Ever since 2005, I have really enjoyed studying businesses and have kept my money mostly in publicly listed stocks and since 2011, been interested in building one myself. At the same time, I love and seek inspiration from nature.
I’ve had trouble keeping them together because capitalism and its main cogs – business and finance, seem to be largely working against nature. I find it disturbing and hard to balance.
Several years ago, I owned ITC shares – a friend questioned how I could make money from smoking and tree-chopping (paper). I got out (though my reasons are ambiguous at best).
I owned shares in HDFC bank – the question was how I could invest in a money lender who adds little value except seek rent on existing capital. I didn’t buy that argument and stayed invested.
I owned shares in Supreme industries – the question now was how I could invest in a plastic manufacturer who screwed up the environment? (I stayed invested).
After reading Warren Buffett’s letters, I started admiring See’s Candies – someone questioned me how I could like a candy maker who does nothing but sugary stuff that has side effects like cavities and obesity and what not (I am not an expert on this topic)! I didn’t buy that either.
Now, Nestle is going through some investigation on Maggi. Do they really produce healthy foods? I doubt. But has Nestle been a good investment option – yes, it has been a fantastic investment for many, for several decades. Now, if they don’t really produce healthy stuff, but market themselves as such, isn’t that bad? How could you invest in them?
There are companies like Patagonia which claim to be socially and environmentally responsible (the founder has written a very interesting book). Would Patagonia make a good investment / business?
That’s a dilemma I’ve had for a while.
However, these days I give a damn about what others have to say! But I do have my own ethics – so I started looking around.
Life is complicated. These things don’t have simple answers – ITC could be a cigarette maker, but it could also support lakhs of farmers and its connected in a complex way that makes judgement hard. A supposedly do-good business can have its own flaws too.
When things are complex and there really is no fully right-or-wrong answer, we need shortcuts / thumb-rules to cut through all that and arrive at judgements. Even then its open to argument.
The rule of thumb for me in business and investing is this – I care deeply for my daughter and the world she is going to live in. Those businesses and ideas that I think are good for my daughter and her generation, I will participate in gladly. Those that I think are bad for their generation, I don’t want to be part of.
That is my own judgement – I don’t care about what others have to say about it. If I find Disney to be good for her, I will support it. Even if someone says it spoils children and what not. I could be wrong, but I know I will correct it if I find it so (because I care for her deeply).
If I care for my daughter and want her to be a non-smoker, I don’t want to be part of a cigarette company even if that company does a lot of good things too. If I want her to eat healthy and fresh, I cannot invest or build a business that does packaged and processed food with a 1 year expiry date.
That is it. No analysis, no theories! Just one rule of thumb – if its good for my daughter, its good for me. It sounds selfish – but I figured out what is good for my daughter should probably be good for most of the world too.