You likely heard the story of William Buffet, who started with $100 dollars and built a multibillion-dollar fortune, through stock investing. But have you read his recent biography, The Essential Buffett: Timeless Principles for the New Economy, which raises disturbing questions … 
With each passing year, the noise level in the stock market rises. Television commentators, financial writers, analysts, and market strategists are all overtalking each other to get investors' attention. At the same time, individual investors, immersed in chat rooms and message boards, are exchanging questionable and often misleading tips. Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices skyrocket with little reason, then plummet just as quickly, and people who have turned to investing for their children's education and their own retirement become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly.
Buffet’s experience and current stock market activity raise questions about the solidarity or safety of numbers, and ethical trends, in the today’s stock market.
Are you concerned about continual stock market exploits that erode business and seem to diminish our culture? How would you respond to any one of these questions:
1. How can we support a stock market system which for the vast majority of people is not working?
2, What keeps the stock market so resilient in light of bad news daily in the oil industry?
3. Where is the balance between stock market investing and ethical business practice and what are balancing skills to hold both?
4. Can leaders invest in the stock market and invest in themselves ... or their customers ... at the same time?
5. What have we learned about the crash of the Great Depression in the 1930s that improves the way stock markets work today?
6. Have you heard what the stock market is shouting about consumer spending and corporate profits? Is there any hint though - about how to slow expenditures and decrease big business greed? Or is that a concern of stock markets?
7. In light of growing layoffs and business bankruptcies with falling stock markets and less consumer confidence, is it time to reboot for a stock exchange system with financial possibilities for more?
8. Is Robert Bright correct when he said, “You need half a million to work with to have a chance of making a decent living with the stock market?”
9. Since the stock market seems to go in cycles, I am wondering … where are we in the cycle now?
10. Does the research finding below raise any questions about governmental and stock market ties to your business success?
An interesting research paper titled… Congress and the Stock Market … shows an astonishing 90% of all gains in the Dow Jones Industrial Average took place when Congress was out of session. Apparently Dow Jones gains during Congressional sessions are rare – with most occurring only when Congress held a high approval rating.” What do you think?
Ellen,
This is meaningful to me in three ways:
1. Literally yesterday, I had a conversation with a friend who was lamenting the consistent poor performance of stocks. He is smart, does his homework, and has been in the market for a long time.
I told him that I had gotten out of the market a little more than a year ago. After losing half my accumulated wealth from investments 6 years ago, I looked hard, researched, watched some more, and didn't like what I saw. My decision would be called intuitive vs. research-based by some. I'm fine with that.
What I do have to invest now goes into less exciting, more conservative instruments. I'm willing to live with the results instead of feeling like I'm in Vegas instead of an ethically run marketplace.
2. As you know, I consult to corporations. I cringe now at the "shareholder value" mantra. Why? I'm not seeing shareholders as the consistent beneficiaries of the rallying cry. In many cases, the money is going to huge executive salaries--the same executives who are street smart enough to keep saying "shareholder value."
3. Buffet's reference to "the noise level rising" could be applied to the managing of the companies on whom we for investment profit. The noise level among gurus, charlatans, and instant fixes is deafening. There are many companies and organizations who grab at the program-du-jour thinking that it will lead to business nirvana. Instead, it often melts into the next program-du-jour before it is even understood, let alone implemented.
The clamor for (more) money creates a decibel level that overrides the stillness needed to question one's approach to business and to look at long-term implications of the current way of doing things.
Even a Conservative favorite like U.S. President Teddy Roosevelt chose to jump in and stop the monopolies when he saw the havoc they were wreaking on potential competitors and the average person. No one would accuse him of being anything but a capitalist. Yet he called business leaders to task for what he clearly identified as practices that interfered with the common good.
Is it time for similar leadership again?
Posted by: Steve Roesler | April 24, 2007 10:43 AM | Permalink to Comment