is investing in stocks "immoral"?

[jalanlong]

https://www.polygon.com/2019/2/16/18226 ... pay-unions


I have always been fascinated by stocks and owning a piece of a company etc. But recently I have had more friends and co-workers than I have ever heard from before tell me that investing in stocks is "immoral." Their view is that when a company becomes public, most of the time they stop caring about the employees or really even about their customers as much as they care about doing whatever it takes to make the numbers the analysts want this quarter and next. And if that means laying off people, cutting benefits or whatever, they will do it just to make those numbers. My friends say if companies weren't public and working quarter to quarter then they would take a longer term view and would be more employee and customer friendly. What say you?

[Cortopassi]

I completely agree that being public and having to hit numbers drives short sighted decision making at times.

That's why it always (used to...) surprised me why a company's stock would go up when they announced big layoffs. Bad quarter, big layoffs, I guess the market sees that as good for future quarters, less heads to pay.

I become very "socialist" thinking when it comes to CEO pay, actor pay and athlete's pay. I understand that it is their right to make as much as the market is willing to pay, but still hard to comprehend that there are people making hundreds of millions of dollars out there.

Seems like that's where a tax system of old might be better where the tax rates at those levels of income were really high. But then again, I would not necessarily feel the government should get that money.

[vnatale]

https://www.polygon.com/2019/2/16/18226 ... pay-unions


I have always been fascinated by stocks and owning a piece of a company etc. But recently I have had more friends and co-workers than I have ever heard from before tell me that investing in stocks is "immoral." Their view is that when a company becomes public, most of the time they stop caring about the employees or really even about their customers as much as they care about doing whatever it takes to make the numbers the analysts want this quarter and next. And if that means laying off people, cutting benefits or whatever, they will do it just to make those numbers. My friends say if companies weren't public and working quarter to quarter then they would take a longer term view and would be more employee and customer friendly. What say you?

I was a CFO of a company that went public (IPO / 1986). It went all downhill after that as in that in less than 1.5 years, I and many others had left the company, the company went through all the money it had brought in though the offering (more like 90% of it in less than six months), and was in bankruptcy.

My initial $7,000 investment that was worth $250,000 when we went public (but with the stock locked up for six months) eventually became a $7,000 tax loss / write-off.

A company can choose to not be public, have full control but have limited growth potential and access to capital.

Going public means giving up some or a lot of control and potentially having greater growth potential and access to capital.

If you have gone public, then you have a different set of owners - those faceless shareholders who you don't know but who you now have to please and who themselves are putting pressure on you to perform in the short-term, with no patience for waiting for long-term performance.

I don't consider investing in stocks or a company choosing to go public as being "immoral". It's a choice.

And, as far as unions go? Over 40 years ago my coworkers and I became devotees of Peter Drucker. We used to fight over who got to first read his new books. He made the clear case 40 years ago that unions had their place way back in labor history but no longer. Workers already (this is back in 1979) were already getting a huge share of the pie and all the unions did was take their share of the pie (taking some away from both the workers and the owner / managers).

[vnatale]

I completely agree that being public and having to hit numbers drives short sighted decision making at times.

That's why it always (used to...) surprised me why a company's stock would go up when they announced big layoffs. Bad quarter, big layoffs, I guess the market sees that as good for future quarters, less heads to pay.

I become very "socialist" thinking when it comes to CEO pay, actor pay and athlete's pay. I understand that it is their right to make as much as the market is willing to pay, but still hard to comprehend that there are people making hundreds of millions of dollars out there.

Seems like that's where a tax system of old might be better where the tax rates at those levels of income were really high. But then again, I would not necessarily feel the government should get that money.

Living in a market economy (and being a sports fan) I have never begrudged the athletes' pay and said they earn too much. They are in the entertainment business, they have relatively short careers, susceptible to career ending (and money earning) injuries, and are simply among the elite in the entire universe of what they do. However, that did not mean that I was going to give them my money once ticket prices started skyrocketing from what they used to be. But others (witness the explosion in baseball attendance) have voted with their dollars that the athletes are worth all they are getting paid. These are the same people paying these exorbitant ticket prices who say players are getting paid too much!

Entertainers would not get paid what they get paid if people were not willingly paying their ticket prices. Again, for me I don't find value in paying those ticket prices and prefer to see local musicians perform for a variety of reasons, not the least because of the much lower costs. But if people are creating the revenues for those entertainers why shouldn't those entertainers earn as much as they do?

CEO pay? Someone thinks that they are worth it. I'm sure there jobs are not as secure as your average teacher's job is. And, that they work a lot more hours than your average teacher does. And, take a lot more risk and are under a lot more pressure.

Finally. Who do you think should get that money if not the government?

Vinny

[jalanlong]

Over 50% of NFL Revenue comes from television contracts. Ticket sales are a much smaller %. And since it costs nothing for people to sit at home and watch games on tv, they really aren’t feeling the hit of higher player salaries other than the incessant advertising that invades every part of the game now.

[vnatale]

Over 50% of NFL Revenue comes from television contracts. Ticket sales are a much smaller %. And since it costs nothing for people to sit at home and watch games on tv, they really aren’t feeling the hit of higher player salaries other than the incessant advertising that invades every part of the game now.

Except that they are giving up their valuable time since I assume the games would be shorter absent all the extra time that is added for commercials? That is definitely one of the reasons why baseball games are longer. More time between innings for commercials.

And, I pay a ton of money to XM Radio, DirecTV, Comcast, MLB Baseball so as to be able to follow the Yankees while living in Massachusetts. I don't watch any football but my understanding is that you cannot get all NFL football games for free if you were able to get stations via an antenna and did not need cable or satellite? I grew up in Rhode Island, in an intense metropolitan area and we got plenty of TV stations just via our roof antenna. But when I moved to western Massachusetts one place I lived at I got one station with my antenna (and no cable or satellite available at that location then). With just my roof antenna now I think I might be able to get 2 stations. I don't know but am assuming that some of those NFL revenues are also coming from what we pay for Satellite TV and Cable TV services?

[Cortopassi]

Who should get the money? Good question. If I trusted it to spend it wisely, the government, I guess. Otherwise, maybe spread it around to local governments based off population.

We go to one game at ND a year, for parent's price of $45 a ticket. For big games, like Georgia and Michigan this year, people were easy paying 3 and 4 figures for seats.

Recently, I can't remember who, a performer was on tour who I haven't seen in a long time. Cheapest tickets were $150+ Needless to say, I was not going.

I get my play/musical, music and sports fix at the high school currently. When my younger daughter graduates in two years, I actually think I will still go there for those kinds of events.

**I get 50+ stations on the roof antenna (of course I do not pay for cable, I'm a cheap bastard!)** Bears at least are always on free TV. I don't watch any other sports generally, and the Bears have taken up little of my time this year because they suck.

[Xan]

https://www.polygon.com/2019/2/16/18226 ... pay-unions


I have always been fascinated by stocks and owning a piece of a company etc. But recently I have had more friends and co-workers than I have ever heard from before tell me that investing in stocks is "immoral." Their view is that when a company becomes public, most of the time they stop caring about the employees or really even about their customers as much as they care about doing whatever it takes to make the numbers the analysts want this quarter and next. And if that means laying off people, cutting benefits or whatever, they will do it just to make those numbers. My friends say if companies weren't public and working quarter to quarter then they would take a longer term view and would be more employee and customer friendly. What say you?

I highly recommend the video linked to in this discussion:
viewtopic.php?t=9656
which talks about companies which focus on what they actually do rather than on the universe of finance.

[Kbg]

I think it is a company’s basic job to make money and the government’s basic job to make regulations and laws. It would be nice to be in a system where companies aren’t allowed to be considered as people and finance those who make the laws.

There should be separation of corporate and state...

[ochotona]

I think it is a company’s basic job to make money and the government’s basic job to make regulations and laws. It would be nice to be in a system where companies aren’t allowed to be considered as people and finance those who make the laws.

There should be separation of corporate and state...

Well said

[Xan]

A corporation is just a group of people. Especially one like Citizens United. Why shouldn't they be able to have an opinion?

The only entities who can actually vote are people, not corporations. So the only effect corporate money can have is whatever people let it have.

[dualstow]

I used to be friendly with a wolf who eventually told me that he was going to stop eating meat.
He died.

[vnatale]

I used to be friendly with a wolf who eventually told me that he was going to stop eating meat.
He died.

I don't get it; maybe I'm just dense sometimes, but please translate.

Yet another one in which I am in agreement with you. I thought it was only me who was not understanding...

Vinny

[dualstow]

I used to be friendly with a wolf who eventually told me that he was going to stop eating meat.
He died.

I don't get it; maybe I'm just dense sometimes, but please translate.

You’re not dense; it was an oblique post. I think I was frustrated by the premise from jalanlong’s co-workers. Not that it’s necessarily untrue, but the idea of avoiding (corporate) investing on those grounds, pah! The idea that those who eschew that form of investing are somehow morally superior.

Anyone who’s looked into even the “good” corporations on a list ordered by social responsibility — a friend and I have — knows how slippery that can be. It gets very subjective, and companies may move on and off the list.

I can see not buying those Canada Goose down jackets to not be a part of cruelty toward animals. One can buy a warm coat made of something else.

So what are they going to do, invest in gold? Diamonds? U.S. currency? Are they going to avoid corporations as consumers, too? Avoid buying their products, including medicines?

Even the groups that live inside and yet outside of a nation, e.g. the Amish, orthodox Jews (in the past), and hippies- even they depend on the economy and the army of the nation they choose to separate themselves from.

It just gets under my skin. We can avoid corporations about as easily as wolves can switch to eating berries.
This is the system we live in.

End of rant. I’m grateful for the thread. I feel better now after venting.

[Xan]

Speaking of the Amish, I stumbled on a fascinating article about them recently:
https://qz.com/1275194/the-amish-unders ... f-us-dont/

It isn't so much that they're "frozen in time" (which is what I would have thought) as that they collectively decide, after observing their guinea pigs (us) whether or not any given piece of technology is a net good, and disallow it if not.

It hit much the same note as discussions we've had here recently and a longer time ago about how our streets have become very dangerous because of cars, and that we never really made a decision about whether that was good or not.

[Kriegsspiel]

Speaking of the Amish, I stumbled on a fascinating article about them recently:
https://qz.com/1275194/the-amish-unders ... f-us-dont/

It isn't so much that they're "frozen in time" (which is what I would have thought) as that they collectively decide, after observing their guinea pigs (us) whether or not any given piece of technology is a net good, and disallow it if not.

It hit much the same note as discussions we've had here recently and a longer time ago about how our streets have become very dangerous because of cars, and that we never really made a decision about whether that was good or not.

Good article. One of the books I just posted (Better Off, by Eric Brende) was the authors long experiment doing just this by living with a group that he calls the Minimites (heh).

From what I understand of Cal Newport's Digital Minimalism, it's what he proposes too. Get rid of everything, then add back in things that add value.

I have a lot of respect for the Amish.

[vnatale]

I used to be friendly with a wolf who eventually told me that he was going to stop eating meat.
He died.

I don't get it; maybe I'm just dense sometimes, but please translate.

You’re not dense; it was an oblique post. I think I was frustrated by the premise from jalanlong’s co-workers. Not that it’s necessarily untrue, but the idea of avoiding (corporate) investing on those grounds, pah! The idea that those who eschew that form of investing are somehow morally superior.

Anyone who’s looked into even the “good” corporations on a list ordered by social responsibility — a friend and I have — knows how slippery that can be. It gets very subjective, and companies may move on and off the list.

I can see not buying those Canada Goose down jackets to not be a part of cruelty toward animals. One can buy a warm coat made of something else.

So what are they going to do, invest in gold? Diamonds? U.S. currency? Are they going to avoid corporations as consumers, too? Avoid buying their products, including medicines?

Even the groups that live inside and yet outside of a nation, e.g. the Amish, orthodox Jews (in the past), and hippies- even they depend on the economy and the army of the nation they choose to separate themselves from.

It just gets under my skin. We can avoid corporations about as easily as wolves can switch to eating berries.
This is the system we live in.

End of rant. I’m grateful for the thread. I feel better now after venting.

I have high standards. One would be not smoking. Therefore, I'm not going to buy tobacco or directly buy tobacco stocks. But I will own tobacco stocks as part of the Vanguard Total Stock Market Fund. The first seems completely direct. While the second and completely indirect and in a highly diluted way. We all have to choose lines to draw as it is extremely difficult to be 100% pure. Anyone can choose to challenge where I have drawn this particular line and challenge me by saying it violates one of my principles.

Vinny

[Kriegsspiel]

To circle back and tie into what Vinny said, what happens when, for whatever reason, less companies decide to go public? The question of whether buying their shares becomes irrelevant, because they aren't giving you the option anyways. Does that really change anything that causes people to think it's immoral? Private companies can still lay people off, pollute, corrupt politicians, etc. It seems to me that the ownership type doesn't matter so much as the size of the company. A small, privately owned resource extraction business doesn't cause problems (the guy who digs mud from a riverbank for Major League Baseball), but a large, privately owned resource extraction business can cause a lot of damage (large mining companies/pipeline companies, for instance). With regard to laying off employees, they're still counting on the majority owner of a private company to accept lower profits in order to keep on those employees; the same thing could be accomplished by a owner of the majority of shares of a corporation, right?

For several years now I've been noticing people talk about how less companies are going public. It seems to me that this trend could be a big time black swan. Because becoming a part owner of a corporation is a big part of how people can participate in rising wealth and prosperity. If less companies go public then all that profit and wealth accrues behind a firewall (from all but a handful of people's perspective). In addition, money is going to be chasing after fewer available assets, like real estate and commodities, when the stock market isn't there to soak it up. The unintended consequences (unintended wishes, really) would not be things that opponents of corporate stock ownership would like.

The part in the OP link, about the Nintendo CEO saying he'd take less pay in order to keep developers on, is a very Japanese thing to do.

[vnatale]

To circle back and tie into what Vinny said, what happens when, for whatever reason, less companies decide to go public? The question of whether buying their shares becomes irrelevant, because they aren't giving you the option anyways. Does that really change anything that causes people to think it's immoral? Private companies can still lay people off, pollute, corrupt politicians, etc. It seems to me that the ownership type doesn't matter so much as the size of the company. A small, privately owned resource extraction business doesn't cause problems (the guy who digs mud from a riverbank for Major League Baseball), but a large, privately owned resource extraction business can cause a lot of damage (large mining companies/pipeline companies, for instance). With regard to laying off employees, they're still counting on the majority owner of a private company to accept lower profits in order to keep on those employees; the same thing could be accomplished by a owner of the majority of shares of a corporation, right?

For several years now I've been noticing people talk about how less companies are going public. It seems to me that this trend could be a big time black swan. Because becoming a part owner of a corporation is a big part of how people can participate in rising wealth and prosperity. If less companies go public then all that profit and wealth accrues behind a firewall (from all but a handful of people's perspective). In addition, money is going to be chasing after fewer available assets, like real estate and commodities, when the stock market isn't there to soak it up. The unintended consequences (unintended wishes, really) would not be things that opponents of corporate stock ownership would like.

The part in the OP link, about the Nintendo CEO saying he'd take less pay in order to keep developers on, is a very Japanese thing to do.

Then we have the strange case of Dell. Private to Public. Back to Private. Then not that long ago back to Public.

https://www.theverge.com/2018/12/28/181 ... ublic-nyse

But good job, as usual, in describing the usual unintended consequences when you analyze the result of certain goals being met, like less investing being done in public companies.

Vinny

[dualstow]

To circle back and tie into what Vinny said, what happens when, for whatever reason, less companies decide to go public?

Private equity, now that is truly immoral.

I have a lot of respect for the Amish as well (although I also understand why many don’t return after Rumspringa (sp?))

Kevin Kelly wrote a great book called ‘What Technology Wants’. You’ve probably read it, Kriegs. One chapter is about the Amish and how they get around the electronics prohibition with pneumatic tools. Pretty cool. I think it’s chapter one.

[jacksonm2]

To circle back and tie into what Vinny said, what happens when, for whatever reason, less companies decide to go public?

Private equity, now that is truly immoral.

I have a lot of respect for the Amish as well (although I also understand why many don’t return after Rumspringa (sp?))

Kevin Kelly wrote a great book called ‘What Technology Wants’. You’ve probably read it, Kriegs. One chapter is about the Amish and how they get around the electronics prohibition with pneumatic tools. Pretty cool. I think it’s chapter one.

I grew up around Amish people and could never figure them out. Basically they live a lifestyle that is maybe 50 to 100 years behind the times, eschewing "modern" conveniences, but not going all the way back to .... whenever. So how do they figure that it is pleasing to God for them to live that way? The logic escapes me.

[vnatale]

To circle back and tie into what Vinny said, what happens when, for whatever reason, less companies decide to go public?

Private equity, now that is truly immoral.

I have a lot of respect for the Amish as well (although I also understand why many don’t return after Rumspringa (sp?))

Kevin Kelly wrote a great book called ‘What Technology Wants’. You’ve probably read it, Kriegs. One chapter is about the Amish and how they get around the electronics prohibition with pneumatic tools. Pretty cool. I think it’s chapter one.

Just bought on your recommendation!

Vinny

[dualstow]

Good lord! I promise not to make up any fanciful titles but maybe you should slow down with that book buying, unless you’ve got a concrete bunker and are expecting a Stephen King ‘The Stand’ type situation.*





*(I’m not worried about you buying that. It’s a thousand pages and it’s fiction).

((Although it is quite fantastic and has influenced many writers, including the creator of ‘Jericho’)).

[Kriegsspiel]

Good lord! I promise not to make up any fanciful titles but maybe you should slow down with that book buying, unless you’ve got a concrete bunker and are expecting a Stephen King ‘The Stand’ type situation.*





*(I’m not worried about you buying that. It’s a thousand pages and it’s fiction).

((Although it is quite fantastic and has influenced many writers, including the creator of ‘Jericho’)).

I'd be more worried about him buying Eternity Road

[dualstow]

Wow, that looks...similar.