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I thought buying stock was only between people and does not help the company unless it offered new stock. please enlighten Me on this viewpoint. If I purchase weapon it helps the company but buying stock in the company does not. highest regards Circa33
It's a matter of whether it is an issue for the individual. If you buy or sell a stock for the same price the other guy got it for, or wants to buy it for, then ostensibly it's all the same. It's a "wash." ...But nothing happens in a vacuum. And markets do not have consciences, but people ought to possess them. I have ethical filters that I keep in mind, and try, at least, to steer clear of involvement in the types of businesses I abhor. Or, maybe the business is not filthy, but a particular company (i.e., the PEOPLE who are the key players in the company) have been caught doing bad stuff. If I don't care, then it's a non-issue. But if my ethics, my moral standards are offended by the news, I might just divest. Why? My conscience won't let me sleep at night, until I do.
But nothing happens in a vacuum. If regulators are asleep or don't want to be bothered regulating, that's another fly in the ointment. And there is no perfect economic system, either. Capitalism is all about me. The individual. I want MINE. ... OK, I got MINE, so I can relax now. I hope you get YOURS. There is no "we" in capitalism, and that is its biggest, most obvious flaw. From another angle, capitalism has managed to figure out how to privatize profit among the "in-crowd" of shareholders, but leave the public in general holding the bag when things go wrong. Just ask uncle Lloyd Blankfein and the others in the Big Bank and Big Money tong. And did I mention yet that nothing happens in a vacuum? There are no guarantees, and there is no perfect world. If you live in this society, capitalism has already got you by the short hairs. Nobody's clean.... Now, go away, you troll. I'm done with you, and I hope the others here will not offer you any more attention, either.
@Crash, I'm sure you aren't aware that @circa33 has been an MFO member since 2011. I enjoyed your write up. I hope circa33 overlooks your final comment.
I believe "moral hazard" comes to mind with the big bank bailouts...maybe appropriate when it comes to the manufacturing of weapons.
It's a matter of whether it is an issue for the individual. If you buy or sell a stock for the same price the other guy got it for, or wants to buy it for, then ostensibly it's all the same. It's a "wash." ...But nothing happens in a vacuum. And markets do not have consciences, but people ought to possess them. I have ethical filters that I keep in mind, and try, at least, to steer clear of involvement in the types of businesses I abhor. Or, maybe the business is not filthy, but a particular company (i.e., the PEOPLE who are the key players in the company) have been caught doing bad stuff. If I don't care, then it's a non-issue. But if my ethics, my moral standards are offended by the news, I might just divest. Why? My conscience won't let me sleep at night, until I do.
But nothing happens in a vacuum. If regulators are asleep or don't want to be bothered regulating, that's another fly in the ointment. And there is no perfect economic system, either. Capitalism is all about me. The individual. I want MINE. ... OK, I got MINE, so I can relax now. I hope you get YOURS. There is no "we" in capitalism, and that is its biggest, most obvious flaw. From another angle, capitalism has managed to figure out how to privatize profit among the "in-crowd" of shareholders, but leave the public in general holding the bag when things go wrong. Just ask uncle Lloyd Blankfein and the others in the Big Bank and Big Money tong. And did I mention yet that nothing happens in a vacuum? There are no guarantees, and there is no perfect world. If you live in this society, capitalism has already got you by the short hairs. Nobody's clean.... Now, go away, you troll. I'm done with you, and I hope the others here will not offer you any more attention, either.
truly sorry I offended you or others I have never purchased from weapons or drug people I only wanted an opinion from others such as yourself. again I truly am sorry and will not post on MFO again. CIRCA33
No offense intended by @Crash or anyone else. We’re just a little jumpy due to some recent unfortunate circumstances. And thanks for the comment.
It’s a reasonable question you ask. I really don’t know. But if enough investors shun a particular company, that should in theory depress the stock’s value. So other holders of the stock might take a haircut in the short term. Might also affect the company’s bond rating, making borrowing more expensive and cutting into profits. Would it affect the bottom line (ie how many donuts a company sells)? Negative publicity of any type is never good for the bottom line. You use the term the company to depict the injured party. But since it’s a publicly traded company, it’s actually the investor/owners who suffer from a diminished stock price or increased borrowing costs.
Nothing wrong with the question from @circa33...hope Crash's comments doesn't chase you away from MFO.
@hank comments reminds me of the up-swell of divesting pressure college students put on college endowments in the early 1960"s with regard to South African investments and the anti-apartheid movement.
Social change can be brought about by paying attention to ethical investments. May not be an exacting science, but worthy of our humanness.
aamarchives.org/ Investment may seem agnostic, but investors often are not.
I've got to write faster - the post below echos some of hank's and bee's thoughts. Nevertheless, I hope it adds some value.
circa33 is correct in so far as buying stock from another owner does not directly affect a company's coffers. But it affects a company in other ways.
While "small potatoes" like you and me can't move a company, large investors buying stock can. This is why it's worth paying attention to how your mutual fund companies vote their proxies. You're buying stock not only as an individual but as part of a group of fund shareholders.
In theory, if enough people sell a stock in unison, its price will be depressed. A company will have a harder time raising more cash with secondary offerings. Lenders may scrutinize a company's business prospects more closely, making it harder for a company to borrow cash.
Realistically though, it's very hard to move stock prices this way and the direct economic impact on companies is likely small. The larger impact is on reputation and good will.
One of the best case studies for how effective divestment may be the movement targeting apartheid South Africa in the 70s and 80s. To what extent direct economic pressure had an effect isn't clear. The indirect effect, of creating political action is indisputable.
Here's one column concluding that "but the actions of U.S. investors gave the [anti-apartheid] movement both visibility and legitimacy and had a decisive economic impact."
@circa33: I think buying a stock is a form of a vote of confidence in the company. My or your purchase won’t move the needle, but at least we can keep our front stoop clean. I think that’s what Voltaire’s famous, “Mais il faut cultiver notre jardin,” means. In the face of calamity, let’s not waste our time looking for some explanation for the existence of evil. Rather, let’s do what each of us can do, one small lot of shares at a time.
Quite right, except that there's a difference between a collection of individuals, and a group with a purpose and identity. It doesn't have to be very specific, just the awareness that I am part of a larger whole. (Note: that's WITH a "w.")
Comments
But nothing happens in a vacuum. If regulators are asleep or don't want to be bothered regulating, that's another fly in the ointment. And there is no perfect economic system, either. Capitalism is all about me. The individual. I want MINE. ... OK, I got MINE, so I can relax now. I hope you get YOURS. There is no "we" in capitalism, and that is its biggest, most obvious flaw. From another angle, capitalism has managed to figure out how to privatize profit among the "in-crowd" of shareholders, but leave the public in general holding the bag when things go wrong. Just ask uncle Lloyd Blankfein and the others in the Big Bank and Big Money tong. And did I mention yet that nothing happens in a vacuum? There are no guarantees, and there is no perfect world. If you live in this society, capitalism has already got you by the short hairs. Nobody's clean.... Now, go away, you troll. I'm done with you, and I hope the others here will not offer you any more attention, either.
I believe "moral hazard" comes to mind with the big bank bailouts...maybe appropriate when it comes to the manufacturing of weapons.
Good read on examples of moral hazard in business:
https://investopedia.com/ask/answers/040815/what-are-some-examples-moral-hazard-business-world.asp
people I only wanted an opinion from others such as yourself. again I truly am sorry and will not post on MFO again.
CIRCA33
No offense intended by @Crash or anyone else. We’re just a little jumpy due to some recent unfortunate circumstances. And thanks for the comment.
It’s a reasonable question you ask. I really don’t know. But if enough investors shun a particular company, that should in theory depress the stock’s value. So other holders of the stock might take a haircut in the short term. Might also affect the company’s bond rating, making borrowing more expensive and cutting into profits. Would it affect the bottom line (ie how many donuts a company sells)? Negative publicity of any type is never good for the bottom line. You use the term the company to depict the injured party. But since it’s a publicly traded company, it’s actually the investor/owners who suffer from a diminished stock price or increased borrowing costs.
Just some thoughts from off the top of the head.
Regards
@hank comments reminds me of the up-swell of divesting pressure college students put on college endowments in the early 1960"s with regard to South African investments and the anti-apartheid movement.
Social change can be brought about by paying attention to ethical investments. May not be an exacting science, but worthy of our humanness.
aamarchives.org/
Investment may seem agnostic, but investors often are not.
circa33 is correct in so far as buying stock from another owner does not directly affect a company's coffers. But it affects a company in other ways.
While "small potatoes" like you and me can't move a company, large investors buying stock can. This is why it's worth paying attention to how your mutual fund companies vote their proxies. You're buying stock not only as an individual but as part of a group of fund shareholders.
In theory, if enough people sell a stock in unison, its price will be depressed. A company will have a harder time raising more cash with secondary offerings. Lenders may scrutinize a company's business prospects more closely, making it harder for a company to borrow cash.
Realistically though, it's very hard to move stock prices this way and the direct economic impact on companies is likely small. The larger impact is on reputation and good will.
Here's a New Yorker column somewhat supporting circa33's viewpoint, that "There is an important difference between divestment and product boycotts. "
https://www.newyorker.com/business/currency/does-divestment-work
One of the best case studies for how effective divestment may be the movement targeting apartheid South Africa in the 70s and 80s. To what extent direct economic pressure had an effect isn't clear. The indirect effect, of creating political action is indisputable.
Here's one column concluding that "but the actions of U.S. investors gave the [anti-apartheid] movement both visibility and legitimacy and had a decisive economic impact."
http://articles.chicagotribune.com/2013-12-15/business/ct-biz-1215-outside-opinion-20131215_1_sullivan-principles-south-africa-outside-opinion
poor wording of the Question. All is well.
Regards
circa33