Galt's Gulch

ESG Investing Revisited

Posted by mshupe 2 years, 6 months ago to Business
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With the great publicity surrounding the FTX crime scene, renewed scrutiny is being applied to ESG protocols. Deservedly so.
SOURCE URL: https://medium.com/@markshupepjw/socially-responsible-investing-part-one-kindness-that-kills-f1f78b1ed78d

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  • Posted by Lucky 2 years, 6 months ago
    Good points. Back in the day, you may remember, there was The Triple Bottom Line. I detested it not just because of the people who were promoting it but because it reminded me of what Milton Friedman was saying.

    FTX: carried a big label saying ESG. This naturally got the floodgates opened by those who spend other people's money.
    However, as you say, if it really were ESG it would be worse (in the long run) by corrupting values, targets and accountability.

    By the way, enjoyed reading about Temple Grandin who I admire.
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  • Posted by $ Markus_Katabri 2 years, 6 months ago
    As a fellow drummer and RUSH fan....Neal Peart stands alone among the greatest of all time.
    As far as empirical evidence that the stock market is not linked to anything.....the soaring market values as the Plandemic shut the economy down is all the proof I need to see that it is linked to nothing that matters. It’s a gigantic casino table game and the house has the advantage. Want more proof? The WallStreetBets guys against the hedge fund managers when Robinhood (among other brokerages) suspended trading in the affected stocks to give their buddies time to “rebalance” their positions.
    And of course we have SBF.....Some Bitcoin FAKE.
    Now let’s talk about the very medium that we trade in (the dollar) goes about a metamorphosis every time the government needs to default on its debt without looking like it’s defaulting on its debt. CBDCs will be the third time money was intrinsically changed in the last 100 years for no good reason.
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    • Posted by mshupe 2 years, 6 months ago
      I think the "soaring market values as the pandemic shut down the economy" is flawed. After the extreme sell-off in March and April of 2020 on pandemic fears, the soaring index prices was on the backs of five stocks - five. Also, the pandemic didn't cause any such thing. It was a supply side disaster caused by horrid government intrusion. Over time, market value is driven by earnings and valuation. Of course, we can argue about what's behind that too, but there is the reality that capital will always flow to its most productive use - eventually, Anerica maintains the most friendly legal system for capital formation, and entrepreneurs are creative and resilient. Why all the malevolent universe types around here? The FTX crime scene is actually a valuable course of events that proves the efficacy of markets. The weak and corrupt get discovered and crushed.
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  • Posted by freedomforall 2 years, 6 months ago
    The Stock Market is more rigged than Vegas casinos.
    It is intended to be a place to fleece investors and for that it works very well.
    It was an apt target on 9-11, as was the pentagon.
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    • Posted by mshupe 2 years, 6 months ago
      Not true, it works quite well despite the massive government intrusion.
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      • Posted by freedomforall 2 years, 6 months ago
        Government intrusion is a secondary effect after the corruption of Wall Street itself. There is more theft there from innocent, naive investors than from the MIC.
        Then WS powers use the unearned profits and corrupt government to destroy any free market competition possible, while claiming to 'protect' the small investor.
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        • Posted by mshupe 2 years, 6 months ago
          Sorry, but that is a gross rationalization. There is no such thing as collective "Wall Street" corruption for the same reason there is no collective mind. Obviously, banking is massively regulated, this incentivizes cronyism, and we are enduring a mixed economy. On a side note, do you know anything about Objectivist principles?
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          • Posted by mhubb 2 years, 6 months ago
            no sale
            try to get into an initial offering
            only those on the inside can do that

            and hillary made how much on a small invenstment??
            you thin she is alone in doing that???
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            • Posted by mshupe 2 years, 6 months ago
              So what? Try getting a table at a 5 star restaurant on Saturday night at 8 pm with no reservation, no history with that establishment, and the reputation of being a lousy tipper. Oh, you know? Well never mind. Anyway, the primary market is not an active, liquid, secondary market, which is what matters. They have much different functions.
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  • Posted by mccannon01 2 years, 6 months ago
    Nicely written article. Thanks. ESG investing, IMHO, is like the dot com craze in the late '90s. When the investors forking out the loot discover there isn't anything there for them, they will run. Boom to bust.
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    • Posted by mshupe 2 years, 6 months ago
      Thank you! To me, the .com bubble was a natural phase that left the best and strongest standing, and we benefit greatly today for the market forces that made it happen. There is nothing good or natural about ESG.
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      • Posted by mccannon01 2 years, 6 months ago
        I participated in the burst of '87 (meaning I lost my butt), but that's OK because I was relatively young and speculating the way I shouldn't have been doing. It didn't scare me too much so I re-evaluated what I was doing and modified my strategy. After a while I got back into investing/speculating again much smarter. I did extremely well with a set of unwritten "rules" I pretty much stuck to. One rule, "If you can't pay attention to the market stay off it", paid off when I went overseas for work in '99 just before the .com debacle and moved everything into "safer" securities so I basically dodged the .com bullet. The smoke was clearing when I came home and I started investing again. I had a lot more money so I didn't put it all into "play", if you will, because retirement was close and there was no point in screwing it up. As luck would have it, I had another great overseas opportunity in '06 and took it, so again I liquidated all the speculative stuff and held on to the "safe" stuff. I got back just in time for the real estate bust and was not yet participating in equities so I dodged that bullet, too, mostly as a couple of "safe" REITs I had a small percentage of my money in got bloody noses. For the most part I did well - until Xiden, but still well above water and expect to have a positive balance to leave the kids. My speculating days are over, but were a lot of fun. There's an old saying, "Nothing ventured, nothing gained". Well I ventured and lost some, but gained a lot more.
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  • Posted by mshupe 2 years, 6 months ago
    "The primary goal of objective investors is to choose a “path that’s clear” — the values and aspirations that give life its meaning and purpose. Disinterested in the market forecasters as “ready guides,” we also disregard government gods as “celestial voices” and dismiss the risks we cannot control as “phantom fears.”
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