The Trouble with Business

Last year I sat across from a client who announced, "I'm dying." He needed help with his taxes and putting his estate in order. "This dying is such a distracting process I can't even add a column of numbers."

On that first meeting we sat in his kitchen. His family was in the front room. They had just buried his middle son. The old man was nursing a glass of cheap brandy, neat. The bottle was in the dining room, his other sons would appear and refill their glasses and return to their mother. This is odd I thought. He handed me ledgers, binders and bundles of envelopes, the provrebial shoe box of a man's financial life. He never offered me a drink, I was working. As I sorted through the papers and numbers I noticed that the old guy had an extensive portfolio of stocks. We ended up swapping trader stories. We decided that stock trading was gambling, a game and it could be fun. My joke was that it all wasn't much different from livestock trading of years gone bye just that the shit was santitized to eliminate the honest stink. I took his pile home to sort through his life.

At our next meeting a few days later the old fellow wanted to talk about his life, the intricacies of engineering, how he became a Republican and his doubts about the Catholic church. He vigorously defended profitabilty, the moral neutrality of business and the righteousness of wealth. I could hear the doubt in his argument. "Bill," I said. "There are companies in your portfolio that I would not hold for moral reasons."

Despite what the Supreme Court says corporations are not human but they are managed by humans therefore frought with sin. Jesus had a lot to say about money and he was right on. I does corrupt. After the accounting scandals of the 90's (Enron, Tyco, MCI, ect.) many thought a lesson was learned and the corporate moral compass would reform and restore. Wrong. Human frailties like greed, avarice, envy and excess find a convenient hiding place in the supposed moral neutrality of business. Legions of MBA's, lawyers and accountants muddy the waters hiding the Ken Lay's, Bernie Ebber's, Blankstien's et al.

Individual investors like old Bill are at an instant disadvantage. The playing field is terribly tilted. A Vegas casino is a fairer gamble, they do have rules and must follow them. How can you ask the individual to be moral while the market is not? I haven't the time or room to enumerate the swindles but on the surface it appears that an honest man hasn't a chance. This is not a reason to follow the sinners.

The fun part of investing that old Bill and I laughed about is the ability to recognized clumsy corporate lies. Enron taught us all to never trust. Follow the money, spot the lies, play the players and make money.

After Lehman Brothers bit it and a bail out became apparent I bought safe banks like Sachs (like Paulson wasn't going to save his people) and Chase while ignoring the biggest liars like BOA and the most corrupt CITI. I knew all the banks would make money because of the bailout but you've got to draw a line. I soon sold the banks, took a profit on the lie and bought Ford because they turned down the free money. I sold Ford to pay some bills and bought into Homebuilders in a depressed market because the government was propping them up.

Now I'm sitting on cash waiting for Europe to go in the toilet. I see little hope for our present form of capitalism and governance. All answers are apparent in nature. Science is a way at looking at nature but so is animism. Machine efficiency is now being augmented by robotics while ignoring the human power of cooperation. Human potential has been ignored for years, unless a big war pops up and the need to retool an economy happens instantly (WWII). Our slave driving histroy and mentality suppresses human potential. Today we have an excess of discarded workers. They are a result of stiff corporate thinking that does not recognize human value. During the 90's when corporate America was thriving they couldn't spend money fast enough, they built huge corporate campuses and filled them with meaningless workers to justify the space. Then the bubble bursts and the space is empty and the workers gone. This all is a result of bad thinking.

We don't need a President (look at the idiots aspiring) we need a Chief, a shaman and a wise council. Everything exists in the green circle. Navigate within nature and find your way.

Old Bill died at the end of May. I'd go see him every week. At the end he slept a lot. He was not in pain and awake his mind was clear. He had good hospice care and his wife and kids were there. Bill had a good death, if that is possible. We laughed and told lies to the end.