Capital Commitment

  

Categories: Investing, Banking, Stocks

This is when a company promises to spend future capital on a specific long-term asset for a certain amount of time. Commitments are tough. Like exercising every day. For. The. Rest. Of. Your. Life. Or showing up to work on time…forever.

But yes, even companies make commitments…Capital commitments get made when an expensive project is dilated 7 inches - i.e. just before its birth...because the process of raising a big project requires the commitment of banks, regulators, builders, managers, unions, and 50 other interested parties. Yes, it takes a village...

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Finance: What is a Hard Asset?12 Views

00:00

Finance allah shmoop What is Ah hard asset Yeah It

00:07

takes a lot of hard work to get an asset

00:08

like that Okay So hard asset is just one that

00:12

you can bang on touch Engage with cell Alright examples

00:17

Oil it's Hard asset gold Hard of vintage nineteen Fifty

00:21

seven Ferrari with beige leather interior hard four thousand head

00:25

of longhorn cattle in texas A commercial building in the

00:28

best part of town All of these arm or less

00:31

commodities Hard assets Well okay Okay The categories Rare cars

00:35

art coins stamps stuff like that that's where they fit

00:38

So what do you care if something is ah hard

00:40

asset or a soft one Well most or all hard

00:43

assets are commodities and they generally do very well in

00:47

periods of very high inflation when you know stocks were

00:51

getting crushed And yeah the feds raising rates appoint a

00:54

quarter now forever Well equities and bonds will get crushed

00:58

Commodities well generally keep up with the spike in prices

01:02

causing the fed raised rates in the first place So

01:04

they're a good hedge for most investment portfolios And not

01:07

all of them are great forever like check out riel

01:10

Inflation adjusted oil prices the last few decades you had

01:14

not a good run Most not all do well though

01:17

an oil will likely have its day in the sun

01:20

again At some point you lan When in doubt remember

01:24

what kim kardashian and warren buffett said A good asset

01:27

is hard to find and a hard asset is good

01:30

to find But we won't tell you who said which

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