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Sunday, 22 January 2017

Applying second level thinking to purchasing consumer electronics.

Okay, now that I've begun to understand what second level thinking means, I want to apply it to real life. Since I'm interested in technology and gadgets, it struck me that second level thinking is a philosophy consumers should use when they buy a product. I have always been a 'first-level thinking consumer'. When Apple launches a new phone, I always say, 'I want that phone-it's the best phone on the market'. However, I realised that a second level thinker might say that although Apple makes the best phone, you can buy a One plus  or Xiaomi phone which is almost as good at half the price, hence rendering the iPhone a bad purchase. However, it could also be argued, that phone companies such as One plus and Xiaomi do not provide reliable customer services, that their phones malfunction frequently, and are less user-friendly or have poorer software than an iPhone. Hence, the value a consumer puts to user-interface and reliability must be greater than the extra cost of the iPhone. In conclusion, the price paid for a stock must be less than the calculated (present day or future) value.

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