While this might ruffle the feathers of ESG activists, those responsible for the day-to-day work of picking stocks have the real-world experience to fully understand where Buffett is coming from.
Tag "Robert R. Johnson"
It is the world we inhabit right now. Your company is good for the world because you say so. And no one can legitimately argue with your feelings.
As you’ll see in a moment, there are situations when it does make sense to sell short that are consistent with one’s fiduciary duty. Still, the dangers are there and it’s best to proceed into this financial minefield only with the most expert of advice.
This has long been demanded of fiduciaries. Nearly two centuries ago in Harvard College v. Amory, the Massachusetts court promulgated what has become known as the “prudent man rule.”
It’s fun to talk about “risk” and “return” because these are measurables and people are comfortable with the tangible world. But none of that touches upon what really matters. Worse, it can distract you from achieving what you want most.
Despite the better intentions of finance professors a generation ago, the market regularly fails the efficiency test. The scary reality is not a question of what degree of market inefficiency exists, it’s that market inefficiency exists at all. And that can harm investors.
A good fiduciary must keep a level head and know when emotions drive investors. After all, if they’re not careful, emotion will drive investors right off the cliff.
Quite the opposite from being “over the hill,” those in their forties may find they’re still slogging up hill in terms of saving for retirement.
Ultimately, to survive, Social Security must evolve into a defined contribution system and away from its current Ponzi Scheme structure.
Perhaps, when planning for retirement, self-security is more important than Social Security.
