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Tag: philosophy

I watched Paul Graham’s talk Be Good last week, and I really enjoyed it. It’s always nice to see benevolence rewarded. It’s also had me thinking about my old school and its success– Ron was always completely focussed on what was best for the kids. “If the education is great, the business side will almost take care of itself,” he said.

I recently found the following question and answer session between Warren Buffet and a group of MBA students on Kempton’s blog. Obviously, as a value investor, I pay close attention to what the “Oracle of Omaha” has to say. What impressed me most about this video, though, was Buffet’s personal philosophy. He’s the least materialistic billionaire the world has ever seen, and his values show through clearly in this speech. “Do what you love. Have integrity.” That’s his message.

Be sure to check out how my thoughts changed in the nine years after writing this post!

Recently, it seems there’s been a sort of obsession spreading through the expat blogging communities. It’s about search engine optimization, i.e., trying to get one’s site to come up as high as possible in search engine results. The idea is to bring in traffic by figuring out how the search engines rank sites and then exploiting that system, or at least making sure of not being ranked artificially low. It’s not really a topic I’m interested in, but I’ve been dragged into this debate. Now that I have, I’ll let let my feelings be known.
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Making modest goals doesn’t work. They just don’t motivate me enough to make real progress. I find that the results I get from setting several relatively easy goals are usually worse than those I get from setting none at all. Small goals aren’t exciting enough to give me the drive to actually achieve them, yet they are enough to sap my motivation when I don’t achieve them.
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I’ve often heard people talk about “investing ethically”. What they mean, of course, is that they believe in supporting companies that they feel do good things, or they at least avoid supporting companies that do bad things. The one crucial problem with this line of reasoning is that except in a few special circumstances, investing in a company doesn’t really “support” it at all.

This can be illustrated with a few examples. Let’s say that you are a wealthy investor and that company A sells children’s books. You feel that company A’s books are educational, wholesome, and deserving of your financial support. They earn $7 million per year, and are currently valued at $100 million dollars. Seeing some growth potential in the company and wanting to support their cause, you buy $1 million of company A’s stock. The question is, how much did company A earn from your million dollar purchase? The answer is nothing. They still earned $7 million dollars this year; the only difference is that you now own 1% of company A and they will pay you next time they issue dividends.

If company A’s business improves, you will make money from your investment; if it deteriorates, you will lose money. Either way, your effect on them is non-existent unless you buy the stock directly from them (e.g. in an IPO), or they decide to sell more shares after you’ve made your purchase. Had you simply bought a million dollars worth of books, you would have increased their earnings from $7 million to $8 million and had a huge effect on their business for the year. Investing though, won’t help them a bit. If their earnings falter, you’ll lose your money, but it won’t have done them any good.

Likewise, if you don’t want to support company B which sells oil refinery equipment, you’ll have to find a better way than just not buying their stock. In fact, even selling their stock would do nothing to them in the long run. Suppose Bill Gates, Warren Buffet, the Vatican, Opera Winfrey, and the estate of Colonel Sanders managed to secretly buy all of company B’s stock and then agreed to sell all of it on the open market at a prearranged time.

The stock price would plummet, yes, but company B’s earnings and business prospects would stay the same. Opportunistic people, such as myself, would recognize how under-valued the stock was and buy it at a fraction of its true worth. Very quickly, the stock price would climb back to its actual value, give or take a factor of two, and our sneaky “pentavirate” would have accomplished nothing more than throwing away their own money.

When it comes to ethics and corporations, I have to make rational choices. That doesn’t mean I don’t think the effect of my actions is too small to matter. It just means that making investments based on ethical evaluations of companies doesn’t make much sense. If there’s a company I want to support, I’ll buy its products. If I don’t want to support a company, I won’t buy its products. If it’s a really evil organization, such as the RIAA, I might even try to get others to boycott it or write to my congressional representative. However, barring an IPO or an SPO, I’d buy stock in any of the RIAA’s member companies if I found the valuation attractive. Heck, I might even be able to influence them with the voting privilages that came with the stock…

I’ve been actively participating in some discussions about the Japanese whaling issue over on Darin’s blog. I don’t want to discuss the ethics of hunting endangered species, nor do I want to get into the complex legal background of the issue. What I’m more interested in is this question: Do right and wrong depend upon culture?

In other words, could hunting endangered species be “wrong” in western countries, but “right” in Japan? Could inflicting pain on dogs to cause them to release chemicals that make them taste better be “right” in Korea, but “wrong” in Australia? Could creating absurd quantities of greenhouse gasses be “wrong” in Europe, but “right” in America? My feeling is that if something is “wrong”, it’s wrong regardless of culture. Maybe the things I listed above are all “wrong”, but only a little bit so.

Think about slavery. Would anybody actually defend slavery as just part of the “culture” in the southern states of the US 150 years ago? Could anybody defend the concentration camps and gas chambers in Nazi Germany, or the chemical and biological toxins experiments the Japanese performed on the Chinese during World War II as “culture”? Obviously, some things that large numbers of people think are ok, or at one point thought were ok, are still wrong. It’s my contention that relative ethics are no ethics at all. Still, boundary cases, such as cases in which one thing is good for an individual’s rights and another is good for society in general, require that conflicting values are weighed against each other. Obviously not all people and cultures will put the same weight on the same values. What are your views? Should you ignore what happens outside of your own culture and let other cultures decide what is right for themselves, or should you stand up for what you think is right?