV SURSRVHG GHVLJQ LV D JRRG RQH ZRXOG EH IUXVWUDWHG E\ PHHWLQJ WKH
SHRSOH
V RSSRVLWLRQ 6R VXFK D UXOHU WHQGV WR HQIRUFH WKH GHVLJQ ZLWK DOVR D EUXWH IRUFH IRU GHPRQVWUDWLQJ LWV
JRRGQHVV DQG ZKHQ LW IDLOV WR SURGXFH LPPHGLDWH UHVXOWV PD\ WU\ WR UDLVH WKH DXWKRULW\ RI WKH UXOHU E\ SLOLQJ
XS WKH UXOHU
V KRQRUV WKURXJK ZDUOLNH PHDQV
:KDW , KDYH GRQH VR IDU LQ WKH DERYH DUJXPHQW LV WR URXJKO\ VXPPDUL]H DQ DVSHFW RI UXOLQJ ZKLFK
DSSOLHV WR PRVW SHULRGV RI WKH 7LPHV RI :DU H[FHSW LWV ILQDO SHULRG ZKHQ GLFWDWRUVKLS DQG WKH UXOH E\ IHDU
HIIHFWLYHO\ FDPH LQWR EHLQJ 7KH UXOH E\ IHDU LV D SROLWLFDO WHFKQLTXH WR WXUQ HDFK LQGLYLGXDO VXVSLFLRXV RI
HYHU\ RWKHU PDNLQJ LW KDUG IRU WKH SHRSOH IRUP D UHEHOOLRXV JURXS DJDLQVW WKH UXOLQJ ERG\ WKH JUHDWHVW ZRUU\
RI D UXOHU ZKR ZDQWV WR LPSRVH D VRFLDO GHVLJQ GLVOLNHG E\ WKH SHRSOH 7KH LGHD LWVHOI LV DQ ROG RQH XVHG
RFFDVLRQDOO\ E\ ORFDO GLFWDWRUV EXW WKH UHDVRQ ZK\ LW FUHDWHG VXFK D KDYRF LQ WKH ILUVW KDOI RI WKH WK
&HQWXU\ ZDV EHFDXVH WKH DGYDQFHG DUWLILFLDO HYROXWLRQ DVVLVWHG LWV SUDFWLFH LQ DQ XQSUHFHGHQWHG VFDOH
%HVLGHV VXFK DVVLVWDQFH RI DUWLILFLDO HYROXWLRQ LQ DSSO\LQJ SROLWLFV LW LV QRWHZRUWK\ WKDW IHZ LQQRYDWLRQV
KDYH DFWXDOO\ WDNHQ SODFH LQ WKH DUHD RI SROLWLFV LWVHOI 7KDW PD\ SUREDEO\ EH EHFDXVH WKHUH KDYH EHHQ
FRPSDUDWLYHO\ IHZ UHDO SUDFWLWLRQHUV LQ SROLWLFV DQG WKRVH ZKR ZHUH LQ WKH EXVLQHVV ZRXOG KDYH EHHQ WRR
EXV\ LQ HQJDJLQJ LQ WKHLU RZQ SROLWLFV WR EULQJ QHZ LGHDV LQWR LW %HIRUH JRLQJ LQWR WKH WKLQJV WKDW WUDQVSLUHG
LQ WKH HDUOLHU SDUW RI WKH WK &HQWXU\ OHW PH WDNH D ORRN DW WKH WK &HQWXU\ ZKHQ WKH ILUVW XQPLVWDNDEOH
VLJQDO RI WKH FRPLQJ 6HFRQG *UHDW 7UDQVLWLRQ WRRN SODFH WKH WUDQVLWLRQ WKDW UHPDGH WKH KXPDQ VRFLHWLHV DV
GUDVWLFDOO\ DV WKH ILUVW WUDQVLWLRQ GLG
7KH VHFRQG JUDQG WUDQVLWLRQ
3UHOXGH WR WKH VHFRQG JUDQG WUDQVLWLRQ WKH GUHDP RI XWRSLDQ VRFLDOLVP
7KH WK &HQWXU\ ZDV D TXLWH UHPDUNDEOH WLPH HVSHFLDOO\ LQ (XURSH ZKHUH PDQ\ HYHQWV KHUDOGLQJ
WKH QHDUQHVV RI WKH HQG RI WKH 7LPHV RI :DU DQG FRPLQJ RI WKH QHZ DJH ZKHQ WKH KXVN RI W\SLFDO SROLWLFDO
V\VWHPV RI WKH 7LPHV RI :DU ZLWK WKHLU ODUJH VWDWXV YDULDQFH ZDV DERXW WR EXUVW ,Q )UDQFH WKH FHQWXU\ EHJDQ
ZLWK NLQJ /RXLV ;,9 ZKR WULHG KDUG WR HVWDEOLVK KLV SHDN VWDWXV LQ WKH W\SLFDO IHXGDOLVWLF NLQJ VW\OH +H
GHFODUHG KLPVHOI WKH *RG
V UHSUHVHQWDWLYH RQ (DUWK GHPRQVWUDWHG KLV SRZHU E\ EXLOGLQJ WKH PDJQLILFHQW
SDODFH RI 9HUVDLOOHV DQG IRXJKW TXLWH D QXPEHU RI ZDUV WR DFFXPXODWH KRQRUV (YHQ WKRXJK KH ZDV QRW YHU\
VXFFHVVIXO LQ KLV ZDU YHQWXUHV )UDQFH SURVSHUHG XQGHU KLV UHLJQ DQG LW ZDV QRW MXVW )UDQFH WKH ZKROH
(XURSH ZDV PDGH TXLWH ULFK ZLWK WKH SURGXFWV RI WKH DFFHOHUDWLQJ DUWLILFLDO UHYROXWLRQ SURGXFLQJ D ODUJH
SRZHUIXO PLGGOH FODVV
$V PHQWLRQHG HDUOLHU D ODUJH DQG HPSRZHUHG PLGGOH FODVV GLVWRUWV WKH VKDSH RI WKH WDSHUHG
S\UDPLGDO W\SH RI FRPPXQLW\ VWDWXV FRQVWLWXWLRQ EULQJLQJ GRZQ WKH SHDN VWDWXV DQG WKDW FRXOG KDYH EHHQ
RQH RI WKH FULWLFDO IDFWRUV IRU WKH FRQWLQXDO GHFOLQH RI WKH DXWKRULW\ RI %RXUERQ G\QDVW\ LQ )UDQFH VLQFH /XLV
;,9 ZKLFK ILQDOO\ OHG WR WKH
)UHQFK 5HYROXWLRQ
LQ $PRQJ WKH SURVSHURXV PLGGOH FODVV SHRSOH ZHUH PDQ\ LQWHOOHFWXDOV RI YHU\ KLJK GHJUHH RI WKH ,&$
LQYHQWLYH FRQGLWLRQDO DQWLFLSDWLRQ FDSDELOLW\ ZKR GUHDPHG DERXW D XWRSLDQ VRFLHW\ LQ ZKLFK XQOLNH LQ DQ
ROG VW\OH SROLWLFDO V\VWHP RI KLJK VWDWXV YDULDQFH SHRSOH ZHUH EDVLFDOO\ HTXDO LQ VWDWXV DQG KDSSLO\ IUHH IURP
\RNHV LPSRVHG E\ GHVSRWLF UXOHUV 0DQ\ RI WKHP WKRXJKW DQG SUHDFKHG WKDW WKH NH\ WR OHDG WR VXFK DQ LGHDO
VRFLHW\ ZDV LQ WKH SRZHU RI UHDVRQ DQG VKDULQJ E\ HYHU\RQH WKH NQRZOHGJH REWDLQHG WKURXJK WKH SXUVXLW RI
NQRZOHGJH
SHU VH
WKH PRYHPHQW RI LQWHOOHFWXDO RI WKH WK DQG WK &HQWXU\ NQRZQ DV HQOLJKWHQPHQW
1HHGOHVV WR VD\ WKH DPRXQW RI NQRZOHGJH DFFXPXODWHG WKURXJK WKH DGYDQFH RI DUWLILFLDO HYROXWLRQ DW
WKH WLPH ZDV TXLWH VL]DEOH IDU EH\RQG WKH PRQRSRO\ RI WKH UXOLQJ FODVV DQG HIIHFWLYHO\ LQ WKH KDQGV RI WKH
PLGGOH FODVV LQWHOOHFWXDOV $ JRRG GHDO RI LW ZDV DOVR VHHSLQJ LQWR WKH FRPPRQ SHRSOH SDUWO\ EHFDXVH RI WKH
HQOLJKWHQPHQW PRYHPHQW EXW SHUKDSV PRUH RI WKHLU RZQ HQWKXVLDVP RI EHLQJ HGXFDWHG QRZ WKDW WKH
PRQRSRO\ RI NQRZOHGJH E\ WKH UXOLQJ FODVV HQGHG 6R VLQFH 0DULD 7KHUHVD WKH 4XHHQ RI $XVWULD LQLWLDWHG
FRPSXOVRU\ HGXFDWLRQ
LQ IRU KHU PDLQ REMHFWLYH RI REWDLQLQJ EHWWHU HGXFDWHG ZRUNLQJ IRUFH WKDW WKH
DGYDQFHG DUWLILFLDO HYROXWLRQ UHTXLUHG IUHH HGXFDWLRQ IRU FKLOGUHQ VRRQ EHFDPH D SDUW RI WKH FRPPRQ
GHPDQG RI WKH SHRSOHV LQ PDQ\ SODFHV DQG WKH SUDFWLFH VSUHDG ZLGHO\ DQG FRQWULEXWHG WR D ODUJH LQFUHDVH LQ
WKH SRZHU RI WKH FODVV RI FRPPRQ SHRSOH DV ZHOO 7KH 'HFODUDWLRQ RI 5LJKWV RI 0DQ DQG &LWL]HQV
JLYHQ LQ
WKH HGLFW LVVXHG E\ 1DWLRQDO $VVHPEO\ ULJKW DIWHU WKH ILUVW XSULVH RI )UHQFK 5HYROXWLRQ ZDV WKH ILUVW H[SOLFLW
WHVWLPRQ\ RI WKH LQFUHDVHG SRZHU RI FRPPRQ SHRSOH
7KH HPSRZHUPHQW RI WKH FRPPRQ SHRSOH LQ DGGLWLRQ WR WKH VDPH RI WKH PLGGOH FODVV ZRXOG KDYH
HDVLO\ WRSSOHG WKH UXOLQJ FODVV LQ DQ\ ODUJH VWDWH RI (XURSH KDG WKHUH QRW EHHQ RWKHU IDFWRUV RSHUDWLQJ DV ZHOO
,Q WKH ILUVW SODFH GHVSLWH WKH ODUJH DPRXQW RI NQRZOHGJH DPDVVHG E\ WKH PLGGOH FODVV LQWHOOHFWXDOV LW IDLOHG
WR SURGXFH DQ\ JRRG HQRXJK SROLWLFDO VXEVWLWXWH IRU ROG VW\OH UXOLQJ ZLWK KRQRUEDVHG DXWKRULW\ 7KH JRU\
EORRGVKHG
FRPPLWWHG
E\
WKHLU
UHSUHVHQWDWLYHV
DW
WKH
ODVW
VWDJH
RI
)UHQFK
5HYROXWLRQ
DSSDUHQWO\
GLVLOOXVLRQHG WKH )UHQFK SHRSOH HQRXJK WR OHW WKHLU XUJH RI DGPLUDWLRQ RU KHUR ZRUVKLS WDNH RYHU WKHLU ]HDO
ZKHQ 1DSROHRQ FDPH XS DV D YLFWRULRXV PLOLWDU\ FRPPDQGHU WUDQVIRUPLQJ )UDQFH DJDLQ LQWR DQRWKHU
YHUVLRQ RI WKH KLJK VWDWXV YDULDQFH FRPPXQLW\ DQ HPSLUH
1DSROHRQ KRZHYHU KDG WR NHHS SLOLQJ XS KLV KRQRU DV DQ HPSLUHEXLOGHU E\ FRQTXHU DIWHU FRQTXHU
DV KH KDG QR LQKHULWHG KRQRU WR VWDELOL]H KLV WKURQH XQWLO KLV HYHQWXDO GHIHDW 6R )UHQFK 5HYROXWLRQ IDLOHG WR
EULQJ GRZQ WKH
DQFLHQ UpJLPH
LPPHGLDWHO\ EXW LW ZDV DQ XQPLVWDNDEOH VLJQ IRU WKH WXUQLQJ WLGH WKDW WKH
DEXQGDQFH RI SURGXFWV RI DUWLILFLDO HYROXWLRQ HVSHFLDOO\ RI WKH NQRZOHGJH W\SH EHJDQ WR WLS WKH EDODQFH RI
SRZHUV KHOG DPRQJ UHVSHFWLYH VRFLDO FODVVHV PDNLQJ LW PRUH GLIILFXOW IRU WKH UXOLQJ FODVV WR PDLQWDLQ KLJK
VWDWXV YDULDQFH FRPPXQLWLHV 7KH PDMRU LPSDFW RI )UHQFK 5HYROXWLRQ PD\ EH VHHQ LQ WZR SRLQWV )LUVW LW
PDGH FRPPRQ SHRSOH UHDOL]H WKDW WKH\ FRXOG EXLOG XS D ODUJH SRZHU HYHQ WR WRSSOH WKH UXOLQJ ERG\ LI HQRXJK
QXPEHU RI WKHP XQLWHG 6HFRQGO\ LW DOVR PDGH PDQ\ SHRSOH QRWLFH WKDW UXOLQJ D FRPPXQLW\ ZDV DQ DUW KDUG
WR FRPH E\ DQ DUW WKDW FRXOG QRW EH DWWDLQHG MXVW E\ GUHDPLQJ VRPH LGHDO ZD\ RI UXOLQJ SDUWLFXODUO\ ZKHUH
ROG WUDGLWLRQV VWLOO OLYHG VWURQJ OLNH LQ (XURSH
,W VHHPV QRW WRR GLIILFXOW WR IDWKRP WKH UHDVRQV ZK\ WKH 8QLWHG 6WDWHV RI $PHULFD GHFODUHG KHU
LQGHSHQGHQFH D VKRUW ZKLOH EHIRUH WKH )UHQFK 5HYROXWLRQ VXFFHHGHG LQ HVWDEOLVKLQJ WKHLU GHPRFUDWLF
SROLWLFDO V\VWHP GHVSLWH WKHLU SROLWLFDO OHDGHUV VKDUHG D JUHDW GHDO ZLWK WKRVH VSLULWV RSHUDWHG LQ )UHQFK
5HYROXWLRQ )LUVW WKH\ KDG QR
DQFLHQ UpJLPH
WR ILJKW DJDLQVW WKH SROLWLFDO KHJHPRQ\ ZDV LQ WKH KDQGV RI
FRPPRQ SHRSOH DV WKH\ ZHUH HIIHFWLYHO\ DOO FRPPRQ SHRSOH ZKR HPLJUDWHG IURP (XURSH WR WKH QHZ ZRUOG
ORRNLQJ IRU IUHHGRP $V D QHZ QDWLRQ FRQVLVWLQJ RI LPPLJUDQWV RI YDULRXV RULJLQV WKH\ FRXOG IUHHO\
HVWDEOLVK ZKDWHYHU WKH IRXQGHUV RI WKH QDWLRQ GLG DV WKHLU WUDGLWLRQV 8QOLNH )UHQFK WKH\ KDG QR QHHG WR
FRQWHQG ZLWK SRZHUIXO DQWDJRQLVWLF QHLJKERULQJ VWDWHV ZKRVH UXOLQJ FODVV IHOW WKUHDWHQHG RI WKH QHZ
SROLWLFDO SULQFLSOHV )XUWKHUPRUH $PHULFDQV KDG WR EH SUDFWLFDO LQ EXLOGLQJ D QHZ QDWLRQ :KLOH H[SDQGLQJ
LQWR D YDVW FRQWLQHQW ZLWK QHDUO\ LQH[KDXVWLEOH UHVRXUFHV WKH\ KDG WRR PDQ\ WDVNV DW KDQG WR SXUVXH DQ\
RYHUO\ LGHDOLVWLF GUHDPV /HW ZKDWHYHU EHOLHIV SROLWLFDO RU RWKHUZLVH VWD\ DV D SDUW RI WKHLU WUDGLWLRQ DV ORQJ
DV WKH\ ZRUNHG DOO ULJKW ZLWK WKHP ,Q WKLV ZD\ WKH $PHULFDQ WUDGLWLRQ ZDV ILUPO\ VHW ZKLOH WKH HDUO\ VHWWOHUV
RI 8 6 ZHUH LQWR[LFDWHG ZLWK WKHLU QHZO\ DFTXLUHG IUHHGRP EHOLHYLQJ WKDW WKH EDVLF KXPDQ ULJKWV ZHUH WKH
HTXDO ULJKWV JLYHQ WR HYHU\ERG\ WR FKDQFH RQH
V OLIH RQ ZKDWHYHU D FRXUVH WKH SHUVRQ ZLVKHG 1RWH WKDW LQ
WKLV YLHZ WKH JRYHUQPHQW ZKLFK QHFHVVDULO\ FRQVWUDLQHG WKH SHRSOH
V OLYHV WR NHHS WKH JHQHUDO GRPHVWLF
SHDFH DQG RUGHU ZDV DOPRVW D QHFHVVDU\ HYLO SUHIHUDEO\ WKH EHWWHU E\ EHLQJ WKH VPDOOHU ,Q DQ\ FDVH WKH
EHOLHIV RI WKH FRUUHFWQHVV RI WKH $PHULFDQ WUDGLWLRQ ZDV IXUWKHU VROLGLILHG LQ WKH PLQGV RI 8 6 FLWL]HQV E\
WKH QDWLRQ
V FRQWLQXHG VXFFHVV 6R PDQ\ $PHULFDQV ZHUH VLPSO\ EDIIOHG ZKHQ WKH\ ODWHU VWDUWHG WR SUHDFK
WKHLU EHOLHIV WR WKH ZLGH ZRUOG DQG IRXQG WKDW PDQ\ RWKHU QDWLRQV GLG QRW DFFHSW WKHP DV D JRVSHO
,Q WKH PHDQWLPH PRVW RI RWKHU (XURSHDQ QDWLRQV PDQDJHG WR NHHS WKHLU SROLWLFDO VWUXFWXUHV ZLWK
ODUJH VWDWXV YDULDQFH LQ WKH WUDGLWLRQDO 7LPHV RI :DU VW\OH E\ PDNLQJ WKHLU UHVSHFWLYH UXOLQJ FODVVHV HYHU
PRUH SRZHUIXO WKDQ EHIRUH E\ TXLFNO\ DEVRUELQJ SRZHUV SURGXFHG E\ DUWLILFLDO HYROXWLRQ WR ZKRVH SURJUHVV
ZDV JLYHQ D WUHPHQGRXV LPSHWXV E\ WKH LQGXVWULDO UHYROXWLRQ VWDUWHG DURXQG V LQ (QJODQG 7KH GLUHFW
EHQHILFLDU\ RI LQGXVWULDO UHYROXWLRQ ZDV WKH PLGGOH FODVV LQGXVWULDOLVWV EXW LQGXVWULHV QHHGHG UDZ PDWHULDOV
6R LQGXVWULDOLVWV VXSSRUWHG WKHLU UHVSHFWLYH UXOLQJ FODVVHV LQ WKHLU DWWHPSWV RI LPSHULDOLVWLF H[SDQVLRQ
DQQH[LQJ PRUH DQG PRUH QHZ ODQGV DV WKHLU FRORQLHV 7KLV WKH\ FRXOG HDVLO\ GR DV WKH\ ZHUH IDU VXSHULRU LQ
WKH PLOLWDU\ PLJKW WKDQ WKRVH ZKRVH ODQGV ZHUH FRORQL]HG GXH WR WKH ODUJH JDS LQ WKH OHYHO RI DUWLILFLDO
HYROXWLRQ EHWZHHQ WKH FRORQL]LQJ FRXQWULHV DQG WKRVH FRORQL]HG
7KH SHULRG WKURXJK WKH WK &HQWXU\ DQG WKH HDUO\ WK &HQWXU\ PD\ EH VXPPDUL]HG DV WKH WLPH RI
ERWK JORU\ DQG XQHDVH IRU WKH UXOHUV RI (XURSH ,W ZDV WKH WLPH RI JORU\ VLQFH WKLV UDSLG H[SDQVLRQ RI
WHUULWRULHV E\ PHDQV RI FRORQL]DWLRQ PDGH PDQ\ (XURSHDQ FRXQWULHV YLUWXDO HPSLUHV DQG WKHLU UXOHUV
QDWXUDOO\ JUDVSHG JUHDW KRQRUV WKDW RQO\ HPSLUH EXLOGHUV GHVHUYHG DQG EHVLGHV WKH\ KDG DFFXPXODWHG
HQRXJK SRZHU RI WKHLU RZQ WR EDFN XS WKH KLJK SHDN VWDWXV ZLWK WKH ZHDOWK VXSSOLHG ERWK E\ WKH DGYDQFHG
DUWLILFLDO HYROXWLRQ DQG E\ WKHLU QHZO\ DFTXLUHG FRORQLHV ,W ZDV DOVR WKH WLPH RI XQHDVH QRW RQO\ EHFDXVH RI
VR PDQ\ YLUWXDO HPSHURUV FORVH E\ ZKR QDWXUDOO\ ZHUH HQJDJHG LQ ZDUV DPRQJ WKHPVHOYHV EXW DOVR EHFDXVH
RI IUHTXHQW XQUHVWV DQG UHYROWV E\ WKH FRPPRQ SHRSOH ZKR ZHUH WKHQ DZDUH RI WKHLU RZQ SRZHU LI WKH\ ZHUH
XQLWHG IRU D FRPPRQ FDXVH ,Q IDFW WKH WK &HQWXU\ ZDV DOVR D WLPH ZKHQ WUDGH XQLRQV DQG ODERU XQLRQV
SUROLIHUDWHG $V QDWXUDOO\ H[SHFWHG XQLRQV RQO\ PHW EDQV DQG KDUDVVPHQWV LQ WKH EHJLQQLQJ EXW JUDGXDOO\
JDLQHG WKHLU OHJDO UHFRJQLWLRQ DW WKH HQG LQ YDULRXV SDUWV RI WKH ZRUOG LQFLGHQWDOO\ VDYLQJ FDSLWDOLVP IURP
VWUDQJOLQJ LWVHOI E\ RYHUJUHHG\ LQGXVWULDOLVWV
/HW PH SXW D ZRUG LQ KHUH DERXW
FDSLWDOLVP
&DSLWDOLVP LV DQ LVP
RQO\ LQ FRQWUDVW WR RWKHU
LGHRORJLHV VXFK DV VRFLDOLVP DV ZKDW LV ERUQH XQGHU WKH QDPH RI FDSLWDOLVP VHHPV QRQH EXW WKH ROG VRFLDO
UHVWUDLQWV WKH KXPDQV KDYH VSRQWDQHRXVO\ FUHDWHG IRU UHJXODWLQJ WKH HFRQRPLF DVSHFWV RI WKHLU VRFLDO
DFWLYLWLHV 7KH RULJLQ RI HFRQRPLF PDUNHWV LV SUREDEO\ DV ROG DV WKH SHULRG ZKHQ WKH KXPDQV EHJDQ WKHLU
HFRQRPLF WUDGHV DPRQJ WKHPVHOYHV 7KLV ROG ZD\V RI FRXUVH KDYH XQGHUJRQH YDULRXV WUDQVIRUPDWLRQV LQ
DFFRUGDQFH ZLWK FKDQJLQJ FRQGLWLRQV VXUURXQGLQJ KXPDQ VRFLHWLHV PRVW RI WKH WLPHV VSRQWDQHRXVO\ DOZD\V
WDNLQJ FRXUVHV WKDW DUH LQ SULQFLSOH WKRVH FKDUDFWHUL]HG E\ PLQLPDO VRFLDO FRVWV ZLWK PD[LPDO HIIHFWLYHQHVV
7KH HPHUJHQFH RI WUDGH DQG ODERU XQLRQV PD\ EH VHHQ LQ WKH VDPH FRQWH[W 7KH\ ZHUH ERUQ RXW RI VKHHU
QHFHVVLW\ VSRQWDQHRXVO\
LH
QRW RXW RI VRPHERG\
V QRWHERRN RI VRFLDO GHVLJQV $V VXFK WKH\ DUH WR EH
YLHZHG DV DQRWKHU VSRQWDQHRXV WUDQVIRUPDWLRQ RI FDSLWDOLVP WKH ROG ZD\V WR PHHW WKH VRFLDO QHHG RI WKH
WLPHV ,Q WKLV VHQVH ODERU XQLRQV DUH D OHJLWLPDWH SDUW RI FDSLWDOLVP GHVSLWH WKH VWURQJ DOOLDQFH WKH ODWHU GD\
ODERU XQLRQV WHQGHG WR VKRZ ZLWK VRFLDOLVWLF SROLWLFDO PRYHPHQWV 6XFK DQ DOOLDQFH ZDV FDXVHG E\ WKHLU
WHPSRUDU\ VKDULQJ RI WKH VLPLODU JRDO RI UDLVLQJ WKH VWDWXV RI FRPPRQ SHRSOH %XW LQ VSLULW ODERU XQLRQ LV
IRUHLJQ WR WKH VRFLDOLVWLF GHVLJQ ,W LV HVVHQWLDOO\ D VHOIGHIHQVH VRFLDO RUJDQL]DWLRQ VSRQWDQHRXVO\ FUHDWHG E\
WKRVH ZKR VKDUH WKH VDPH WUDGH 6R LW LV QR ZRQGHU WKDW UDGLFDO VRFLDOLVWV RU FRPPXQLVWV EDQQHG ODERU
XQLRQV ZKHQ WKH\ KDG HVWDEOLVKHG WKHLU SROLWLFDO KHJHPRQ\ LQ FRQWUDVW WR WKH SUROLILUDWLRQ DQG SURVSHULW\ RI
ODERU XQLRQV LQ FDSLWDOLVWLF QDWLRQV
$V D QDWXUDO SURGXFWV RI FDSLWDOLVP LQ WKH DERYH VHQVH LW LV HQWLUHO\ ZLWKLQ WKH SRVVLELOLW\ WKDW ODERU
XQLRQV VSRQWDQHRXVO\ GLVDSSHDU XQGHU DQRWKHU FRQGLWLRQ RI VRFLDO FKDQJH DQG LW VHHPV D VLJQDO WKDW UROH RI
ODERU XQLRQV ORVLQJ LWV VLJQLILFDQFH ZKHQ WKHLU JRDOV RI UDLVLQJ WKH VWDWXV RI FRPPRQ SHRSOH KDV EHHQ
SDUWLDOO\ DFKLHYHG LQ GHYHORSHG FRXQWULHV %XW , DP MXPSLQJ DKHDG RI WKH FRQWH[W $OORZ PH WR KDUN EDFN WR
WKH WK &HQWXU\
'UHDPHUV RI D XWRSLDQ VRFLHW\ FRQWLQXHG WR GUHDP RQ WKURXJKRXW WKH WK &HQWXU\ HVSHFLDOO\ WKRVH
ZKR ZHUH WR EH VXEVXPHG XQGHU WKH QDPH RI UDGLFDO VRFLDOLVWV RU FRPPXQLVWV 7KH IDLOXUH RI )UHQFK
5HYROXWLRQ WDXJKW WKHP D OHVVRQ WKDW MXVW EULQJLQJ GRZQ WKH UXOLQJ FODVV DORQH ZRXOG QRW OHDG WR D VXFFHVVIXO
UHYROXWLRQ EXW WKH\ ZHUH KDUGO\ GLVLOOXVLRQHG DQG ZRUNHG RXW DQ LPSURYHG SODQ RI D VRUW ILUVW UHPRYH WKH
HYLOGRHUV IURP WKH VRFLHW\ QRW MXVW WKH UXOLQJ FODVV EXW DOVR WKRVH LQ WKH PLGGOH FODVV VXFK DV ODUJH ODQG
RZQHUV DQG JUHHG\ LQGXVWULDOLVWV ZKR ZHUH IDWWHQG E\ H[SORLWLQJ WKH FRPPRQ SHRSOH 2QFH WKH UHYROXWLRQ
HOLPLQDWHG WKHP WKH WKHQ OLEHUDWHG FRPPRQ SHRSOH ZRXOG IUHHO\ FKRRVH SHRSOH
V UHSUHVHQWDWLYHV ZKRVH
GXWLHV DUH WR UXOH WKH VRFLHW\ DFFRUGLQJ WR WKH SODQ SUHPHGLDWHG IRU HVWDEOLVKLQJ ZKDW WKH\ WKRXJKW ZDV DQ
LGHDO VRFLHW\ IRU WKH FRPPRQ SHRSOH SUROHWDULDQ GLFWDWRUVKLS DV WKH FRPPRQ SHRSOH
V XWRSLD :KHQ WKH\
ZHUH DUJXLQJ WKHVH SODQV WKHVH UDGLFDO VRFLDOLVWV ZRXOG KDYH QDWXUDOO\ WKRXJKW RI QR RQH HOVH EXW WKHPVHOYHV
DV WKH ZLVH UXOHUV DV WKH VHOIFRQFHLW LV D YLFH LQWHOOHFWXDO GUHDPHUV PRVW HDVLO\ IDOO SUH\ WR
%HIRUH GLVFXVVLQJ ZKDW KDSSHQHG ZKHQ WKH SODQ ZDV DFWXDOO\ H[HFXWHG OHW PH ILUVW VHH ZKHQFH KDG
FRPH WKH LPDJH RI VXFK XWRSLDQ GUHDPV 7KH PRWWR RI )UHQFK 5HYROXWLRQ
OLEHUWp pJDOLWp IUDWHUQLWp
RU
OLEHUW\ HTXDOLW\ DQG IUDWHUQLW\ LV WHOOLQJ HQRXJK DERXW WKH VRXUFH RI WKH LPDJH 3XWWLQJ DVLGH OLEHUW\
PHDQLQJ WKH DEVHQFH RI XSSHU FODVV FRHUFLRQ HTXDOLW\
DQG IUDWHUQLW\
DUH QRWKLQJ EXW WKH PDQLIHVWDWLRQ RI
WKH VSLULW RI QRQNHUQHOOHG FORVH FRDOLWLRQ $ QRQNHUQHOOHG FORVH FRDOLWLRQ LV OLNH D FORVH IULHQGVKLS FRDOLWLRQ
KDV QR DSSUHFLDEOH LQ FRDOLWLRQ VWDWXV GLIIHUHQFH WKDW LV HTXDOLW\ $OVR HYHU\ PHPEHU RI D QRQNHUQHOOHG
FORVH FRDOLWLRQ KROGV D KLJK SRVLWLYH DIILQLW\ LQGH[ WRZDUG HYHU\ RWKHU WKDW LV IUDWHUQLW\ 6R WKH W\SLFDO LPDJH
KHOG E\ XWRSLDQ VRFLDO UHIRUPHUV LV HVVHQWLDOO\ D QRQNHUQHOOHG FORVH FRDOLWLRQ RI D VRFLHW\ VL]H 7KLV LV QR
GRXEW D EHDXWLIXO GUHDP DOEHLW D KRSHOHVVO\ LPSRVVLEOH RQH WR UHDOL]H $V GLVFXVVHG DW WKH YHU\ EHJLQQLQJ RI
WKLV FKDSWHU D QRQ NHUQHOOHG FORVH FRDOLWLRQ KDV D VHYHUH VL]H OLPLW WHQ RU OHVV ZKLFK LV XQDOWHUDEOH DV ORQJ
DV WKH KXPDQV UHPDLQ FUHDWXUHV RI WKH XUJH V\VWHP WKH KXPDQ XUJH V\VWHP WKDW ZLOO NHHS FRQVWUDLQLQJ
SRVVLEOH IXWXUHV RI WKH KXPDQ VRFLHW\
7KH RULJLQ RI WKLV GUHDP RI XWRSLDQ KXPDQ VRFLHW\ DV D ODUJHO\ H[SDQGHG FORVH FRDOLWLRQ LV DFWXDOO\
YHU\ ROG NHSW UHFXUULQJ LQ YDULRXV IRUPV )URP WLPHV ORQJ JRQH UHOLJLRXV OHDGHUV RIWHQ HQYLVLRQHG D VRFLHW\
LQ WKH OLNHQLQJ RI DQ H[WHQGHG NHUQHOOHG FORVH FRDOLWLRQ WKH RQH ZLWK D JRG DOPLJKW\ DV WKH NHUQHO PHPEHU
ZKRVH JORU\ ILOOHG WKH H\HV RI EHKROGHUV ZLWK WHDUV RI DGPLUDWLRQ 0DQ\ RI WKHP ZHUH KRZHYHU DZDUH RI
WKH LPSRVVLELOLW\ RI UHDOL]LQJ VXFK D VRFLHW\ LQ WKH PXQGDQH ZRUOG DQG SUHDFKHG WKHLU GLVFLSOHV WR OLYH LQ
KRSH WR EH FKRVHQ DV FLWL]HQV RI VXFK D XWRSLDQ DIWHUOLIH VRFLHW\ ZKLOH UHQGHULQJ WR &DHVDU WKH WKLQJV WKDW
ZHUH &DHVDU
V
6RPH UHYROXWLRQDU\ WKLQNHUV LQ WKH WK &HQWXU\ KRZHYHU FDPH WR EHOLHYH WKDW WKH UHDOL]DWLRQ RI
VXFK XWRSLDQ VRFLHW\ PXVW EH SRVVLEOH LQ WKLV ZRUOG :KDW WKH\ WKRXJKW WKH\ QHHGHG ZDV RQO\ D FRUUHFW
UHYROXWLRQDU\ VWUDWHJ\ FRQGXFLYH WR D ILUP HVWDEOLVKPHQW RI D ZLVH
JRYHUQPHQW WKDW UXOHG IRU WKH FRPPRQ
SHRSOH RU WKH SUROHWDULDQ FODVV DV WKHLU SURSHU UHSUHVHQWDWLYHV 7KH\ ZHUH VR ILOOHG ZLWK ULJKWHRXVQHVV WKH\
WKRXJKW DQ\ PHDQV KRZHYHU UXWKOHVV ZHUH DFFHSWDEOH WR UHDFK WKLV JRDO 8QGRXEWHGO\ WKH\ PXVW KDYH
WKRXJKW WKHPVHOYHV WR EH ILW PHPEHUV RI VXFK D ZLVH
JRYHUQPHQW ZKR HOVH FRXOG KDYH EHHQ EHWWHU
FDQGLGDWHV IRU WKH UXOLQJ FODVV RI VXFK D VRFLHW\ WKDQ WKHPVHOYHV DV LWV GHVLJQHU"
%XW QRWH WKDW WKH VRFLHW\ WKH\ HQYLVLRQHG LV QRQH EXW WKH NLQJGRP RI JRG ZKHUH WKH JRG LV UHSODFHG
E\ D ZLVH JRYHUQPHQW $ JRG FDQ EH WKH NHUQHO PHPEHU RI D ODUJH NHUQHOOHG FORVH FRDOLWLRQ DV D JRG LV E\
GHILQLWLRQ EH\RQG WKH OLPLWLQJ IDFWRU IRU WKH VL]H RI D NHUQHOOHG FRDOLWLRQ WKH FRQWURO RYHUORDG ,W ZDV
KRZHYHU DQ LQFRQFHLYDEOH DUURJDQFH IRU WKHP WR FODLP WKDW D KXPDQ JRYHUQPHQW KRZHYHU ZLVH LWV
PHPEHUV PLJKW EH FRXOG HYHU HPXODWH JRG
V RPQLVFLHQFH DQG RPQLSRWHQFH
7KH WRWDOLWDULDQ GLFWDWRUV DW WKH HQG RI WKH 7LPHV RI :DU
7KH ODVW DFW RI WKH GUDPD RI WKH 7LPHV RI :DU EHJDQ LQ ZLWK ZKDW ZRXOG KDYH EHHQ DQRWKHU
RUGLQDU\ ZDU KDG LW QRW EHHQ IRU WKH DGYDQFHG VWDJH UHDFKHG E\ DUWLILFLDO HYROXWLRQ DW WKDW WLPH 7KH
RWKHUZLVH FOHYHU LGHD RI *HUPDQ .DLVHU RI PDNLQJ DOOLHG IRUFHV DQG H[SDQG KLV HPSLUH PHW WKH RSSRVLWLRQ RI
DQRWKHU DOOLDQFH WKDW LQFOXGHG PDQ\ QDWLRQV ZRUOGZLGH DQG HVFDODWHG LQWR DQ XQSUHFHGHQWHG :RUOG :DU
:KDW ZDV XQH[SHFWHG E\ WKH RULJLQDO SDUWLHV ZDV WKDW D ZDU ZDV QR ORQJHU D EXVLQHVV RI MXVW QHLJKERULQJ
QDWLRQV WKH VFDOH RI JOREDO WUDGH DQG FRPPXQLFDWLRQ JUHDWO\ HQKDQFHG E\ WKH DGYDQFHG DUWLILFLDO HYROXWLRQ
WKHQ KDG DOUHDG\ PDGH HYHU\ PDMRU QDWLRQV LQ WKH ZRUOG YLUWXDO QHLJKERUV DQG LQWHUHVWHG SDUWLHV ,QGHHG
ZKDW SXVKHG WKH RULJLQDOO\ QHXWUDO 8QLWHG 6WDWHV WR MRLQ WKH DOOLDQFH VLGH DQG WLSSHG WKH VFDOH RI WKH ZDU
HYHQWXDOO\ ZDV *HUPDQ VXEPDULQHV LQGLVFULPLQDWHO\ VLQNLQJ WUDGLQJ YHVVHOV LQFOXGLQJ WKRVH RI 8 6 DV
ZHOO
6XEPDULQHV ZHUH QRW WKH RQO\ PDFKLQHV WKDW MRLQHG WKH EDWWOH 2WKHU ZDU PDFKLQHV VXFK DV DLUSODQHV
DQG WDQNV VKRZHG XS LQ WKH EDWWOH ILHOG DQG WKH EDWWOHV ZHUH IRXJKW E\ D TXDLQW PL[WXUH SOD\HUV PHQ DQG
PDFKLQHV ZLWK KHDY\ FDVXDOWLHV IRU PHQ :KLOH SHRSOH ZHUH VWLOO GD]HG DQG VRPH RI WKHP ZHUH UDWKHU
H[FLWHG E\ WKLV VWUDQJH GHYHORSPHQW LQ ZDU WHFKQRORJ\ WKH ZRUOG ZDV VKDNHQ E\ WKH UDSLG HPHUJHQFH RI
WZR GLFWDWRULDO HPSLUHV WKH 6RYLHW 8QLRQ DQG WKH 1D]LV *HUPDQ\ %\ D KLQGVLJKW WKH\ PD\ EH VHHQ DV WKH
ODVW VSDVPV GLVSOD\HG E\ WKHQ G\LQJ ODUJH VWDWXV YDULDQFH FRPPXQLWLHV
7KH 5XVVLDQ 5HYROXWLRQ VWDUWHG LQ D \HDU EHIRUH WKH HQG RI WKH ZDU E\ D FRXS DWWHPSWHG E\
ZDUZHDU\ VDLORUV DQ RSSRUWXQLW\ LPPHGLDWHO\ WDNHQ XS E\ UDGLFDO VRFLDO UHIRUPLVWV VXFK DV /HQLQ DV D
FKDQFH WR UHDOL]H WKHLU ORQJ GUHDPHG XWRSLD RI SUROHWDULDQ GLFWDWRUVKLS /HQLQ ZDV XQGRXEWHGO\ DQ DXWKHQWLF
LGHDOLVW ZKR IRXJKW ILHUFHO\ DJDLQVW HYHU\ DWWHPSW DW FRPSURPLVH UXWKOHVVO\ FUXVKLQJ REVWDFOHV WR WKH
UHDOL]DWLRQ RI KLV JRDO D XWRSLDQ VRFLHW\ UXOHG E\ D ZLVH JRYHUQPHQW 7KH SUREOHP LV REYLRXVO\ WKDW VXFK D
XWRSLDQ VRFLHW\ LV D IDQWDV\ FUHDWHG E\ DQ DUURJDQW PLQG WKHUH DUH QR KXPDQV ZLVH HQRXJK WR SOD\ JRG 6R
LQVWHDG RI FUHDWLQJ D XWRSLD ZKDW KH GLG RQO\ SDYHG WKH ZD\ WR GLFWDWRUVKLS ZKLFK /HQLQ DSSDUHQWO\ UHDOL]HG
EHIRUH KLV GHDWK DQG VKXGGHUHG ZKR ZHUH VXFFHHGLQJ KLV OLIH
V ZRUN WKH SHUVRQV OLNH 6WDOLQ DQG 7URWVN\
ZKR ZHUH XQOLNH KLP MXVW DPELWLRXV UHDOLVWV
(YHQ LI WKHUH KDG EHHQ QR 6WDOLQ WKH FRXUVH WKDW WKH SRVH /HQLQ 6RYLHW 8QLRQ WRRN ZRXOG QRW KDYH
EHHQ PXFK GLIIHUHQW KRZHYHU 7KDQNV WR WKH RYHUO\ ZHOOSDYHG URDG EXLOW E\ /HQLQ 6RYLHW 8QLRQ ZRXOG
KDYH KDG OLWWOH FKRLFH EXW WR EHFRPH D EXUHDXFUDWLF HPSLUH :LWK LWV PLGGOH FODVV YLUWXDOO\ JRQH WKH
JRYHUQPHQW KDG WR RYHUVHH QHDUO\ HYHU\ PLQXWH GHWDLOV RI WKH IXQFWLRQV RI DQ RUJDQL]HG VRFLHW\ DV
EXVLQHVVHV RI WKH JRYHUQPHQW &RQVLGHULQJ WKH OLPLWDWLRQV RI LQGLYLGXDO SHUVRQV VXFK D IRUPLGDEOH WDVN
FRXOG KDYH GRQH RQO\ E\ D EXUHDXFUDF\ RI D FRPPHQVXUDEOH SURSRUWLRQ /XFNLO\ 6RYLHW 8QLRQ KDG D
KLHUDUFKLFDOO\
RUJDQL]HG
DUWLILFLDO
FRDOLWLRQ
WKH
FRPPXQLVW
SDUW\
ZKLFK
FRXOG
IXQFWLRQ
DV
D
FRUH
RUJDQL]DWLRQ WR IDOO EDFN RQ H[SDQG LW E\ UHFUXLWLQJ ZKRHYHU RI D WDOHQW DQG DJUHHDEOH WR IROORZ WKH 0DU[LVW
GRFWULQHV FRQYHQLHQWO\ LQWHUSUHWHG DV RIILFLDO UXOHV DQG WKH JRYHUQPHQW PLJKW KDYH EHHQ DEOH WR EXLOG D
EXUHDXFUDF\ RI UHTXLVLWH FKDUDFWHULVWLFV DQG RI WKH VL]H LQ DQ DPD]LQJO\ VKRUW WLPH $ EXUHDXFUDF\ VKRXOG
KDYH QR GRPHVWLF FRPSHWLWLRQ DQG WKHUHIRUH HYHU\ RWKHU SDUW\ WKDQ WKH FRPPXQLVW SDUW\ ZDV EDQQHG
1HYHUWKHOHVV LW VHHPV DOPRVW PLUDFXORXV WKDW VXFK D FRQYHQLHQW PHWKRG KDG UHDOO\ ZRUNHG 5XVVLD
ZKLFK KDG EHHQ D UDWKHU EDFNZDWHU PRQDUFKLF HPSLUH ZDV WXUQHG LQWR D PLJKW\ LQGXVWULDO SRZHU LQ D
VXUSULVLQJO\ VKRUW WLPH 2QH RI WKH UHDVRQV IRU WKH VXFFHVV ZDV DV GLVFXVVHG HDUOLHU WKDW WKH EXUHDXFUDF\
FRXOG IXQFWLRQ DV D IXQQHO WR DWWUDFW WDOHQWHG \RXQJVWHUV HVSHFLDOO\ ZKHQ WKHUH ZDV OLWWOH FKDQFH IRU WKHP WR
GHPRQVWUDWH WKHLU WDOHQWV DQG HOHYDWH WKHLU VWDWXV 7KLV FRQGLWLRQ ZDV FHUWDLQO\ PHW LQ 6RYLHW 8QLRQ LQ ZKLFK
RQO\ WZR FODVVHV ZHUH OHIW DIWHU WKH IRUPHU UXOLQJ FODVV DQG GLVVLGHQW PLGGOH FODVV ZHUH REOLWHUDWHG WKH
ZRUNLQJ FODVV DQG WKH SULYLOHJHG FODVV
LH
WKH PHPEHUV RI WKH SDUW\ DQG RI WKH EXUHDXFUDF\
$OWKRXJK WKLV ZDV D VRFLHW\ WKDW ZDV TXLWH DQ DQWLWKHVLV WR WKH WDUJHW VWULYHQ IRU WKH RULJLQDO GUHDPHUV
WR UHDFK LW GLG QRW ERWKHU 6WDOLQ DV D UHDOLVW ZKR NHSW SXUVXLQJ KLV JRDO RI EXLOGLQJ D PLJKW\ HPSLUH E\
EUDQGLVKLQJ SRZHUV DYDLODEOH WR KLP LQ KLV UXWKOHVV WRWDOLWDULDQ VW\OH +H HOLPLQDWHG PDQ\ RI KLV SROLWLFDO
ULYDOV E\ KDYLQJ WKHP HLWKHU H[HFXWHG RU VHQW WR ODERU FDPSV LQ 6LEHULD )RU WKH SXUSRVH RI NHHSLQJ KLV SHDN
VWDWXV H[WUHPHO\ KLJK KH KDG QR VKRUWDJH RI ZDUV ZKHUHE\ KRQRUV ZHUH JDLQHG +DYLQJ ZRQ WKH GHVSHUDWH
EDWWOH ZLWK *HUPDQ\ LQ WKH 6HFRQG :RUOG :DU KH PDLQWDLQHG WKH VRFDOOHG &ROG :DU ZLWK WKH 8 6 DOZD\V
NHHSLQJ LW RQ WKH EULQN RI EUHDNLQJ RXW LQWR D KRW RQH WKH QXFOHDU DUPDJHGGRQ DQG ZKLOH GRLQJ VR KH
VXFFHHGHG LQ HDUQLQJ PDQ\ FUHGLWV RQ WKH DUPV UDFH ZLWK WKH 8 6 LQFOXGLQJ WKH FRPSHWLWLRQ LQ WKHLU
UHVSHFWLYH VSDFH SURJUDPV +H DQG KLV SDUW\ EXUHDXFUDF\ DOVR PRQRSROL]HG NQRZOHGJH DQG NHSW WKH JHQHUDO
SXEOLF LQ LJQRUDQFH FRQFHUQLQJ WKH DIIDLUV RI WKH ZRUOG RXWVLGH LWV WHUULWRU\ E\ GHSOR\LQJ WKH QRWRULRXV
LQIRUPDWLRQVKLHOG WKDW ZDV JLYHQ WKH HSLWKHW RI LURQ FXUWDLQ
1RWH WKDW WKH RSHUDWLRQDO SULQFLSOHV RI WKH LURQ
FXUWDLQ ZHUH MXVW DQ LPPHQVHO\ PDJQLILHG YHUVLRQ RI WKH SHUVRQDO )HVWLQJHULDQ GHIHQVH PHFKDQLVP ,W
FHQVRUHG WKH LQIRUPDWLRQ LQIORZ VR DV WR PLQLPL]H LWV KDUP XSRQ WKH SUHYDLOLQJ EHOLHIV LQVLGH ZKLOH NHHSLQJ
WKH IDoDGH WR WKH RXWVLGH WKDW LW VWLOO FRQWDLQHG WKH EDVLF XWRSLDQ GUHDP RI /HQLQ
2QH RI WKH PRVW UHPDUNDEOH GLFWDWRULDO SOR\V 6WDOLQ HPSOR\HG ZRXOG EH IRXQG LQ WKH UXOHE\IHDU
KH DSSOLHG WR KLV SHRSOH SDUW\ PHPEHUV QRW H[FHSWHG 7KH SULQFLSDO SROLWLFDO HIIHFW RI WKH UXOHE\IHDU SROLF\
DLPV DW LV WR SUHYHQW SHRSOH IURP IRUPLQJ RI DQ\ VL]DEOH VXEYHUVLYH FRDOLWLRQ DJDLQVW WKH FXUUHQW UHJLPH 7KH
SROLF\ ZLOO JHQHUDOO\ EH H[HFXWHG LQ WKH IROORZLQJ ZD\ /HW HYHU\ERG\ IHDU RI RQH
V QLJKWPDULVK IDWH WR
EHIDOO XSRQ RQHVHOI LI RQH LV HYHU VXVSHFWHG RI KDYLQJ D VXEYHUVLYH LQWHQW ([SDQG WKH GHILQLWLRQ RI D
VXEYHUVLYH WR DQ\ SHUVRQ ZKR NQRZLQJO\ IDLOV WR WHOO WKH VHFUHW SROLFH RI D VXEYHUVLYH WKH SHUVRQ NQRZV
7KHQ WKH VHFUHW SROLFH PD\ DFFRVW DOPRVW DQ\RQH DQG WHOO WKH SHUVRQ :H NQRZ \RX DUH D VXEYHUVLYH %XW
\RX PD\ EH H[RQHUDWHG LI \RX NHHS DOHUW DQG OHW XV NQRZ ZKR LV XWWHULQJ VXEYHUVLYH LGHDV <RX VXUH ZLOO
PHHW XV DJDLQ LI \RX GRQ
W GR LW TXLFNO\ ,Q WKLV ZD\ WKH VHFUHW SROLFH FRXOG GHSOR\ D YDVW KLGGHQ QHWZRUN RI
JUDSHYLQH ZLWK OLWWOH FRVW %HVLGHV LWV DFWXDO WKUHDWHQLQJ YDOXH WKH UXPRU WKH H[LVWHQFH RI VXFK D VHFUHW
VS\LQJ QHWZRUN DORQH ZRXOG EH TXLWH HIIHFWLYH ,I HYHU\RQH NQRZV WKDW WKHUH DUH KLGGHQ VSLHV DPRQJ RQH
V
QHLJKERUV RU HYHQ DPRQJ RQH
V IDPLO\ PHPEHUV QR RQH ZRXOG GDUH WR PRXWK D VXEYHUVLYH LGHD WR DQRWKHU
DQG LI HYHU\ERG\ NHHSV KLV RU KHU VLOHQFH QR XQLWHG RSSRVLWLRQ FRXOG EH IRUPHG DJDLQVW WKH FXUUHQW UHJLPH
HYHQ LI PRVW RI WKH SRSXODFH DUH IXOO RI JUXPEOHV $V VXFK WKH UXOHE\IHDU LV DQ ROG SOR\ HPSOR\HG E\
PDQ\ GLFWDWRULDO UXOHUV DV IDU DV LWV EDVLF SULQFLSOHV DUH FRQFHUQHG EXW LW ZDV RQO\ ZLWK WKH KHOS RI WKH
DGYDQFHG LQIRUPDWLRQ PDQDJHPHQW WHFKQRORJ\ RI WKH WK &HQWXU\ WKDW 6WDOLQ FRXOG KDYH LPSOHPHQWHG LW VR
V\VWHPDWLFDOO\ DQG UXWKOHVVO\
7KH UXOHE\IHDU RI HVVHQWLDOO\ WKH VDPH QDWXUH ZDV HPSOR\HG E\ DQRWKHU UHPDUNDEOH GLFWDWRULDO
ILJXUH +LWOHU +H FDPH RXW UDWKHU TXLFNO\ DV D SROLWLFDO ILJXUH LQ WKH ZDUEHDWHQ HFRQRPLFDOO\ DQG
SROLWLFDOO\ WURXEOHG *HUPDQ\ +LV XVHG DV KLV PDMRU SRZHU EDVH WKH VXSSRUWV KH JDUQHUHG IURP WKH FRPPRQ
SHRSOH DQG IURP VRPH LQGXVWULDOLVWV 7KH ODWWHU ZDQWHG WR XVH KLV DV WKHLU WRRO EXW KH ZDV LQJHQLRXV SROLWLFDO
PDQLSXODWRU LQ XVLQJ ZKRHYHU WULHG WR XVH KLP 7KH FRPPRQ SHRSOH RU WKH
9RON
ZHUH UDWKHU HQFKDQWHG E\
WKH IXWXUH +LWOHU SDLQWHG LQ KLV RUDWRU\ EXLOW XSRQ KLV VXSHUQDWLRQDOLVWLF FODLP RI WKH UDFLDO VXSHULRULW\ RI
7HXWRQV DQG WKHLU GHVWLQ\ WR EULQJ D JUDQG JORU\ EDFN WR WKHLU FRXQWU\ E\ WKH ZLVH JXLGDQFH RI WKHLU OHDGHU
RU WKH
)KUHU
+LWOHU KLPVHOI
1RWH WKDW WKH WDVN RI HOHYDWLQJ KLV RZQ VWDWXV DV D GLFWDWRU DV ZHOO DV KLV SHRSOH
V DV EHILWWLQJ WR D
VXSHULRU UDFH FRXOG QRW EH DFFRPSOLVKHG ZLWKRXW IRUIHLWLQJ VRPH RWKHUV
VWDWXV LQ D ODUJH VFDOH DV WKH
FRPPXQLW\ PHDQ VWDWXV KDG WR UHPDLQ FRQVWDQW 6R KH HPSOR\HG WKH WRWDOLWDULDQ UXOHE\IHDU SOR\ HVSHFLDOO\
DJDLQVW -HZV DV WKH WDUJHW IRU SHUVHFXWLRQ
7KH SHUVHFXWLRQ RI -HZ REYLRXVO\ VHUYHG PXOWLSOH SXUSRVHV IRU +LWOHU )LUVW E\ GHSULYLQJ DOPRVW
FRPSOHWHO\ DOO KXPDQ ULJKWV RI -HZLVK SHRSOH KH FUHDWHG D VRFLDO FODVV RI XQGHU SHRSOH ZLWK DOPRVW ]HUR
VWDWXV HOHYDWLQJ WKH VWDWXV RI RWKHU *HUPDQV DXWRPDWLFDOO\ $OVR PXFK RI WKH ZHDOWK DQG WKH VWDWXV WKXV
VHL]HG IURP WKH -HZV FRQWULEXWHG WR SXVKLQJ XS +LWOHU
V SHDN VWDWXV 1RWH DOVR WKDW PDQ\ RI WKH SHUVHFXWHG
-HZV ZHUH RI WKH PLGGOH FODVV ZKLFK LQFOXGHG PDQ\ QRLVRPH LQWHOOHFWXDOV ZKR ZRXOG KDYH SURWHVWHG ORXGO\
DJDLQVW WKH 1D]L UHJLPH LI KH KDG OHW WKHP
+LWOHU KDG D IHZ GHILQLWH GLVDGYDQWDJHV FRPSDUHG WR 6WDOLQ LQ LPSOHPHQWLQJ KLV WRWDOLWDULDQ UXOH )RU
RQH WKHUH ZDV WKH JHRJUDSKLFDO ORFDWLRQ RI *HUPDQ\ LQ WKH PLGGOH RI (XURSH ZLWKRXW 6LEHULD WR H[LOH
SHRSOH WR 6R PDQ\ -HZLVK DQG RWKHU LQWHOOHFWXDOV ZKR RSSRVHG WR 1D]LV UHJLPH VXFFHHGHG LQ IOHHLQJ WR WKH
8 6 DQG ODWHU EHFDPH VWDXQFK ILJKWHUV DJDLQVW +LWOHU
V FDXVH DOWKRXJK JUHDW PDQ\ -HZV ZHUH OHIW EHKLQG LQ
2ZHOO
V ZHOONQRZQ DOOHJRULFDO QRYHO RI 1LQHWHHQ (LJKW\ )RXU
FDWFKHV WKH VSLULW RI WKH UXOHE\IHDU LQ D WRWDOLWDULDQ
UHJLPH DQG PD\ EH VHHQ DV GHSLFWLQJ HLWKHU WKH 6WDOLQLVW UHJLPH RU WKDW RI 1D]LV FDUULHG WR D SRVVLEOH H[WUHPH
SRZHUOHVV PLVHU\ RQO\ WR EH VODXJKWHUHG ODWHU 7KLV JHRJUDSKLFDO ORFDWLRQ DQG WKH HGXFDWLRQDO OHYHO RI
DYHUDJH *HUPDQV PXFK KLJKHU WKDQ DYHUDJH 5XVVLDQV DW WKH WLPH PDGH LW TXLWH LPSUDFWLFDEOH HYHQ LI KH VR
ZLVKHG IRU +LWOHU WR HPSOR\ D WDFWLF VLPLODU WR ZKDW 6WDOLQ GLG ZLWK KLV LURQ FXUWDLQ DOLJQLQJ KLV SHRSOH
V
EHOLHIV ZLWK WKH RIILFLDO %ROVKHYLN GRFWULQH DQG VKLHOGLQJ WKHVH EHOLHIV IURP RXWVLGH LQIOXHQFH
+LWOHU KRZHYHU ZRXOG QRW KDYH PXFK PLQGHG KDYLQJ VXFK KDQGLFDSV +LV VXSHUQDWLRQDOLVP GLG QRW
KDYH PXFK GRFWULQDO FRQWHQW WR EHJLQ ZLWK 7KH FODLPV OLNH WKH 7HXWRQLF VXSHULRULW\ DQG +LWOHU
V ZLVH
JXLGDQFH FRXOG GHPRQVWUDWH WKHLU ULJKWHRXVQHVV RQO\ WKURXJK DFWLRQV DQG DFWLRQV KH ORYHG WR WDNH )LUVW KH
VXFFHHGHG LQ FRQVROLGDWLQJ WKH SHRSOH
V VXSSRUWV E\ HIIHFWLYHO\ VROYLQJ WKH XQHPSOR\PHQW SUREOHP WKURXJK
FUHDWLQJ QHZ MREV E\ PHDQV RI UHDUPLQJ *HUPDQ PLOLWDU\ DQG FRQVWUXFWLQJ VXSHUKLJKZD\V +H DOVR
SUHVHQWHG WKHP 9RONVZDJHQV IRU WKHLU FRQYHQLHQFH DQG DOVR DV WKH V\PERO RI WKHLU QRZ VXSSRVHGO\ HOHYDWHG
VWDWXV
7KHQ FDPH WKH SDUW RI GHPRQVWUDWLQJ 7HXWRQLF VXSHULRULW\ E\ DFWLRQV :KDW ZRXOG KH EH DV WKH
JUHDW OHDGHU RI D JUHDW UDFH KDG KH QRW DFW OLNH D PLJKW\ HPSHURU DFTXLULQJ KRQRU DIWHU KRQRU E\ JORULRXV
FRQTXHVWV" 6R KH VWDUWHG WR DQQH[ QHLJKERULQJ WHUULWRULHV E\ EURZEHDWLQJ WKHP ZLWK WKUHDWV HYHQWXDOO\
SOXQJLQJ KLP DQG KLV FRXQWU\ LQWR WKH 6HFRQG :RUOG :DU DQG +LWOHU WRRN LW DV LI LW ZHUH D FKDQFH +LWOHU KDG
ORQJ ZDLWHG IRU WR UHDOL]H KLV GUHDPV
$QG SUREDEO\ LW UHDOO\ ZDV VLQFH KH ZDV RQH RI WKH W\SLFDO DUURJDQW GUHDPHUV ZKR LQ WKHLU EHOLHIV
ZHUH GHVWLQHG WR IXOILOO WKHLU GUHDPV E\ WDNLQJ H[WUHPHV RI FKDQFHV +LWOHU DSSDUHQWO\ HQYLVLRQHG D ZRUOG LQ
ZKLFK WKH SHRSOH ZHUH SURSHUO\ VWUDWLILHG LQWR OD\HUV DFFRUGLQJ WR WKHLU UDFHGHSHQGHQW VWDWXV *HUPDQV
FDPH RQ WRS RWKHU $U\DQ UDFHV IROORZHG QH[W DQG -HZV RQ WKH ERWWRP ZKR ZHUH HYHQWXDOO\ WR EH
H[WHUPLQDWHG DV WKH VRXUFH RI DOO HYLOV $QG +LWOHU KLPVHOI LQ KLV YLVLRQ QDWXUDOO\ VKLQHG OLNH D VXQ RQ WRS RI
WKHP LQ DZHVRPH JORU\
6R KH KDG WR ZDJH ZDUV LQ DQ\ FDVH VLQFH WKH 7LPHV RI :DU PHQWDOLW\ WROG WKDW RQO\ WKRVH YLFWRULRXV
LQ PDMRU ZDUV FRXOG GHVHUYH VXFK D JORU\ ,Q WKH ILUVW VWDJH RI WKLV :DU +LWOHU ZDV FHUWDLQO\ JORULRXV DV KLV
:HKUPDFKW LQYDGHG QHLJKERULQJ FRXQWULHV OLNH IODVKHV RI OLJKWHQLQJ YLFWRULHV WKDW PXVW KDYH ORRNHG LQ WKH
H\HV RI +LWOHU DQG PDQ\ RI KLV VROGLHUV HQRXJK WR FRQYLQFH WKH ZKROH ZRUOG RI WKH FRUUHFWQHVV RI 1D]LV
FODLPV RI 7HXWRQLF VXSHULRULW\ +LWOHU WKHQ VWDUWHG KLV QH[W SDUW RI KLV SURJUDP RI HVWDEOLVKLQJ D QHZ RUGHU
LQ
WKH ZRUOG PHDQLQJ D ZRUOG FOHDQVHG RI YLUPLQ
LH
WKH -HZU\
, GR QRW NQRZ LI +LWOHU KDG DQ\ RWKHU SDUWLFXODU SROLWLFDO UHDVRQV WKDQ KLV DEKRUUHQFH RI -HZU\ IRU
FRPPLWWLQJ WKLV DWURFLW\ , DP KRZHYHU DW OHDVW VXUH WKDW +LWOHU
V VKUHZG SROLWLFDO PLQG ZDV ZHOO DZDUH RI
WKH IDFW WKDW WKH SHUVHFXWLRQ RI PLQRULWLHV DV VFDSHJRDWV VHOGRP KXUW JHQHUDOO\ VROLGLI\ WKH VXSSRUWV RI WKH
SRSXODFH ZKHQ WKH\ ZHUH FDSWLYDWHG LQ D VXSHUQDWLRQDOLVWLF IUHQ]\
7KLV LV D PRUWDO GDQJHU WKDW DOZD\V
OXUNV EHKLQG VXSHUQDWLRQDOLVP DQG PDQLSXODWLQJ SROLWLFLDQV
7KH HQG RI WKH 7LPHV RI :DU DQG WKH FRPLQJ RI WKH VHFRQG JUDQG WUDQVLWLRQ
7KH VHFRQG :RUOG :DU WULJJHUHG E\ +LWOHU VRRQ EHFDPH DOPRVW D VKRZFDVH IRU YLFLRXV ZDU
PDFKLQHV FUHDWHG E\ WKH DUWLILFLDO HYROXWLRQ LQ D YHU\ DGYDQFHG VWDJH OHDYLQJ IHZ LQ WKH ZRUOG XQVFDWKHG E\
WKH HIIHFWV RI WKH ZDU DQG LQ DWURFLWLHV RI ZDU WHQV RI PLOOLRQV RI OLYHV ZHUH ORVW FRPEDWDQWV DQG QRQ
FRPEDWDQWV DOLNH $QG RQ LWV YHU\ ILQDO VWDJH WKH ZDU WHFKQRORJ\ VSDZQHG LWV ILQDO DERPLQDWLRQ WKH DWRPLF
)ROORZLQJ WKH KHHOV RI 0DR 3RO 3RW LQ &DPERGLD VLPSO\ PDVVDFUHG WKH PLGGOH FODVV ZKLFK E\ KLV GHILQLWLRQ PHDQW
DOO EXW .KPHU 5RXJH SDUW\ PHPEHUV DQG SHDVDQWV 7KLV REYLRXVO\ WKH ZRUVW RI WKH EDG GUHDPV WKDW FKDUDFWHUL]HG WKH
DIWHUPDWK SHULRG RI WKH 7LPHV RI :DU VHUYHG QR SXUSRVH H[FHSW KDYLQJ OHIW WKH FRXQWU\ VWLOO JURYHOOLQJ PLVHUDEO\ IRU
ERPE WKH FORXG RI LWV GHWRQDWLRQ VSUHDG RYHU WKH VN\ RI +LURVKLPD ORRNLQJ H[DFWO\ OLNH D PRQVWURXV
TXHVWLRQ PDUN XSRQ WKH IXWXUH RI KXPDQLW\
7KLV ZDV WKH PRPHQW ZKHQ WKH 7LPHV RI :DU HIIHFWLYHO\ HQGHG DIWHU LWV ILYH WKRXVDQG \HDUV RI
EORRG\ KLVWRU\ 1RW WKDW WKH KXPDQV VWRSSHG ZDUULQJ HQWLUHO\ WKHQ DQG WKHUH %XW DOO WKDW KDSSHQHG DIWHU WKLV
PRPHQW DUH WR EH WKRXJKW DV D SDUW RI WKH DIWHUPDWK RI WKH 7LPHV RI :DU EHFDXVH WKH ORRPLQJ VFDUH RI D
ZRUOG ZLGH QXFOHDU ZDUIDUH DQG WKH SRVVLEOH DQQLKLODWLRQ RI WKH KXPDQ VSHFLHV DV LWV FRQVHTXHQFH KDG FRPH
WR IXQGDPHQWDOO\ DOWHU WKH ZD\ SHRSOH ORRNHG DW ZDUV ,W PD\ VHHP WKDW WKH VSLULW RI WKH 7LPHV RI :DU
OLQJHUHG RQ TXLWH D ZKLOH DIWHU WKH 6HFRQG :RUOG :DU VLQFH WKH VRFDOOHG &ROG :DU ZDV IRXJKW E\ WKH
UHPDLQLQJ WZR VXSHUSRZHUV WKH 8 6 DQG WKH 6RYLHW 8QLRQ 7KHVH WZR FRXQWULHV EHLQJ HYHU LQFRPSDWLEOH
GXH WR WKHLU DQWLWKHWLFDO SROLWLFDO SKLORVRSKLHV
LH
FDSLWDOLVP DQG FRPPXQLVP JODUHG DW DQG WKUHDWHQHG HDFK
RWKHU E\ VKRZLQJ WKHLU UHDGLQHVV WR SXVK WKH EXWWRQ RI WKH IDWHIXO ILUVW VWULNH 'HVSLWH WKH KDUVK ZRUGV WKH\
H[FKDQJHG KRZHYHU LW EHFDPH JUDGXDOO\ FOHDU WR WKH SHRSOH LQ WKH ZRUOG WKDW WKH VFDUH RI KRORFDXVW ZRXOG
HYHQWXDOO\ VWD\ WKHLU KDQGV IURP WKHLU UHVSHFWLYH EXWWRQV $V D UHVXOW D QHZ JHQHUDWLRQ RI SHRSOH HPHUJHG LQ
PDQ\ SODFHV LQ WKH ZRUOG ZKR ZHUH ERUQ DQG UDLVHG QHYHU H[SHULHQFLQJ D ZDU WKUHDW ORRPLQJ RPLQRXVO\ RQ
WKHLU KHDGV D QHZ EUHHG RI SHRSOH ZKR GLG QRW FDUH DERXW ZDUV RU ZDUUHODWHG FRQWURO SRZHU GLPHQVLRQV
7KH HPHUJHQFH RI WKHVH QHZ ZDUIUHH JHQHUDWLRQ FRPELQHG ZLWK WKH IDGLQJ PHPRU\ RI ZDUV LQ
ROGHU SHRSOH WKHQ EHJDQ WR WLOW WKH FRPPXQLW\ QRUP D[LV LQ PDQ\ PDMRU FRPPXQLWLHV IURP KLJKO\ ZDU
UHOHYDQW GLPHQVLRQV WR PRUH ZDULUUHOHYDQW GLPHQVLRQV $V GLVFXVVHG HDUOLHU DQG LOOXVWUDWHG LQ )LJ VXFK
VKLIW LQ WKH GLUHFWLRQ RI D FRPPXQLW\ QRUP D[LV WHQGV WR FDXVH WKH IDOO RI
HVWDEOLVKHG
DXWKRULWLHV *RQH ILUVW
ZHUH DXWKRULWLHV RI UR\DO DQG QREOH KRXVHV ZKRVH KLJK VWDWXV GHSHQGHG PRVWO\ RQ LQKHULWHG KRQRUV ZKLFK
WKHLU DQFHVWRUV RULJLQDOO\ DFTXLUHG LQ VRPH ROG VW\OH ZDUV 7KH IRUFH WKDW EURXJKW WKHLU GRZQIDOO ZDV DOUHDG\
RSHUDWLQJ ZKHQ ZDU PDFKLQHV VKRZHG XS LQ EDWWOHILHOGV DV LPSHUYLRXV DFWRUV WR ROG KXPDQ KRQRUV WKH IRUFH
WKDW HYHQWXDOO\ WUDQVIRUPHG PDQ\ RI WKHLU SDODFHV DQG PDQVLRQV LQWR KRWHOV DQG PXVHXPV IRU WKH
FRQYHQLHQFH DQG HOXFLGDWLRQ RI WKH FRPPRQ SHRSOH
,W LV QRW MXVW UR\DOWLHV DQG QRELOLWLHV ZKR IHOO LQ VWDWXV $XWKRULWLHV RI DQ\ NLQG LQ WKH ROG WLPHV
IROORZHG VXLW DQG QRW MXVW EHFDXVH WKH VLJQLILFDQW WLOW RI FRPPXQLW\ QRUPV 7KH PRVW LPSRUWDQW UHDVRQ IRU
WKH IDOO RI DXWKRULWLHV ZDV WKH HQRUPRXV ULVH RI WKH FRQWURO SRZHU LQ WKH KDQGV RI FRPPRQ SHRSOH &RPPRQ
SHRSOH ZHUH DOUHDG\ PXFK HPSRZHUHG LQ WKH WK &HQWXU\ PDLQO\ GXH WR WKH NQRZOHGJH VSLOOLQJ RYHU WR
WKHP DV VR PXFK RI LW ZDV FUHDWHG E\ DUWLILFLDO HYROXWLRQ 7KH WUHQG KDG NHSW XS VLQFH WKHQ DQG ZKHQ WKH
6HFRQG :RUOG :DU HQGHG VHYHUDO WKLQJV KDSSHQHG DW WKH VDPH WLPH WR IXUWKHU DFFHOHUDWH WKLV WUHQG RI
HPSRZHULQJ FRPPRQ SHRSOH
2QH RI WKH GLUHFW FRQVHTXHQFHV RI WKH IDOOLQJ DXWKRULWLHV ZDV GLVLQWHJUDWLRQ RI ROG FRORQLDO HPSLUHV
:KHQ WKH SHRSOH RI IRUPHU FRORQLHV ZDQWHG WKHLU LQGHSHQGHQFH WKH GHFOLQLQJ DQG ZDU ZHDU\ JRYHUQPHQWV
RI ROG HPSLUHV GLG QRW KDYH WKH ZLOOLQJQHVV RU WKH PLOLWDU\ SRZHU WR VSDUH WR VXSSUHVV VXFK PRYHPHQWV 7KH
IRUPHU FRORQLHV WKXV REWDLQHG WKHLU LQGHSHQGHQFH UDWKHU HDVLO\ KRZHYHU KDG WKHQ WR JR WKURXJK GLIILFXOW
SURFHVVHV RI EXLOGLQJ XS WKHLU RZQ FRXQWULHV VLQFH WKHLU HFRQRP\ RIWHQ GHSHQGHG VR KHDYLO\ RQ H[SRUWLQJ
UDZ PDWHULDOV DV WKH\ GLG LQ WKHLU FRORQLDO WLPHV WKDW WKH\ KDG OLWWOH PRGHUQ LQGXVWU\ RI WKHLU RZQ , VKDOO
DGGUHVV WKH LVVXHV RI WKH 7KLUG :RUOG PDQ\ RI ZKLFK DUH IRUPHU FRORQLHV
7KH HQGLQJ RI WKH :DU OHIW EHKLQG KXJH PXQLWLRQV LQGXVWULHV LQ WKH ZLQQLQJ VLGH DOPRVW LQWDFW
:KLOH VRPH RI WKHP NHSW RSHUDWLQJ LQ WKH DUPV UDFH GXULQJ WKH &ROG :DU RWKHUV QHHGHG WR ILQG QHZ
PHUFKDQGLVHV WR PDQXIDFWXUH DQG WKH PDUNHW WR VHOO WKHP 7KH UDSLGO\ DGYDQFLQJ DUWLILFLDO HYROXWLRQ VROYHG
WKH ILUVW SDUW RI WKH SUREOHP ZLWK WHFKQRORJLFDO LQQRYDWLRQV ZKRVH RFFXUUHQFH EHFDPH DOPRVW D GDLO\ DIIDLU
UHFRYHU\
WKHQ DQG WKH FRPPRQ SHRSOH VROYHG WKH VHFRQG SDUW E\ RIIHULQJ WKHPVHOYHV DV WKH PDUNHW RI WKHVH QHZ
SURGXFWV ,W ZDV HVSHFLDOO\ WKLV IDFW WKDW WKH FRPPRQ SHRSOH KDG EHFRPH WKH PDMRU FXVWRPHUV RI
PDQXIDFWXUHG JRRGV WKH DPHQLWLHV RI FLYLOL]DWLRQ WKDW KHUDOGHG WKH DGYHQW RI WKH
6HFRQG *UDQG 7UDQVLWLRQ
$FWXDOO\ TXLWH D IHZ WKLQJV KDSSHQHG VLPXOWDQHRXVO\ DW DERXW WKLV WLPH DQG RQH FDQQRW GUDZ D
FDXVDO GLDJUDP LQ D VLQJOH GLUHFWLRQDO IDVKLRQ %XW OHW PH JLYH D ODUJHO\ VLPSOLILHG SLFWXUH RI ZKDW KDSSHQHG
7KH IDOO RI DXWKRULWLHV GHVFULEHG DERYH FDXVHG WKH DXWRPDWLF HOHYDWLRQ RI WKH VWDWXV RI WKH FRPPRQ SHRSOH
6LQFH LQ WKH WUDGLWLRQDO HFRQRP\ RQH
V LQFRPH ZDV URXJKO\ SURSRUWLRQDO WR RQH
V VWDWXV WKH ZRUNHUV LQ
LQGXVWULHV ZRXOG KDYH FODLPHG PXFK PRUH VWURQJO\ WKDQ EHIRUH D UDLVH LQ WKHLU ZDJHV 0DQDJHUV RI
LQGXVWULHV ZKR ZHUH QDWXUDOO\ KHVLWDQW LQ PDNLQJ FRQFHVVLRQV KRZHYHU IRXQG WKDW WKHLU EXVLQHVV ZRXOG
SURVSHU LI WKH ZRUNHUV VSHQW PRUH RI WKHLU LQFRPH LQ SXUFKDVLQJ WKHLU SURGXFWV
,QFLGHQWDOO\ WKH SULQFLSOHV RI PDQXIDFWXULQJ GLJLWDO FRPSXWHUV ZHUH ZRUNHG RXW LQ WKH 8 6 GXULQJ
WKH :DU DQG ZKHQ PRUH SRZHUIXO DQG SUDFWLFDO FRPSXWHUV EHFDPH DYDLODEOH WKH\ RSHQHG D FRPSOHWHO\ QHZ
YLVWD LQ PDFKLQHPDNLQJ DOORZLQJ DUWLILFLDO HYROXWLRQ WR PDNH DQRWKHU KXJH MXPS DKHDG $QG SHRSOH ORYHG
WR KDYH WKHVH JDGJHWV ZLWK PLQXWH FRPSXWHU FKLSV EXLOWLQ ERWK LQ WKHLU KRXVHKROGV DQG RIILFHV 6R WKH
PDUNHW IRU LQGXVWULDO SURGXFWV JUHZ DV WKH QXPEHU RI FRPPRQ SHRSOH DV FXVWRPHUV ZDV KXJH 2Q WKH RWKHU
KDQG WKH FRPPRQ SHRSOH WKHPVHOYHV DW OHDVW WKRVH ZKR OLYHG LQ WHFKQRORJLFDOO\ DGYDQFHG VRFLHWLHV ZHUH
LQXQGDWHG ZLWK PDWHULDO ULFKHV WR D GHJUHH XQLPDJLQDEOH LQ WKH WLPHV RI :DU
,W ZDV QRW MXVW PDWHULDO ULFKHV WKDW IHOO LQ WKH KDQGV RI FRPPRQ SHRSOH $GYDQFHG FRPSXWHUV FUHDWHG
ZRUOGZLGH LQIRUPDWLRQ QHWZRUNV WKURXJK ZKLFK D ODUJH DPRXQW RI LQIRUPDWLRQ FRQVWDQWO\ IOHZ DFURVV WKH
ZRUOG ZLWKRXW DQ\ DSSUHFLDEOH GHOD\ DQG YDULRXV PHGLD SURYLGHG WKH SHRSOH ZLWK WKH DFFHVV WR PRVW RI VXFK
XS WRGDWH LQIRUPDWLRQ (GXFDWLRQ ZDV DOVR PDGH RSHQ WR WKH JHQHUDO SXEOLF DQG PRVW RI WKH FRPPRQ
SHRSOH LQGHHG JRW HGXFDWHG VR WKDW WKH\ FRXOG KDYH D EHWWHU FKRLFH RI MREV RIIHUHG LQ WKH PRGHUQ VRFLHW\
&RQVLGHULQJ DOO WKHVH WKLQJV QRZ LQ SRVVHVVLRQ RI WKH FRPPRQ SHRSOH WKH PDWHULDO DEXQGDQFH
KLJKHU HGXFDWLRQ DQG DOPRVW IUHH DFFHVV WR LQIRUPDWLRQ LW LV TXLWH DSSDUHQW WKDW WKH FRPPRQ SHRSOH ZKR DUH
GHQL]HQV RI WKH WHFKQRORJLFDOO\ DGYDQFHG PRGHUQ VRFLHWLHV WRGD\ DUH TXLWH SRZHUIXO SRZHUIXO HQRXJK WR
KDYH UDLVHG WKHLU VRFLDO VWDWXV FORVH WR WKH UHVSHFWLYH FRPPXQLW\ PHDQ VWDWXV $V WKH VWDWXV RI WKH IRUPHU
XSSHU FODVV SHRSOH KDV DOVR IDOOHQ WR QHDU WKLV OHYHO WKH FRPPRQ SHRSOH DUH QR ORQJHU FRPPRQ
ZKDW LV OHIW
LV YLUWXDO D VLQJOH FODVV RI SHRSOH ZKR PD\ EH FDOOHG MXVW WKH
SHRSOH
7KH PRVW LPSRUWDQW LPSOLFDWLRQ RI WKLV
LV WKDW PRVW RI XV DUH QRZ OLYLQJ LQ FRPPXQLWLHV ZKRVH VWDWXV YDULDQFHV DUH GUDVWLFDOO\ UHGXFHG IRU WKH ILUVW
WLPH DIWHU ILYH PLOOHQQLD RI WKH 7LPHV RI :DU ZH OLYH LQ FRPPXQLWLHV RI YHU\ VPDOO VWDWXV YDULDQFH 7KLV
DGYHQW RI VPDOO VWDWXV YDULDQFH FRPPXQLWLHV LV ZKDW KHUDOGV WKH FRPLQJ RI WKH
6HFRQG *UDQG 7UDQVLWLRQ
5HPHPEHU KRZHYHU ZKDW ZH DUH H[SHULHQFLQJ WRGD\ LV MXVW WKH ILUVW VWDJH RI WKH WUDQVLWLRQ LQ ZKLFK PXFK
RI WKH KHULWDJH RI WKH 7LPHV RI :DU LV OHIW DV WUDGLWLRQV DQG IHZ RI XV KDYH HYHQ DQ LQNOLQJ RI ZKDW ZLOO EH
DZDLWLQJ RXU SRVWHULW\ LQ WKH VHFRQG VWDJH RI WKH WUDQVLWLRQ DQG RQ OLNH QRQH RI WKRVH ZKR VXFFHHGHG LQ
PDNLQJ DJULFXOWXUH D ZRUNLQJ YHQWXUH LQ WKH ILUVW VWDJH RI WKH ILUVW JUDQG WUDQVLWLRQ ZRXOG KDYH LPDJLQHG WKH
FRPLQJ RI WKH 7LPHV RI :DU
6PDOO VWDWXV YDULDQFH FRPPXQLWLHV
%HIRUH JRLQJ LQWR IXUWKHU DUJXPHQWV RQ WKH LPSOLFDWLRQV RI WKLV VHFRQG JUDQG WUDQVLWLRQ OHW PH ILUVW
FRUURERUDWH P\ DVVHUWLRQ FRQFHUQLQJ WKH VPDOOQHVV RI WKH VWDWXV YDULDQFH LQ FRQWHPSRUDU\ VRFLHWLHV
HVSHFLDOO\ RI WHFKQRORJLFDOO\ GHYHORSHG W\SHV DOWKRXJK WKH RQH OLNH PH ZKR UHPHPEHUV ZHOO ZKDW WKH SUH
ZDU VRFLHWLHV ZHUH OLNH ZRXOG QHHG QR FRUURERUDWLRQ ,Q WKH 7LPHV RI :DU WKHUH DOZD\V ZHUH VRPH ZKR
FRPPDQGHG YLUWXDOO\ DEVROXWH REHGLHQFH DQG WKHUH ZHUH DXWKRULWLHV RI HYHU\ YDULHW\ 1RW WR PHQWLRQ
OR\DOWLHV DQG QREOHV JRYHUQPHQW FOHUNV ZHUH TXLWH DXWKRULWDWLYH 6WXGHQWV ZHUH KXVKHG E\ WKH VLJKW RI D
SURIHVVRU DQG JUDGH VFKRRO WHDFKHUV ZHUH DOORZHG WR JLYH SK\VLFDO SXQLVKPHQWV WR XQUXO\ SXSLOV *XLOG
PDVWHUV MXGJHV FODQ KHDGV SUHVLGHQWV RI FRPSDQLHV DQG PDQ\ RWKHUV ZHUH DZHG DQG ZLHOGHG LQ IDFW JUHDW
SRZHUV LQ WKHLU MXULVGLFWLRQ 7KH KHDG RI D IDPLO\ JHQHUDOO\ WKH IDWKHU DOVR KDG D FRQVLGHUDEOH DXWKRULW\ WR
FRPPDQG RYHU RWKHU PHPEHUV RI WKH IDPLO\ 6RPH RI WKHVH DXWKRULWLHV PD\ VWLOO UHPDLQ EXW ZKDW DFWXDOO\
UHPDLQV LV D PRFNHU\ FRPSDUHG WR WKH VWDWXV WKH\ RQFH KHOG
:KDW LV PRVW WHOOLQJ DERXW WKH IDOO RI ROG WLPH DXWKRULWLHV LV WKH GLVDSSHDUDQFH RI VWDWXV V\PEROV
2QH PD\ VWLOO ILQG VRPH LI RQH ORRNV FORVH HQRXJK EXW H[LVWLQJ VWDWXV V\PEROV DUH QR PRUH WKLQ VKDGRZV RI
ZKDW RQFH H[LVWHG 7RS SROLWLFLDQV LQ PRVW QDWLRQV RI WKH ZRUOG SUHVLGHQWV DQG SULPH PLQLVWHUV DOO ZHDU
RUGLQDU\ VXLWV QR GLIIHUHQW LQ DSSHDUDQFH IURP WKRVH SHRSOH ZHDU DQG WKHLU GHPHDQRUV DUH DOVR TXLWH
RUGLQDU\ H[FHSW ZKHQ WKH\ DUH SHUIRUPLQJ WKHLU RIILFLDO IXQFWLRQV LQ VRPH FHUHPRQLDO RFFDVLRQV PDNLQJ D
VWULNLQJ FRQWUDVW WR WKH ROG WLPH UXOHUV ZLWK WKHLU FKDUDFWHULVWLF SRPS DQG UHJDOLD ,Q PDQ\ QDWLRQV MXGJHV
KDYH GRQH ZLWK WKHLU WUDGLWLRQDO ZLJV DQG JRZQV (YHQ OLYLQJ LQ D OX[XULRXV PDQVLRQ GRHV QRW DXWRPDWLFDOO\
FRPPDQG SHRSOH
V UHVSHFW 2QH PD\ IHHO DQ HQY\ WR VXFK D SHUVRQ 1RWH WKDW HQY\ LV D QDWXUDO HPRWLRQDO
UHVSRQVH DURXVHG E\ D VRFLDO FRPSDULVRQ EHWZHHQ RQHVHOI DQG DQRWKHU OXFNLHU RQH DQG VRFLDO FRPSDULVRQV
DUH GRQH DPRQJ EDVLFDOO\ HTXDOV $OVR ORRN DW SRUWUDLWV RI PDOHV LQ KLJK VRFLDO VWDWXV LQ WKH HDUO\ SDUW RI WKH
WK &HQWXU\ 0DQ\ RI WKHP OLNH WKH *HUPDQ .DLVHU RU XQLYHUVLW\ SURIHVVRUV RI WKH WLPH ORRN TXLWH
GLJQLILHG ZLWK WKHLU DIIHFWDWLRQ RI DQ XSWXUQHG KDQGOHEDU PRXVWDFKH ,PDJLQH VRPHRQH LQ D VLPLODU VRFLDO
SRVLWLRQ KDV HPSOR\HG WKH VDPH DIIHFWDWLRQ DQG ZH ZLOO PLVWDNH KLP IRU D FRPHGLDQ :KHQ WKHUH FRXOG EH
QR KLJK VWDWXV WKDW VXEVWDQWLDWH LW D KLJK VWDWXV V\PERO ORRNV IXQQ\ IRU LWV PLVPDWFK
, DP MXVW FODLPLQJ WKDW WKH VWDWXV YDULDQFH LQ FXUUHQW VRFLHWLHV LV VPDOO LQ FRPSDULVRQ WR WKH ROG
VRFLHWLHV DQG QRW WKDW LW LV ]HUR $OWKRXJK RQH PD\ GUHDP DERXW D ]HUR YDULDQFH VRFLHW\ LQ ZKLFK HYHU\ERG\
LV HTXDO LQ VWDWXV VXFK D VRFLHW\ FDQQRW H[LVW DV ORQJ DV WKH KXPDQ XUJH V\VWHP NHHSV JRDGLQJ SHRSOH WR
FRPSHWH IRU VWDWXV $QG LQGLYLGXDO FRQWURO SRZHUV YDU\ IURP RQH SHUVRQ WR DQRWKHU
/HW PH SXVK P\ VSHFXODWLRQ RQ WKH QDWXUH RI WKH FXUUHQW VPDOO VWDWXV YDULDQFH VRFLHWLHV RQH VWHS
IXUWKHU , FRXQWHG DERYH DV RQH RI WKH PDMRU FDXVHV RI WKH UHGXFWLRQ LQ FRPPXQLW\ VWDWXV YDULDQFH WKH WLOWLQJ
RI WKH FRPPXQLW\ QRUP D[LV DZD\ IURP ZDU UHOHYDQW GLPHQVLRQV %XW WRZDUG ZKHUH LV QRW FHUWDLQ DV WKHUH
ZLOO EH D JUHDW PDQ\ ZDULUUHOHYDQW SRZHU GLPHQVLRQV 3UREDEO\ MXVW EHFDXVH RI WKLV PXOWLSOLFLW\ RI ZDU
LUUHOHYDQW GLPHQVLRQV LQGLYLGXDO SHUVRQDO VWDWXVDSSUDLVDO D[HV PLJKW KDYH PRYHG WRZDUG GLYHUVH GLUHFWLRQV
ORRVHQLQJ XS WKH FOXVWHU RI SHUVRQDO VWDWXV DSSUDLVDO D[HV ZKLFK RQFH IRUPHG D IDLUO\ WLJKW EXQGOH DURXQG
WKH FRPPXQLW\ QRUP D[LV 7KHQ WKHVH VFDWWHUHG SHUVRQDO VWDWXVDSSUDLVDO D[HV PD\ QRW JUDYLWDWH WR HDFK
RWKHU DQG IRUP D QHZ ZHOO GHILQHG FRPPXQLW\ DJDLQ EHFDXVH WKHUH DUH QRZDGD\V WRR PDQ\ SHRSOH LQ HDFK
FRPPXQLW\ IRU DQ\ RQH PHPEHU RI WKH FRPPXQLW\ WR GLUHFWO\ LQWHUDFW DQG DIIHFW WKHLU EHOLHIV $V D UHVXOW
WKH GLVWULEXWLRQ RI SHUVRQDO VWDWXVDSSUDLVDO D[HV ZLWKLQ D FRPPXQLW\ EHFRPHV TXLWH QHEXORXV DOPRVW
ZLWKRXW D VWUXFWXUH H[FHSW WKDW RQH PD\ EH DEOH WR GLVFHUQ TXLWH D IHZ ORFDO VXEFRPPXQLW\ FOXVWHUV
7KLV GRHV QRW PHDQ WKDW WKH QRWLRQ RI FRPPXQLW\ QRUP D[LV LV UHQGHUHG PHDQLQJOHVV *LYHQ D
SURSHU PXOWLGLPHQVLRQDO V\VWHP UHSUHVHQWLQJ FRQWURO SRZHUV RQH FDQ FRPSXWH WKH FRPPXQLW\ QRUP IRU
HDFK QDWLRQ DQG $PHULFDQ QRUP )UHQFK QRUP -DSDQHVH QRUP DQG VR RQ PD\ DOO EH GLIIHUHQW EHFDXVH
HDFK QDWLRQ VWLOO KDV WUDGLWLRQV WR VKDUH DPRQJ LWV PHPEHUV 7KH SRLQW LV WKDW WKHVH QRUPV QR ORQJHU KDYH
WKHLU ELQGLQJ SRZHU WKH\ RQFH FRPPDQGHG %HFDXVH WKH SHRSOH ZKRVH SHUVRQDO VWDWXVDSSUDLVDO D[HV FOXVWHU
DURXQG WKH FRPPXQLW\ QRUP DUH IDU IHZHU WKDQ WR EH D PDMRULW\ LQ WKH FRPPXQLW\ WKRVH SHUVRQV ZKRVH
EHOLHIV DUH QRW FORVH WR WKH FRPPXQLW\ QRUP QHHG QRW IHHO FRPSHOOHG WR FRQIRUP DQG WKH\ ZRXOG KDYH OLWWOH
GLIILFXOW\ LQ ILQGLQJ WKH OLNHV RI WKHP ZLWKLQ WKH RYHUVL]HG FRPPXQLW\ 7KLV , EHOLHYH LV WKH PDMRU UHDVRQ
ZK\ PRUDO FRGHV XVXDOO\ VKDSHG DURXQG WKH FRPPXQLW\ QRUP KDYH ORVW WKHLU ELQGLQJ SRZHU WKH\ RQFH KDG
DQG ZK\ WKH FRQWHPSRUDU\ FXOWXUHV LQ PRVW RI WHFKQLFDOO\ DGYDQFHG QDWLRQV DUH UHJDUGHG DV PXOWL YDOXHG
&DSLWDOLVP YHUVXV FRPPXQLVP
/HW PH PDNH D YHU\ EULHI RYHUYLHZ RI WKH VRFLRKLVWRULFDO SURFHVVHV WKDW KDYH WDNHQ SODFH VLQFH WKH
HQG RI WKH 6HFRQG :RUOG :DU WLOO WRGD\ 7KHVH ZHUH UDWKHU WXUEXOHQW GD\V LQWHUVSHUVHG ZLWK PDQ\ ORFDOL]HG
ZDUV GRPHVWLF GLVWXUEDQFHV OLNH WKH &XOWXUDO 5HYROXWLRQ LQ &KLQD DQG GLVRUGHUV DW XQLYHUVLWLHV WKDW VSUHDG
RYHU PRVW RI WHFKQRORJLFDOO\ DGYDQFHG FRXQWULHV LQ ODWH V DQG HDUO\ V $QG RQ WKH EDFN RI DOO WKDW WKHUH
ZDV WKH &ROG :DU EHWZHHQ WKH 6RYLHW EORFN DQG WKH 8 6 DQG KHU DOOLHV WLOO WKH IRUPHU GLVLQWHJUDWHG DW QHDU
WKH HQG RI V
$PRQJ WKH ORFDOL]HG ZDUV LQ WKLV SHULRG WKH 9LHWQDP :DU LV WKH RQH PRVW QRWHZRUWK\ DV LW
LOOXVWUDWHV WKH HWKRV RI WKH WLPH PRVW HORTXHQWO\ )RU RQH WKLQJ LW ZDV VSDZQHG DV D KRW VSDUN RI WKH &ROG
:DU WKH OHJDF\ RI WKH 7LPHV RI :DU 2Q WKH RWKHU KDQG LW GHPRQVWUDWHG KRZ IDU UHPRYHG WKH SHRSOH
V PLQGV
KDG DOUHDG\ EHHQ WKHQ IURP WKH 7LPHV RI :DU PHQWDOLW\ ,W ZDV WKLV SHRSOH
V GLVHQFKDQWPHQW ZLWK WKH JORU\
LQ ZDUV WKDW ILQDOO\ PDGH WKH 8 6 ZLWKGUDZ LWV PLOLWDU\ IURP 9LHWQDP PRUH WKDQ EHFDXVH WKH ZDU ZDV
LQGHHG LQJORULRXV
/HW PH WDNH XS DV WKH VLJQLILFDQW PLGZD\ SRLQWHU RI WKH VHFRQG JUHDW WUDQVLWLRQ WKH GLVWXUEDQFHV DW
XQLYHUVLWLHV WKDW EHJDQ LQ ODWH V 0DQ\ XQLYHUVLW\ VWXGHQWV UDOOLHG DJDLQVW WKH HVWDEOLVKHG DXWKRULWLHV QHDUO\
VLPXOWDQHRXVO\ DOO RYHU WKH ZRUOG LQ WHFKQRORJLFDOO\ DGYDQFHG
FDSLWDOLVWLF
QDWLRQV 1RWH WKDW WKHVH VWXGHQW
XQUHVWV DUH LQ SULQFLSOH D PLQLDWXUH IRUP RI UHYROXWLRQ DQG D UHYROXWLRQDU\ JURXS PRRG LV IRUPHG ZKHQ D
PDVV RI SHRSOH SHUFHLYH D FHUWDLQ ZHDNQHVV LQ WKH FXUUHQW DXWKRULW\ DQG IHHO WKDW WKHLU MRLQHG SRZHU PD\
KDYH D FKDQFH WR JLYH D IDWDO EORZ WR WKH ZHDNHQHG FXUUHQW DXWKRULW\ 7KH RXWFRPH RI VXFK D UHYROXWLRQDU\
DWWHPSW PDLQO\ GHSHQGV XSRQ ZKHWKHU WKH JHQHUDO SXEOLF VKDUH WKH VDPH FDXVH ZLWK WKH UHYROXWLRQDU\ JURXS
,I WKH\ GR WKH\ PD\ VXFFHHG DV LQ )UHQFK 5HYROXWLRQ VLQFH WKH DPDVVHG SRZHU RI D ODUJH QXPEHU RI SHRSOH
LQIXVHG DQG LQWR[LFDWHG ZLWK WKH FKDOOHQJH DQG WKH SRZHU GHPRQVWUDWLRQ XUJHV FRXOG LQGHHG EH DZHVRPH DV
WKH KXPDQNLQG KDV EHHQ KLVWRULFDOO\ GHPRQVWUDWLQJ LQ YDULRXV FRQWH[WV
,Q WKH FDVH RI XQLYHUVDO VWXGHQW XQUHVW QRZ LQ TXHVWLRQ WKHUH DUH D IHZ UHPDUNDEOH SRLQWV WR EH
QRWLFHG )LUVW WKH\ WRRN SODFH LQ PRVW RI WHFKQRORJLFDOO\ DGYDQFHG FDSLWDOLVWLF FRXQWULHV ZKHUH XQLYHUVLW\
VWXGHQWV ZHUH TXLWH ZHOOIHG SULYLOHJHG \RXWKV :KDW ZDV FRPPRQ WR DOO WKHVH FDSLWDOLVWLF FRXQWULHV ZDV
WKDW WKH\ ZHUH DOO LQ D IDLUO\ DGYDQFHG VWDJH RI WKH VHFRQG JUDQG WUDQVLWLRQ XQGHUFXWWLQJ WKH VWDWXV RI
DXWKRULWLHV DQG SXVKLQJ WKH SHUVRQDO VWDWXVDSSUDLVDO D[HV RI PDQ\ SHRSOH WR WLOW DZD\ IURP WKH ROG
FRPPXQLW\ QRUPV 7KH TXHVWLRQ WKHQ ZDV WRZDUG ZKLFK GLUHFWLRQ VKRXOG WKH\ WLOW WKHLU D[HV
$V IRU WKH VWXGHQWV ZKR SURWHVWHG DJDLQVW DXWKRULWLHV DW WKDW WLPH LW VHHPV QDWXUDO WKDW WKH\ IRXQG DV
WKH LGHDO SROH WR DOLJQ WKHLU D[HV DORQJ LQ FRPPXQLVP VLQFH WKH DXWKRULWLHV WKH\ ZHUH DJDLQVW ZHUH DOO
FDSLWDOLVWLF DXWKRULWLHV 6R WKH\ VKRXWHG VORJDQV RI VRPH YHUVLRQV RI 0DU[/HQLQLVP EXW WKH SRLQW WR EH
QRWLFHG LV WKDW PRVW RI WKHP ZHUH QHLWKHU SUR6RYLHW QRU SUR &KLQD WKH PDMRULW\ RI WKHP HYHQ IRXJKW
DJDLQVW IDFWLRQV RI WKHPVHOYHV RI WKH ODWWHU NLQG 7KH PRVW OLNHO\ K\SRWKHVLV LV WKDW WKH\ ZHUH QHZ YHUVLRQV
RI WKH WUDGLWLRQDO XWRSLDQ GUHDPHUV ZKR E\ SHUFHLYLQJ ZHDNHQLQJ DXWKRULWLHV WKRXJKW WR KDYH VHHQ D FKDQFH
RI EULQJLQJ WKHP GRZQ 8QLYHUVLW\ FDPSXVHV DUH QDWXUDOO\ HDVLHVW SODFH WR UDOO\ DQ HDJHU PDVV RI SHRSOH DQG
WKH\ ZHUH HODWHG ZKHQ WKHLU ILUVW WDUJHW WKH XQLYHUVLW\ DXWKRULWLHV JHQHUDOO\ VKRZHG VR IHHEOH D UHVLVWDQFH WR
WKHLU DFFXVDWLRQV WKHLU DXWKRULWLHV ZHUH DOUHDG\ DOPRVW JRQH
7KHUH ZDV KRZHYHU QR UHDO FKDQFH IRU WKHVH XQLYHUVLW\ GLVWXUEDQFHV WR GHYHORS LQWR D UHDO
UHYROXWLRQ DV WKH JHQHUDO SXEOLF IRXQG QR FDXVH WR MRLQ WKHP ,Q WKHVH FDSLWDOLVWLF FRXQWULHV SHRSOH KDG EHHQ
VWHDGLO\ JHWWLQJ PRUH SRZHU DQG VWDWXV 7KHUH ZDV QR UHDVRQ IRU WKHP WR MHRSDUGL]H WKH FXUUHQW SURVSHULW\
IRU WKH VDNH RI DQ ROG XWRSLDQ GUHDP ZKRVH SUDFWLFDELOLW\ KDG QHYHU EHHQ JXDUDQWHHG
7KH ILQDO EORZ WR WKRVH ZKR VWLOO NHSW WKLV XWRSLDQ GUHDP ZDV JLYHQ E\ WKH GLVLQWHJUDWLRQ RI WKH
UHJLPH RI 6RYLHW 8QLRQ LQ ODWH V $JDLQVW DOO KRSH DQG SUHWHQVHV RI WKHLUV 6RYLHW 8QLRQ WXUQHG RXW WR EH
QR XWRSLD RI DQ\ NLQG EXW D FRXQWU\ JRYHUQHG E\ DQ RYHUJURZQ EXUHDXFUDF\ LQ D WRWDOLWDULDQ IDVKLRQ 7KH
LQKHUHQW IODZ LQ DQ\ VWDWH EXUHDXFUDF\ LV DV PHQWLRQHG HDUOLHU LWV WUDGLWLRQERXQG LQIOH[LELOLW\ HQWUHQFKHG E\
WKH ODFN RI DQ\ GLUHFW FRPSHWLWRUV $V WLPHV JR E\ HYHQ D EXUHDXFUDF\ WKDW ZRUNHG HIIHFWLYHO\ LQ WKH
EHJLQQLQJ PD\ JHQHUDOO\ EHFRPH XQDEOH WR DGDSW LWVHOI WR WKH FKDQJLQJ H[WHUQDO FRQGLWLRQV &RQVLGHULQJ WKH
H[FHHGLQJO\ IDVW VSHHG RI FKDQJH LQWURGXFHG E\ WKH DFFHOHUDWLQJ DUWLILFLDO HYROXWLRQ LW ZDV FHUWDLQO\
LQHYLWDEOH WKDW WKH UHJLPH RI 6RYLHW 8QLRQ ZDV GUDJJHG GRZQ E\ LWV EXUHDXFUDF\ WXUQLQJ XQZLHOG\
6R LW LV ZURQJ WR UHIHU WR WKLV HYHQW ZLWK D VLPSOLVWLF VXPPDWLRQ DV D YLFWRU\ RI FDSLWDOLVP RYHU
FRPPXQLVP LQ WKH HFRQRPLF FRPSHWLWLRQ $V , KDYH EHHQ DUJXLQJ FDSLWDOLVP LV D VHOI DGMXVWLQJ QDWXUDO
V\VWHP FKDQJLQJ LWVHOI DFFRUGLQJ WR WKH FKDQJLQJ KXPDQ QHHGV :KDWHYHU D GRFWULQH EHKLQG LW PD\ EH WKDW
RI $GDP 6PLWK OHDYH WKH V\VWHP WR *RG
V LQYLVLEOH KDQG RU PLQLPL]H LQWHUYHQWLRQV E\ LQGLYLGXDO SHUVRQV
LQWR WKH ZRUNLQJV RI WKH V\VWHP $V VXFK LW FRXOG FRQWDLQ DQ\ H[SOLFLW PRWLYH WR FRPSHWH ZLWK DQRWKHU
V\VWHP 2Q WKH RWKHU KDQG WKH UHJLPH RI 6RYLHW 8QLRQ ZDV FUHDWHG RXW RI WKH PLQGV RI VRPH XWRSLDQ
GUHDPHUV ZKR WKRXJKW LQ WKHLU DUURJDQFH WKDW D IHZ LQGLYLGXDOV FRXOG UXOH D QDWLRQ ZLWK WKHLU ZLVH JXLGDQFH
6XFK DQ DUURJDQFH QDWXUDOO\ WXUQHG VRXU DQG WKH UHJLPH GHIHDWHG LWVHOI EHFDXVH WKH GUHDPHUV FRXOG ILQH QR
RWKHU ZD\ WR UXOH WKDQ FUHDWLQJ D PDPPRWK EXUHDXFUDF\
7KLV LQFLGHQFH FRQWDLQV D KDUG OHVVRQ WR EH OHDUQHG HVSHFLDOO\ E\ XWRSLDQ GUHDPHUV LQWHOOHFWXDOV
ZKR WHQG WR ILQG WRR VLPSOLVWLF DUURJDQW D VROXWLRQ IRU WKHLU JRRG LQWHQWLRQV )RU LQVWDQFH WKHUH KDYH EHHQ
SHRSOH ZKR FODLP WKDW ZH VKRXOG KDYH D :RUOG *RYHUQPHQW ZKLFK UXOHV RYHU WKH XQLILHG (DUWK QRZ WKDW WKH
DOPRVW XQLILHG (DUWK 6RFLHW\ LV LQ WKH PDNLQJ , DP QRW DJDLQVW WKH LGHD EXW DP DOVR DSSDOOHG E\ LW :KDW LI
ZH GLG KDYH VXFK D JRYHUQPHQW EHIRUH ZH KDYH IRXQG D EHWWHU V\VWHP WR JRYHUQ WKDQ WKH WUDGLWLRQDO
EXUHDXFUDF\" $ :RUOG %XUHDXFUDF\ WUXO\ ZLWKRXW D FRPSHWLWRU FRXOG WXUQ WKH ZRUOG LQWR DQ\ NLQG RI
QLJKWPDUHV WKH GHWDLOV RI ZKLFK PD\ QHHG QR HODERUDWLRQ
%\ VD\LQJ VR , GR QRW PHDQ WR LPSO\ WKDW ZH FDQ WUXVW RXU IXWXUH LQ WKH KDQGV RI WKH QDWXUDO ZLVGRP
RI FDSLWDOLVP DV D VHOIDGMXVWLQJ V\VWHP DV FDSLWDOLVP RQO\ IROORZ WKH FRXUVH GLUHFWHG E\ WKH FXUUHQW QHHGV RI
WKH SHRSOH DQG DV D QDWXUDO V\VWHP IXWXUH
LV QHYHU UHDOO\ DPRQJ LWV FRQFHUQV $QG LQ P\ YLHZ WKH FXUUHQW
FDSLWDOLVP KDV REYLRXVO\ EHHQ WDNLQJ D ZURQJ WZLVW ZKLFK ZRXOG MHRSDUGL]H WKH IXWXUH RI WKH KXPDQNLQG
7KH JURZWKGHSHQGHQW HFRQRP\
7KH DFFHOHUDWLYH QDWXUH RI DUWLILFLDO HYROXWLRQ UHVWV PDLQO\ RQ WKH SRVLWLYH IHHGEDFN ORRS EHWZHHQ
NQRZOHGJH DQG FRQWURO :KHQ D WRRO DOORZV RQH D EHWWHU FRQWURO RI WKH ZRUOG RQH PD\ REWDLQ D EHWWHU
NQRZOHGJH RI WKH ZRUOG ZKLFK ZLOO LQ WXUQ IXUWKHU LPSURYH RQH
V FRQWURO RI WKH ZRUOG DQG VR RQ 7KHUH LV
KRZHYHU RQH PRUH PDMRU DJHQW SXVKLQJ WKH DFFHOHUDWLRQ IRUZDUG DQG WKDW LV WKH HFRQRPLF V\VWHP QRZ
FDOOHG FDSLWDOLVP HVSHFLDOO\ LWV PDUNHW PHFKDQLVPV 7KH HIIHFW RI WKLV WKLUG DJHQW EHFDPH QRWLFHDEOH DV WKH
FRPPRQ SHRSOH EHFDPH JHQHUDOO\ ZHOO WR GR DQG FUHDWHG D ODUJH PDUNHW IRU PDQXIDFWXUHG SURGXFWV VLQFH WKH
RQVHW RI LQGXVWULDO UHYROXWLRQ 7KH ODUJHU WKH PDUNHW WKH JUHDWHU ZRXOG EH WKH SURILW IRU WKH PDQXIDFWXUHUV D
SDUW RI ZKLFK ZRXOG EH UHLQYHVWHG LQ LQFUHDVLQJ WKH SURGXFWLRQ KLULQJ PRUH ZRUNHUV ZKR LQ WXUQ ZRXOG
KDYH FRQWULEXWHG LQ IXUWKHU HQODUJLQJ WKH PDUNHW $W WKH VDPH WLPH DQRWKHU SDUW RI WKH SURILW ZRXOG EH XVHG
LQ UHVHDUFK DQG GHYHORSPHQW IXUWKHU VWLPXODWLQJ DUWLILFLDO HYROXWLRQ
7KLV HIIHFW RI PDUNHW PHFKDQLVP RI IDFLOLWDWLQJ DUWLILFLDO HYROXWLRQ KDV EHHQ PDJQLILHG HQRUPRXVO\
LQ WKH WLPH RI VHFRQG JUDQG WUDQVLWLRQ ZKHQ PRVW RI WKH SHRSOH LQ WHFKQRORJLFDOO\ DGYDQFHG QDWLRQV ZDV
PDGH VR SRZHUIXO DV WR EH DEOH WR SXUFKDVH PDQ\ SURGXFWV RI YHU\ DGYDQFHG DUWLILFLDO HYROXWLRQ DQG WKHLU
VWDWXV EHFDPH VR KRPRJHQHRXV DV WR RSHUDWH FXVWRPHUV RI DOPRVW WKH VDPH W\SH RI PHUFKDQGLVHV 6R
PDUNHWV JUHZ DQG SURGXFWLRQV JUHZ DQG FDSLWDOLVP DV WKH VHOIDGDSWLYH V\VWHP RUJDQL]HG LWV RSHUDWLRQV
FRPSOHWHO\ WR PDLQWDLQ D FRQVWDQWO\ JURZLQJ HFRQRP\ $QG WKLV JURZWK RI HFRQRP\ LV DFFHOHUDWHG DV
QDWXUDOO\ H[SHFWHG IURP LWV FORVH WLH WR WKH DFFHOHUDWLQJ DUWLILFLDO HYROXWLRQ DQG WKH H[SHFWDWLRQ LV DWWHVWHG E\
WKH IDFW WKDW PDQ\ HFRQRPLF LQGLFDWRUV VXFK DV *'3 HPSOR\V WKH SHUFHQWDJH RI \HDUO\ JURZWK UDWH RI
SURGXFWLRQ LQ D QDWLRQ WKDW LV VXSSRVHGO\ WR VWD\ DSSUR[LPDWHO\ FRQVWDQW
,W PD\ VHHP WKDW WKHUH LV QRWKLQJ ZURQJ ZLWK D JURZLQJ HFRQRP\ DV LW LPSOLHV HYHU JUHDWHU
SURVSHULW\ WR WKH SHRSOH WR ZKRP VXFK HFRQRP\ EHORQJV %XW QRWKLQJ DV JRRG DV WKDW FRXOG EH UHDO ZLWKRXW
PDWFKLQJ VDFULILFHV PDGH VRPHZKHUH HOVH %HIRUH JRLQJ LQWR WKLV LVVXH OHW PH WDNH D EULHI RYHUYLHZ RI WKH
FRQGLWLRQV RI WKH ZRUOG WRGD\ LQ D OLWWOH ZLGHU FRQWH[W
&RQWHPSRUDU\ VRFLHWLHV DQG WKHLU SUREOHPV
3XWWLQJ QHZ ZLQH LQ ROG ERWWOHV KRZ FRQWHPSRUDU\ VRFLHWLHV DUH UXQ
7KH WUDQVIRUPDWLRQV WKDW WKH VHFRQG JUDQG WUDQVLWLRQ KDYH EURXJKW WR EHDU XSRQ WKH OLYHV RI SHRSOH
LQ WHFKQRORJLFDOO\ DGYDQFHV QDWLRQV DUH TXLWH SURIRXQG LQVRIDU DV ZH MXVW ORRN DW WKHLU PDWHULDO VLGH 0RVW RI
WKH FLWL]HQV RI WKHVH QDWLRQV OLYH LQ KLVWRULFDOO\ XQSUHFHGHQWHG OX[XU\ ZHOOEXLOW UHVLGHQFHV PDQ\ RI WKHP
DLU FRQGLWLRQHG ILOOHG ZLWK HOHFWULFDO DQG RWKHU ZRQGHUV RI WHFKQRORJ\ %\ EHLQJ UHOLHYHG IURP PXFK RI WKH
GUXGJHULHV WKDW ZDV IRUFHG XSRQ WKH SHRSOH LQ WKH SDVW IRU OLYLQJ WKH PRGHUQ SHRSOH FRXOG EH HQJDJHG LQ WKH
NLQG RI DFWLYLWLHV ZKLFK ZHUH QR PRUH WKDQ VKHHU ILJPHQW RI GUHDPV LQ WKH SDVW OLNH WDONLQJ RU H[FKDQJLQJ
LQIRUPDWLRQ ZLWK DOPRVW DQ\ SHUVRQ LQ WKH ZRUOG DQG PHHWLQJ ZLWK WKH SHUVRQ YLVDYLV LI QHHG EH E\
WDNLQJ D WULS WKDW XVXDOO\ WDNHV QR PRUH WKDQ D GD\
(VSHFLDOO\ EHFDXVH RI WKHVH WHFKQRORJLFDO GHYHORSPHQWV LQ FRPPXQLFDWLRQ DQG WUDQVSRUWDWLRQ
GLVWDQFH KDV EHFRPH OHVV DQG OHVV KLQGUDQFH IRU SHUVRQV WR IRUP SHUVRQDO DQG RIILFLDO WLHV DFURVV FRPPXQLW\
ERUGHUV HVWDEOLVKLQJ H[WUHPHO\ FRPSOLFDWHG FDXVDO UHODWLRQV DPRQJ WKH HYHQWV RI WKH ZRUOG 6RPH LQFLGHQW
LI WKDW LV VLJQLILFDQW HQRXJK PD\ VKDNH WKH ZRUOG LQ DOPRVW QR WLPH DW DOO 7R SXW LW DQRWKHU ZD\
FRPPXQLWLHV LQ WKH ZRUOG LV RQ LWV ZD\ RI IXVLQJ WRJHWKHU WR IRUP D VLQJOH FRPPXQLW\ WKDW LV WR EH FDOOHG WKH
(DUWK 6RFLHW\
6WLOO WKHUH VHHPV WR EH D ORQJ ZD\ IRU WKH KXPDQV WR WUDYHO EHIRUH DQ\ UHDO XQLILFDWLRQ RI WKH ZRUOG
FRPPXQLWLHV WDNHV SODFH DQG WKLV LV IRU WKH EHWWHU DV ZH DUH QRW UHDG\ IRU LW \HW ZLWKRXW DQ LQNOLQJ RI ZKDW D
SURSHU VRFLDO VWUXFWXUH VKRXOG VXLW VXFK D VRFLHW\ $V D PDWWHU RI IDFW WKH VHFRQG JUDQG WUDQVLWLRQ DQG WKH ORZ
VWDWXV YDULDQFH FRPPXQLWLHV WKDW HQVXHG KLW DOO RI XV TXLWH XQSUHSDUHG 1RW DPD]LQJO\ SHRSOH PHW LW ZLWK
WKHLU FKDUDFWHULVWLF XQFRQFHUQ MXVW ZDLWLQJ IRU D QHZ EHWWHU VRFLDO V\VWHP WR QDWXUDOO\ HPHUJH PHDQZKLOH
PDNLQJ GR ZLWK ZKDWHYHU SDUWV RI ROG V\VWHPV WKDW VWLOO VHHPHG WR ZRUN XQGHU QHZ FRQGLWLRQV ZLWK D IHZ
SDWFK ZRUNV KHUH DQG WKHUH
:KDW LV ZURQJ ZLWK WKH KDELWXDO ZD\V RI RXU DQFHVWRUV WR ZDLW IRU XQVHWWOLQJ VRFLDO FRQGLWLRQV WR
VHWWOH" $V IDU DV WKH KXPDQ HFRQRPLF DFWLYLWLHV DUH FRQFHUQHG WKH QDWXUDO DGDSWLYH PHFKDQLVP LQFRUSRUDWHG
ZLWKLQ WKH ROG ZD\ RI RXU GRLQJ HFRQRPLF WUDQVDFWLRQV ZKRVH QDPH QRZ LV FDSLWDOLVP VHHPHG WR KDYH GRQH
LWV KRPHZRUN DOO ULJKW VR IDU ,W KDV HYHQ DEVRUEHG VRPH VSLULW RI VRFLDOLVP DV ZHOO LQ DZDUHQHVV RI ZKDW
XWRSLDQ VRFLDOLVWV ZRXOG DWWHPSW WR GR LQ GHVSHUDWLRQ 0DQ\ FDSLWDOLVWLF FRXQWULHV HVSHFLDOO\ (XURSHDQ RQHV
LPSOHPHQWHG VRFLDO ZHOIDUH V\VWHPV DV D SDUW RI WKHLU QDWLRQDO LQFRPH DOORFDWLRQ VFKHPH VR WKDW WKH VSLULW RI
QHHGGHSHQGHQW DOORFDWLRQ ZDV UHSUHVHQWHG LQ WKH VFKHPH )XUWKHUPRUH WKH 3HRSOH
V 5HSXEOLF RI &KLQD
DIWHU OHDUQLQJ KDUG OHVVRQV IURP WKH GDPDJH GRQH E\ &XOWXUDO 5HYROXWLRQ DQG WKH IDLOXUH RI 6RYLHW 8QLRQ
WU\LQJ JUDGXDOO\ WR UHYLVH LWV HFRQRP\ WRZDUG FDSLWDOLVP 7DNLQJ LQWR DFFRXQW DOO WKHVH LW PD\ VHHP DV LI WKH
ZRUOGZLGH FRQVHQVXV ZHUH HVWDEOLVKHG IRU OHWWLQJ FDSLWDOLVP UXQ LWV FRXUVH IUHHO\ DQG LWV VHOIDGMXVWLQJ
PHFKDQLVP ZRXOG HYHQWXDOO\ ZRXOG WDNH FDUH RI DOO SUREOHPV
7KHUH DUH WZR PDMRU UHDVRQV IRU WKLQNLQJ ZK\ WKH VWUDWHJ\ ZRXOG QRW ZRUN WKLV WLPH RI ZDLWLQJ RXW
IRU WKH VHOIDGMXVWLQJ PHFKDQLVPV JHQHUDOO\ EXLOW LQ PRVW VRFLDO V\VWHPV FDSLWDOLVP LQFOXGHG WR IXQFWLRQ
SURSHUO\ DV WKH\ VHHPV WR KDYH GRQH LQ SDVW RFFDVLRQV )LUVW WKH FRQGLWLRQV WKH FRQWHPSRUDU\ VRFLHWLHV DUH
SXW XQGHU DUH VR GUDVWLFDOO\ GLIIHUHQW IURP WKRVH LQ WKH 7LPHV RI :DU WKDW XVLQJ V\VWHPV GHYHORSHG LQ ROG
WLPHV LV ERUURZLQJ ZRUGV RI FDXWLRQ IURP 1HZ 7HVWDPHQW VRPHZKDW OLNH SXWWLQJ QHZ ZLQH LQ ROG
ZLQHVNLQV
DV ROG ZLQHVNLQV OHDN KRZHYHU GLOLJHQWO\ RQH SDWFKHV WKHP XS 6HFRQGO\ WKH SURFHVVHV RI WKH
VHFRQG JUDQG WUDQVLWLRQ DUH DFFHOHUDWLQJ FKDQJLQJ WKLQJV VR TXLFNO\ QRZ WKDW LW ZRXOG VFDUFHO\ JLYH
VXIILFLHQW WLPH IRU WKH QDWXUDO VHOI DGMXVWLQJ PHFKDQLVP RI VRFLDO V\VWHPV WR VHW LQ SURSHUO\
&DSLWDOLVP DPD]LQJO\ VHHPV WR EH IUHH IURP WKLV ILUVW SUREOHP RI EHLQJ RXWPRGHG SUREDEO\
EHFDXVH LWV RULJLQ ZRXOG JR EDFN HYHQ HDUOLHU WKDQ WKH 7LPHV RI :DU 3HRSOH ZRXOG KDYH EHJXQ WKHLU
H[FKDQJHV DQG WUDGHV DV VRRQ DV WKH ILUVW JUDQG WUDQVLWLRQ HQDEOHG WKHP WR SRVVHVV REMHFWV ZRUWK WUDGLQJ DQG
WKH SHRSOH LQ WKH 7LPHV RI :DU NHSW RQ WUDGLQJ DQG RWKHU FDSLWDOLVWLF DFWLYLWLHV LQ VSLWH RI HQFXPEUDQFHV
SUHVHQWHG E\ VWHDGLO\ JRLQJ RQ ZDUV 6R LW LV PRUH WKDQ QDWXUDO WKDW WKHVH DFWLYLWLHV DGGHG D IXUWKHU YLJRU
ZKHQ PDMRU ZDUV ZHUH RXW RI WKH SHRSOH
V VLJKW
7KH VHFRQG W\SH RI GLIILFXOW\ VWLOO KROGV IRU FDSLWDOLVP DQG LW LV SRVVLEOH WKDW WKHUH UHPDLQV OLWWOH
WLPH DQG PHDQV WR EULQJ LW EDFN RQ LWV ULJKW FRXUVH ZKHQ SHRSOH ILQG RXW VRPHWKLQJ EHLQJ VHULRXVO\ ZURQJ
ZLWK WKH FRQWHPSRUDU\ FDSLWDOLVP ,Q P\ RSLQLRQ FDSLWDOLVP KDV DGDSWHG LWVHOI VR ZHOO WR WKH FRQGLWLRQV RI
WKH WLPHV DQG SHRSOH
V ZLVK WR JDLQ PRUH DPHQLW\ RI FLYLOL]DWLRQ WKDW LW KDV EHHQ SXVKHG RIIFRXUVH DQG LV
QRZ WUHDGLQJ D UDWKHU GDQJHURXV SDWK 6LQFH WKH LVVXHV RI FDSLWDOLVP DUH UDWKHU XQLTXH OHW PH GLVFXVV LW D
OLWWOH PRUH LQ GHWDLO
0RUH DERXW FRQWHPSRUDU\ FDSLWDOLVP
7KH
JURZWKGHSHQGHQW
HFRQRP\
PHQWLRQHG
HDUOLHU
FKDUDFWHULVWLFDOO\
VHHQ
ZLWK
GRPHVWLF
HFRQRPLFDO V\VWHPV RI WHFKQRORJLFDOO\ DGYDQFHG QDWLRQV LV QRQH EXW D WHOOLQJ HYLGHQFH RI WKH VHOI DGDSWLYH
QDWXUH RI FDSLWDOLVP $V WKH FRPPRQ SHRSOH RI HDFK RI WKHVH QDWLRQV JUHZ PRUH SRZHUIXO DQG JDLQHG PRUH
SXUFKDVLQJ SRZHU WKH\ FUHDWHG D ODUJH PDUNHW IRU QHZ W\SHV RI SURGXFWV WKDW LQFRUSRUDWHG WHFKQRORJLFDO
DGYDQFHV FDXVLQJ GRPHVWLF LQGXVWULHV WR H[SDQG 7KH H[SDQGLQJ LQGXVWULHV QHHGHG WR KLUH PRUH SHRSOH ZLWK
KLJKHU ZDJHV DQG WKH SHRSOH ZHOFRPHG WKH JURZLQJ GRPHVWLF HFRQRP\ ZKLFK SURGXFHG WKHLU SURVSHULW\
DQG DGRUQHG WKHLU KRXVHKROGV ZLWK WHFKQRORJLFDO ZRQGHUV &RPSO\LQJ ZLWK VXFK ZLVKHV RI WKH SHRSOH
FDSLWDOLVP DGMXVWHG LWVHOI WR VXLW WKLV VLWXDWLRQ ZKHUHE\ PDNLQJ JURZLQJ GRPHVWLF HFRQRP\ DV D QRUP UDWKHU
WKDQ H[FHSWLRQ $V D UHVXOW HDFK GRPHVWLF HFRQRPLF V\VWHP KDG EHFRPH ILQH WXQHG WR WKH SDFH RI LWV
FRQVWDQW JURZWK VR PXFK VR WKDW D SURORQJHG IDLOXUH LQ JURZLQJ HYHQ D VWDEOH HFRQRP\ RI QR JURZWK FRXOG
VHULRXVO\ XSVHW LWV QRUPDO RSHUDWLRQ
7KH SUHPLVH WKDW WKH GRPHVWLF HFRQRP\ RI RQH
V QDWLRQ FRXOG NHHS RQ JURZLQJ HQGOHVVO\ LV
REYLRXVO\ WRR JRRG DQ DVVXPSWLRQ WR EH WUXH +RZHYHU RQFH D GRPHVWLF HFRQRP\ ZDV WXQHG WR LW WKH QDWLRQ
KDG EXW WR WU\ WR NHHS XS WKH SDFH 2QH RI WKH PRVW VHULRXV SUREOHP LQKHUHQW WR WKH JURZWKGHSHQGHQW
HFRQRP\ LV WKDW LW KDV WR NHHS H[SDQGLQJ LWV PDUNHW IRU WKH SURGXFWV RI LWV LQGXVWU\ EHVLGHV SUHYHQWLQJ WKH
H[LVWLQJ PDUNHW RI LWV RZQ IURP VDWXUDWLRQ $ GRPHVWLF PDUNHW KRZHYHU ODUJH LW PLJKW EH ZRXOG VRRQHU RU
ODWHU EH VDWXUDWHG ZLWK PDMRU SURGXFWV RI WKH GRPHVWLF HFRQRP\ LQ RWKHU ZRUGV ZKDW LI HDFK IDPLO\ DOUHDG\
RZQHG D 79 VHW D IDPLO\ FDU DQG WKH OLNH" 8QOHVV WKH PDQXIDFWXUHUV VRPHKRZ UHYLWDOL]H WKH SHRSOH
V
DSSHWLWH IRU EX\LQJ PRUH WKH PDUNHW ZRXOG VKULQN 7KH RQO\ UHPHG\ IRU WKLV VDWXUDWLRQ SUREOHP LV WR
SURGXFH LQVRIDU DV LW LV SRVVLEOH QHZ DQG PRUH DWWUDFWLYH YHUVLRQV RI WKHVH SURGXFWV DQG HQWLFH WKH SHRSOH
WR EX\ WKHP E\ GLVFDUGLQJ WKH ROG RQHV 7KH SURGXFLQJ VLGH KDV SUHVHQWHG OLWWOH SUREOHP VR IDU DV WKH UDSLGO\
DGYDQFLQJ DUWLILFLDO HYROXWLRQ KDV DFFRPPRGDWHG WKH UHTXHVW ZLWK HDVH SURGXFLQJ DWWUDFWLYH QHZ YHUVLRQV RI
DOPRVW HYHU\ NLQG WKURXJK LQQRYDWLRQ DIWHU DQRWKHU $QG SHRSOH QHHGHG OLWWOH SURGGLQJ IRU EX\LQJ WKHP DV
WKH\ ORYHG WR GR VR DV ORQJ DV WKHLU LQFRPHV ZHUH LQFUHDVLQJ ZLWK WKH JURZLQJ HFRQRP\ ,W ZDV KRZHYHU WKH
ILUVW WLPH LQ WKH ORQJ KXPDQ KLVWRU\ WKDW WKH FRQVXPSWLRQ
SHU VH
ZDV UHJDUGHG DOPRVW DV SHRSOH
V PRUDO
REOLJDWLRQ
:KLOH YLWDOL]LQJ GRPHVWLF PDUNHW WKLV ZD\ WKH JURZWK GHSHQGHQW HFRQRP\ RI D QDWLRQ DOVR
GHPDQGHG LWV PDUNHW WR H[SDQG WR IRUHLJQ PDUNHWV E\ H[SRUWLQJ LWV SURGXFWV 7KH FRQVHTXHQFH ZDV D VHYHUH
FRPSHWLWLRQ DV RWKHU QDWLRQV QDWXUDOO\ ZLVKHG WKH VDPH $OWKRXJK VXFK D FRPSHWLWLRQ FRQWULEXWHG WR D
IXUWKHU JURZWK RI HFRQRP\ E\ IXUWKHU VWLPXODWLQJ WKH DGYDQFH RI HDFK QDWLRQ
V WHFKQRORJ\ LW FRXOG QRW GR
PXFK IRU WKH H[SDQVLRQ RI PDUNHWV RI WHFKQRORJLFDOO\ DGYDQFHG QDWLRQV DV D ZKROH VLQFH WKH VL]H RI WKH
ZKROH SLH WKH DJJUHJDWH PDUNHW UHPDLQHG WKH VDPH 6R WKH JRYHUQPHQWV RI WKHVH FRXQWULHV DOO WXUQHG WKHLU
KHDGV WRZDUG XQGHUGHYHORSHG FRXQWULHV :K\ KHUH ZH KDYH PDUNHWV ZH KDYH EHHQ ORRNLQJ IRU
/HW
PH
WRXFK
XSRQ
DW
WKLV
MXQFWXUH
WKH
UHODWLRQVKLSV
EHWZHHQ
VRFDOOHG
GHYHORSHG
DQG
XQGHUGHYHORSHG FRXQWULHV 7KH WUDGH UHODWLRQV EHWZHHQ WKHVH WZR JURXSV RI FRXQWULHV DUH YHU\ RIWHQ WKH
IRUPHU H[SRUWLQJ LQGXVWULDO SURGXFWV LQ H[FKDQJH IRU WKH LPSRUWV RI UDZ PDWHULDOV IURP WKH ODWWHU 6R WKH
ODWWHU KDYH EHHQ IXQFWLRQLQJ DV D PDUNHW IRU WKH SURGXFWV RI WKH IRUPHU EXW QRW PXFK VLQFH WKH SXUFKDVLQJ
SRZHU RI XQGHUGHYHORSHG FRXQWULHV UHPDLQV IDU ORZHU WKDQ WKRVH RI GHYHORSHG FRXQWULHV ,Q IDFW WKH ZHDOWK
GLIIHUHQWLDO EHWZHHQ WKH FRPPRQ SHRSOHV RI WKHVH WZR JURXSV RI QDWLRQV PDUNHGO\ LQFUHDVHG VLQFH WKH
,QGXVWULDO 5HYROXWLRQ VWDUWHG WR DFFXPXODWH ZHDOWK LQ :HVWHUQ FRXQWULHV ZKLOH WKH XQGHUGHYHORSHG FRXQWULHV
ZHUH PRVWO\ FRORQLHV RI ULFK :HVWHUQ FRXQWULHV ZKR ZHUH GHOLEHUDWHO\ H[FOXGHG IURP LQGXVWULDOL]DWLRQ
:KHQ WKH VHFRQG JUDQG WUDQVLWLRQ FDPH QRZ DEXQGDQW ZHDOWK LQ GHYHORSHG FRXQWULHV ZHUH PRUH RU OHVV
HTXDOO\ VKDUHG E\ WKHLU SHRSOHV 7KH VKDULQJ KRZHYHU GLG QRW H[WHQG PXFK EH\RQG QDWLRQDO ERUGHUV ,W LV
LURQLFDO WR REVHUYH WKDW WKH VDPH SURFHVV WKDW EURXJKW DQ DSSUR[LPDWH HTXDOL]DWLRQ RI PDWHULDO ZHDOWK ZLWKLQ
QDWLRQDO ERUGHUV PDJQLILHG WKH ZHDOWK GLIIHUHQWLDO EHWZHHQ GHYHORSHG DQG XQGHUGHYHORSHG QDWLRQV WR DQ
XQSUHFHGHQWHG OHYHO QRWH WKDW D FRXSOH RI FHQWXULHV EHIRUH VXFK GLIIHUHQWLDO GLG QRW H[LVW (YHU\ZKHUH LQ
WKH ZRUOG WKH FRPPRQ SHRSOH IDUHG MXVW EDUHO\ DERYH WKH VXEVLVWHQW OHYHO
2QH PD\ VHH KHUH WKH UHDVRQ ZK\ QDWLRQDO ERUGHUV VWLOO VWDQG ILUP LQ WKLV WLPH RI LQWHUQDWLRQDOL]DWLRQ
7KH\ DUH VRPHZKDW OLNH ORFN JDWHV LQ 3DQDPD FDQDO WKH\ FDQQRW EH RSHQHG ZLWKRXW FDXVLQJ D JUHDW GDPDJH
WR WKH HFRQRPLHV RI WKH FRQFHUQHG QDWLRQV XQOHVV WKH JHQHUDO ZHDOWK OHYHO RI WKH FRXQWULHV FRQFHUQHG DUH
DSSUR[LPDWHO\ HTXDOL]HG
,W LV WKHUHIRUH WKH ULJKW WKLQJ WKDW WKHVH XQGHUGHYHORSHG QDWLRQV DUH QRZ WU\LQJ
KDUG WR EXLOG WKHLU RZQ LQGXVWULHV DQG GHYHORSHG FRXQWULHV DUH H[WHQGLQJ VRPH DVVLVWDQFH WR WKHVH VHOIKHOS
$ JRRG H[DPSOH RI JUDGXDO GLVVROXWLRQ RI QDWLRQDO ERUGHUV LQ DFFRUGDQFH ZLWK WKH GHJUHH RI ZHDOWK HTXDOL]DWLRQ PD\
EH VHHQ LQ WKH VRFLRHFRQRPLF H[SHULPHQW WKH (8 LV QRZ FRQGXFWLQJ YHU\ FDXWLRXVO\ ZLWK LWV PHPEHU QDWLRQV
HQWHUSULVHV HYHQ WKRXJK VXFK DQ DVVLVWDQFH LV RIWHQ EDFNHG E\ D UDWKHU SUHGDWRU\ FDSLWDOLVWLF PRWLYH RI
GHYHORSHG FRXQWULHV WR H[SDQG WKHLU PDUNHWV
(YHQ LI QRZ XQGHUGHYHORSHG FRXQWULHV KDYH VXFFHHGHG LQ WKH GLIILFXOW WDVN RI EXLOGLQJ XS WKHLU
GRPHVWLF LQGXVWULHV DQG GHYHORSHG FRXQWULHV SDUWO\ VDWLVILHG WKHLU QHHG RI H[SDQGLQJ WKHLU PDUNHWV , PXVW
ZDUQ WKDW WKH JURZWKGHSHQGHQW HFRQRP\ WKDW FDSLWDOLVP LV QRZ PROGLQJ LWVHOI LV D EOLQG DOOH\ FRXUVH 7KHUH
LV TXLWH D IHZ REYLRXV ZURQJQHVV WR GHPRQVWUDWH LW 7KH ILUVW TXHVWLRQ LV DERXW WKH VRXUFH RI WKH ZHDOWK WKDW
WKH JURZLQJ HFRQRP\ EURXJKW WR WKH SHRSOH RI GHYHORSHG FRXQWULHV 7KH PRUH WKH HFRQRPLHV JURZ WKH PRUH
RI WKH ILQLWH QDWXUDO UHVRXUFHV RI WKH (DUWK LV FRQVXPHG ZLWK DQ DFFHOHUDWHG SDFH 'HVSLWH WKH VWURQJ
ZDUQLQJV UDLVHG DJDLQVW VXFK D SURGLJDO FRQVXPSWLRQ RI UHVRXUFHV 0HDGRZV
HW
DO
SHRSOH DUH
UHVSRQGLQJ WR WKHP UDWKHU REWXVHO\ 2Q WKH EDVLV RI VXFK DQ RSWLPLVP SUREDEO\ LV WKHLU XQFRQVFLRXV
H[SHFWDWLRQ WKDW OLNH
GHXV H[ PDFKLQD
WKH DGYDQFLQJ WHFKQRORJ\ ZLOO HYHQWXDOO\ FRPH XS ZLWK D VROXWLRQV
WR DQ\ SUREOHPV RI SK\VLFDO PDWHULDOV ZKHQ WKH VLWXDWLRQ KDV EHFRPH VHULRXV HQRXJK MXVW DV LW SURGXFHG LQ
WKH SDVW V\QWKHWLF ILEHUV DQG V\QWKHWLF UXEEHUV DQG WKH OLNH /HW PH WHPSRUDULO\ GLVUHJDUG WKDW WKHVH V\QWKHWLF
PDWHULDOV DOVR XVH RWKHU W\SHV RI QDWXUDO UHVRXUFHV DQG DFFHSW HYHQ WKH UHPRWH SRVVLELOLWLHV OLNH D VXSSO\ RI
LQH[KDXVWLEOH HQHUJ\ WKURXJK QXFOHDU IXVLRQ RU DQ HIILFLHQW XVH RI VRODU HQHUJ\ LQFOXGLQJ D WHFKQRORJLFDO
EUHDNWKURXJK IRU UHF\FOLQJ HYHU PRXQWLQJ LQGXVWULDO ZDVWH %HFDXVH HYHQ DOO WKDW ZRXOG QRW VDYH WKH JURZWK
GHSHQGHQW FDSLWDOLVP IURP LWV ZURQJQHVV
6XSSRVH WKDW HYHU\ QDWLRQ LQ WKH ZRUOG LV LQGXVWULDOL]HG DQG VWLOO VWULYHV IRU JURZWK RI LWV HFRQRP\
6LQFH WKH DJJUHJDWH ZRUOG PDUNHW FDQ H[SDQG RQO\ E\ LQFUHDVLQJ LWV SRSXODWLRQ WKH H[WUDSRODWHG LPDJH RI
WKH IXWXUH RI WKH KXPDQ VRFLHW\ LV D FKHHUOHVV RQH D WUHPHQGRXVO\ EORDWHG XS KXPDQ SRSXODWLRQ LQ ZKLFK
HYHU\ SHUVRQ LV FODPRULQJ IRU PRUH PDWHULDO SURVSHULW\ D SLFWXUH WKDW UHPLQGV PH RI RQH RI WKH HLJKW PDMRU
VFHQHV RI %XGGKLVWV
+HOO
2I FRXUVH WKH WLPH ZLOO FRPH IDU HDUOLHU WKDQ VXFK D ILQDO VFHQH ZKHQ GHYHORSHG FRXQWULHV DUH
IRUFHG WR VWRS JURZLQJ DQG WKH HDUOLHU LW LV WKH OHVV ZRXOG EH WKH KDUP GRQH %XW ZH GR QRW NQRZ KRZ WR GR
LW 6XSSRVH WKDW RQH RI WKH PDMRU GHYHORSHG FRXQWU\ KDV FHDVHG LWV HFRQRPLF JURZWK IRU D FHUWDLQ SHULRG RI
WLPH HLWKHU LQWHQWLRQDOO\ RU E\ PHHWLQJ D GLIILFXOW\ LQ GRLQJ VR 7KHQ KXH DQG FU\ ZLOO EH UDLVHG IURP DPRQJ
LWV SHRSOH DV WKH VPRRWK RSHUDWLRQ RI LWV VRFLRHFRQRPLF V\VWHP PXVW KDYH EHHQ ZHOO WXQHG WR D FRQVWDQW
JURZWK 7DNH IRU LQVWDQFH WKH VRFLDO ZHOIDUH V\VWHP QRZ SUDFWLFHG E\ PRVW RI GHYHORSHG FRXQWULHV :KLOH
WKH DYHUDJH LQFRPH RI SHRSOH LV LQFUHDVLQJ ZLWK D JURZLQJ HFRQRP\ WKH\ PD\ QRW EHJUXGJH VRPH SRUWLRQ RI
WKHLU LQFUHDVHG LQFRPH EHLQJ XVHG WR KHOS WKRVH QHHGHG %XW ZKHQ WKH HFRQRP\ VWRSSHG JURZLQJ IRU VRPH
WLPH WKH IL[HG FRVW IRU UXQQLQJ WKH V\VWHP ZRXOG EHFRPH D KHDY\ EXUGHQ RQ WKH JRYHUQPHQW
V EXGJHW
)XUWKHUPRUH WKH FORVH LQWHUGHSHQGHQFH RI WKH JOREDO HFRQRP\ ZLOO WHQGV WR PDNH RQH QDWLRQ
V
IODJJLQJ HFRQRP\ FRQWDJLRXV WR WKH HFRQRP\ RI RWKHUV DQG WKHUH ZLOO EH D VHULRXV LQWHUQDWLRQDO SUHVVXUH
WRZDUG WKH QDWLRQ WR UHEXLOG LWV HFRQRP\ DQG SXW LW RQ WKH JURZLQJ FRXUVH RQFH DJDLQ 6R MXVW DV 'XFDV
VRUFHUHU
V DSSUHQWLFH KDG WR ZDWFK KLV DERPLQDWLRQ NHSW PXOWLSO\LQJ DV KH GLG QRW NQRZ ZKDW VSHOO WR FDVW WR
VWRS WKH SURFHVV KH VWDUWHG ZH DUH DSSDUHQWO\ KHOSOHVV EXW WR ZDWFK FDSLWDOLVP PDUFKHV RQ LWV JURZWK
GHSHQGHQW FRXUVH KDQG LQ KDQG ZLWK DFFHOHUDWLQJ DUWLILFLDO HYROXWLRQ
1RZ OHW PH JHW WR WKH URRW RI WKLV SUREOHP &DSLWDOLVP DV D VHOIDGMXVWLQJ V\VWHP RI DQ DQFLHQW RULJLQ
IRU SHRSOH WR FRQGXFW WKHLU HFRQRPLF DFWLYLWLHV DOZD\V UHDG\ WR VHUYH SHRSOH
V FROOHFWLYH ZLVKHV LI WKH
PHDQV LV DYDLODEOH WR GR VR 3HRSOH KDYH EHHQ ZLVKLQJ WR REWDLQ PDWHULDO SURVSHULW\ IRU D ORQJ SHULRG RI WLPH
DQG FDSLWDOLVP DOZD\V REOLJHG 3HRSOH GLG QRW JHW PXFK ULFK XQWLO UHFHQWO\ RQO\ EHFDXVH WKH DYDLODEOH PHDQV
ZHUH UHODWLYHO\ SRRU %XW ZKHQ WKH VHFRQG JUDQG WUDQVLWLRQ FUHDWHG DQ HQRUPRXVO\ SRWHQW PHDQV WR SURYLGH
PDWHULDO ULFKHV FDSLWDOLVP EOLWKHO\ WRRN LW XS DQG NHSW VXSSO\LQJ SHRSOH ZLWK DEXQGDQFH
6R ZK\ GRQ
W ZH VWRS ZLVKLQJ PRUH" 'RQ
W ZH DOUHDG\ KDYH HQRXJK PDWHULDO ZHDOWK" %XW QR VXFK
VWRSSLQJ PHFKDQLVP LV LQFRUSRUDWHG LQ WKH KXPDQ XUJH V\VWHP VLQFH RXU UHPRWH DQFHVWRUV GLG QRW QHHG
WKHP ZKHQ WKH XUJH V\VWHP HYROYHG 7KH\ QHHGHG WR DXJPHQW WKHLU FRQWURO SRZHUV DV WKDW PHDQW VXUYLYDO
DQG WKDW ZD\ WKH KXPDQ XUJH V\VWHP DFTXLUHG WKH SRZHUDXJPHQWDWLRQ XUJH DQG ZKDWHYHU PDWHULDO REMHFWV
WKDW VHUYHG WR DXJPHQW WKHLU SRZHUV WKH\ ZDQWHG WR NHHS WKHP $QG ZKHQ WKH\ UHPDLQHG XVHIXO WKH\
ZDQWHG WKHLU RIIVSULQJV WR LQKHULW WKHP 6R ZKHQ WKH ILUVW JUDQG WUDQVLWLRQ EHJDQ ZLWK WKH $JULFXOWXUDO
5HYROXWLRQ DQG EHJDQ WR SURGXFH PDQ\ VXFK REMHFWV ZRUWK\ WR SRVVHVV WKH SURSULHWDU\ ULJKWV DQG WKH
LQKHULWDQFH ULJKWV EHFDPH D SDUW RI WKH WUDGLWLRQ WKH ULJKWV WKDW VWLOO VWDQG DV PDLQ SLOODUV RI FDSLWDOLVP
$V GLVFXVVHG LQ WKH HDUO\ SDUW RI WKLV ERRN WKH HYROXWLRQ RI WKH KXPDQ XUJH V\VWHP DV ZH VHH LW
WRGD\ KDV SUDFWLFDOO\ EHHQ FRPSOHWHG EHIRUH WKH ILUVW JUDQG WUDQVLWLRQ ZKHQ +RPR 6DSLHQFH 6DSLHQFH
HPHUJHG LQWR WKH VFHQH $V VXFK LW KDV QR EXLOWLQ UHJXODWLYH IXQFWLRQV DJDLQVW FHUWDLQ KXPDQ DFWLYLWLHV LQ
IRUHVLJKW RI FLYLOL]DWLRQ ,Q IDFW WKH SHRSOH ZKR KDG WRLOHG LQ KDUG FRQGLWLRQV WR VXFFHHG LQ WKHLU DJULFXOWXUDO
YHQWXUH ZRXOG KDYH KDG QRW DQ LRWD RI LQNOLQJ WKDW WKH\ ZHUH WKXV FUHDWLQJ FLYLOL]DWLRQ OHW DORQH WKDW WKH
FLYLOL]DWLRQ ZRXOG VRRQ SOXQJH LQWR WKH 7LPHV RI :DU 7KH\ ZHUH MXVW GULYHQ E\ WKH DFWLYH FRSHU VSLULW
ZLWKRXW NQRZLQJ ZKHUH WKHLU DFWLYLWLHV ZRXOG OHDG WKHP WR
$W WKLV MXQFWXUH OHW PH UHPLQG WKH UHDGHU KRZ D JURXS RI KXPDQV DV DFWLYH FRSHUV JHQHUDOO\
RSHUDWHV 7KHUH DOZD\V ZLOO EH D IHZ WKH EUHHG RI H[SORUHUV ZKR DUH KLJKULVN WDNHUV UHDG\ WR H[SORUH VRPH
XQNQRZQ ODQG XQUHYHDOHG UHDOP RI NQRZOHGJH RU XQGHUWDNH VRPH VSHFXODWLYH YHQWXUH )LUVW PRVW RI RWKHUV
ZRXOG MXVW ZDWFK ZKDW ZRXOG KDSSHQ DQG QDWXUDOO\ PDQ\ RI WKHP PHHWV GLVDVWHUV EXW VRPH ZLOO VXFFHHG
EULQJLQJ EDFN VRPH ZHDOWK RU D QHZV RI IHUWLOH ODQG EH\RQG 7KHQ PDQ\ RI WKH RWKHUV ZLOO IROORZ WKH OHDG RI
WKHVH VXFFHVVIXO H[SORUHUV DQG ZKHQ HYHU\WKLQJ VHHPV WR EH DOO ULJKW PDMRULW\ RI WKH UHVW ZLOO IROORZ HYHQ
SXVKLQJ WKH H[SORUHUV ZKLOH RFFDVLRQDOO\ VQLJJHULQJ WKH UHPDLQLQJ IHZ GLHKDUG VNHSWLFV
(VVHQWLDOO\ WKH VDPH SURFHVV ZRXOG KDYH WDNHQ SODFH ZKHQ WKH KXPDQV VWDUWHG DJULFXOWXUH LQ WKH
WLPH RI WKH ILUVW JUDQG WUDQVLWLRQ DQG LV EHLQJ UHSHDWHG LQ WKH FXUUHQW VHFRQG JUDQG WUDQVLWLRQ :H VHHP WR EH
LQ WKH SHULRG WKDW WKH PDMRULW\ DUH JODGO\ IROORZLQJ WKH SDWK WR SURVSHULW\ VKRZQ E\ H[SORUHUV RI WKH PRGHUQ
WLPHV VFLHQWLVWV HQJLQHHUV SLRQHHULQJ HQWUHSUHQHXUV DQG VR RQ ZLWKRXW D HDU WR OLVWHQ WR FDXWLRXV ZRUGV RI
VRPH VNHSWLFV DQG DOVR ZLWKRXW DQ LQNOLQJ WR ZKHUH WKH\ DUH JRLQJ :KDW FRXOG VWRS WKLV UXVK WRZDUG
SURVSHULW\ ZRXOG EH DQ XQH[SHFWHG GLVDVWHU IRXQG WR OLH RQ WKHLU FRXUVH DQG WKH UHDO SHULO RI VXFK D SRWHQWLDO
GLVDVWHU RI WRGD\ LV WKH VZLIWQHVV RI LWV FRPLQJ OHDYLQJ XV OLWWOH WLPH WR SUHSDUH IRU UHWUHDW
/HW PH DGG DQRWKHU ZRUG RI D FDXWLRQDU\ DERXW D GDQJHURXV WZLVW FDSLWDOLVP LV H[KLELWLQJ ODWHO\
1RWH WKDW WKH EUHHG RI H[SORUHUV
DUH ELJ VWDNH JDPEOHUV E\ GHILQLWLRQ 7KH\ RIWHQ SXW WKHLU OLIH RU IRUWXQH RU
ERWK DW ULVN E\ JHWWLQJ VRPHWKLQJ YHU\ YDOXDEOH WR WKHPVHOYHV DQG WKDW VRPHWKLQJ RIWHQ WXUQHG RXW WR EH
YHU\ YDOXDEOH WR WKH KXPDQNLQG DV D ZKROH (YHQ PDQ\ RI QRQ H[SORUHUV ZKR FDQQRW SXW WKHPVHOYHV
LQYROYHG LQ VXFK D VWUHVVIXO JDPEOLQJ FDQ VWLOO HQMR\ JDPEOLQJ RI D VPDOO VFDOH WKH JHQXLQH JDPEOLQJ DQG
WKH\ ZRXOG KDYH GRQH VR HYHU VLQFH WKH WRNHQ PRQH\ ZDV LQYHQWHG ZLWKRXW KDYLQJ PXFK WR GR ZLWK WKH
PDMRU FRXUVH RI HYHQWV LQ WKH KXPDQ KLVWRU\
1RWH WKDW LQ WKH SDVW DQ HQWUHSUHQHXU RI WKH H[SORUHU W\SH ZKR LQYHVWHG D VXP RI WKH SHUVRQ
V FDSLWDO
RQ DQ XQFHUWDLQ YHQWXUH OLNH RQ WKH FDUJR RI D WUDGH VKLS JRLQJ WR D IDU DZD\ ODQG KDG WR OHDYH WKH FDSLWDO
IUR]HQ IRU D FHUWDLQ SHULRG RI WLPH EHIRUH WKH RXWFRPH RI KLV JDPEOH ZDV OHDUQHG D IRUWXQH ZRXOG EH PDGH
LI WKH VKLS UHWXUQHG DQG ORVW DOO LI RWKHUZLVH 6WLOO D FHUWDLQ SHUFHQWDJH RI WKH WUDGH VKLSV ZHUH GXH WR
FRPSOHWH WKH URXQG WULS EULQJLQJ SURVSHULW\ WR ERWK ODQGV DQG WKH FDSLWDO WKXV LQYHVWHG DFFRPSOLVKHG LWV
SURSHU UROH RI PRQH\ DV WKH QHFHVVDU\ OXEULFDQW RI HFRQRPLF DFWLYLWLHV
,Q WKLV H[DPSOH WKH LQYHVWRU KDG WR ZDLW RXW D ORQJ WLPH EHIRUH NQRZLQJ ZKHWKHU KLV LQYHVWPHQW
SDLG RII RU QRW 5HFHQWO\ KRZHYHU FDSLWDOV KDYH EHHQ ODUJHO\ OLTXLGL]HG QRW ERXQG WR DQ\ SDUWLFXODU WDUJHWV
YHU\ VWURQJO\ HQDEOLQJ LQYHVWRUV WR ZLWKGUDZ WKHLU FDSLWDOV ZLWK D VKRUW QRWLFH IURP VRPH GRPHVWLF PDUNHW
7KH ZLWKGUDZQ FDSLWDOV WKHQ PD\ EH UHLQYHVWHG LQ VRPH RWKHU PDUNHW LQ WKH ZRUOG 7KLV OLTXLGL]DWLRQ RI
FDSLWDOV LV RQH RI WKH RXWFRPHV RI WKH GHYHORSPHQW RI JOREDO LQIRUPDWLRQ QHWZRUN DQG DOVR RI WKH QDWXUDO
DIILQLW\ RI PRQH\ WR GLJLWDO LQIRUPDWLRQ SURFHVVLQJ PRQH\ EHLQJ QRWKLQJ EXW WRNHQV RI GLJLWL]HG VRFLDO
YDOXHV 7KLV SRVVLELOLW\ WKHQ FUHDWHG IRU ODUJH VFDOH LQYHVWRUV FKDQFHV RI JDPEOLQJ RI DQ XQSUHFHGHQWHG VFDOH
PDNLQJ DQ\ PDUNHW RI DQ\ ORFDOLW\ RI WKH ZRUOG DV WKH WDUJHW WR VWDNH DQ DPRXQW RI OLTXLGL]HG LQYHVWPHQW
FDSLWDO RQ $V D UHVXOW RI VXFK JDPEOLQJ VW\OH LQYHVWPHQWV D QDWLRQ PD\ ILQG WKDW HYHQ ZLWK D VOLJKW VLJQ RI
PDOIXQFWLRQ RI LWV HFRQRP\ PXFK RI WKH PRQH\ LQYHVWHG LQ LWV GRPHVWLF PDUNHW VXGGHQO\ GLVDSSHDUV
PDNLQJ VXUH D VLJQ RI GLVDVWHU DOZD\V OHDGV WR D UHDO GLVDVWHU
6R FDSLWDOLVP KDSSLO\ PDUULHG ZLWK DGYDQFHG LQIRUPDWLRQ WHFKQRORJ\ QRZ VHHPV WR EH FRQYHUWLQJ
WKH ZRUOG HFRQRP\ LQWR D JOREDO FDVLQR ZKHUH WUHPHQGRXV DPRXQWV RI PRQH\ IODVK DFURVV WKH ZRUOG IURP
KDQG WR KDQG ZLWK D VSHHG VR IDVW WKDW OHDYHV IHZ ORQJWLPH YHQWXUHV VXIILFLHQW WLPH WR EXLOG XS DQG PDWXUH
$UWLILFLDO FRDOLWLRQV RI PRGHUQ WLPHV
1RZ OHW PH PRYH RQ WR GLVFXVV KRZ DUWLILFLDO FRDOLWLRQV DUH IDULQJ LQ WKHVH GD\V $UWLILFLDO FRDOLWLRQV
SURVSHUHG LQ WKH 7LPHV RI :DU DV KDOI DUWLILFLDO DQG KDOI QDWXUDO XQLWV RI VRFLDO RUJDQL]DWLRQV 7KH DUWLILFLDO
SDUW GHSHQGHG RQ WKHLU PDNHEHOLHYH QDWXUH PLPLFNLQJ WKH VSLULW RI NHUQHOOHG FORVH FRDOLWLRQV 3RVWV ZHUH
GHILQHG E\ FRDOLWLRQDO UXOHV VR WKDW HDFK VHFWRU RI DQ DUWLILFLDO FRDOLWLRQ VXSSRVHGO\ RSHUDWHG DV LI LW ZHUH D
UHDO NHUQHOOHG FRDOLWLRQ DOWKRXJK WKH FRDOLWLRQDO UXOHV VWLSXODWHG WKDW VXFK UHODWLRQVKLSV DPRQJ PHPEHUV RI
HDFK VHFWRU DSSOLHG RQO\ ZKHQ WKH OHJLWLPDWH FRDOLWLRQDO DFWLYLWLHV ZHUH FRQFHUQHG 7KLV UHVWULFWLRQ HQDEOHG
DQ DUWLILFLDO FRDOLWLRQ WR WDNH RQ D KLHUDUFKLFDO VWUXFWXUH ZLWKRXW DQ LQKHUHQW VL]H OLPLW
7KH QDWXUDO SDUW WKDW 7LPHV RI :DU DUWLILFLDO FRDOLWLRQV FDPH IURP WKH XWLOL]DWLRQ RI ODUJH VWDWXV
YDULDQFH SUHYDOHQW LQ WKH 7LPHV RI :DU FRPPXQLWLHV 7KH RSHUDWLRQ RI DQ DUWLILFLDO FRDOLWLRQ ZRXOG FHUWDLQO\
KDYH EHHQ HDVLHU LI D VHFWRU KHDG KDG D GLVWLQFWO\ KLJKHU VWDWXV WKDQ KLV RU KHU GLUHFW VXERUGLQDWHV DV WKH
FRPPDQGV JLYHQ E\ WKH IRUPHU ZRXOG KDYH EHHQ REH\HG E\ WKH ODWWHU ZLWKRXW PXFK DGR 6R WKH KLHUDUFKLFDO
RUGHULQJ ZLWKLQ DQ DUWLILFLDO FRDOLWLRQ ZRXOG KDYH EHHQ WULHG WR NHHS D FORVH PDWFK ZLWK WKH VWDWXV RUGHULQJ LQ
D ODUJHU FRPPXQLW\ ,Q RUGHU WR JDLQ WKDW PDWFKLQJ DSSURSULDWH VWDWXV V\PEROV DQG WKH PRUDO FRGH WKDW SXW
OR\DOW\ RQ WKH OLVW RI WRS YLUWXHV ZRXOG EH OLEHUDOO\ XVHG
7KH FRPLQJ RI WKH VHFRQG JUDQG WUDQVLWLRQ KDV GHSULYHG DUWLILFLDO FRDOLWLRQV RI WKH XWLOL]DWLRQ RI WKLV
FRPPXQLW\ VWDWXV GLIIHUHQWLDO DV SRVWUHOHYDQW DXWKRULWLHV DUH HIIHFWLYHO\ JRQH LQ WKH FXUUHQW VPDOO VWDWXV
YDULDQFH VRFLHW\ 7KH DUWLILFLDO RU WKH FRQWUDFWXDO SDUW PD\ VWLOO VWDQGV JRRG LQ WKH FXUUHQW VRFLHW\
VXERUGLQDWHV IROORZ RUGHUV JLYHQ E\ VXSHULRUV DV IDU DV WKH FRDOLWLRQ LV IDULQJ ZHOO DQG WKH RUGHUV UHPDLQ
ZLWKLQ WKH GHILQHG UHJLRQV RI FRDOLWLRQDO DFWLYLWLHV $V D UHVXOW ZH VHH LQ WKH FXUUHQW VRFLHW\ VRPH DUWLILFLDO
FRDOLWLRQV VWLOO WKULYLQJ VRPH EDUHO\ IXQFWLRQLQJ DQG VRPH GRLQJ SRRUO\ /HW PH SLFN XS D IHZ
UHSUHVHQWDWLYH W\SHV RI WKHP DQG FRQVLGHU ZKDW IDFWRUV DUH UHVSRQVLEOH IRU WKHLU VXFFHVVHV DQG IDLOXUHV
$SSDUHQWO\ WKH PRVW VXFFHVVIXO W\SH RI DUWLILFLDO FRDOLWLRQV WRGD\ DUH EXVLQHVV FRUSRUDWLRQV $V WKH
SURWDJRQLVWV RI WKH HYHU JURZLQJ HFRQRP\ RI WHFKQRORJLFDOO\ DGYDQFHG FRXQWULHV WKHUH DUH PDQ\ H[WUHPHO\
ZHOOWRGR EXVLQHVV FRUSRUDWLRQV RSHUDWLQJ ZLWKRXW H[FHSWLRQ LQ WKH LQWHUQDWLRQDO PDUNHW DWWHVWLQJ WKH
PDNLQJ RI DQ DOPRVW ERUGHUOHVV (DUWK 6RFLHW\ 1HHGOHVV WR VD\ QRW HYHU\ EXVLQHVV FRUSRUDWLRQ LV WKDW
VXFFHVVIXO 7KHLU ILHOGV RI RSHUDWLRQ EH LW LQWHUQDWLRQDO RU GRPHVWLF DUH JURXQGV RI ILHUFH FRPSHWLWLRQ
/RVHUV DUH UXWKOHVVO\ HOLPLQDWHG IURP WKH ILHOG EXW QHZ RQHV DUH IRUPHG WR ILOO WKH YDFDQF\ LPPHGLDWHO\
,W LV XQGRXEWHGO\ WKLV YHU\ VWURQJ VHOHFWLRQ SUHVVXUH LQ WKH EXVLQHVV ZRUOG WKDW NHHS DUWLILFLDO
FRDOLWLRQV RI WKH EXVLQHVV FRUSRUDWLRQ W\SH KDOH DQG WKULYLQJ 0RVW PHPEHUV RI VXFK D FRDOLWLRQ DUH DZDUH RI
WKLV FRPSHWLWLRQ HVSHFLDOO\ WKH KLJK UDQNLQJ RQHV LI RQH RI WKHP LV LQFRPSHWHQW DV WKH FRDOLWLRQ PHPEHU KH
RU VKH ZRXOG EH UHSODFHG E\ D PRUH FRPSHWHQW RQH 7KLV UXOH DSSOLHV HYHQ LI WKH SHUVRQ LV RQ WKH WRS RI WKH
FRDOLWLRQDO KLHUDUFK\ LW DSSOLHV HVSHFLDOO\ WR WKH WRS 6R HYHQ WKH WRS UDQNLQJ SHUVRQ RI D EXVLQHVV
FRUSRUDWLRQ ZRXOG KDYH OLWWOH SHUVRQDO DXWKRULW\ LQ WKH EXVLQHVV ZRUOG ZKHUH WKH FRPSHWLWLRQ LV WKH WRXJKHVW
6R E\ YLUWXDOO\ HOLPLQDWLQJ VWDWXV YDULDQFH DUWLILFLDO FRDOLWLRQV RI WKH EXVLQHVV FRUSRUDWLRQ W\SH
DFTXLUHG D TXLWH JHQXLQH YHUVDWLOLW\ DJHQWV EHLQJ UHSODFHG DV WKH JLYHQ VLWXDWLRQ FRPPDQGV , DP KRZHYHU
QRW VXJJHVWLQJ WKDW EXVLQHVV FRUSRUDWLRQV RI WRGD\ LV DQ LGHDO IRUP RI RUJDQL]DWLRQ WR UXQ WKH VPDOO VWDWXV
YDULDQFH FRQWHPSRUDU\ VRFLHW\ 7KH FRPSHWLWLRQ LV PDGH WRR ILHUFH DQG SURVSHULW\ DQG GHFOLQH YLVLW EXVLQHVV
FRUSRUDWLRQV WRR TXLFNO\ IRU WKHP WR HPSOR\ DQ\ UHDOO\ ORQJ WHUP SROLF\ DQG WKDW LV GXH WR WKH RYHUO\ VZLIW
FKDQJHV RI WKH EXVLQHVV HQYLURQPHQW EURXJKW E\ WKH DFFHOHUDWLQJ DUWLILFLDO HYROXWLRQ
2WKHU W\SHV RI DUWLILFLDO FRDOLWLRQV DUH IDULQJ QRW VR ZHOO DV EXVLQHVV FRUSRUDWLRQV %XUHDXFUDFLHV RI
PRVW QDWLRQV DSSHDU WR EH PDQDJLQJ MXVW EDUHO\ $SSDUHQWO\ WKH\ DUH UHQW E\ WZR RSSRVLQJ IRUFHV 2Q WKH
RQH KDQG ORVLQJ WKH SRVLWLRQGHSHQGHQW DXWKRULWLHV WKDW RQFH NHSW LWV KLHUDUFKLFDO VWUXFWXUH IXQFWLRQDO WKH\
KDG WR DGKHUH WR WKHLU WUDGLWLRQ HYHQ PRUH VWURQJO\ WKDQ WKH SDVW PDNLQJ WKHP PRUH ULJLG DQG OHVV YHUVDWLOH
2Q WKH RWKHU KDQG WKH HYHU FKDQJLQJ VRFLDO FRQGLWLRQV UHTXLUH WKHP WR KDQGOH QHZ LVVXHV WR ZKLFK WKH RQO\
UHVSRQVH WKH\ DUH UHDG\ WR PDNH LV WR HVWDEOLVK D QHZ GHSDUWPHQW WR KDQGOH LW 6R XQOHVV SROLWLFLDQV FRQWURO LW
MXGLFLRXVO\ DQG UHMXYHQDWH LW FRQVWDQWO\ WKH VWDWH EXUHDXFUDF\ ZRXOG VLPSO\ EHFRPH PRUH IDWWHQHG DQG PRUH
XQZLHOG\
8QIRUWXQDWHO\ WKH SROLWLFLDQV ZH KDYH WRGD\ HOHFWHG E\ GHPRFUDWLF SURFHGXUHV JHQHUDOO\ IDOO IDU
VKRUW RI VXFK D OHYHO RI FRPSHWHQFH (YHQ LI WKH\ DUH UHDOO\ FRPSHWHQW KRZHYHU WKH EXUGHQ RI PDLQWDLQLQJ
EXUHDXFUDF\ DOZD\V LQ VKDSH ZRXOG EH WRR KHDY\ D EXUGHQ IRU WKHP WR VKRXOGHU 7KHUHIRUH LW LV LPSHUDWLYH
IRU XV WR FRPH XS ZLWK VRPH QHZ VRFLDO V\VWHP WKDW UHSODFHV WKH FXUUHQW EXUHDXFUDWLF V\VWHP D V\VWHP
ZKLFK LV YHUVDWLOH HQRXJK WR PHHW WKH FKDOOHQJHV WKDW WKH UDSLGO\ FKDQJLQJ VRFLDO FRQGLWLRQV NHHS FDVWLQJ XV
, VKDOO JLYH D OLWWOH WKRXJKW WR WKLV LVVXH DW WKH HQG RI WKLV ERRN
1RZ OHW PH WDNH D ORRN DW VRPH RWKHU DUWLILFLDO FRDOLWLRQV ,Q WKH 7LPHV RI :DU IDPLOLHV DFTXLUHG D
JUHDW GHDO RI DUWLILFLDOLW\ $ IDPLO\ IXQFWLRQHG DV DQ DUWLILFLDO FRDOLWLRQ KDG D UDWKHU ODUJH QXPEHU RI PHPEHUV
DQG D FOHDU KLHUDUFKLFDO VWUXFWXUH DPRQJ WKHP JHQHUDOO\ KHDGHG E\ D PDOH HOGHU )DPLO\ DV VXFK ZDV
UHJDUGHG DV WKH EDVLF EXLOGLQJ EORFN RI D FRPPXQLW\ DQG PDQ\ ODUJHU VRFLDO V\VWHPV ZHUH RIWHQ PROGHG LQ
LPLWDWLRQ RI D SDWULDUFKDO IDPLO\ :KHQ WKH DXWKRULW\ RI WKH KHDG RI D IDPLO\ EHFDPH QR ORQJHU PDLQWDLQHG
E\ WKH RQVHW RI WKH VHFRQG JUDQG WUDQVLWLRQ WKH IDPLO\ DV DQ DUWLILFLDO FRDOLWLRQ HIIHFWLYHO\ UHYHUWHG WR LWV
RULJLQDO IRUP WKH IDPLO\ DV D QDWXUDO FRDOLWLRQ $OWKRXJK PDQ\ VRFLDO FRQVWUDLQWV VWLOO UHPDLQ DV D OHJDF\ RI
WKH ROG WLPHV D IDPLO\ KDV EHFRPH RQFH DJDLQ D FRDOLWLRQ EDVHG RQ D QDWXUDO PDWULPRQLDO FRDOLWLRQ IRUPHG
DQG GLVVROYHG E\ WKH ZLOO RI D FRXSOH DQG WKH FKLOGUHQ ERUQ LQ D IDPLO\ DUH XVXDOO\ DOORZHG WR FKRRVH WKHLU
RZQ FRXUVHV RI OLIH ZKHQ WKH\ JURZ XS
7KH W\SH RI DUWLILFLDO FRDOLWLRQV ZKLFK SUREDEO\ VXIIHUHG PRVW IURP WKH ORVV RI DXWKRULW\ DUH VFKRROV
(OHPHQWDU\ VFKRROV DQG XQLYHUVLWLHV DUH UHODWLYHO\ IUHH RI WURXEOHV 7HDFKHUV RI HOHPHQWDU\ VFKRROV
HVSHFLDOO\ RI ORZHU JUDGH FDQ JHQHUDOO\ DVVHUW WKHLU DXWKRULW\ EHFDXVH RI WKH REYLRXV SRZHU GLIIHUHQWLDO WKDW
H[LVWV EHWZHHQ WHDFKHUV DV DGXOWV DQG SXSLOV DV FKLOGUHQ ,Q XQLYHUVLWLHV PRVW VWXGHQWV DUH DGXOW HQRXJK WR
XQGHUVWDQG WKH FRQWUDFWXDO QDWXUH H[LVWLQJ EHWZHHQ WKHPVHOYHV DQG SURIHVVRUV 7KH JUHDWHVW GLIILFXOW\ LQ
HGXFDWLRQ VHHPV WR DULVH LQ EHWZHHQ GXULQJ WKH SHULRG RI VHFRQGDU\ HGXFDWLRQ ZKHQ WHDFKHUV KDYH OLWWOH
DGYDQWDJH RYHU VWXGHQWV SRZHUZLVH ZKLOH PDQ\ VWXGHQWV ODFN PRWLYDWLRQ WR OHDUQ
'HVSLWH RI WKH ODUJH YDULHW\ VHHQ LQ HGXFDWLRQDO V\VWHPV RI YDULRXV FRXQWULHV LW PD\ EH JHQHUDOO\
VDLG WR EH UDWKHU VWURQJO\ WUDGLWLRQERXQG ZKRVH VSLULW LV WKH RQH WKDW KDQGHG GRZQ IURP WKH 7LPHV RI :DU
WRJHWKHU ZLWK WKH WHUP FRPSXOVRU\ HGXFDWLRQ
ZKLFK 0DULD 7KHUHVD VWDUWHG LQ WKH WK &HQWXU\ WR FUHDWH
HGXFDWHG ODERU IRUFH 7KH FRPPRQ SHRSOH KDG QR REMHFWLRQ WR WKDW DV WKH\ DOVR ZLVKHG WR EH HGXFDWHG 6R
XQGHU WKH FRQVHQVXV RI WKH UXOLQJ FODVV DQG WKH FRPPRQ SHRSOH WKH WUDGLWLRQ RI VFKRRO HGXFDWLRQ ZDV
HVWDEOLVKHG DQG DOPRVW VDQFWLILHG FDUHIXOO\ JXDUGHG E\ D JUHDW GHDO RI VWDWXWHV PDNLQJ HGXFDWLRQDO V\VWHPV
KDUG WR DGDSW WR FKDQJHV LQ VRFLDO FRQGLWLRQV
:KDW VHHPV PRVW ZURQJ ZLWK WKH FXUUHQW HGXFDWLRQDO V\VWHPV LV WKDW WHDFKHUV DUH XVXDOO\ MXVW
KDQGLQJ RXW VHFWLRQV RI NQRZOHGJH DV WKH\ KDYH EHHQ GRLQJ IRU D ORQJ WLPH 2QFH VFKRROV DUH QHDUO\ WKH
RQO\ SODFH ZKHUH SHRSOH FRXOG OHDUQ WKHVH VHFWLRQV RI NQRZOHGJH DQG VWXGHQWV FRXOG DSSUHFLDWH EHLQJ
HGXFDWHG LQ VFKRROV 7RGD\ KRZHYHU NQRZOHGJH LV HYHU\ZKHUH DFFHVVLEOH E\ DQ\RQH LI RQH LV VR PLQGHG
DQG WKLV IDFW GHSULYHG VFKRROV RI WKHLU RQFH SULYLOHJHG SRVLWLRQ DV WKH RQO\ JDWHZD\ WR NQRZOHGJH ,W LV QRW
WKDW VWXGHQWV ZRXOG YROXQWDULO\ DFFHVV WR VXFK NQRZOHGJH LI LW LV QRW WDXJKW DW VFKRRO LW LV WKH GHYDOXDWLRQ RI
WKH W\SHV NQRZOHGJH WDXJKW DW VFKRRO WKDW UHGXFH WKHLU PRWLYDWLRQ WR OHDUQ 0RUH DQG PRUH VWXGHQWV
QRZDGD\V JR WR KLJKHU HGXFDWLRQDO LQVWLWXWLRQV EHFDXVH WKH\ RU WKHLU SDUHQWV FDQ QRZ DIIRUG HGXFDWLRQDO
FRVWV DQG WKH FRVWV DUH WKRXJKW WR EH SDLG E\ GLSORPDV VWXGHQWV JHW DV WKH OHYHO RI RQH
V VFKRRO HGXFDWLRQ
VWLOO VHHPV WR ZRUN DV DQ LPSRUWDQW GLPHQVLRQ RI WKH VRFLDO QRUP D[LV DJDLQVW ZKLFK RQH
V VRFLDO VWDWXV LV
DSSUDLVHG HYHQ KRZ VPDOO WKH VWDWXV YDULDQFH KDV EHFRPH WKHUH DOZD\V UHPDLQV VRPH VWDWXV GLIIHUHQFHV
6FKRROV EHLQJ XVHG WKLV ZD\ KRZHYHU LV LQGHHG D JUHDW ZDVWH RI SRWHQWLDOLW\ WKH\ KDYH DV WKH
FRQWHPSRUDU\ VRFLHWLHV KDYH D JUHDW QHHG RI WKH W\SH RI SHRSOH ZKR FDQ
XVH
NQRZOHGJH IRU FRQVWDQWO\
FURSSLQJ XS VRFLDO SUREOHPV RI QHZ W\SHV LQ D YHUVDWLOH IDVKLRQ ,Q RUGHU WR KDYH VXFK SHRSOH LQ QXPEHUV ZH
QHHG VFKRROV WR WHDFK KRZ WR WDS YDULRXV VRXUFHV RI NQRZOHGJH WKDW DUH WKHUH LQ WKH ZRUOG DQG KRZ WR
WKLQN
LPDJLQDWLYHO\ E\ XVLQJ WKH NQRZOHGJH WKH\ JDLQHG 7KH VFKRROV RI WKLV NLQG KRZHYHU FDQQRW EH REWDLQHG
ZLWKRXW ILUVW IUHHLQJ VFKRROV HVSHFLDOO\ WKH VHFRQGDU\ HGXFDWLRQ DQG XS IURP WKH \RNHV RI WUDGLWLRQDO
HGXFDWLRQDO VWDWXWHV DQG WKHQ LQWURGXFH FRPSHWLWLRQ DPRQJ VFKRROV RI FRPSDUDEOH OHYHOV ,I VWXGHQWV DUH
JLYHQ D IUHH FKRLFH DPRQJ YDULRXV W\SHV RI QHZ VFKRROV WKH\ ZRXOG FKRRVH WKH RQH WKDW VHHPV EHVW WR GUDZ
DQG QXUWXUH WKH SRWHQWLDOLW\ WKH\ SRVVHVV DQG WKRVH VFKRROV ZKLFK GR WKH WDVN EHVW ZLOO ZLQ WKH FRPSHWLWLRQ
3UREOHPV RI WKH FRQWHPSRUDU\ GHPRFUDF\
'HPRFUDF\
ZDV RFFDVLRQDOO\ SUDFWLFHG LQ WKH SDVW W\SLFDOO\ LQ DQFLHQW *UHHN DQG 5RPDQ FLW\ VWDWHV
ZKHUH WKHLU FLWL]HQV GLG QRW ZDQW IRU DQ\ SDUWLFXODU SHUVRQ WR PRQRSROL]H SROLWLFDO SRZHU ,W VXEVHTXHQWO\
EHFDPH XQSRSXODU SULPDULO\ EHFDXVH WKH VORZQHVV LQ PDNLQJ SROLWLFDO GHFLVLRQV WKURXJK GHEDWHV ZDV D
GHFLVLYH GHPHULW LQ WKH 7LPHV RI :DU )XUWKHUPRUH FRPPXQLWLHV JUHZ LQ VL]H PDGH GHPRFUDF\ HLWKHU GLUHFW
RU UHSUHVHQWDWLYH UDWKHU LPSUDFWLFDEOH $V WLPH GUHZ FORVHU WR WKH HQG RI WKH 7LPHV RI :DU GHPRFUDWLF
SROLWLFDO V\VWHPV JUDGXDOO\ PDGH WKHLU FRPHEDFN HVSHFLDOO\ DV WKH FRPPRQ SHRSOH JDLQHG WKHLU SROLWLFDO
SRZHU DQG WKH VRFLHW\ EHFDPH RUJDQL]HG HQRXJK WR DOORZ ODUJH VFDOH HOHFWLRQV RI SROLWLFDO UHSUHVHQWDWLYHV
7KHUHIRUH LW LV QDWXUDO WKDW ZKHQ WKH PDMRU ZDU WKUHDWV ZHUH JRQH GHPRFUDF\ EHFDPH DFFHSWHG DOPRVW
ZRUOG ZLGH DV WKH RQO\ OHJLWLPDWH SROLWLFDO V\VWHP RI WRGD\
1HYHUWKHOHVV VRPHWKLQJ LV JRLQJ ZURQJ ZLWK WKH ZD\ GHPRFUDF\ LV SRSXODUO\ LPSOHPHQWHG LQ PDQ\
QDWLRQV DQG LW LV FRLQFLGHQWDO ZLWK WKH JOREDO GRZQIDOO RI DXWKRULWLHV 1RWH WKDW LQ WKH SDVW HDFK RI WKRVH
ZKR ZHUH HQJDJHG LQ SROLWLFV HPSHURUV NLQJV KLJK JRYHUQPHQW RIILFLDOV KDG WKH KDOR RI D YHU\ KLJK
VRFLDO VWDWXV RQ WKHLU EDFN ZKLFK DOPRVW DXWRPDWLFDOO\ FRPPDQGHG REHGLHQFH DQG UHVSHFW RI WKH UHVW RI
SHRSOH 3HUKDSV WKH VDPH SULQFLSOH ZRXOG KDYH ZRUNHG LQ WKH HDUO\ SHULRG RI WKH FXUUHQW UHSUHVHQWDWLYH
GHPRFUDF\ HDFK RI WKH UHSUHVHQWDWLYHV UHDOO\ UHSUHVHQWHG D PDMRULW\ RI WKH FRQVWLWXHQF\ DQG FRXOG KDYH
ZLHOGHG QHFHVVDU\ SROLWLFDO SRZHU DQG VWDWXV FRQIHUUHG E\ WKH SHUVRQ
V VXSSRUW FRDOLWLRQ
$V WKH VHFRQG JUDQG WUDQVLWLRQ SURFHHGHG DQG DOO DXWKRULWLHV GHFOLQHG KRZHYHU WKH VDPH IDWH YLVLWHG
SROLWLFLDQV LQ GHPRFUDWLF UHJLPHV 1RZDGD\V YRWHUV VHHP WR YRWH MXVW EHFDXVH YRWLQJ LV FRQVLGHUHG DV D FLYLO
GXW\ DQG KDUGO\ UHJDUG WKH HOHFWHG DV WKHLU UHSUHVHQWDWLYHV 1RW RQO\ SHRSOH GR QRW SD\ PXFK UHVSHFW WR WKHP
EXW WKH\ RIWHQ JUXPEOH DERXW WKH TXDOLWLHV RI SROLWLFLDQV WKH\ JHW QR PDWWHU ZKHUH WKH\ DUH LQ WKH ZRUOG
$ ZRUG PD\ EH VDLG LQ GHIHQVH RI SUHVHQW GD\ SROLWLFLDQV 0D\EH WKH\ DUH QR ZRUVH WKDQ WKH SDVW
WLPH SROLWLFLDQV ZLWKRXW VWDWXV WR EDFN WKHP XS KRZ FRXOG WKH\ SHUIRUP WKHLU IXQFWLRQV SURSHUO\ DQG WKHLU
IXQFWLRQV DUH WRXJKHVW RI DOO RI JRYHUQLQJ D QDWLRQ E\ FRQWUROOLQJ VWUDLJKWMDFNHWHG EXUHDXFUDWV %XW EHFDXVH
RI WKH VXSUHPH LPSRUWDQFH RI WKHLU IXQFWLRQV ZH QHHG SROLWLFLDQV RI H[FHOOHQW TXDOLWLHV DQG LW LV XQGHQLDEOH
ZH DUH QRW JHWWLQJ WKHP XQGHU WKH FXUUHQW V\VWHP RI GHPRFUDF\ LPSOHPHQWDWLRQ
:KDW LV PRVW VHULRXVO\ ZURQJ ZLWK WKH FXUUHQW V\VWHP LV WKDW EHLQJ D SROLWLFLDQ DV D SURIHVVLRQ LV QRW
DWWUDFWLYH HQRXJK WR GUDZ PDQ\ SRWHQWLDOO\ FDSDEOH SHRSOH WR YROXQWDULO\ UXQQLQJ DV SROLWLFDO FDQGLGDWHV 7R
EH D SROLWLFLDQ JHQHUDOO\ PHDQV KDUG ZRUNV KLJK UHVSRQVLELOLWLHV OLWWOH VWDELOLW\ LQ WKH SRVLWLRQ HYHQ HOHFWHG
DQG DQ HQRUPRXV FRVW IRU FDPSDLJQLQJ 7KHUH VWLOO LV VRPH VWDWXV JDLQHG E\ EHLQJ D VXFFHVVIXO SROLWLFLDQ EXW
IDU ORZHU WKDQ LQ WKH SDVW LV WKH VWDWXV RI D SROLWLFLDQ VWLOO ZRUWK WDNLQJ DOO WKH WURXEOHV" 4XLWH D IHZ DSSHDU
WR VD\ \HV WR WKH TXHVWLRQ EXW PDQ\ RI WKHP DUH XQIRUWXQDWHO\ QRW WKH NLQG RI SHUVRQV RQ ZKRVH KDQGV ZH
ZDQW WR SODFH WKH UHVSRQVLELOLW\ RI JRYHUQLQJ RXU QDWLRQV
7KH W\SH RI SHUVRQV ZH QHHG PRVW DUH WKRVH ZKR FDQ FRSH ZLWK GLIILFXOW LVVXHV SUHVHQWHG E\ TXLFNO\
FKDQJLQJ GRPHVWLF DQG JOREDO VRFLDO FRQGLWLRQV E\ WDNLQJ D EURDG XQELDVHG YLHZV RI WKH ZRUOG JUDVSLQJ
WKH HVVHQFH RI SUREOHPV DULVHQ DQG VHWWLQJ WKH FRXUVH RI DFWLRQV RI WKH QDWLRQ FRUUHFWO\ LQ D ORQJ WHUP EDVLV
7KLV PD\ VHHP D TXDOLILFDWLRQ GLIILFXOW WR VDWLVI\ EXW WKH SRSXODWLRQ RI D QDWLRQ LV QRZDGD\V ODUJH HQRXJK WR
LQFOXGH TXLWH D QXPEHU RI VXFK SHRSOH DQG WKRVH ZKR DUH FDSDEOH PLJKW EH SURGGHG WR DFWLYDWH WKH
GHPRQVWUDWLRQ XUJH IRU WKHLU SRWHQWLDO SROLWLFDO SRZHU XQGHU WKH ULJKW FRQGLWLRQV
7KH DFWXDO FRQGLWLRQV XQIRUWXQDWHO\ DUH QRW ULJKW $V GHVFULEHG DERYH WKHUH DUH KXUGOHV DZDLWLQJ
DQ\ VXFK DWWHPSW RI GHPRQVWUDWLRQ RI SROLWLFDO SURZHVV KDUG HQRXJK WR GDXQW DQ\RQH ZKR FDQ VHH WKHP
FOHDUO\ 7KH ZRUVW RI ZKLFK PD\ EH WKH LQVWDELOLW\ RI WKH SRVLWLRQ RI D SROLWLFLDQ $ SROLWLFLDQ ZKR ORVHV WKH
HOHFWLRQ DOVR ORVHV D JUHDW GHDO PRUH WKDQ WKH SHUVRQ
V VHDW LQ WKH KRXVH DQG HOHFWLRQ XVXDOO\ FRPHV XS HYHU\
D IHZ \HDUV 6R LW LV QR ZRQGHU WKDW WKH PLQG RI D SROLWLFLDQ LV XVXDOO\ SUHRFFXSLHG E\ PDWWHUV OLNH KRZ WR
ZLQ WKH QH[W HOHFWLRQ KRZ WR SOHDVH WKH VSRQVRUV ZKR VXSSO\ PRVW RI WKH SHUVRQ
V FDPSDLJQ FRVW EHVLGHV
KRZ WR VXUYLYH LQ WKH SROLWLFDO LQILJKWLQJ DPRQJ WKH SHUVRQ
V IHOORZ SROLWLFLDQV ZKHQ ZH H[SHFW WKHP WR
FRQFHQWUDWH RQ PDWWHUV RI WKH VWDWH 7KHVH SUREOHPDWLF DVSHFWV DUH REYLRXVO\ FDXVHG E\ V\VWHP G\VIXQFWLRQV
RI WKH FXUUHQW LPSOHPHQWDWLRQ RI GHPRFUDF\ ZKLFK ZRUNHG RQFH EXW QR ORQJHU EHFDXVH RI WKH FRQVLGHUDEOH
WUDQVIRUPDWLRQV RXU VRFLHWLHV KDYH XQGHUJRQH $V VXFK WKH\ DUH FRUUHFWDEOH LI WKH SROLWLFLDQV FXUUHQWO\ LQ
RIILFH GHWHUPLQH WR GR VR HYHQ WKRXJK PDNLQJ WKHP GR LW LV DOPRVW DV GLIILFXOW DV ILQGLQJ D JRRG VROXWLRQ IRU
WKH V\VWHP LQQRYDWLRQ
$OO WKDW KRZHYHU LV VWLOO QRW WKH ZKROH SUREOHP 6XSSRVLQJ WKDW ZH KDG JRRG FDSDEOH SROLWLFLDQV LQ
RIILFH FRXOG WKH\ UHDOO\ EULQJ WKHLU DELOLWLHV LQWR IXOO SOD\" 0RUH VSHFLILFDOO\ FDQ WKH\ FRQWURO EXUHDXFUDF\"
1RPLQDOO\ RU FRQWUDFWXDOO\ VSHDNLQJ SROLWLFLDQV VKRXOG KDYH DQ XSSHU KDQG RYHU EXUHDXFUDF\ %XW
SROLWLFLDQV DUH RIWHQ QR PDWFK WR EXUHDXFUDWV LQ PDWWHUV WKDW UHTXLUH SURIHVVLRQDOO\ NQRZOHGJH DQG OLWWOH KHOS
LV H[SHFWHG LQ WKLV LVVXH IURP WKH QRW YHU\ KLJK VRFLDO VWDWXV RI WKH IRUPHU
7KLV LPSOLHV WKDW WKH UHIRUP RI SROLWLFDO V\VWHP DQG WKH UHIRUP RI EXUHDXFUDF\ DUH QRW VHSDUDWH
LVVXHV DQG D QHZ SROLWLFRDGPLQLVWUDWLYH V\VWHP KDV WR EH GHVLJQHG ZLWK D FRPPRQ VHW RI SULQFLSOHV 6XFK D
FODLP PD\ DSSHDU XWWHUO\ SUHSRVWHURXV EXW LW LV QRW UHDOO\ VR DV WKH SURJUHVV RI WKH VHFRQG JUDQG WUDQVLWLRQ
HVSHFLDOO\ WKH DFFHOHUDWLQJ DUWLILFLDO HYROXWLRQ KDV PDGH WKH WLPH IDU JRQH ZKHQ VWDWH LVVXHV FRXOG EH
GHEDWHG E\ ORFDO UHSUHVHQWDWLYHV ZKR ZHUH FRDFKHG E\ EXUHDXFUDWV RQ KRZ SUREOHPV KDG EHHQ VROYHG
WUDGLWLRQDOO\ $OWKRXJK QHLWKHU FXUUHQW SROLWLFLDQV DQG EXUHDXFUDWV ZRXOG WDNH LQLWLDWLYHV IRU D FRPSOHWH
UHQHZDO RI WKH V\VWHP VRRQHU RU ODWHU WKH\ ZRXOG KDYH WR IDFH WKH IDFW WKDW WKH\ FRXOG QR ORQJHU FDSDEOH RI
KDQGOLQJ VRFLDO LVVXHV SURSHUO\ ,Q VXFK D FULVLV WKH GLVVDWLVILHG SHRSOH ZRXOG WHQG WR DSSO\ D YLROHQW FRXUVH
RI DFWLRQ XQOHVV WKH\ ZHUH JLYHQ D YLVLRQ DERXW DQ DOWHUQDWLYH V\VWHP RI JRYHUQDQFH RI QDWLRQV DQG WKH
ZRUOG FDSDEOH RI KDQGOLQJ QHZ SUREOHPV XQGHU QHZ VRFLDO FRQGLWLRQV ,I WKH\ KDG VXFK D YLVLRQ SHRSOH PD\
ZDLW EHIRUH KDYLQJ UHFRXUVH WR YLROHQFH IRU VRPHRQH WR ZRUN RXW SUDFWLFDO GHWDLOV WKDW EULQJV UHDOLW\ WR WKH
YLVLRQ
/HW PH SUHVHQW EHORZ D YHU\ FUXGH VNHWFK RI RQH VXFK YLVLRQ ZLWKRXW GHWDLOV RQH WKDW DFWLYHO\ PDNH
XVH RI DGYDQFHG WHFKQRORJ\ DQG RQH WKDW LV QRW XWRSLDQ EHFDXVH WKH KXPDQV DV DFWLYH FRSHUV DUH GHQLHG
KDYLQJ D XWRSLD DQG RQ HYHU\ FRXUVH WKDW SURPLVHV D XWRSLD OLHV D GRRP
$ YLVLRQ RI QHZ VRFLHW\ WKDW IXQFWLRQV DV D PHWDPLQG
%DVLF LGHDV IRU D PHWDPLQG VRFLHW\
7KH JLVW RI WKH LGHD , HQYLVLRQ RI WKH IXWXUH KXPDQ VRFLHW\ PD\ EH VXPPDUL]HG DV WKDW RI PDNLQJ WKH
VRFLHW\ EH LW D QDWLRQ RU WKH ZRUOG IXQFWLRQ DFFRUGLQJ WR SULQFLSOHV YHU\ VLPLODU WR WKH RQHV WKDW UXQ RXU
SHUVRQDO PLQG $V GLVFXVVHG LQ &KDSWHU DQG WKH KXPDQ PLQG LV FKDUDFWHUL]HG E\ KDYLQJ D ZHOO GHVLJQHG
YHUVDWLOH VWUXFWXUH :KHQ D SHUVRQ LV ORRNLQJ IRU DQ DSSURSULDWH DFWLRQ SODQ XQGHU D FHUWDLQ XUJH UHSUHVHQWLQJ
WKH QHHG RI WKH SHUVRQ DW WKH PRPHQW YDULRXV DFWLRQ DJHQWV DUH DFWLYDWHG LQ WKH FRQVFLRXV SDUW RI WKH PLQG
HDFK RI ZKLFK UHSUHVHQWV D VSHFLILF DFWLRQ SODQ HVSHFLDOO\ WKRVH DFWLRQ DJHQWV GUDZQ E\ WKHLU UHOHYDQFH WR
WKH JLYHQ XUJH RU E\ WKH DIIRUGDQFH RI WKH JLYHQ VLWXDWLRQ 7KHQ LI WKH VLWXDWLRQ DOORZV WKH WLPH PHQWDO
VLPXODWLRQV ZLOO EH UXQ IRU HDFK RI WKH SURSRVHG DFWLRQ SODQ E\ XVLQJ DSSURSULDWH G\QDPLF VFKHPDV
UHSUHVHQWLQJ WKH VHOI DQG WKH VLWXDWLRQ 7KHQ ZKLFKHYHU DFWLRQ SODQ WKDW GHPRQVWUDWHG LWVHOI WR EH WKH PRVW
VXFFHVVIXO LQ DFKLHYLQJ WKH GHVLUHG JRDO GHVLJQDWHG E\ WKH XUJH ZLOO EH HPSOR\HG DQG H[HFXWHG
%\ YLUWXH RI KDYLQJ JUHDW PDQ\ GLIIHUHQW W\SHV RI DFWLRQ DJHQWV DQG HODERUDWH G\QDPLF VFKHPDV
UHSUHVHQWLQJ WKHP D SHUVRQ FDQ FRSH ZLWK D ZLGH VSHFWUXP RI VLWXDWLRQV LQ D VWURQJ FRQWUDVW WR WKH
FRQWHPSRUDU\ DUWLILFLDO LQWHOOLJHQFH HDFK RI ZKLFK FDQ GHDO RQO\ ZLWK D YHU\ OLPLWHG W\SH RI VLWXDWLRQV
&RQVLGHULQJ WKLV YHUVDWLOLW\ H[KLELWHG E\ HDFK VLQJOH SHUVRQ WKH
SRWHQWLDO
YHUVDWLOLW\ RI D KXPDQ VRFLHW\
FRPSRVHG RI PLOOLRQV RI SHRSOH ZLWK GLIIHUHQW W\SHV RI YHUVDWLOLW\ VKRXOG EH VWXSHQGRXVO\ ODUJH ,I D VRFLHW\
LV SURSHUO\ RUJDQL]HG VR WKDW DW OHDVW D IUDFWLRQ RI WKLV SRWHQWLDO YHUVDWLOLW\ FDQ EH XWLOL]HG WKHUH ZRXOG EH
IHZ VRFLDO VLWXDWLRQV WKLV VRFLHW\ FDQQRW VXFFHVVIXOO\ FRSH ZLWK
7KH SURSRVDO , DP JRLQJ WR PDNH WR UHDOL]H VXFK D YHUVDWLOH VRFLHW\ LV WR FUHDWH D VRFLHW\ ZKLFK
IXQFWLRQV DV LI LW ZHUH LWVHOI D PLQG D
PHWDPLQG
WKDW FRQVLVWV RI D ODUJH QXPEHU RI LQGLYLGXDO PLQGV 7KH
YHUVDWLOLW\ RI D VRFLHW\ ZRXOG EH JXDUDQWHHG LI LW FRXOG XWLOL]H GLIIHUHQW DELOLWLHV RI LWV LQGLYLGXDO PHPEHUV DV
LI WKH\ ZHUH DFWLRQ DJHQWV RI WKH PHWDPLQG /HW PH VNHWFK EHORZ D URXJK RXWOLQH RI P\ LGHD DERXW KRZ
VXFK D PHWD PLQG VRFLHW\ FRXOG EH FUHDWHG
)RU D VRFLHW\ WR IXQFWLRQ DV D PHWDPLQG LW KDV WR EH DEOH WR UHFRJQL]H WKH VLWXDWLRQ
LW LV IDFLQJ DQG
WR OHW LWV FLWL]HQV NQRZ ZKDW WKH FXUUHQW VRFLHWDO VLWXDWLRQ LV EHFDXVH RQO\ WKHQ VRPH RI WKHP PD\ EH DEOH WR
DFW DV WKH VRFLHWDO DFWLRQ DJHQW RIIHULQJ WKHLU SURSRVLWLRQV IRU WKH SURSHU VRFLHWDO DFWLRQ WR EH WDNHQ 7KH
PHWDPLQG VRFLHW\ ZLOO QHHG DQ DJHQF\ WDNLQJ FDUH RI WKLV WDVN ZKLFK PD\ EH FDOOHG WKH
FDUHWDNHU DJHQF\
FRUUHVSRQGLQJ WR WKH DSSUDLVDO PRQLWRU
LQ P\ PRGHO RI WKH SHUVRQDO PLQG 1RWH KHUH WKDW ZKDW LV
LQGLVSHQVDEOH IRU D VRFLHW\ WR IXQFWLRQ SURSHUO\ DV D PHWDPLQG LV WKH H[LVWHQFH RI DQ YDVW LQIRUPDWLRQ
QHWZRUN RQ ZKLFK LQIRUPDWLRQ IORZV YHU\ TXLFNO\ DQG ELODWHUDOO\ QRW RQO\ EHWZHHQ WKH FDUHWDNHU DJHQF\ DQG
HDFK RI WKH FLWL]HQV EXW DOVR DPRQJ WKH FLWL]HQV WKHPVHOYHV $VVXPLQJ WKH H[LVWHQFH RI VXFK D VRFLHWDO
KDUGZDUH LV REYLRXVO\ ZLWKLQ WKH SRVVLELOLWLHV RI D QHDU IXWXUH DV LW LV QR PRUH WKDQ D VLPSOH H[WHQVLRQ RI WKH
LQWHUQHW WRGD\ MXVW HDVLHU WR EH DFFHVV DQG XWLOL]HG E\ HYHU\ERG\ ,Q DGGLWLRQ WR WKLV QHWZRUN WKH FDUHWDNHU
DJHQF\ KDV WR SRVVHVV D YHU\ HIILFLHQW FRPSXWHU V\VWHP FDSDEOH RI KDQGOLQJ D ODUJH QXPEHU RI SDUDOOHO WDVNV
6XFK D FRPSXWHU V\VWHP ZLOO DOVR EH QR QRYHOW\ LQ WKH WLPHV XQGHU FRQVLGHUDWLRQ DQG PDQ\ FLWL]HQV EHVLGHV
WKH FDUHWDNHUV ZLOO SRVVHVV VLPLODU V\VWHPV
/HW PH HPSKDVL]H KHUH WKH LQGLVSHQVDELOLW\ RI TXLFN LQIRUPDWLRQ H[FKDQJH EHWZHHQ WKH FDUHWDNHUV
DQG FLWL]HQV IRU D PHWDPLQG VRFLHW\ ,I LW WDNHV WLPH IRU WKH FDUHWDNHUV WR DSSULVH WKH FLWL]HQV RI WKH VRFLHWDO
VLWXDWLRQ DQG REWDLQ WKH ODWWHU
V UHVSRQVHV WKH XUJHQF\ RI VRPH RI WKH VLWXDWLRQV ZLOO IRUFH WKH FDUHWDNHUV WR
PDNH GHFLVLRQV ZLWKRXW FRQVXOWDWLRQ ZLWK FLWL]HQV 7KHQ WKH FDUHWDNHUV ZRXOG KDYH WR EHFRPH D JRYHUQPHQW
DVVLVWHG E\ D EXUHDXFUDF\ %XW WKH FDUHWDNHU DJHQF\ , DP JRLQJ WR GLVFXVV LV QRW D JRYHUQPHQW DV LW QHYHU
JRYHUQV 7KH FDUHWDNHU DJHQF\ KDV WR KDYH TXLWH D IHZ VXEDJHQFLHV EXW WKH\ DUH GLIIHUHQW IURP WKH
FRQWHPSRUDU\ EXUHDXFUDWLF DJHQFLHV DV WKH\ ZRXOG DOZD\V KDYH FRPSHWLWRUV DV ZLOO EH GLVFXVVHG VKRUWO\
$ FODVV RI WKH VXEDJHQFLHV RI WKH FDUHWDNHU DJHQF\ DUH
REVHUYHU DJHQFLHV
ZKLFK LQ FRUUHVSRQGHQFH
WR WKH VHQVDWLRQ DQG SHUFHSWLRQ PHFKDQLVPV RI WKH SHUVRQDO PLQG FROOHFW DQG FROODWH LQIRUPDWLRQ FRQFHUQLQJ
LQWHUQDO DQG H[WHUQDO DIIDLUV RI WKH VRFLHW\ DQG VHQG LW XS WR WKH FDUHWDNHU DJHQF\ IRU LW WR GHWHUPLQH WKH
VLWXDWLRQ LW LV FXUUHQWO\ LQ 7KH SLOH RI REVHUYDWLRQ UHSRUWV KRZHYHU KDV WR EH SURSHUO\ LQWHUSUHWHG WR GHILQH
WKH VLWXDWLRQ DV LW GRHV QRW GR VR E\ LWVHOI 7KH QDWXUH RI WKLV LQWHUSUHWDWLRQ
FDQ EH LQIHUUHG IURP ZKDW WKH
SHUVRQDO PLQG GRHV ZLWK WKH LQSXW IURP WKH SHUFHSWXDO SURFHVVHV ,Q WKH VLWXDWLRQDO FRJQLWLRQ RI WKH SHUVRQDO
PLQG D VLWXDWLRQ LPSOLHV D FRQILJXUDWLRQ RI PXWXDOO\ LQWHUDFWLQJ REMHFWV LQFOXGLQJ WKH VHOI DV DQ REMHFWV DQG
DOO WKHVH REMHFWV DUH DOLYH EH WKH\ DQLPDWH RU LQDQLPDWH LQ WKH VHQVH WKDW WKH\ DUH DOO DERXW WR FKDQJH WKHLU
VWDWHV LQ WKH QH[W PRPHQW ,Q RWKHU ZRUGV WKH VLWXDWLRQDO FRJQLWLRQ DOZD\V LQYROYHV DQ DQWLFLSDWLRQ RI ZKDW
LV JRLQJ WR KDSSHQ
,Q WKH FRQWH[W RI WKH PRGHO RI WKH PLQG SUHVHQWHG LQ &KDSWHU WKLV LPSOLHV WKDW WKH VLWXDWLRQDO
FRJQLWLRQ RI WKH SHUVRQDO PLQG LV GRQH E\ WKH DSSUDLVDO PRQLWRU E\ ZD\ RI ILWWLQJ D SURSHU VHW RI LQWHUDFWLQJ
G\QDPLF VFKHPDV LQFOXGLQJ WKH VHOIVFKHPD WR WKH LQFRPLQJ LQIRUPDWLRQ 6LQFH G\QDPLF VFKHPDV RU
G\VFV DUH G\QDPLF WKH\ DXWRPDWLFDOO\ SURGXFH WKH DQWLFLSDWLRQ RI ZKDW LV WR KDSSHQ QH[W
,I WKH PHWDPLQG VRFLHW\ LV WR HPXODWH WKH SHUVRQDO PLQG WKH FDUHWDNHU DJHQF\ KDV WR EH DEOH WR
SHUIRUP WKH VDPH IXQFWLRQ RQO\ LQ D PXFK ODUJHU VFDOH 7KLV PHDQV WKDW WKH FDUHWDNHU DJHQF\ KDV WR SRVVHVV D
ODUJH UHSHUWRLUH RI G\QDPLF PRGHOV RI PDMRU DJHQWV KXPDQV RU QDWXUDO REMHFWV ZKRVH DFWLRQV PD\ DIIHFW WKH
VRFLHWDO SURFHVVHV G\QDPLF PRGHOV FRPSDUDEOH WR G\VFV LQ WKH SHUVRQDO PLQG EXW QR ORQJHU SHUVRQDO DV
WKH\ KDYH WR EH SURGXFHG DV D MRLQW YHQWXUH RI PDQ\ SHRSOH ZKR DUH LQ FKDUJH RI FUHDWLQJ WKHP WKURXJK
FDUHIXO UHVHDUFKHV /HW PH FDOO WKHVH G\QDPLF PRGHOV RI VRFLDO DJHQWV WKH
VFKHPDV
RU
& G\VFV
FROOHFWLYHO\
FUHDWHG
G\QDPLF
IRU VKRUW )RU WKH UHDOL]DWLRQ RI D PHWDPLQG VRFLHW\ LW LV FULWLFDO IRU WKH FDUHWDNHU
DJHQF\ WR KDYH D ODUJH VWRFN RI ZRUNDEOH &G\VFV LQ LWV FRPSXWHU V\VWHP , VKDOO FRQVLGHU WKH LVVXH RI KRZ WR
FUHDWH WKHP DW WKH HQG RI WKH SUHVHQW DUJXPHQW )RU WKH PRPHQW OHW PH VLPSO\ DVVXPH WKDW WKH\ DOUHDG\
H[LVW
&RQVLGHU D VLPSOH H[DPSOH 6XSSRVH WKDW D SDUW RI WKH REVHUYDWLRQ UHSRUWV UHIHU WR D VRFLDO HYHQW WKDW
DFWLYDWHV &G\VFV WKDW LQFOXGHV
$ %
FRQIOLFW ZLWK DQRWKHU JURXS RI SHRSOH
DQG
%
&
LQ VXFK DQ LQWHUDFWLRQDO SDWWHUQ DV $ JURXS RI SHRSOH
RYHU WKH XVH RI ZDWHU RI WKH ULYHU
&
$
LV LQ
ZKRVH ZDWHU OHYHO LV ORZ GXH WR
WKH VXVWDLQHG GU\ ZHDWKHU LI FUXGHO\ H[SUHVVHG YHUEDOO\ 2QFH D SDUW RI WKH VRFLDO VLWXDWLRQ LV UHSUHVHQWHG
E\ UHOHYDQW & G\VFV RQ WKH FDUHWDNHU
V FRPSXWHU V\VWHPV WKH\ ZLOO LPPHGLDWHO\ VWDUW LQWHUDFWLQJ ZLWK HDFK
RWKHU DFFRUGLQJ WR WKH UXOHV HPEHGGHG ZLWKLQ HDFK RI WKHP WKHUHE\ LQGLFDWLQJ ZKDW ZLOO RFFXU LPPHGLDWHO\
DIWHU EHVLGHV WKHPVHOYHV SUHVHQWLQJ D JRRG PHDQLQJIXO SDWWHUQ RI WKH WKDW SDUW RI WKH JLYHQ VLWXDWLRQ
$V VRRQ DV WKH FXUUHQW VRFLHWDO VLWXDWLRQ LV SURSHUO\ UHSUHVHQWHG LW ZLOO EH EURDGFDVW WKURXJK WKH
QHWZRUN WRJHWKHU ZLWK LWV DQWLFLSDWRU\ RXWFRPHV DFFRPSDQLHG ZLWK SURSHU YLVXDO LPDJHV DQG YHUEDO
FRPPHQWDULHV ,W LV VRPHZKDW OLNH D KRXUV QHZV VHUYLFH DQG WKH LQWHUHVWHG FLWL]HQV PD\ VXEPLW WKHLU
RSLQLRQV RQ WKHP DV WKH QHWZRUN LV ELODWHUDO ,Q WKH PHDQWLPH QHZ UHSRUWV ZLOO WULFNOH LQ IURP REVHUYDWLRQ
DJHQFLHV ZKLFK PD\ FRQILUP RU GLVFRQILUP WKH RIILFLDOO\ DQWLFLSDWHG VLWXDWLRQ $Q\ GLVFUHSDQFLHV WKXV IRXQG
PXVW EH UHPHGLHG E\ PHDQV OLNH UHVHWWLQJ WKH VWDWHV RI VRPH RI WKH DFWLYDWHG &G\VFV LQWURGXFLQJ QHZ &
GLVFV DQG WKH OLNH WKHUHE\ SURGXFLQJ D QHZ &G\VF UHSUHVHQWDWLRQ RI WKH FXUUHQW VRFLDO VLWXDWLRQ
8S WR WKLV SRLQW WKH DFWLYLW\ RI WKH FDUHWDNHU DJHQF\ FRUUHVSRQGV WR WKH RSHUDWLRQV RI WKH DSSUDLVDO
PRQLWRU GRQH RQ WKH :: ZRUOGZDWFK ZLQGRZ RI WKH SHUVRQDO PLQG GLVFXVVHG LQ WKH SUHYLRXV FKDSWHU
5HPHPEHU WKDW WKH DSSUDLVDO PRQLWRU VLPXOWDQHRXVO\ HQJDJHV LQ VLPXODWLRQDO DFWLYLW\ FRQGXFWHG RQ DQRWKHU
ZLQGRZ WKH ,7 LPDJLQDWLRQWKLQNLQJ ZLQGRZ 7KH DSSUDLVDO PRQLWRU
V RSHUDWLRQ RQ WKH ,7 ZLQGRZ LV ILUVW
WR WUDQVSODQW WKH FRQWHQWV RI WKH :: ZLQGRZ WR WKH ,7 ZLQGRZ DQG WKHQ UXQ WKH G\VFV IUHH DQG IDVW XQGHU
ZKDWHYHU DQ DFWLRQ SODQ RI WKH VHOIVFKHPD ZLWKRXW ZDLWLQJ IRU WKH DQWLFLSDWLRQV WR EH FRQILUPHG 7KH
RXWFRPHV RI VXFK VLPXODWLRQV WKHQ ZLOO KHOS FKRRVLQJ D PRVW SURPLVLQJ DFWLRQ SODQ JLYHQ WKH FXUUHQW
VLWXDWLRQ
(VVHQWLDOO\ WKH VDPH VLPXODWLRQV FRXOG EH FDUULHG RXW E\ WKH FDUHWDNHU DJHQF\ XVLQJ LWV &G\VFV DQG
LW KDV D GHILQLWH DGYDQWDJH RYHU WKH PHQWDO VLPXODWLRQ LQ FDUU\LQJ RXW WKLV VLPXODWLRQDO IXWXUH SURMHFWLRQ DV
WKH FDUHWDNHU FRPSXWHU V\VWHP ZRXOG EH DEOH WR UXQ PDQ\ VLPXODWLRQV LQ SDUDOOHO XVLQJ YDULRXV GLIIHUHQW
VRFLHWDO DFWLRQ SODQV
SURSRVHG E\ WKH FLWL]HQV RI WKH VRFLHW\
7KH DFWXDO H[HFXWLRQ RI WKH HPSOR\HG DFWLRQ SODQ LV GRQH E\
YDULRXV W\SHV RI DFWLRQ DJHQFLHV XQGHU WKH VXSHUYLVLRQ RI WKH FDUHWDNHU DJHQF\
'LUHFW SDUWLFLSDWRU\ GHPRFUDF\ RI WKH PHWDPLQG VRFLHW\
/HW PH QRZ VKLIW WKH IRFXV RI DUJXPHQWV IURP WKH FDUHWDNHU RSHUDWLRQV WR WKH FLWL]HQV
SDUWLFLSDWLRQ
LQ WKH SURFHVVHV RI WKH PHWDPLQG VRFLHW\ 7KH W\SLFDO ZD\ RI VXFK FLWL]HQV
SDUWLFLSDWLRQ LV WR RIIHU WR WKH
FDUHWDNHU DJHQF\ D VRFLDO DFWLRQ SODQ DQ DOWHUQDWLYH WR WKH RQH FXUUHQWO\ XQGHU H[HFXWLRQ 7KLV WKH\ FDQ GR
DQ\ WLPH DERXW DQ\ DVSHFW RI WKH VRFLDO DFWLYLWLHV EXW VLQFH HDFK FLWL]HQ
V LQWHUHVW PD\ EH GLYHUVH WKH
FDUHWDNHU DJHQF\ PD\ GUDZ WKHLU DWWHQWLRQ DQG HQFRXUDJH WKHLU PDNLQJ SURSRVDOV HVSHFLDOO\ ZKHQ HLWKHU WKH
FXUUHQW VLWXDWLRQ RU WKH DQWLFLSDWHG VLWXDWLRQ RU WKH RXWFRPH RI WKH PDLQVWUHDP VLPXODWLRQ IDOOV LQWR WKH
7KH VLWXDWLRQ LQ LWV HQWLUHO\ LV PXOWLOD\HUHG HYHQ LQ WKH FDVH RI SHUVRQDO VLWXDWLRQ $ SHUVRQ PD\ EH UHFRJQL]LQJ ZKDW
LV KDSSLQJ DURXQG WKH SHUVRQ ZKLOH ZRUU\LQJ DERXW WKH WURXEOH RQH RI WKH SHUVRQ
V FKLOGUHQ OLYLQJ LQ D GLVWDQW FLW\
KDSSHQHG WR EH LQYROYHG $QG DOVR RQ DQRWKHU OD\HU RI WKH PLQG WKH SHUVRQ PD\ EH ZRQGHULQJ DERXW ZKDW VWRFN KH
VKRXOG LQYHVW WKH PRQH\ RQ ,Q WKH FDVH RI D VRFLHW\ WKH QXPEHU RI VLWXDWLRQDO OD\HUV ZLOO EH IDU JUHDWHU WKDQ WKH
SHUVRQDO PLQG DQG WKH GHJUHH RI PXWXDO LQWHUUHODWLRQVKLSV DPRQJ WKH OD\HUV ZLOO EH PRUH FRPSOH[ %XW WKH FDUHWDNHU
V
FRPSXWHU V\VWHP KDV RQH JUHDW DGYDQWDJH RYHU WKH SHUVRQDO PLQG VXFK WKDW LW FDQ UXQ PDQ\ WDVNV LQ SDUDOOHO ZKLOH WKH
SHUVRQDO PLQG HVSHFLDOO\ LWV FRQVFLRXV RSHUDWLRQV KDV WR UXQ DURXQG GLIIHUHQW VLWXDWLRQDO OD\HUV VHULDOO\ GXH WR LWV
OLPLWHG FRJQLWLYH UHVRXUFHV
FDWHJRU\ WKDW PD\ EH GHVLJQDWHG DV
SUREOHPDWLF
3UREOHPDWLF VLWXDWLRQV DUH WKRVH VLWXDWLRQV ZKLFK VXJJHVW WKDW WKH FXUUHQW VRFLDO DFWLRQ SODQ PLJKW
QRW EH WKH PRVW GHVLUDEOH RQH ,Q WKH FDVH RI WKH SHUVRQDO PLQG D SUREOHPDWLF VLWXDWLRQ LV WKDW ZKLFK
DFWLYDWHV D QHZ XUJH 6KRXOG WKH PHWDPLQG VRFLHW\ DOVR KDYH FRUUHVSRQGLQJ
VRFLDO XUJHV"
, WKLQN LW VKRXOG
SULPDULO\ EHFDXVH XUJHV PDNH SHRSOH FRPSUHKHQG WKH HVVHQFH RI WKH LVVXH SUHVHQWHG E\ VXFK SUREOHPDWLF
VLWXDWLRQV 5HPHPEHU WKDW WKH PDMRU IXQFWLRQ RI DQ XUJH ZKHQ LW LV DFWLYDWHG LV WR VHW WKH XUJHVSHFLILF JRDO
WR SXUVXH ,I WKH JRDO LV SRVLWLYHYDOXHG WKH SHUVRQ LV XUJHG WR DFKLHYH LW DQG LI QHJDWLYH WR DYRLG IDOOLQJ
LQWR LW :KHQ WKH SHUVRQ LV DOUHDG\ HQJDJHG LQ D JRDOSXUVXLW RU D JRDO DYRLGDQFH DFWLYLW\ LQFRPSDWLEOH WR
WKH QHZ JRDO WKHUH RFFXUV DQ LQWHUUXSWLRQ SUREOHP WR UHVROYH ZKHWKHU WR VZLWFK WKH FXUUHQW JRDOSXUVXLW
DFWLYLW\ WR WKH QHZ RQH RU WR VWD\ ZLWK WKH ROG DV GLVFXVVHG LQ &KDSWHU 2QH RI WKH JUHDWHVW PHULWV IRU WKH SHUVRQDO PLQG RI KDYLQJ D ODUJH UHSHUWRU\ RI EXLOWLQ XUJHV LV WKDW D
SHUVRQ FDQ FKRRVH DQ DSSURSULDWH DFWLRQ SODQ YHU\ TXLFNO\ E\ PDNLQJ XVH RI WKH UHGXQGDQF\ H[LVWLQJ
EHWZHHQ VLWXDWLRQV DQG JRDOV ,Q WKH NLQG RI ZLOG HQYLURQPHQW LQ ZKLFK WKH KXPDQV OLYHG ZKHQ WKH JHQHWLF
XUJH SURJUDP KDG EHHQ HYROYLQJ EHLQJ DEOH WR PDNH DSSURSULDWH GHFLVLRQV IDVW ZDV RIWHQ WKH PRVW FULWLFDO
IDFWRU LQ ZDUUDQWLQJ VXUYLYDO 7KHUH LV QR UHDVRQ IRU WKHVH EHQHILWV GR QRW DSSO\ WR WKH VRFLDO XUJH V\VWHP
RQFH LW LV SURSHUO\ HVWDEOLVKHG
7KHUH XV D ODUJH DGYDQWDJH D VRFLDO XUJH V\VWHP FRXOG KDYH RYHU WKH SHUVRQDO XUJH V\VWHP EDVHG RQ
WKH IDFW WKDW VRFLDO XUJHV DUH
GHVLJQDEOH
SURJUDPV DQG DV VXFK WKH\ FDQ EH PRGLILHG DQG LPSURYHG $V ,
KDYH EHHQ GLVFXVVLQJ WKURXJK WKLV ERRN WKH SHUVRQDO XUJH V\VWHP LV YHU\ ZHOO EXLOW EXW LW KDV WKH
VKRUWFRPLQJ RI LUUHYLVDELOLW\ DV ELRORJLFDO V\VWHPV JHQHUDOO\ DUH XQOHVV RI FRXUVH D ELRORJLFDO HYROXWLRQ
WDNHV SODFH RU RQH DUWLILFLDOO\ WDPSHUV ZLWK WKH JHQRPH 6R ZH FDQQRW UHYLVH WKH KXPDQ XUJH V\VWHP WRGD\
HYHQ WKRXJK VRPH RI LWV RSHUDWLRQV KDYH EHFRPH XQILW IRU WRGD\
V HQYLURQPHQW ZLWK LWV KLJK FLYLOL]DWLRQ DQG
ODUJH SRSXODWLRQ WKH IDFWRUV FRPSOHWHO\ DEVHQW LQ WKH WLPHV ZKHQ WKH XUJH V\VWHP ZDV HYROXWLRQDOO\ PROGHG
6R OHW XV DVVXPH WKDW D IDLUO\ ZHOO GHVLJQHG VRFLDO XUJH V\VWHP H[LVWV LQ WKH PHWDPLQG VRFLHW\
ZKLFK DXWRPDWLFDOO\ ULQJ DQ DODUP ZKHQ WKH VLWXDWLRQ FXUUHQW RU LQ WKH IXWXUH UXQV LQWR RQH WKDW LV
HDUPDUNHG E\ WKH V\VWHP ,Q UHVSRQVH WR WKLV LQWHUUXSWLRQ WKH VRFLDO XUJH DFWLYDWHG ZLOO VKRZ WKH JRDO WR EH
DFKLHYHG RU QHJDWLYH JRDO WR EH DYRLGHG DQG WKH FLWL]HQV DUH HQFRXUDJHG WR RIIHU SURSHU DFWLRQ SODQV LQ WKH
IDFH RI VXFK D JRDO 7KHQ WKH FDUHWDNHU FRPSXWHU ZLOO LPPHGLDWHO\ UXQ VLPXODWLRQV RQ SURSRVHG SODQV DJDLQ
LQ SDUDOOHO IDVKLRQ DQG PD\ EH DEOH WR ILQG RXW YHU\ TXLFNO\ ZKLFK RQHV ZRUNV EHVW
$ YHU\ JRRG DVSHFW RI WKLV VRFLDO XUJH V\VWHP LV WKDW WKH FRPSXWHU RQ ZKLFK LW LV UXQ LV IUHH IURP WKH
GLVWXUELQJ KHUHDQG QRZ HIIHFW FDXVHG E\ DQ LQWHQVH XUJH DFWLYDWLRQ 6XSSRVH WKDW HLWKHU WKH FXUUHQW
VLWXDWLRQ RU WKH VLPXODWLRQDO RXWFRPH RI WKH FXUUHQW VRFLDO DFWLRQ VKRZV DQ LPSHQGLQJ GLVDVWHU EHIDOOLQJ WKH
VRFLHW\ PDNLQJ PRVW RI WKH FLWL]HQV LQ IHDUIXO SDQLF $V ORQJ DV WKHUH UHPDLQV VRPH ZKR FRXOG SURSRVH
VRPH DFWLRQ SODQV WKH FRPSXWHU LWVHOI FDQ NHHS RQ UXQQLQJ FRROKHDGHGO\ DV LW LV QRW KDPSHUHG E\ WKH
OLPLWHG UHVRXUFH SUREOHP WKDW FDXVHV WKH KHUHDQGQRZ HIIHFW WR WKH KXPDQ PLQG DQG PD\ EH DEOH WR
GHPRQVWUDWH WKDW RQH RI WKH SODQV EULQJV VRPH
KRSH
LQ WKH IXWXUH RI WKH VRFLHW\ ZLWK D FDOPLQJ HIIHFW RQ
PDQ\ RI WKH FLWL]HQV
1RZ OHW PH KDUN EDFN WR WKH WRSLF RI FLWL]HQV SURSRVLQJ DFWLRQ SODQV 7KHVH SODQV ZLOO EH WHVWHG
WKURXJK VLPXODWLRQV DQG , PHQWLRQHG DERYH WKDW WKH SODQ WKDW LV EHVW
ZLOO EH FKRVHQ IRU H[HFXWLRQ 7KH
FRQFHSW RI EHVW
KRZHYHU LPSOLHV D YDOXH MXGJPHQW DQG LQ WKH PHWDPLQG VRFLHW\ WKH ULJKW RI PDNLQJ
YDOXH MXGJPHQWV VKRXOG DOZD\V EH LQ WKH KDQGV RI LWV FLWL]HQV DQG WKDQNV WR WKH DGYDQFHG LQIRUPDWLRQ
QHWZRUN WKH\ FDQ HDVLO\ PDNH WKHLU YDOXH MXGJPHQWV ZKHQHYHU QHFHVVDU\ RQ DQ\ VXEMHFW
7KH SUREOHP LV KRZ WR DJJUHJDWH FLWL]HQV
YDOXH MXGJPHQWV DV WKH\ PD\ GLVDJUHH PRUH RIWHQ WKDQ QRW
9RWLQJ DQG WKH PDMRULW\ UXOH DUH WRR VLPSOLVWLF WR HPSOR\ LQ WKH PHWDPLQG VRFLHW\ &RQVLGHU WKH SHUVRQDO
YDOXH MXGJPHQW ZKLFK LV PDGH DFFRUGLQJ WR P\ PRGHO RI PLQG WKURXJK RQH
V PRRGVWDWH DW WKH WLPH RI
GHFLVLRQ %XW WKH FRQWHQW RI RQH
V PRRGVWDWH ZKLFK LV IRUPHG E\ DJJUHJDWLQJ LQSXWV IURP YDULRXV PHQWDO
DQG ERGLO\ DJHQWV RSHUDWLQJ DW WKH WLPH ZKHQ WKH SHUVRQ LV FRQWHPSODWLQJ D FHUWDLQ VXEMHFW LV DOZD\V IDU
ULFKHU WKDQ XQLGLPHQVLRQDO YDOXH MXGJPHQW )RU LQVWDQFH WKH PRRGVWDWH WKDW REWDLQV ZKHQ RQH LV WKLQNLQJ
DERXW WKH SRVVLELOLW\ WKDW RQH
V KDWHG ULYDO LV JRLQJ WR EH SURPRWHG 7KH HYDOXDWLRQ RI VXFK D VLWXDWLRQ ZRXOG
RI FRXUVH EH QHJDWLYH DQG WKH QHJDWLYHQHVV ZRXOG EH HQKDQFHG LI WKH SHUVRQ LV IHHOLQJ D SDLQ LQ WKH VWRPDFK
EXW WKH PRRGVWDWH FUHDWHG E\ WKH KDWH DQG WKH HQY\ DQG WKH VWRPDFK DFKH FRQWDLQV D JUHDWO\ PRUH
LQIRUPDWLRQ DERXW WKH VWDWH RI WKH SHUVRQ
V PLQG DQG ERG\ WKDQ MXVW KRZ QHJDWLYH WKH YDOXH RI WKH LPDJLQHG
VLWXDWLRQ LV
8QGHU D VLPLODU VSLULW WKH FDUHWDNHU PD\ OHW D SDUW RI LWV FRPSXWHU SURFHVV YHUEDOL]HG RSLQLRQV
VXEPLWWHG E\ WKH FLWL]HQV IRU HDFK VXEMHFW LVVXH DQG SURGXFH D PXOWLGLPHQVLRQDO WKH
VRFLDO PRRGVWDWH
IRUPHG DERXW WKH LVVXH LQ DFFRUGDQFH WR VRPH SUHGHWHUPLQHG IRUPXOD 7KH VRFLDO PRRGVWDWH WKXV REWDLQHG
IRU HDFK LVVXH ZLOO WKHQ EH IHG EDFN WR WKH FLWL]HQV LQ DQ HDVLO\ FRPSUHKHQVLEOH VXFK DV JUDSKLF IRUPDW VR
WKDW WKH SHRSOH PD\ EH DEOH WR UHYLVH WKHLU RSLQLRQV XQWLO WKH RXWFRPH VHWWOHV :KHQ D FROOHFWLYH YDOXH
MXGJPHQW LV QHHGHG IRU D FHUWDLQ LVVXH LW PD\ EH GHULYHG IURP WKH UHOHYDQW VRFLDO PRRG VWDWH DJDLQ DFFRUGLQJ
WR D FHUWDLQ SUHGHWHUPLQHG IRUPXOD
/HW PH FDOO WKH SDUW RI WKH FDUHWDNHU FRPSXWHU WKDW WDNHV FKDUJH RI WKLV RSLQLRQ DJJUHJDWLRQ WKH
PRRGVWDWH PDFKLQH
7KH TXDOLW\ RI WKH RXWSXWV RI WKLV PDFKLQH KRZHYHU ZHOO SURJUDPPHG PD\ QRW EH DEOH
WR UHDFK D OHYHO FRPSDUDEOH WR WKDW RI WKH SHUVRQDO PRRGVWDWH DV ORQJ DV LWV LQSXWV DUH OLPLWHG WR YHUEDO
UHSRUWV 2Q WKH RWKHU KDQG WKLV PDFKLQH PD\ RXWGR WKH SHUVRQDO PRRGVWDWH JHQHUDWLRQ PHFKDQLVP LQ LWV
SDUDOOHO PRGH RI RSHUDWLRQ LW FDQ SURGXFH VRFLDO PRRGVWDWHV RQ ZLGHO\ YDULHG VXEMHFWV VLPXOWDQHRXVO\
VXEMHFWV VXFK DV WKH RXWFRPH RI VLPXODWLRQ UXQ XQGHU HDFK VHSDUDWH VHW RI FRQVWUDLQWV HDFK VRFLDO DFWLRQ SODQ
SURSRVHG WKH TXDOLW\ RI WKH RSHUDWLRQ RI HDFK VRFLDO DJHQF\ LQFOXGLQJ WKH FDUHWDNHU DJHQF\ LWVHOI 7KLV
DELOLW\ RI WKH PRRG VWDWH PDFKLQH RI JDWKHULQJ HYDOXDWLYH RSLQLRQV RQ GLYHUVH VXEMHFW VLPXOWDQHRXVO\ LV
FHUWDLQO\ LWV DGYDQWDJH RYHU WKH SHUVRQDO PRRG VWDWH JHQHUDWLRQ PHFKDQLVP ZKLFK FDQ ZRUN RQO\ VHULDOO\
DQG VRPHWLPHV ZLWK D JUHDW GLIILFXOW\ DW WKDW :KHQ RQH
V PLQG LV XQGHU WKH KHUHDQGQRZ HIIHFW ZLWK WKH
PRRGVWDWH IXOO RI HQY\ KDWH DERXW RQH
V ULYDO VD\ LW LV IDU IURP HDV\ WR VZLWFK WKH WDUJHW RI DWWHQWLRQ WR
RQH
V GHDU FKLOG IRU IHHOLQJ WKH PRRG VWDWH RI ORYLQJ FDUH
,Q WKH DUJXPHQWV PDGH VR IDU , KDYH FRQVLGHUHG SDUWLFLSDWLRQ RI LQGLYLGXDO FLWL]HQV LQ WKH RSHUDWLRQV
RI WKH PHWDPLQG VRFLHW\ 7KH XQLW RI SDUWLFLSDWLRQ KRZHYHU QHHG QRW EH LQGLYLGXDOV )RU LQVWDQFH WHDP RI
LQGLYLGXDOV ZLWK GLIIHUHQW VSHFLDOLWLHV PD\ EH DEOH WR ZRUN RXW D EHWWHU SODQ IRU WKH VRFLDO DFWLRQ DQG PD\ EH
HQFRXUDJHG WR GR VR $QRWKHU W\SH RI FLWL]HQ SDUWLFLSDWLRQ LQ WKH PHWDPLQG VRFLHW\ RI WKH FULWLFDO
LPSRUWDQFH LV WKDW RI SURYLGLQJ DOO VRFLDO DJHQFLHV LQFOXGLQJ WKH FDUHWDNHU DJHQF\ ZLWK FRPSHWLWRUV
,Q WKH
PHWDPLQG VRFLHW\ HYHU\ LQIRUPDWLRQ JRLQJ LQ DQG RXW RI WKH FDUHWDNHU V\VWHP LV RSHQ 6R DQ\ RXWVLGH
DUWLILFLDO FRDOLWLRQ ZLWK D VXIILFLHQW LQIRUPDWLRQ SURFHVVLQJ FDSDFLW\ DQ HDV\ HQRXJK FRQGLWLRQ WR IXOILOO LQ
WKH WLPHV RI WKH PHWDPLQG VRFLHW\ PD\ WU\ WR RYHUGR RSHUDWLRQV RI VRPH IRUPDO DJHQF\ WKHUHE\
FKDOOHQJLQJ WKH ODWWHU :KLFKHYHU RI WKH WZR WKH FKDOOHQJHU DQG WKH FKDOOHQJHG ZKRVH SHUIRUPDQFH VHHPV
WR EHVW WKH RWKHU LQ WKH SXEOLF HYDOXDWLRQ ZRXOG EH UHFRJQL]HG DV WKH IRUPDO DJHQF\ IURP WKHQ RQ
6RPH RWKHU LVVXHV RI WKH PHWDPLQG VRFLHW\ LQ OLHX RI FRQFOXVLRQ
2EYLRXVO\ WKHUH DUH D JUHDW GHDO PRUH WR EH GLVFXVVHG RI WKH PHWDPLQG VRFLHW\ WKDQ JLYHQ DERYH
EXW OHW PH FORVH P\ DUJXPHQWV RQ WKLV VXEMHFW E\ EULQJLQJ XS WZR LVVXHV LQ D FRQWH[W EURDGHU WKDQ WKH PHWD
PLQG VRFLHW\ WKH\ DUH WKH
KDUG VKHOO
RI D YHUVDWLOH V\VWHP DQG WKH
&G\VF WHFKQRORJ\
, PHQWLRQHG HDUOLHU WKDW D KXPDQ VRFLHW\ FRXOG KDYH DQ HQRUPRXV SRWHQWLDO
YHUVDWLOLW\ IRU WKH UHDVRQ
WKDW HDFK FLWL]HQ RI WKH VRFLHW\ DOUHDG\ SRVVHVVHV D YHUVDWLOH PLQG 1RZ OHW PH H[WHQG WKH FRQWH[W RI
DUJXPHQW WR DQ\ SRWHQWLDOO\ YHUVDWLOH V\VWHP DQG FRQVLGHU ZKDW DUH WKH FULWLFDO IDFWRUV WKDW WXUQV SRWHQWLDOLW\
LQWR UHDOLW\ $ SRWHQWLDOO\ YHUVDWLOH V\VWHP LV D V\VWHP WKDW FRQWDLQV GLYHUVH PRUH RU OHVV DXWRQRPRXV DJHQWV
ZKLFK WKH V\VWHP PD\ XVH HLWKHU VLQJO\ RU MRLQWO\ WR KDQGOH WKH VLWXDWLRQ WKH V\VWHP IDFHV 7KH EDVLF VSLULW RI
D YHUVDWLOH V\VWHP LV WKDW HDFK DJHQW RU D WHDP RI DJHQWV PD\ DSSO\ VSRQWDQHRXVO\ IRU EHLQJ XVHG IRU WKH
WDVN DQG WKH ILQDO FKRLFH RI WKH DJHQWV WR EH LQ FKDUJH LV PDGH WKURXJK D VRUW RI FRPSHWLWLRQ DPRQJ WKRVH
ZKLFK DSSOLHG 2QH RI WKH FULWLFDO IDFWRUV SHUKDSV WKH PRVW LPSRUWDQW RQH WKDW GHWHUPLQHV WKH GHJUHH RI
YHUVDWLOLW\ RI D V\VWHP LV REYLRXVO\ WKH VHW RI UXOHV ZKLFK WKH V\VWHP XVHV WR VHWWLQJ WKH VWDJH IRU
FRPSHWLWLRQ ILUVW HQFRXUDJLQJ DOO WKH SRWHQWLDOO\ DEOH DJHQWV WR DSSO\ DQG VHFRQGO\ MXGJLQJ ZKLFK RI WKH
DSSOLFDQWV DUH WKH PRVW SURPLVLQJ IRU WKH WDVN 7KHUH DUH DX[LOLDU\ UXOHV EXW OHW PH FDOO WKH DJJUHJDWH RI DOO
WKHVH UXOHV WKH
KDUG VKHOO
RI D SRWHQWLDOO\ YHUVDWLOH V\VWHP 7KH KDUG VKHOO LV KDUG
LQ WKH VHQVH WKDW WKH UXOHV
PXVW QRW EH DUELWUDULO\ DOWHUHG DOWKRXJK VRPH DOORZDQFHV PD\ EH PDGH DERXW VRPH SDUWV RI WKH KDUG VKHOO WR
LPSURYH WKHPVHOYHV WKURXJK OHDUQLQJ
7KH XUJH V\VWHP LV WKH PDMRU SDUW RI WKH KDUG VKHOO RI WKH PLQG DV D YHUVDWLOH V\VWHP WKDW FDQQRW EH
DOWHUHG 7KH EHOLHI V\VWHP LV WKH SDUW WKDW LV DPHQDEOH WR FKDQJH DOWKRXJK LW WHQGV WR JHW KDUGHU ZLWK DJH 2Q
WKH ZKROH WKH KDUG VKHOO RI WKH PLQG PD\ EH UHJDUGHG DV DQ H[DPSOH RI D JRRG GHVLJQ
,Q FRPSDULVRQ
WR WKH
PLQG
DV DQ
DOPRVW
HVWDEOLVKHG YHUVDWLOH
V\VWHP
WKH KDUG VKHOOV
RI
FRQWHPSRUDU\ VRFLHWLHV DV SRWHQWLDOO\ YHUVDWLOH V\VWHPV DUH JHQHUDOO\ DZIXOO\ PLVGHVLJQHG :KHQ WKH KDUG
VKHOO RI D PRGHUQ QDWLRQ LV QHJOLJHQW LQ UHFUXLWLQJ FDSDEOH LQGLYLGXDOV DV UHVSRQVLEOH RIILFHUV LQ WKH VRFLHW\
PRVW RI WKH QDWLRQ
V SRWHQWLDO YHUVDWLOLW\ DUH ZDVWHG ,I WKH QDWLRQ
V KDUG VKHOO UXOHV DUH UDWKHU DPELJXRXV DQG
DOORZ WKRVH LQ VRFLDOO\ UHVSRQVLEOH SRVLWLRQV WR ZDUS WKHP IRU WKHLU SHUVRQDO DPELWLRQV WKH QDWLRQ FRXOG EH
WXUQHG LQWR D WRWDOLWDULDQ GLFWDWRUVKLS ZLWK DOPRVW QR YHUVDWLOLW\ 1RWH WKDW WKH SRWHQWLDO FROOHFWLYH SRZHU RI
WKH SHRSOH RI PRVW PRGHUQ QDWLRQV LV TXLWH VWURQJ VWURQJ HQRXJK WR UHVLVW DQ\ DWWHPSW DW GLFWDWRUVKLS LI WKH\
ZHUH JLYHQ HQRXJK WLPH WR UDOO\ DJDLQVW VXFK DQ DWWHPSW 7KH GDQJHU RI GLFWDWRUVKLS VWLOO UHPDLQV
QHYHUWKHOHVV EHFDXVH D SHUVRQ LQ D FHUWDLQ KLJK VRFLDO SRVLWLRQ FRXOG PDNH WKLQJV KDSSHQ YHU\ TXLFNO\ E\ D
GHOLEHUDWH XWLOL]DWLRQ RI DGYDQFHG PRGHUQ WHFKQRORJ\ ZLWKRXW JLYLQJ SHRSOH WLPH WR UHDOL]H VRPHWKLQJ
ZURQJ LV KDSSHQLQJ LQ WKHLU VRFLHW\
1HHGOHVV WR VD\ WKH KDUG VKHOOV LQ XVH LQ PRVW RI WKH PRGHUQ QDWLRQV DUH ERWK TXLWH LQHIILFLHQW DQG
DPELJXRXV 7KH LQHIILFLHQF\ LQ UHFUXLWLQJ FDSDEOH SHUVRQV IRU UHVSRQVLEOH SRVLWLRQV PD\ EH W\SLILHG E\ WKH
KDUG VKHOO RI EXUHDXFUDWLF V\VWHPV ZKLFK UDWKHU VXSSUHVVHV IUHH FRPSHWLWLRQ DPRQJ WKHLU DJHQWV LQVWHDG RI
HQFRXUDJLQJ LW 7KH DPELJXLW\ LV H[HPSOLILHG E\ WKH EHKDYLRU RI SROLWLFLDQV ZKR DUH DOZD\V KDUG DW ZDUSLQJ
UXOHV IRU WKHLU SHUVRQDO EHQHILWV IRUWXQDWHO\ SHWW\ EHQHILWV LQ PRVW RI WKH FDVHV
:KDW P\ DUJXPHQWV DERXW WKH PHWDPLQG VRFLHW\ JLYHQ DERYH LQWHQGHG ZDV WR GHPRQVWUDWH WKDW D
SRVVLELOLW\ H[LVW IRU FUHDWLQJ D VRFLHW\ ZLWK PXFK EHWWHU KDUG VKHOO ZKHUH EXUHDXFUDF\ LV GLVSHQVHG ZLWK 7KH
UHDOL]DWLRQ RI DQ\ VXFK VRFLHW\ GHSHQGV SULPDULO\ XSRQ ZKHWKHU RQH FDQ ZRUN RXW D SURSHU KDUG VKHOO RI D
VRFLHW\ ZKLFK LV QRW RQO\ HIILFLHQW LQ XWLOL]LQJ WKH SRWHQWLDO SRZHUV RI KHOG E\ LWV FLWL]HQV EXW DOVR
XQDPELJXRXV HQRXJK WR SUHFOXGH LWV DEXVH E\ VRPHRQH RYHUO\ DPELWLRXV 2QFH D JRRG KDUG VKHOO LV
HVWDEOLVKHG IRU HYHQ D UHODWLYHO\ VPDOO VRFLHW\ WKHUH LV D JRRG FKDQFH WR H[SHFW WKDW WKH KDUG VKHOO RI WKH
VDPH W\SH ZRXOG DOVR ZRUN IRU DV ODUJH D VRFLDO V\VWHP DV WKH (DUWK 6RFLHW\
$W WKLV MXQFWXUH OHW PH SXW LQ D ORQJ WHUP YLHZ DERXW WKH SRVVLEOH KXPDQ VRFLHW\ D ZDUQLQJ DJDLQVW
DQ\ SUHVXSSRVLWLRQ IRU LW WR DWWDLQ DQ HTXLOLEULXP W\SH XWRSLD RQH WKDW LV RIWHQ XVHG WR GHVFULEH D KHDYHQO\
SDUDGLVH )LUVW DERXW D UHDOO\ YHUVDWLOH (DUWK 6RFLHW\ 2QFH WKH KXPDQV FRXOG DWWDLQ VXFK D VRFLHW\ LI WKH\
HYHU FRXOG LW ZRXOG FHUWDLQO\ EH D QLFH VRFLHW\ WR OLYH LQ %\ EHLQJ DEOH WR IXOO\ WDS WKH GLYHUVH FRQWURO
SRZHUV SRVVHVVHG E\ LQGLYLGXDOV DQG WKHLU FRDOLWLRQV RI D YDVW QXPEHU RI LWV FLWL]HQV WKHUH PD\ EH IHZ VRFLDO
SUREOHPV WKH\ FRXOG QRW VROYH FHUWDLQO\ IUHH IURP PDQ\ LUNVRPH LVVXHV WURXEOLQJ WKH FRQWHPSRUDU\ VRFLHWLHV
OLNH KRZ WR GR ZLWKRXW FRQVWDQW HFRQRPLF JURZWK KRZ WR GR ZLWKRXW JOREDO SRSXODWLRQ LQFUHDVH KRZ WR
SUHVHUYH QDWXUDO UHVRXUFHV DQG WKH QDWXUDO HQYLURQPHQW DQG VR IRUWK
+RZHYHU HYHQ WKH FLWL]HQV RI WKLV YHUVDWLOH (DUWK 6RFLHW\ PD\ QRW EH DEOH WR ILQG D VROXWLRQ WR
DFKLHYH DQ HTXLOLEULXP VRFLHW\ DV ORQJ DV WKH\ UHPDLQ DV DFWLYH FRSHUV DQG NHHS WKH VDPH XUJH V\VWHP ZH
KDYH WRGD\ 7KH\ PD\ EH DEOH WR FXUE PRVW RI WKH LOO HIIHFWV RI XUJH RSHUDWLRQV E\ ILQGLQJ VXLWDEOH VRFLDO
RXWOHWV IRU WKHP EXW WKH RSHUDWLRQV RI WULSOHW RI XUJHV FXULRVLW\ FKDOOHQJH DQG GUHDP UHDOL]DWLRQ ZKLFK
FRQVWDQWO\ SXVKLQJ DUWLILFLDO HYROXWLRQ IRUZDUG FRXOG QRW EH VWRSSHG DV WKHLU RSHUDWLRQV DUH XQLGLUHFWLRQDO
6R HYHQ WKRXJK WKH\ PD\ VORZ GRZQ WKH VSHHG RI DUWLILFLDO HYROXWLRQ VRPHKRZ LW VWLOO ZLOO NHHS SURGXFLQJ
QHZ SURGXFWV QHZ LGHDV DQG VR RQ FRQVWDQWO\ GHVWDELOL]LQJ WKH VRFLHW\ +RZ ZRXOG WKH\ GHDO ZLWK WKLV
FRQVWDQW GHVWDELOL]DWLRQ IDFWRU LV RI FRXUVH WKHLU SUREOHP DW OHDVW LW DSSHDUV WR PH WKDW WKHLU VRFLHW\ LV DW
OHDVW QRW DV ERULQJ DV D KHDYHQO\ SDUDGLVH ZKHUH WKH HWHUQDO SHDFH SUHYDLOV 7RGD 8QOLNH WKHVH SHRSOH LQ WKH IXWXUH ZH WKH GHQL]HQV RI WKH FRQWHPSRUDU\ ZRUOG FDQ KDUGO\ DIIRUG WR
EH DPXVHG E\ WKHVH GHVWDELOL]LQJ HIIHFWV EURXJKW XSRQ RXU VRFLHW\ E\ DUWLILFLDO HYROXWLRQ DQG ZH DUH KDUGO\
DV UHVRXUFHIXO DV RXU IXWXUH RIIVSULQJV ,I ZH NHHS WKH DGYDQFH RI DUWLILFLDO HYROXWLRQ XQFKHFNHG RQH RI WKH
PRVW REYLRXV GDQJHUV LV WKDW VRPHRQH PLJKW IHHO GLIILFXOW WR UHVLVW WKH WHPSWDWLRQ RI XVLQJ DGYDQFHG WRROV RI
ZDU ZKHQ VXFK ZHUH SURGXFHG E\ DUWLILFLDO HYROXWLRQ DQG ZH KDYH QRW \HW FRPH XS ZLWK DQ\ VRFLDO PHDQV WR
SUHYHQW VXFK FKDQFHV IURP HYHU RFFXUULQJ 'R QRW WUXVW WKDW WKH SHRSOH ZRXOG OHDUQ IURP KLVWRU\ DV HDFK
QHZ JHQHUDWLRQ LV ERUQ WKH VDPH DV WKH\ ZHUH LQ WKH WLPHV RI XUEDQGV RU WKH 7LPHV RI :DU +LVWRU\ DV
VWRULHV RQO\ VWLUV XS WKH FXULRVLW\ RI QHZ JHQHUDWLRQ SHRSOH DQG WKH XUJH RI H[SHULHQFLQJ KLVWRU\ GLUHFWO\
PD\ RIWHQ EH IDU VWURQJHU WKDQ WKH ZDUQLQJV LW JLYHV WKHP
7KHUH VHHPV WR UHPDLQ RQO\ RQH ZD\ IRU XV WR FKRRVH $V XUJHV WKHPVHOYHV DUH XQDOWHUDEOH ZKDW ZH
FDQ FRQWURO DUH VRFLDO IDFWRUV LQ D EURDG VHQVH VXFK DV EHOLHIV VRFLDO YDOXHV DQG WKH OLNH ZLWK VRFLDO
LQVWLWXWLRQV DQG VWUXFWXUHV WR PDWFK :KDWHYHU WKH SURSHU VRFLDO IDFWRUV DUH WR EH QRWH DOVR WKDW \RX FDQQRW
IRUFH WKHP XSRQ WKH SHRSOH DV WKH\ ZRXOG DFFHSW RQO\ WKRVH ZKLFK WKHLU XUJH V\VWHP WHOOV WKHP WR )LQGLQJ
QRW MXVW SURSHU VRFLDO IDFWRUV EXW DOVR ULJKW ZD\V WR UHDOL]H WKHP UHTXLUHV D JUHDW GHDO RI NQRZOHGJH LQ WKH
DUHD RI VRFLDO VFLHQFHV DQG ZH VKRXOG DFTXLUH LW UDWKHU UDSLGO\ 7KLV PD\ VHHP DQ LPSRVVLEOH WDVN EXW ,
WKLQN LW FDQ EH GRQH EHFDXVH WKH WLPH LV ULSH DQG WKH FRQGLWLRQV DUH ULJKW
1HHGOHVV WR VD\ WKH DGYDQFHV LQ WKH DUHD RI VRFLDO VFLHQFHV KDV EHHQ YHU\ VORZ LQ FRPSDULVRQ WR
SK\VLFDO VFLHQFHV DQG WHFKQRORJLHV FDXVLQJ WKH SURJUHVV RI DUWLILFLDO HYROXWLRQ WR EH DOPRVW H[FOXVLYHO\
DIIDLUV LQ WKH GRPDLQ RI WKH ODWWHU 7KLV LV QRW EHFDXVH WKH KXPDQV KDYH ODFNHG LQWHUHVWV LQ WKH QDWXUH RI
WKHPVHOYHV DQG RI WKHLU VRFLHWLHV 2Q WKH FRQWUDU\ WKH\ KDYH EHHQ WDONLQJ DQG GHEDWLQJ DERXW WKHVH VXEMHFWV
HQGOHVVO\ VLQFH ZKHQ WKHUH H[LVWHG QRW HYHQ D VFUDS RI SK\VLFDO VFLHQFH LQ WKH KXPDQ NQRZOHGJH V\VWHP
7KH UHDVRQ IRU WKH VORZQHVV LQ PDNLQJ KHDGZD\ LQ VRFLDO VFLHQFHV LV QRW WKH ODFN RI HQWKXVLDVP ,W LV LQ WKH
ILUVW SODFH EHFDXVH RI WKH H[WUHPHO\ VWURQJO\ RUJDQL]HG QDWXUHV RI WKH KXPDQV WKHPVHOYHV DQG WKHLU VRFLHWLHV
DQG ZH GLG QRW KDYH SRZHUIXO HQRXJK WRROV WR PDNH FRQFHSWXDO PRGHOV IRU WKHP H[FHSW QDWXUDO ODQJXDJHV
'RXEWOHVVO\ QDWXUDO ODQJXDJH LV D JUHDW WRRO RI KXPDQ LQYHQWLRQ ZKRVH IOH[LELOLW\ LV VR ODUJH WKDW ZH FDQ
GHVFULEH DQG GLVFXVV DOPRVW DQ\ V\VWHP IURP JRGV WR DWRPV 7KLV HQRUPRXV IOH[LELOLW\ RI WKH QDWXUDO
ODQJXDJH KRZHYHU KDV JDLQHG DW D FHUWDLQ VDFULILFH LQ SUHFLVLRQ 1RWH WKDW WKH JUHDW XSVXUJH RI DUWLILFLDO
HYROXWLRQ LQ WKH SK\VLFDO GRPDLQ LQ UHODWLYHO\ UHFHQW \HDUV DUH PDLQO\ GXH WR WKH IDFW WKDW WR WKRVH ZKR DUH
ZRUNLQJ LQ WKDW GRPDLQ LV PDGH DYDLODEOH LQ DGGLWLRQ WR QDWXUDO ODQJXDJH VRPH SUHFLVLRQ WRROV VXFK DV
PDWKHPDWLFV DQG FRPSXWHUV ZKLFK ZRUNHG ZRQGHUV LQ GHDOLQJ ZLWK UHODWLYHO\ ZHDNO\ RUJDQL]HG SK\VLFDO
V\VWHPV
7KH UHDVRQ ZK\ , PHQWLRQHG WKDW WKH WLPH LV ULSH DQG FRQGLWLRQV DUH ULJKW IRU VRFLDO VFLHQFHV WR PDNH
D JUDQG OHDS QRZ LV WKDW VRPH RI WKHVH SUHFLVLRQ WRROV HVSHFLDOO\ FRPSXWHUV DUH QRZ SRZHUIXO HQRXJK WR
KDQGOH PRGHOV FRPSOLFDWHG HQRXJK WR DSSUR[LPDWH VRFLDO DJHQWV 0HPRU\ FDSDFLWLHV RI FRPSXWHUV DUH QR
ORQJHU D KXUGOH WR FOHDU WR GHDO ZLWK PRGHOV RI VWURQJO\ RUJDQL]HG V\VWHP OLNH VRFLDO DJHQWV DQG QRZ VRPH
FRPSXWHU VRIWZDUH LV VRSKLVWLFDWHG HQRXJK WR UHSUHVHQW UHDO ZRUOG VLWXDWLRQV ZLWK JRRG HQRXJK LPDJHV WR
DFFRPSDQ\ ,QGHHG FRPSXWHU JDPHV DUH RQH VWHS DKHDG RI VRFLDO VFLHQWLVWV DV VRFLDO DJHQWV DUH RIWHQ
SOD\LQJ PDMRU UROHV WKHUH 6R WKHUH LV QR UHDVRQ ZK\ UHVHDUFKHUV LQ WKH VRFLDO GRPDLQ VKRXOG QRW XWLOL]H
FRPSXWHUV DV SUHFLVLRQ WRROV LQ DGGLWLRQ WR QDWXUDO ODQJXDJH IRU EXLOGLQJ PRGHOV RI VRFLDO DJHQWV DV ZHOO
7KH OLQH RI DSSURDFK , DP JRLQJ WR SURSRVH KHUH PD\ EH FDOOHG WKH
&G\VF WHFKQRORJ\
DV LW LV LQ
VSLULW DW OHDVW WR FUHDWH D WHFKQRORJ\ WKDW PD\ OHDG WR &G\VFV XVHG LQ WKH PHWD PLQG VRFLHW\ ,WV PDMRU
SXUSRVH LV WR SURGXFH WKURXJK VLPXODWLRQ DQWLFLSDWLRQV RI ZKDW LV WR RFFXU ZKHQ VRPH QXPEHU RI VRFLDO
DJHQWV DUH LQWHUDFWLQJ LQ D FHUWDLQ VLWXDWLRQ , VKDOO QRW HODERUDWH DQ\ GHWDLOV DERXW WKLV SURSRVDO EHFDXVH WKDW
PD\ EH MXVW UHSHDWLQJ P\ DUJXPHQWV JLYHQ VR IDU LQ WKLV ERRN :KDW , KDYH EHHQ DWWHPSWLQJ WR GR LV WR
GHPRQVWUDWLQJ WKDW WKH KXPDQ PLQG DQG WKH KXPDQ VRFLHW\ FDQ EH UHSUHVHQWHG LQ PRGHOV ZKRVH OHYHO RI
DSSUR[LPDWLRQ LV JRRG HQRXJK WR EH UXQ DQG WHVWHG RQ D FRPSXWHU
$Q LPSRUWDQW UHPLQGHU IRU UHVHDUFKHUV WR SXUVXH WKLV OLQH RI DSSURDFK LV WKDW WKH\ VKRXOG QRW JR DIWHU
ILQGLQJ WUXWK DV VHOI FRQVFLRXV WUXWK VHHNHUV DUH HDVLO\ VLGHWUDFNHG E\ LQVLJQLILFDQW GHWDLOV :KDW RQH FRXOG
DVSLUH WR DFFRPSOLVK LQ WKLV DUHD DUH DW EHVW UHDOO\ JRRG DSSUR[LPDWLRQV WKDW HQDEOH RQH WR SUHGLFW ZKDW LV
JRLQJ WR KDSSHQ LQ WKH KXPDQ VRFLHW\ ,I SUHGLFWLRQV DUH QRW WRR RII WKH PDUN FRUUHFW HYHQ RQFH LQ HYHU\ WHQ
FDVHV KDYLQJ WKHP LV IDU EHWWHU WKDQ KDYLQJ QRWKLQJ DV ZH DUH WRGD\ 7KDW LV RQH RI WKH UHDVRQV ZK\ , QDPHG
WKH SURSRVHG DSSURDFK DV &G\VF WHFKQRORJ\ UDWKHU WKDQ &G\VF VFLHQFH 1HHGOHVV WR VD\ ZKDW DUH UHJDUGHG
DV WUXWK LQ HPSLULFDO VFLHQFHV DUH DOO RQO\ JRRG DSSUR[LPDWLRQV IRU ZKLFK QR FRQWUDGLFWLRQV KDYH EHHQ IRXQG
\HW EXW WKH\ DUH ERXQG WR HYHQWXDOO\ %XW WKH KXPDQ PLQG DQG WKH KXPDQ VRFLHWLHV DUH WRR FRPSOLFDWHG
V\VWHPV WR EH GHVFULEHG FRQWUDGLFWLRQIUHH 6R WKH HYDOXDWLRQ VWDQGDUG IRU UHVHDUFKHV LQ WKLV ILHOG VKRXOG
DOZD\V EH ZKDW DSSUR[LPDWLRQV DUH JRRG DQG ZKDW EDG DQG WKDW MXGJPHQW ZRXOG XVXDOO\ EH PDGH HDVLO\
WKURXJK VXFFHVVHV LQ SUHGLFWLYH VLPXODWLRQV
, ZRXOG EH PRUH WKDQ KDSS\ LI WKLV ERRN FRXOG KHOS HQWLFH VRPH RI WKH UHDGHUV WR WKLV ILHOG
HVSHFLDOO\ WKRVH ZKR DUH RI WKH H[SORUHU
W\SH VLQFH WKHLU VXFFHVVHV ZLOO JDWKHU PDQ\ IROORZHUV &RQVLGHULQJ
WKH JUHDW QHHG RI SHRSOH IRU KDYLQJ D EHWWHU XQGHUVWDQGLQJ RI WKLQJV KDSSHQLQJ LQ WKH FRQWHPSRUDU\ ZRUOG
DQG WKHLU HQWKXVLDVP WR EDFN XS WKH QHHG D IHZ EUHDNWKURXJKV LQ WKLV DUHD PD\ HYHQ WXUQ WKH PDMRU GLUHFWLRQ
RI DGYDQFHPHQWV LQ DUWLILFLDO HYROXWLRQ PDNLQJ LWV IRUZDUG PRYHPHQW PRUH EDODQFHG ZLWK D TXLWH LPSRUWDQW
VLGHHIIHFW WKDW WKH VFLHQWLVWV ZRUNLQJ LQ WKH SK\VLFDO GRPDLQ ZRXOG EH HQJDJHG LQ WKHLU UHVHDUFKHV ZLWK DQ
DZDUHQHVV RI WKHLU VRFLDO LPSDFWV DV ZHOO
5HIHUHQFHV IRU &KDSWHUV $VWHULVNHG SDSHUV DUH LQ -DSDQHVH
$GDPV - 6 ,QHTXLW\ LQ VRFLDO H[FKDQJH ,Q / %HUNRZLW](G
VRFLDO SV\FKRORJ\ 9RO $GYDQFHV LQ H[SHULPHQWDO
1HZ <RUN $FDGHPLF 3UHVV
%ODQFKDUG ' & %ODQFKDUG 5 - 7DNDKDVKL 7 6X]XNL 1 $JJUHVVLYH EHKDYLRUV RI
-DSDQHVH EURZQ EHDU
%ULJJV - / $JJUHVVLYH %HKDYLRU
1HYHU LQ DQJHU 3RUWUDLW RI DQ (VNLPR IDPLO\
&DPEULGJH 0DVV +DUYDUG
8QLYHUVLW\ 3UHVV
%X\V & - /DUVRQ . / +XPDQ V\PSDWK\ JURXSV
'HZVEXU\ ' $ 'DZNLQV 5 &RPSDUDWLYH DQLPDO EHKDYLRU
7KH EOLQG ZDWFKPDNHU
3V\FKRORJLFDO 5HSRUWV
1HZ <RUN 0F*UDZ+LOO
1HZ <RUN 1RUWRQ
'XQEDU 5 , 0 &RHYROXWLRQ RI QHRFRUWLFDO VL]H JURXS VL]H DQG ODQJXDJH LQ KXPDQV
%HKDYLRUDO DQG %UDLQ 6FLHQFHV
(LEO(LEHVIHOGW , (WKRORJ\ 7KH ELRORJ\ RI EHKDYLRU
(LEO(LEHVIHOGW , /RYH DQG KDWH 2Q WKH QDWXUDO KLVWRU\ RI EDVLF EHKDYLRXU SDWWHUQV
0HWKXHQ 7UDQVODWHG E\ * 6WUDFKHQ IURP
/LHEH XQG +DVV
)HVWLQJHU / $ WKHRU\ RI FRJQLWLYH GLVVRQDQFH
)HVWLQJHU / 7KH KXPDQ OHJDF\
)UHXG $ /RQGRQ
0QFKHQ 3LSHU
(YDQVWRQ ,OO 5RZ 3HWHUVRQ
1HZ <RUN &ROXPELD 8QLYHUVLW\ 3UHVV
'DV ,FK XQG $EZHKUPHFKDQLVPHQ
*RRGDOO - 1HZ <RUN +ROW 5LQHKDUW :LQVWRQ
:LHQ ,QWHUQDWLRQDOHU 3V\FKRDQDOLVKHU 9HUODJ
7KH FKLPSDQ]HHV RI *RPEH3DWWHUQV RI EHKDYLRU
&DPEULGJH 0DVV +DUYDUG
8QLYHUVLW\ 3UHVV
*RRG\ ( 1 (G 6RFLDO LQWHOOLJHQFH DQG LQWHUDFWLRQ
&DPEULGJH &DPEULGJH 8QLYHUVLW\
3UHVV
*UREHFNHU ' % 3LHWVFK 7 : &URZV XVH DXWRPRELOHV DV QXWFUDFNHUV
$XN
+DWDQR * 0L\DNH < %LQNV 0 3HUIRUPDQFH RI H[SHUW DEDFXV RSHUDWRUV
&RJQLWLRQ
+DWDQR * 2VDZD . 'LJLW PHPRU\ RI JUDQG H[SHUWV LQ DEDFXVGHULYHG PHQWDO FDOFXODWLRQ
&RJQLWLRQ
+HOVRQ + $GDSWDWLRQOHYHO WKHRU\ $Q H[SHULPHQWDO DQG V\VWHPDWLF DSSURDFK WR EHKDYLRU
1HZ <RUN +DUSHU 5RZ
+RRII - $ 5 $ 0 YDQ &RDOLWLRQV DQG SRVLWLRQV RI LQIOXHQFH LQ D FKLPSDQ]HH FRPPXQLW\ ,Q
* 6FKXEHUW $ 6RPLW(GV
7KH ELRORJ\ RI SULPDWH VRFLRSROLWLFDO EHKDYLRU
'H.DOE
1RUWKHUQ ,OOLQRLV 8QLYHUVLW\
,WDQL - 7DNDVDNL\DPD QR VDUX
0RQNH\V LQ 0W 7DNDVDNL 7RN\R .RGDQVKD
-RQHV ( ( 1LVEHW 5 ( 7KH DFWRU DQG REVHUYHU 'LYHUJHQW SHUFHSWLRQV RI WKH FDXVHV RI
EHKDYLRU ( ( -RQHV ' ( .DQRXVH + + .HOOH\ 5 ( 1LVEHW 6 9DOLQV % :HLQHU (GV
$WWULEXWLRQ 3HUFHLYLQJ WKH FDXVHV RI EHKDYLRU
.|KOHU : 7KH PHQWDOLW\ RI DSHV
0RUULVWRZQ 1- *HQHUDO /HDUQLQJ 3UHVV
/RQGRQ 5RXWOHGJH DQG .HJDQ 3DXO 5HSULQW HG 1HZ <RUN
/LYHUULJKW 0HDGRZV ' + 0HDGRZV ' / 5DQGHUV - 0LQVN\ 0 7KH VRFLHW\ RI PLQG
%H\RQG WKH OLPLWV
9HUPRQW &KHOVHD *UHHQ
1HZ <RUN 6LPRQ 6FKXVWHU
0XUDNDPL 7 .XPRQ 6 6DWR 6 %XQPHL WR VLWHQR L\HVKDNDL,\H VRFLHW\ DV D
FLYLOL]DWLRQ
7RN\R &KXR .RURQ 6KD
1LKHL < +DVKLERVRJDUDVX QR MLGRXVKD R UL\RXVLWD NXUXPLZDULNRXGRX QR EDULHLVKRQ
9DULDWLRQV RI EHKDYLRXU RI FDUULRQ FURZV
-DSDQHVH -RXUQDO RI 2UQLWKRORJ\
&RUFXV FRURQH
XVLQJ DXWRPRELOHV DV QXWFUDFNHUV
1LVKLGD 7 $OSKD VWDWXV DQG DJRQLVWLF DOOLDQFH LQ ZLOG FKLPSDQ]HHV 3DQ WURJORG\WHV
VFKZHLQIXUWKLL
3ULPDWHV
1LVKLGD 7 &KLQSDQMLL QL RNHUX VKDNDLNRX]RX QR KDNNHQ 'LVFRYHU\ RI WKH &KLPSDQ]HH VRFLDO
VWUXFWXUH ,Q 7 7DFKLEDQD (G
1LYHQ / 3RXUQHOOH - )O\QQ 2UZHOO * 1LQHWHHQ HLJKW\IRXU
6DUXJDNX QR *HQ]DL
)DOOHQ DQJHO
7RN\R +HLERQVKD
5LYHUGDOH 1< %DHQ 3XEOLVKLQJ
/RQGRQ 6HFNHU :DUEXUJ
5XPEDXJK ' 0 6DYDJH5XPEDXJK ( 6 :DVKEXUQ ' $ 7RZDUG D QHZ RXWORRN RQ
SULPDWH OHDUQLQJ DQG EHKDYLRU &RPSOH[ OHDUQLQJ DQG HPHUJHQW SURFHVVHV LQ FRPSDUDWLYH
SHUVSHFWLYH ,Q 0 -LWVXPRUL 7 0DWVX]DZD 6 .RMLPD (GV
QRQKXPDQ SULPDWHV
$ VSHFLDO LVVXH RI
&RJQLWLRQ DQG EHKDYLRU RI
-DSDQHVH 3V\FKRORJLFDO 5HVHDUFK
6FKMHOGHUXS(EEH 7 6RFLDO EHKDYLRU RI ELUGV ,Q & 0XUFKLVRQ (G
SV\FKRORJ\
+DQGERRN RI VRFLDO
:RUFHVWHU 0DVV &ODUN 8QLYHUVLW\ 3UHVV
6KLRQR 1 5RPDMLQ QR PRQRJDWDUL 7KH KLVWRU\ RI WKH SHRSOH RI 5RPH 9ROV 7RN\R 6KLQFKRVKD
6X]XNL 1 SHUVRQDO FRPPXQLFDWLRQ
7DFKLEDQD 7 (G 6DUXJDNX QR JHQ]DL
7KH IURQWLHUV RI SULPDWRORJ\ 7RN\R +HLERQVKD
7RGD 0 $ERXW WKH QRWLRQ RI FRPPXQLFDWLRQ DQG VWUXFWXUH $ SHUVSHFWLYH ,Q / 7KD\HU (G
&RPPXQLFDWLRQ &RQFHSWV DQG SHUVSHFWLYHV
:DVKLQJWRQ ' & 6SDUWDQ %RRNV
7RGD 0 7KH QHHG IRU D VFLHQFH RI FLYLOL]DWLRQ ,Q * ( : :ROIVWHUQKROPH 0 2
&RQQHU
(GV
&LYLOL]DWLRQ DQG VFLHQFH LQ FRQIOLFW RU FROODERUDWLRQ"
$PVWHUGDP (OVHYLHU([FHUSWD
0HGLFD 1RUWK +ROODQG
7RGD 0 7LPH DQG WKH VWUXFWXUH RI KXPDQ FRJQLWLRQ ,Q - 7 )UDVHU 1 /DZUHQFH (GV
VWXG\ RI WLPH ,,
1HZ <RUN 6SULQJHU $OVR LQ 7RGD 0 0DQ URERW DQG VRFLHW\
7KH
%RVWRQ
.OXZHU1LMKRII
7RGD 0 &DXVDOLW\ FRQGLWLRQDO SUREDELOLW\ DQG FRQWURO ,Q $ $\NDo & %UXPDW (GV
GHYHORSPHQWV LQ WKH DSSOLFDWLRQV RI %D\HVLDQ PHWKRGV
7RGD 0 0DQ URERW DQG VRFLHW\
1HZ
$PVWHUGDP 1RUWK+ROODQG $OVR LQ
%RVWRQ .OXZHU 1LMKRII
7RGD 0 0DQNLQG DQG WKH VFLHQWLILF FLYLOL]DWLRQ ,Q 7RGD 0
0DQ URERW DQG VRFLHW\
%RVWRQ
.OXZHU1LMKRII
7RGD 0 .LRNX WRZD QDQLND :KDW LV PHPRU\" ,Q
0HPRU\ $ 6SHFLDO ,VVXH RI 6XXULNDJDNX
7RGD 0 ,MRXQLQFKLWDLNHQ RVLUDVHNXGDVDL 7HOO PH DERXW \RXU H[WUDRUGLQDU\ FRJQLWLYH
H[SHULHQFHV ,Q
6L]HQ
0DUFK 7RGD 0 1LQFKL VLVXWHPX QR PRGHUXND VLURQ $ PRGHO IRU WKH FRJQLWLYH V\VWHP RSHUDWLRQV
.HLVRNX WR 6HLJ\R
7RGD 0 +LJXFKL . &RPPRQ VHQVH HPRWLRQV DQG FKDWWLQJ DQG WKHLU UROHV LQ
LQWHUSHUVRQDO LQWHUDFWLRQ ,Q - 6LHJIULHG (G
7KH VWDWXV RI FRPPRQ VHQVH LQ SV\FKRORJ\
1RUZRRG 1 - $EOH[
7R\QEHH $ - 7XGJH & /RQGRQ 2[IRUG 8QLYHUVLW\ 3UHVV
7KH WLPH EHIRUH KLVWRU\
:DDO ) GH =LPHQ ( &KDQJH DQG KDELW
1HZ <RUN 7RXFKVWRQH
&KLPSDQ]HH SROLWLFV 3RZHU DQG VH[ DPRQJ DSHV
'HU :ROI 9HUKDOWHQ gNRORJLH XQG 0\WKRV
/RQGRQ -RQDWKDQ &DSH
0QFKHQ .QHVHEHFN 6KXOHU
$SSHQGL[ %DVLF FRQFHSWV RI WKH XUJH WKHRU\
7KH EDVLF WHQHW RI WKH XUJH WKHRU\ LV WKDW WKH RSHUDWLRQV RI KXPDQ
HPRWLRQ
FRQWDLQ WKH NH\ WR
GLVFRYHU WKH EDVLF SULQFLSOHV XQGHU ZKLFK WKH KXPDQ PLQG IXQFWLRQV 7KH HYHU\GD\ QRWLRQ RI HPRWLRQ
KRZHYHU LV WRR HTXLYRFDO WR SURYLGH D JRRG ZRUNLQJ PDWHULDO DV LW HQFRPSDVVHV D YHU\ EURDG DUHD RI KXPDQ
PHQWDO IXQFWLRQV ZKLFK UHTXLUH VHSDUDWH WUHDWPHQWV HYHQ WKRXJK WKH\ DUH LQWHUUHODWHG 7KH XUJH WKHRU\ XVHV
WKUHH PDMRU HPRWLRQUHODWHG FDWHJRULHV RI PHQWDO YDULDEOHV WKH\ DUH
XUJHV PRRGVWDWHV
DQG
HPRWLRQDO
DWWLWXGHV
$Q XUJH PD\ EH FRQVLGHUHG DV DQ LQERUQ PHQWDO SURJUDP ZKLFK RQFH DFWLYDWHG ZLWKLQ WKH PLQG
H[HUWV D VSHFLILF W\SH RI FRQWURO RYHU WKH PHQWDO DFWLYLWLHV FKDUDFWHULVWLF WR WKH XUJH ZKLOH LW UHPDLQV
DFWLYDWHG 7DNH DQJHU IRU LQVWDQFH 7KH DQJHU XUJH ZLOO EH DFWLYDWHG ZKHQ D SHUVRQ LQWHUSUHWV WKH JLYHQ
VLWXDWLRQ LQ WKH IROORZLQJ ZD\ DQRWKHU SHUVRQ KDV JLYHQ KDUP WR WKH SHUVRQ E\ EUHDNLQJ D UXOH ZKLFK
DFFRUGLQJ WR WKH SHUVRQ
V EHOLHI VKRXOG EH DELGHG E\ WKLV RWKHU SHUVRQ $Q XUJH RQFH DFWLYDWHG ZLOO VHW D
JRDO WKH SHUVRQ LV WR SXUVXH E\ WKH SHUVRQ
V DFWLYLWLHV ,Q WKH FDVH RI WKH DQJHU XUJH WKH JRDO LV JHQHUDOO\
GHILQHG DV VHHLQJ WR WKH UXOHEUHDNHU EHLQJ SURSHUO\ SXQLVKHG IRU WKH UXOHEUHDNLQJ DFW
(YHU\ XUJH DV DQ DFWLYLW\ SURJUDP KDV LWV
LQWHQVLW\
SDUDPHWHU ZKRVH YDOXH GHWHUPLQHV WKH H[HFXWLYH
PRGH RI WKH XUJHEDVHG DFWLYLWLHV 7KH YDOXH RI XUJH LQWHQVLW\ GHSHQGV XSRQ D IHZ IDFWRUV WKDW PD\ EH
VXEVXPHG DV GHILQLQJ WKH VHULRXVQHVV
RI WKH XUJH DFWLYDWLQJ VLWXDWLRQ )RU LQVWDQFH WKH LQWHQVLW\ RI DQ DQJHU
XUJH ZLOO EH LQ SURSRUWLRQ WR WKH KDUP LQIOLFWHG XSRQ WKH SHUVRQ E\ WKH RIIHQGHU DQG WKH KLJKHU WKH DQJHU
LQWHQVLW\ WKH VHYHUHU ZLOO EH WKH OHYHO RI SXQLVKPHQW VHW XS DV WKH DQJU\ SHUVRQ
V JRDO
2QH RI WKH FULWLFDO DVVXPSWLRQV PDGH E\ WKH XUJH WKHRU\ LV WKDW WKH KXPDQ XUJH V\VWHP LV D PHQWDO
VRIWZDUH HYROYHG WR IDFLOLWDWH VXUYLYDO RI KXPDQ LQGLYLGXDOV 7KH XUJH V\VWHP SURYLGH HDFK SHUVRQ ZLWK D
JHQHUDO JXLGHOLQH IRU ZKDW WR GR ZKHQ WKH JLYHQ VLWXDWLRQ FDOOV IRU DFWLRQV H[WHUQDO DQGRU LQWHUQDO $ JRRG
VRIWZDUH LQ WKLV VHQVH QDWXUDOO\ IDFLOLWDWHV VXUYLYDO 7KHUH LV DOVR DQ LPSRUWDQW DX[LOLDU\ DVVXPSWLRQ DERXW WKH
HYROXWLRQ RI WKH XUJH V\VWHP &RQVLGHULQJ WKH WLPH VFDOH IRU DQ\ PDMRU ELRORJLFDO HYROXWLRQ WR WDNH SODFH WKH
XUJH V\VWHP RI WKH KXPDQV LQ WKH SUHFLYLOL]DWLRQDO SHULRG ZRXOG PRVW OLNHO\ EH YLUWXDOO\ WKH VDPH DV WKH
FRQWHPSRUDU\ KXPDQV
7KLV DOVR LPSOLHV WKDW WKH HYROXWLRQ RI WKH XUJH V\VWHP VKRXOG KDYH SURFHHGHG
WRZDUG PD[LPL]LQJ WKH VXUYLYDO EHQHILWV LQ WKH W\SH RI HQYLURQPHQW LQ ZKLFK WKH SUH FLYLOL]DWLRQDO KXPDQV
OLYHG 7KLV SUHFLYLOL]DWLRQDO HQYLURQPHQW LV FKDUDFWHUL]HG E\ LWV WZR SURPLQHQW DVSHFWV )LUVW LW PXVW KDYH
EHHQ D FRPSOHWHO\ ZLOG HQYLURQPHQW ZLWKRXW D WUDFH RI FLYLOL]DWLRQ DQG VHFRQGO\ WKH VDPH HQYLURQPHQW
PXVW KDYH FRQWDLQHG PDQ\ RWKHU KXPDQV WR OLYH DQG LQWHUDFW ZLWK VLQFH WKH DQFHVWUDO KRPLQLG VKRXOG KDYH
EHHQ D JURXSIRUPLQJ VSHFLHV DV DOO JUHDW DSH VSHFLHV ZHUH
/HW PH FDOO WKH VSHFLILF VXUYLYDO DGYDQWDJH HDFK RI WKH XUJH SURJUDPV PXVW KDYH JLYHQ WR D KXPDQ
LQGLYLGXDO DW WKH WLPH WKH
KLGGHQ SXUSRVH
RI WKDW XUJH LW LV KLGGHQ
EHFDXVH WKHUH LV QR QHHG IRU WKH SHUVRQ
DFWLQJ XQGHU WKH XUJH WR EH DZDUH RI WKH GHHSHU OHYHO LPSOLFDWLRQV RI WKH XUJH 2QH RI WKH SXUSRUWV RI WKH
XUJH WKHRU\ LV WR LGHQWLI\ WKLV KLGGHQ SXUSRVH IRU HDFK RI WKH XUJHV DQG WKH DQVZHU VKRXOG EH VRXJKW LQ WKH
FKDUDFWHULVWLFV RI WKH HQYLURQPHQW LQ ZKLFK WKH HYROXWLRQ WRRN SODFH
LH
WKH ZLOGQHVV RI WKH HQYLURQPHQW
DQG WKH JURXSIRUPLQJ QDWXUH RI WKH SHRSOH 7KH KLGGHQ SXUSRVH RI WKH DQJHU XUJH IRU LQVWDQFH PD\ EH
IRXQG LQ LWV IXQFWLRQ RI DGPLQLVWHULQJ VXLWDEOH SXQLVKPHQW WR UXOH EUHDNHUV DV PDLQWDLQLQJ WKH ELQGLQJ
SRZHU RI WKH JURXS UXOHV WKDW UHJXODWH WKHLU LQWUDJURXS LQWHUDFWLRQV VKRXOG KDYH EHHQ RI FULWLFDO LPSRUWDQFH
IRU VXUYLYDO RI WKH JURXS PHPEHUV
2QFH DQ DFWLYDWHG XUJH VHWV D JRDO D VXLWDEOH
DFWLRQ SODQ
KDV WR EH IRXQG WR DFKLHYH WKH JRDO 7KH
SURFHGXUH HPSOR\HG E\ WKH KXPDQV QRW H[FOXGLQJ DQLPDOV IRU VHOHFWLQJ DQ DSSURSULDWH DFWLRQ SODQ LV WKH
RQH WKDW W\SLFDOO\ LOOXVWUDWHV WKH
YHUVDWLOLW\
RI KLJKHU RUGHU OLYLQJ RUJDQLVPV LQ FRSLQJ ZLWK GLYHUVH
HQYLURQPHQWDO VLWXDWLRQV HIIHFWLYHO\ ,PDJLQH WKH GLIILFXOW\ D SHUVRQ ZRXOG PHHW LI WKH PLQG KDG WR VHULDOO\
VHDUFK D VXLWDEOH DFWLRQ SODQ DFURVV WKH YDVW GRPDLQ RI PHPRU\ ZKHUH DFWLRQ SODQV DUH VWRUHG :KDW WKH
PLQG GRHV LQVWHDG LV WR OD\ RXW LQ FRQVFLRXVQHVV WKH VLWXDWLRQDO FRQVWUDLQWV DQG WKH JRDO WR EH SXUVXHG DQG
PDNH TXDOLILHG
DFWLRQ DJHQWV
HDFK UHSUHVHQWLQJ DQ DFWLRQ SODQ RU D SDUW RI LW DXWRPDWLFDOO\ SRS XS LQWR
FRQVFLRXVQHVV IURP PHPRU\
:KDW WKH PLQG GRHV ZLWK WKHVH YROXQWHHUHG DFWLRQ DJHQWV DOVR GHSHQGV XSRQ WKH VLWXDWLRQDO
SDUDPHWHUV VXFK DV WKH WLPH SUHVVXUH :KHQ WKH VLWXDWLRQ GRHV QRW DOORZ D GHOD\ LQ DFWLRQ ZKDWHYHU DFWLRQ
DJHQW WKDW SRSSHG XS ILUVW PD\ EH H[HFXWHG LPPHGLDWHO\ 7KH YROXQWHHUHG DFWLRQ DJHQWV ZRXOG EH H[DPLQHG
PRUH FORVHO\ LI WKH JLYHQ VLWXDWLRQ DOORZV LW HVSHFLDOO\ DERXW WKH SRVVLEOH FRQVHTXHQFHV RI WKH DFWLRQV
SURSRVHG ,Q WKH FDVH RI WKH DQJHU XUJH RQH PD\ RIWHQ UHIUDLQ IURP FRPPLWWLQJ DQ DJJUHVVLYH DFWLRQ DJDLQVW
WKH RIIHQGHU ZKHQ D VWURQJ FRXQWHUDJJUHVVLRQ PD\ FRPH IURP WKH ODWWHU
2QH PD\ ZRQGHU LI D IUHTXHQW DEVWHQWLRQ IURP DGPLQLVWHULQJ SXQLVKPHQW WR D UXOHEUHDNHU PLJKW QRW
QXOOLI\ WKH KLGGHQ SXUSRVH RI WKH DQJHU XUJH 7KH XUJH V\VWHP KRZHYHU LV SUHSDUHG IRU WKLV FRQWLQJHQF\
$QRWKHU FDWHJRU\ RI WKH PDMRU XUJH V\VWHP YDULDEOHV WKH HPRWLRQDO DWWLWXGH H[LVWV PDLQO\ IRU WKH SXUSRVH RI
FRPSLOLQJ HIIHFWV RI HDFK XUJH RSHUDWLRQ VXFFHVVIXO RU RWKHUZLVH DQG DQ DERUWHG DQJHU XUJH PD\ HQKDQFH
WKH SHUVRQ
V HPRWLRQDO DWWLWXGH RI KDWUHG
WRZDUG WKH RIIHQGHU $ SHUVRQ
V HPRWLRQDO DWWLWXGH WRZDUG VRPH
WDUJHW REMHFW LV DFWXDOO\ WKH XUJHUHODWHG DVSHFW RI D VFKHPD D SHUVRQ GHYHORSV WRZDUG WKH REMHFW DQLPDWH RU
LQDQLPDWH ,Q WKH FDVH RI DQ DERUWHG DQJHU WKH LQWHQVLILHG KDWUHG PD\ WHQG WR HYRNH D VWURQJ DQJHU ZKHQ WKH
VFKHPD RI WKH RIIHQGHU LV DFWLYDWHG LQ WKH SHUVRQ
V PLQG HYHQ ZLWKRXW IXUWKHU SURYRFDWLRQ DQG WKH LPSOLHG
SRVVLELOLW\ RI D GHVSHUDWH DJJUHVVLRQ RI WKH SHUVRQ WRZDUG WKH RIIHQGHU PD\ EH GHWHUUHQW HQRXJK IRU WKH
RIIHQGHU WR UHIUDLQ IURP DQ\ IXUWKHU RIIHQVH
7KH WKLUG EDVLF FDWHJRU\ RI WKH XUJHUHODWHG YDULDEOHV WKH PRRGVWDWH SOD\V WKH NH\ UROH LQ DOO WKH
RSHUDWLRQV RI WKH XUJH V\VWHP VLQFH LW LV WKH HYHU SUHVHQW LQGLFDWRU RI WKH SHUVRQ
V VXEMHFWLYH VWDWH
VLPXOWDQHRXVO\ SURYLGLQJ WKH HYDOXDWLRQ RI WKDW VWDWH RQ D SRVLWLYHQHJDWLYH VFDOH ,W LV WKH LQWHQVLW\ RI WKH
PRRGVWDWH WKDW DFWXDOO\ WULJJHUV YDULRXV XUJH SURJUDPV LQFOXGLQJ WKH FDVH ZKHQ DQ XUJH DFWLYDWLRQ GLUHFWHG
DW DQRWKHU SHUVRQ LV FDXVHG E\ WKH SHUVRQ
V HPRWLRQDO DWWLWXGH WRZDUG WKH ODWWHU
7KH FKDUDFWHULVWLF RI WKH XUJH V\VWHP DV D VXUYLYDORULHQWHG PHQWDO VRIWZDUH LQ WKH ZLOG HQYLURQPHQW
LV W\SLFDOO\ VKRZQ LQ WKH ZD\ DQ DFWLYDWHG XUJH FRQWUROV WKH SHUVRQ
V DWWHQWLRQ :KHQ WKH XUJH LQWHQVLW\ LV
UHODWLYHO\ ORZ RQH
V IRFXV RI DWWHQWLRQ LV UDWKHU ZLGHO\ GLVWULEXWHG RYHU GLYHUVH WDUJHWV DQG WKDW LV D UDWLRQDO
WKLQJ WR GR EHFDXVH XQH[SHFWHG WKLQJV PD\ KDSSHQ DQ\ZKHUH DQG DQ\ WLPH LQ WKH ZLOG HQYLURQPHQW DV WKH
ORZ XUJH LQWHQVLW\ LPSOLHV WKDW WKH FXUUHQWO\ HQJDJHG DFWLYLW\ LV QRW PXFK LPSRUWDQW 2Q WKH RWKHU KDQG
ZKHQ WKH FXUUHQW XUJH LQWHQVLW\ LV UHODWLYHO\ KLJK RQH QHHGV WR FRQFHQWUDWH VR PXFK PRUH RQ WKH UHOHYDQW
WDUJHW REMHFWV :LWK DQ H[WUHPHO\ KLJK XUJH LQWHQVLW\ WKH FRQFHQWUDWLRQ RI RQH
V DWWHQWLRQ VKRXOG EHFRPH
VKDUSO\ FRQILQHG RQO\ WR D IHZ GLUHFWO\ UHOHYDQW WDUJHWV
7KHUH LV QRWKLQJ LUUDWLRQDO LQ WKLV DWWHQWLRQDO FRQFHQWUDWLRQ LWVHOI 3UREOHPV FRXOG DULVH RQO\ EHFDXVH
WKH XUJH V\VWHP WHQGV WR PDNH RQH FRQFHQWUDWH RQ WDUJHWV WKDW H[LVW LQ RQH
V FXUUHQW VLWXDWLRQ
GLVPLVVLQJ
HYHU\WKLQJ WKDW LV QRW LQ WKH FRQWH[W RI
KHUHDQGQRZ
1RWH WKDW WKLV LV QRW D ZURQJ VWUDWHJ\ LQ WKH ZLOG
HQYLURQPHQW ZKHUH LPSRUWDQW REMHFWV DOPRVW DOZD\V H[LVW LQ WKH KHUHDQGQRZ ZRUOG :KDW WKH KXPDQV
LQWURGXFHG LQWR WKHLU ZRUOG LQ WKH QDPH RI FLYLOL]DWLRQ KRZHYHU KDV LPSDLUHG WKH YDOLGLW\ RI WKLV DVVXPSWLRQ
DV FLYLOL]DWLRQ LV WDQWDPRXQW WR EULQJLQJ LQWR WKH KXPDQ HQYLURQPHQW RUJDQL]DWLRQV RI RQH NLQG RU DQRWKHU
DQG ORQJ FKDLQV RI FDXVDO UHODWLRQV WKXV LQWURGXFHG LQWR KXPDQ OLYHV KDYH D WHQGHQF\ WR ORFDWH LPSRUWDQW
REMHFWV LQ WLPHV DQG SODFHV IDU UHPRYHG IURP WKH FRQWH[W RI KHUHDQGQRZ 6R ZKHQ D FRQWHPSRUDU\ SHUVRQ
DFWLYDWHV DQ LQWHQVH XUJH WKH FKDQFH LV KLJK IRU WKH SHUVRQ QRW WR WDNH LQWR DFFRXQW WKHVH UHPRWH LVVXHV
GHVSLWH WKHLU LPSRUWDQFH EXW WR DFW LPSXOVLYHO\ RIWHQ ZLWK GLUH FRQVHTXHQFHV
7KLV KHUHDQGQRZ
HIIHFW VHHPV WR EH WKH PDMRU UHDVRQ ZK\ WKHUH LV D SUHYDLOLQJ FRPPRQVHQVH
EHOLHI WKDW HPRWLRQ UHSUHVHQWV LUUDWLRQDO SDUW RI WKH PLQG VLQFH WKH ODEHO RI HPRWLRQ
RU HPRWLRQDO
LV XVXDOO\
DWWDFKHG WR DQ XUJH RSHUDWLRQ ZLWK D KLJK LQWHQVLW\ OLNHO\ WR WULJJHU WKH KHUHDQGQRZ HIIHFW ,W LV KRZHYHU
UDWKHU UDUH WKDW RQH
V XUJH LQWHQVLW\ JRHV XS WR WKDW KLJK D OHYHO DQG WKH UDWLRQDOLW\ RI PRVW RI WKH XUJH V\VWHP
RSHUDWLRQV WKDW KHOG LQ WKH ZLOG HQYLURQPHQW VWLOO KROG LQ WKH FLYLOL]HG HQYLURQPHQW ZH OLYH LQ LQVRIDU DV WKH
XUJH LQWHQVLW\ UHPDLQV LQ D PRGHUDWH GRPDLQ
7KH ZD\ LQ ZKLFK WKH XUJH V\VWHP KDV EHHQ HYROXWLRQDOO\ PROGHG VWURQJO\ UHIOHFW WKH IDFW WKDW WKH
KXPDQNLQG LV D JURXS IRUPLQJ VSHFLHV ,QGHHG WKH KLGGHQ SXUSRVH RI PRVW RI XUJHV LQYROYHV VRPH VRFLDO
HOHPHQW LQ LW WKH DQJHU XUJH EHLQJ QR H[FHSWLRQ /HW PH FRQVLGHU KHUH RQO\ D VSHFLDO FODVV RI XUJHV HDFK RI
ZKLFK WHQGV WR GULYH SHUVRQV WR IRUP D
QDWXUDO FRDOLWLRQ
IRU WKH SXUSRVH GRLQJ YDULRXV WKLQJV WRJHWKHU LQ D
FRRSHUDWLYH IDVKLRQ 1DWXUDO FRDOLWLRQV PD\ EH FODVVLILHG LQWR WZR W\SHV
FORVH FRDOLWLRQV
VSHFLDOSXUSRVH FRDOLWLRQV
DQG
0HPEHUV RI D VSHFLDOSXUSRVH FRDOLWLRQ XVXDOO\ FRRSHUDWH RQO\ LQ D FHUWDLQ W\SH RI DFWLYLWLHV
$ QDWXUDOO\ IRUPHG VSHFLDOSXUSRVH FRDOLWLRQ PD\ EH UHSUHVHQWHG E\ D QDWXUDO
FRPPXQLW\
ZKRVH PHPEHUV
FRRSHUDWH ZKHQ D ODUJH JURXS DFWLRQ LV QHHGHG W\SLFDOO\ ZKHQ WKH VXUYLYDO RI WKH FRPPXQLW\ LV DW VWDNH
1RWH WKDW FRPPXQLW\ PHPEHUV KDYH WR OLYH QHDUE\ VR WKDW WKH\ PD\ EH DEOH WR MRLQ IRUFHV LQ HPHUJHQFLHV
HYHQ WKRXJK HDFK RI WKHP PD\ XVXDOO\ VSHQG WKHLU WLPHV LQ WKHLU RZQ ZD\V 6XFK LV WKH QDWXUH RI WKH JURXS
DV D FRPPXQLW\ ZKHWKHU EH LW RI DQLPDOV RU KXPDQV
8QOLNH VSHFLDOSXUSRVH FRDOLWLRQV D FORVH FRDOLWLRQ LV IRUPHG LQ D SUHVXSSRVLWLRQ WKDW LWV PHPEHUV
FRRSHUDWH DOPRVW LQ DQ\ NLQG RI DFWLYLWLHV &ORVH FRDOLWLRQV PD\ EH UHSUHVHQWHG E\
IULHQGVKLS FRDOLWLRQ
ORYHUV
FRDOLWLRQ
DQG
FORVH
$ FORVH FRDOLWLRQ ZLWK LWV XQFRQGLWLRQDO FRRSHUDWLRQ ZRXOG FUHDWH D JUHDW FRDOLWLRQDO
SRZHU IRU LW WR ZLHOG LI LW UHDOO\ ZRUNV )RU VXFK D YLUWXDOO\ XQFRQGLWLRQDO FRRSHUDWLRQ WR ZRUN KRZHYHU LW
LV SUHUHTXLVLWH WKDW WKH PHPEHUV RI D FORVH FRDOLWLRQ DUH
FRPSDWLEOH
WR HDFK RWKHU DV LI WKH\ ZHUH SDUWV RI D
VLQJOH V\VWHP %HFDXVH RI WKH GLIILFXOW\ LQ ILQGLQJ VXFK FRPSDWLEOH SDUWQHUV WKH XUJH V\VWHP XUJHV RQH WR
DVVHVV RWKHU SHUVRQV RQH KDSSHQV WR LQWHUDFW ZLWK LQ WHUPV RI WKHLU SRWHQWLDO FRPSDWLELOLW\ WR RQHVHOI DQG WKH
RXWFRPHV RI VXFK DVVHVVPHQWV DUH UHSUHVHQWHG E\ HPRWLRQDO DWWLWXGHV WRZDUG RWKHUV RQ WKH OLNLQJGLVOLNLQJ
GLPHQVLRQ :KHQ RQH EHOLHYHV WR KDYH IRXQG D SHUVRQ ZKR LV UHDOO\ FRPSDWLEOH WR RQHVHOI D
DIILOLDWLRQ
ORYH
XUJH RU DQ
XUJH PD\ EH DFWLYDWHG VR WKDW D FORVH FRDOLWLRQ PD\ EH IRUPHG
&ORVH FRDOLWLRQV DUH DOVR FODVVLILHG LQWR WZR W\SHV
$ NHUQHOOHG FRDOLWLRQ ZLOO KDYH D PHPEHU FDOOHG WKH
NHUQHOOHG FRDOLWLRQ
NHUQHO PHPEHU
DFWLYLWLHV DQG WKH RWKHU PHPEHUV ZLOO KROG WKH HPRWLRQDO DWWLWXGH RI
DQG
QRQNHUQHOOHG FRDOLWLRQ
ZKR WDNHV OHDGHUVKLS LQ FRDOLWLRQDO
GHYRWLRQ
WR WKH NHUQHO PHPEHU ,Q
FRQWUDVW DOO PHPEHUV DUH YLUWXDOO\ HTXDO LQ VWDWXV ZLWK D QRQ NHUQHOOHG FRDOLWLRQ
(DFK RI WKHVH QDWXUDO FRDOLWLRQV KDV D GHILQLWH VL]HOLPLW DQG DQ\ FRDOLWLRQ WKDW JRHV EH\RQG WKLV VL]H
OLPLW LV ERXQG WR EH DQ
DUWLILFLDO FRDOLWLRQ
GLVFXVVHG LQ &KDSWHU 6RFLDO6WDWXV
SHDNVWDWXV
,QGLYLGXDOV
)LJ7KHULJKWVLGHKDOIRIWKLVJUDSKVKRZV DW\SLFDOVWDWXVFRPSRVLWLRQ
ZLWKLQ D FRPPXQLW\ ZKHUH FRPPXQLW\ PHPEHUV DUH DOLJQHG IURP OHIW WR
ULJKW LQ WKH GHVFHQGLQJ RUGHU RI VWDWXV 7KH SHDN VWDWXV FRUUHVSRQGV WR WKH
KLJKHVW VWDWXV DFKLHYHG ZLWKLQ WKH FRPPXQLW\ 7KH OHIW KDQG VLGH RI WKH
JUDSK LV MXVW D PLUURU LPDJH RI WKLV VWDWXV FRPSRVLWLRQ VKRZQ RQ WKH ULJKW
KDQGVLGHWRFUHDWHWRJHWKHUDURXJKO\S\UDPLGDOVKDSHZKLFKPD\EHFDOOHG
D¨WDSHUHGS\UDPLGDO©VWDWXVFRPSRVLWLRQ,QWKHIROORZLQJDUJXPHQWVLQWKH
WH[WWKLVUHGXQGDQWUHSUHVHQWDWLRQRIFRPPXQLW\VWDWXVFRPSRVLWLRQZLOOEH
XVHGEHFDXVHRIWKHIDPLOLDULW\WKLVVKDSH
<3K\VLFDO6WUHQJWK
[M\M
(N
SLN
SMN
,
φLN
;,QWHOOLJHQFH
)LJ 7KH SRZHU YHFWRUV RI WZR SHUVRQV , DQG - ORFDWHG ZLWKLQ D WZR
GLPHQVLRQDOYHFWRUVSDFHVSDQQHGE\WKH ,QWHOOLJHQFH; D[LVDQGWKHSK\VL
FDOVWUHQJWK< D[LVDUHDSSUDLVHGE\DQRWKHUSHUVRQ .DJDLQVW.©VSHUVRQDO
VWDWXVDSSUDLVDOD[LV(N
(
N
$
<
%
<L
&
θ
θ
,
;L
;
)LJ7KHSRZHU YHFWRUPD\EHDSSUDLVHGE\
.HLWKHUGLUHFWO\$RUE\
,
;L
L
ILUVWGHFRPSRVLQJLWLQWRWZRFRPSRQHQWYHFWRUV <
DQGDQGWKHQDGGLQJ
WKHDSSUDLVDOVRIWKHVHWZRFRPSRQHQWYHFWRUV %&%RWKSURGXFHVWKH
VDPHUHVXOW
0LOLWDULVWLF3RZHU&RPSRQHQWV
ROGFRPPXQLW\QRUPD[LV
$
GLUHFWLRQRID[LVVKLIW
%
&
QHZFRPPXQLW\QRUPD[LV
$′
%′
&′
1RQPLOLWDULVWLF3RZHU&RPSRQHQWV
)LJ$VWKHFRPPXQLW\QRUPD[LVXQGHUJRHVDUDWKHUGUDVWLFVKLIWIURPWKH
RQH WKDW DSSUDLVHV KLJKO\ WKH SRZHU FRPSRQHQWV VHUYLQJ WKH FRPPXQLW\©V
PLOLWDU\ HQJDJHPHQWV WR D QHZ RQH WKDW HPSKDVL]HV QRQPLOLWDULVWLF SRZHU
FRPSRQHQWVWKHRUGHURIVRFLDOVWDWXVRIVRPHRIWKHUHVLGHQWVRIWKHFRPPX
QLW\OLNHWKRVHUHSUHVHQWHGE\$%DQG&PD\EHUHYHUVHGE\EHFRPLQJ$©%©
DQG&©UHVSHFWLYHO\
&RPPXQLW\QRUPD[LV
(
%
N
$
Κ
φ
N N
)LJ2QH©VVHOIHVWHHP$LVJHQHUDOO\KLJKHUWKDQRQH©VVRFLDOVWDWXV%
1RWH WKDW JLYHQ WKH SRZHU YHFWRU . .©V VHOI HVWHHP ZLOO EH PD[LPL]HG E\
VHWWLQJIRU
(N φ = NN
(N
S
LN
S
MN
S
NN
)LJ([DPSOHVRI.©VVHOIHVWHHPDQG.©VSHUVRQDOO\DSSUDLVHGVWDWXVRIWZR
RWKHUSHUVRQV,DQG-
(
FRPPXQLW\QRUPD[LV
M
%
3RZHU&RPSRQHQW
'
-
(L
$
)
&
(
,
3RZHU&RPSRQHQW
)LJ ,DQG-DUHQHDUO\RIWKH VDPHVRFLDO VWDWXV $EXWWKHLUUHVSHFWLYH
PDMRUSRZHUFRPSRQHQWVUHVWRQGLIIHUHQWGLPHQVLRQV,IHDFKRIWKHLUSHUVRQDO
DSSUDLVDOD[LVUXQV UHODWLYHO\FORVHWRWKHSHUVRQ©VRZQSRZHUYHFWRULWKDSSHQ
WKDWWKH\ERWKKROGFRQWHPSWWRZDUG HDFKRWKHU1RWHWKDWHDFKRIWKHLUVHOIHV
WHHPV&DQG'LVODUJHUWKDQWKH SHUVRQ©VSHUVRQDOO\DSSUDLVHGVWDWXVRIWKH
RWKHU(DQG)UHVSHFWLYHO\
6XFKDSDLURISHUVRQV,DQG-QHHGQRWDOZD\VEHLQFRQIOLFWKRZHYHU7KH\
PD\IRUPDFORVHFRDOLWLRQRUDQDOOLDQFHDQGWKH FRDOLWLRQDOSRZHUPD\JRDV
ODUJHDVUHSUHVHQWHGE\%
%
$
&
'
(
)
)LJ$SDUWLDOUHSUHVHQWDWLRQRIDUHODWLYHO\ODUJHKLHUDU FKLFDODUWLILFLDOFRD
OLWLRQ+ROORZFLUFOHVVLJQLI\SRVWVDQGHDFKOLQHVHJPHQWFRQQHFWLQJFLUFOHVLQ GLFDWHVWKHSUHVHQFHRIDGLUHFWLQWHUDFWLRQFKDQQHOEHWZHHQWKHRFFXSDQWVRIWKH
FRQQHFWHGSRVWV&LUFXPVFULEHGDUHDVUHSUHVHQWVHFWRUV$OOSRV WVZLWKLQDVHFWRU
DUHJHQHUDOO\FRQQHFWHGDOWKRXJKFRPPDQGVPD\UXQDORQJWKHVHFKDQQHOVRQO\
LQWKHGLUHFWLRQIURPKLJKHUSRV WVWRORZHU,QWHUDFWLRQVEHWZHHQSHUVRQVZKRVH
SRVWVDUHQRWFRQQHFWHGE\DGLUHFWLQWHUDFWLRQ FKDQQHOLVHLWKHUSURKLELWHGRUDW
OHDVWIURZQHGDVDEUHDFKRIWKHWDERRDJDLQVWXQDX WKRUL]HGLQWHUDFWLRQ
.LQJ
/RUG%
6RFLDO6WDWXV
/RUG$
$©VVXEORUG
,QGLYLGXDOV
)LJ $ VLPSOLILHG VFKHPDWLF UHSUHVHQWDWLRQ RI WKH ¨KRXVH V\VWHP© SRSXODUO\
HPSOR\HGLQIHXGDODQGVHPLIHXGDOWLPHV(YHU\WULDQJXODU VHJPHQWWREH IRXQG
LQ WKLV ILJXUH UHSUHVHQWV D ¨KRXVH© DQG WKH DSH[ RI HDFK WULDQJOH UHSUHVHQWV WKH
KHDG RI WKDW KRXVH 6PDOO FLUFOHV LQGLFDWH WKDW WKHUH DUH LQGLYLGXDOV RI YDULRXV
VWDWXVZLWKLQKRXVHV:KHQWKHDSH[RIWKHZKROHWULDQJOHUHSUHVHQWVD ¨NLQJ©WKH
ZKROH WULDQJOH PD\ UHSUHVHQW WKH JRYHUQLQJ ERG\ RI WKH FRP PXQLW\ KHDGHG E\
WKHNLQJ EXWWKH NLQJ ©VFRQWURO H[WHQGVRQO\ RYHUWKH FHQWUDOFROXPQ WKH JU D\
DUHDZKLFKLVWKHNLQJ ©VKRXVHLQDQDUURZVHQVH DVZHOODVRYHU WKH KHDGVRI
RWKHUPDMRUKRXVHVWKH ¨ORUGV©$DQG%LQWKLVILJXUHDOOLHGWRVXSSRUWWKHNLQJ