we should not be using shares as a savings medium, for which task they are wholly unsuited precisely because capitalism has a short term view,
Anyone care to offer an organisation or section of society with a longer term view than a capitalist company?
No, not one that should, not one that might, but one that does?
An Oxbridge college maybe? A Livery Company?
And?
Aberdeen Harbour Board, founded 1136.
It may have spent part of its life as a corporation: I don’t know, I’m not familiar with its history.
The explanation for its long life is pretty bloody obvious though.
Nothing as far sighted as a chancellor without the distraction of elections. 5 year plans all round then?
Probably true that buying shares as a one off long term investment is a bad savings idea – in a capatalist society we want older companies to be replaced by young more efficient upstarts. Buying shares in a company and expecting them still to have value in 50 years time would be a risky decision.
Investing in a managed portfolio of shares on the other hand seems wise to me, at any point in time the portfolio is looking for short term profits (based on risk profiles) but you are relying on the fact that in the long term, on average, we expect the economy and productivity to grow so the portfolio should grow over time. Of course in any short term period there may be a recession which removes us from the long term trend which is why the mix in your portfolio changes as you get closer to retirement to a safer but lower yield structure.
‘Investing in a managed portfolio’
Gamecock doesn’t like paying managers.
“An Oxbridge college maybe? A Livery Company? ”
Not really sure about that. Organisations are only people. And the people running them at any particular time are no different from anyone else. It only appears long term planning because of the perspective one’s seeing it from. The organisations who’s short term planners planned badly aren’t around any more.
Said this here about buildings, before. No building is built with the intention it survives any longer than those with the responsibility for its construction. That they last for hundreds of years is luck & maintenance & that they continue to serve a useful purpose. It’s only necessary to see how the builders built them to appreciate this. .
With long established organisations, conservatism plays a big part. There’s safety in not changing & continuing with what was done in the past. Inertia. Can be a successful policy. Except when it isn’t.
The Industrial Society? (snark)
Also of note is that he links capitalism with the publicly listed limited company, which is of course only one of a multiplicity of legal structures used by capitalists, including unlisted limited or unlimited companies funded by shares or guarantees, partnerships (either limited or unlimited), sole traders, joint ventures, etc etc
Some partnerships have been around for a long time. Rothschilds, a bank that existed from 1811 to 1970 as a partnership wholly owned and controlled by the family cannot really be said to have been relentlessly focused on the short term. And the same goes for many such firms that are family owned and controlled. Expansion is usually their death knell. Once they start to amalgamate and enlarge, short termism either destroys them (Arthur Andersen), the founding families stop being involved (Coopers, Barings, Peats, Cazenoves…), or they just sell out.
Also, the Spud probably limits capitalism to the LSE. He probably doesn’t know about NYSE, Nasdaq, Hamburg, Hong Kong etc
Also of interest, the oldest Oxford Colleges, such as Merton, various educational charities such as Eton, the Whitgift Foundation etc are run in a very long term way and are hyper capitalist in the way they manage their property portfolios. Some, such as Magdalen in the period between, say 1900 and 1980, rather lost focus but they rallied round and tapped alumni for donations etc. Various college presidents have been relentless in badgering industrialists for funds to build new libraries and accommodation. Lots of long term thinking goes on in many of those institutions
Apparently according to the article, rather than investing in shares, it points to ‘investing’ in the following:
1. government department
2. local authority
3. other statutory authority e.g. an NHS Trust or an
education authority
4. charity or other public not for profit body undertaking
public work e.g. housing trusts
Apparently these often underfunded organisations with a history of large scale misallocation of funds and enormous waste will be best placed to fund the retirement of the general populace.
As ideas go, this is on a par with the most idiotic I have ever encountered, even by his standards. Moronic doesn’t even begin to do it justice.
I appreciate the zeitgeist may have changed (no Thanks to him) but really it is time for him to be put out to grass.
His idea of ‘investment’ is to get hold of your money, one way or another, and spend it on the public sector. You’ll never see the money again.
Anyway, didn’t we rip the piss out of this same crap from him last week?
Everybody with a brain plans for the short term quite hard, because if you don’t survive the short term you die.
‘because capitalism has a short term view’
‘Capitalism’ is free trade. It is not a living entity. Do rocks have a short term view? Neither does capitalism.
Stocks enable people to conveniently invest in companies. Investing in companies is a good long term investment strategy.
‘we should not be using shares as a savings medium, for which task they are wholly unsuited precisely because capitalism has a short term view’
This is DEAD OPPOSITE of proper investment strategy. He could not be more wrong.
Many religious organisations, especially the Catholic church, take a long-term view. Difficult to invest though, and even harder to get a return.
From research done elsewhere…
“The average age of the FTSE 100 [companies] in 1984? 99.1 years, with a median age of 91 years. The average age of the companies in the 2012 index? 98.4 with a median of 88 years.”
The man’s a fucking moron.
All this really means is that Richard Murphy doesn’t have enough money to invest in stocks.
“Many religious organisations, especially the Catholic church, take a long-term view.” Ironic, really, given that JC was an apocalyptic preacher who thought that the end times were imminent.
@DtP
From his comments at other times, I believe he had a bad experience with his pension pot.
@ dearieme
You need to read a better translation. The destruction of Jerusalem by Vespasian, not the end of the world, was imminent.
The whole point of capitalism is that it has a longer-term view than non-capitalists. Savings are used to create future wealth.
The first capitalist was a farmer who planted seeds instead of eating them. Joseph built granaries (OK, he didn’t build them himself, he organised the building) which was long-term thinking.
Even shares in quoted companies are (or are intended to be) long-term investments: in the case of one share-holding I am the fifth or sixth owner since they were purchased well over a century ago before WWI, the four or five transfers having been by inheritance; two others derive from pre-WWII investments.
Take therefore no thought for the morrow: for
the morrow shall take thought for the things of
itself. Sufficient unto the day is the evil thereof.
This is the gospel of the Lord ( Murph )
King James version
It is in theory possible that we might increase long run growth (and productivity) via investing in better education. However, our tax money is spent on propaganda from left wing plonkers encouraging school strikes to prevent CAGW and on gender studies tripe, so not really seeing this as a solution.
@ bis
The Temple of Solomon, the Parthenon, the Colossus of Rhodes, the Lighthouse of Alexandria, the Temple of Diana at Ephesus, the Pyramids in Egypt, Durham Cathedral – ever heard of any of them?
Some cathedrals weren’t even completed until after the architect had died of old age.
No building is built with the intention it survives any longer than those with the responsibility for its construction
That might be true now. Definitely people in the past (rulers, usually) with the resources to do it built for an eternal monument to themselves. No doubt we’ll still see occasional megalomaniacs attempting to do the same thing now. Ex Soviet Asian republics come to mind, and the odd African.
“The destruction of Jerusalem by Vespasian, not the end of the world, was imminent.” So he was wrong by about 40 years? Pretty poor show for a god.
@john77
There’s an enormous list of buildings have fallen down. The vast majority of them.
Ah, dearieme, but a mere eye-blink for a deity. They think in Ians.
A 60 year old accountant who has been earning a good income for 35 years should be enjoying a comfortable retirement not hustling for grants from fake charities.
Ritchie must have made some really bad investments personally and in his pension.
Well, paying Michael Ashcroft’s legal fees in that libel case will have made a dent. And then of course, imagine if he’s been in bonds – gilts alone – this past 30 years? No equities? Might not be quite true but he might have had to save more than £100 nominal to have £100 in real terms now.
And at least 1 if not 2 ex-wives takes a burden, a colleague of mine was moaning recently he could have retired a couple of years ago if it wasn’t for his 2 ex-wives and kids
“A society grows great when old men plant trees whose shade they know they shall never sit in.”
Seems apt.
The only serious money in my wider family disappeared in serial divorces under Florida law. None of it was coming my way anyway.
“The whole point of capitalism is that it has a longer-term view than non-capitalists.”
Capitalism is free trade. It doesn’t have a “point.”
Have you read A Random Walk Down Wall Street*?
Throw 100 darts at FT shares pages and buy £100 of shares in each.
* eBook is on torrent sites
@ dearieme
By imminent I didn’t mean tomorrow but in the context of your claim that he forecast the end of the world within a lifetime “Weep not for me, daughters of Jerusalem, but for yourselves: if they do these things when the wood is green, what will they do when it is dry” should be interpreted by anyone who is not a militant atheist as referring to suffering at some future date – wood takes time to dry and the metaphor implies several years – later in their lifetimes (which fits the destruction of Jerusalem)
“Might not be quite true but he might have had to save more than £100 nominal to have £100 in real terms now.”
And capitalism looks to the future. Makes wealth out of savings.
So now we have zero or lower effective interest rates for the investor with low risk appetite, and the investor with moderate risk appetite can get price to earnings of, what, 16 or so. Where Japan has gone, there go we. The investor chasing a high gain doesn’t need any damn capital any more, xer can just go set up a business on a laptop on a kitchen table with a few like-minded nerds. What we used to call high-risk investment is now zero-risk investment because if it doesn’t work you just go and get a job again, and you’ve lost what you spent on that laptop.
What I’d love to see you address is whither capitalism when you don’t need any fricking capital any more to create new value. Which is where we have been for the last decade.
John,
Jesus also told a bunch of people that “some standing here will not taste death, etc, etc”. Remember that one?
“Easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven. ”
“Sell all your stuff, give it to the poor, take up your cross and follow me.”
If those bits made the cut for readings in the missal you could hear a pin drop in churches when they are read out.
I feel your pain, Big…. Poor choices
Pcar, years ago I heard that 80% of managed portfolios didn’t do as well as the S&P 500.
What to do . . .
Times up.
Buy S&P 500.
VFINX
@BiG
The full quote is “And he said to them, “Truly, I say to you, there are some standing here who will not taste death until they see the kingdom of God after it has come with power.” Mark 9 v 1
You then see this fulfilled in at least three ways in the Bible narrative.
Firstly – the Transfiguration. It’s not accidental that Mark goes straight into his account of this – his narrative is very carefully constructed.
Secondly – the resurrection. This quote in Mark comes immediately after the section in Mark 8 where Jesus has explained that he is the Messiah, but he’s a Messiah who will be killed and rise again, rather than a earthly leader who is about to restore the kingdom of Israel to its former glory. The Resurrection is the kingdom of God coming with power – what other force can raise the dead to life.
Thirdly – the day of Pentecost. A band of disciples who a few weeks earlier had been running for their lives from Jesus’s execution get the power of the Holy Spirit, go public, and get north of 3000 converts on day one.
They are in the Revised Common Lectionary.
But what is the context of the second? What must I do to _guarantee_ eternal life?
How about an oil company – with a 30 year planning horizon.
Compare that to his preferred option (government) which, at best, plans as far as the next election and normally only as far as getting out of the current scandal.
Er, Tim
Japanese Royal family?
British Royal family traces back to Kenneth MacAlpin 1100-odd years ago