Every once in a while some traders will question the ethics of profiting from calamity.
Following the devastation from the recent hurricane, that topic came up for discussion in several of the trading and investing groups I follow. Whenever there is a war, drought, famine or any other type of disaster, the subject of morality is frequently brought up.
There was a time I too questioned my own integrity because I was invested in companies that would make money from the misfortune of others. Obviously, morality differs from person to person. It seems that one man’s sin is another man’s sainthood. But I wanted to do the right thing. I pondered the subject for quite a while before I came to my realizations.
Sure we all make money when we invest in a company (well, hopefully). But that company wants us to invest in them because they need our cash infusion to help them produce their product or to expand and develop a new product/service. So, when hundreds of thousands of vehicles are destroyed because of major flooding, those cars will need to be replaced. When thousands of homes are demolished, there will be a great need for lumber and building supplies.The victims of a disaster want to have their lives restored, they want the products that these companies produce. Those companies want our investment capital so they can fill those orders.
The victims of a disaster want to have their lives restored, they want the products that these companies produce. Those companies want our investment capital so they can fill those orders. Additionally, local, state and federal governments rely on the tax dollars from our profits to rebuild infrastructure and to see to it that aid goes to those who need it.
So what if investors stopped investing out of guilt? And what if companies stop producing because they didn’t want to take advantage of the victims? I suppose we could feel good about ourselves because we are not profiting from those unfortunate people left standing knee-deep in the muck.
You can follow Robert at https://www.youtube.com/channel/UCT0sxOcn7FxAs71sxXgXXBw
