View Full Version : Ethics and morals- how do you feel about share trading?


metaphoria
18-09-2008, 22:06
As the thread title says: Is share dealing OK, ethically?

sibon
18-09-2008, 23:13
This is not a 'do you believe in God?' thread, or about muslims, nothing to do with evolution, nor atheism, erm...just questions.

First question: Is share dealing OK, ethically?

Yes.

What do I win?

DIVA
19-09-2008, 00:16
For me, it would depend on what the shares are in, and where the profits from transactions are going.

metaphoria
19-09-2008, 16:08
For me, it would depend on what the shares are in, and where the profits from transactions are going.

I was thinking about it, in principle, but maybe it's not necessary. Thanks.

metaphoria
19-09-2008, 16:09
Yes.

What do I win?

A bouncing cat.

Halibut
19-09-2008, 16:13
I have problems with it Metaphoria; as I see it share dealing allows a very limited nuber of people to make huge profit at the expense of the rest of the population. I've been following the latest wave of financial upsets in a not terribly commited sort of way and it appears to me to be entirely possible for those in this business to spread rumour seee shre prices fall and subsequently make enormous profit on the basis of lies.
That sits uneasily with me.

Bloomdido
19-09-2008, 16:19
Share dealing in BAE Systems (http://en.wikipedia.org/wiki/BAE_Systems)? They make things that kill and maim people. There is evidence that financial institutions make a 'killing' out of wars. How many contracts were awarded to American companies after the Iraq invasion?

metaphoria
19-09-2008, 16:27
I have problems with it Metaphoria; as I see it share dealing allows a very limited nuber of people to make huge profit at the expense of the rest of the population. I've been following the latest wave of financial upsets in a not terribly commited sort of way and it appears to me to be entirely possible for those in this business to spread rumour seee shre prices fall and subsequently make enormous profit on the basis of lies.
That sits uneasily with me.

Yes, I know what you mean. It's the ill gotten gains thing that sits uneasily with me. Still, I'd like to make a little more money than I earn at work, and saving doesn't seem to be getting me anywhere fast enough to be able to enjoy it whilst I'm still young-ish.

Need to invest. But where?

Halibut
19-09-2008, 16:28
Yes, I know what you mean. It's the ill gotten gains thing that sits uneasily with me. Still, I'd like to make a little more money than I earn at work, and saving doesn't seem to be getting me anywhere fast enough to be able to enjoy it whilst I'm still young-ish.

Need to invest. But where?

I'd like to use some of my meagre savings to make a little more, but where indeed?

Jessica23
19-09-2008, 16:31
This might be a good starting place?

http://www.ethicalinvestments.co.uk/

Based in Sheffield, according to the phone number! :)

plekhanov
19-09-2008, 16:41
This is not a 'do you believe in God?' thread, or about muslims, nothing to do with evolution, nor atheism, erm...just questions.

First question: Is share dealing OK, ethically?
Most denominations nowadays have no problem with it but for centuries lending or borrowing money at interest was forbidden by the Catholic Church (iirc on the strength of a few OT verses) which for a strict/old fashioned Christian would make investing in pretty much any company (as they nearly all borrow or lend) problematic.

metaphoria
19-09-2008, 16:53
Share dealing in BAE Systems (http://en.wikipedia.org/wiki/BAE_Systems)? They make things that kill and maim people. There is evidence that financial institutions make a 'killing' out of wars. How many contracts were awarded to American companies after the Iraq invasion?

Well, OK I once invested in Marconi, but they were just a name on this moving conveyer-belt at bottom of a TV screen, and I was only looking at numbers at the time. However, I'm not entirely certain that defense systems have the pure intention of killing people, but protecting their own. However, I'm not entirely sure if I'm right in that either.

Hmmmm. Don't know what to say really. :(

metaphoria
19-09-2008, 16:59
This might be a good starting place?

http://www.ethicalinvestments.co.uk/

Based in Sheffield, according to the phone number! :)

Yes, this is the kind of thing I'm looking for. Thank you.

metaphoria
19-09-2008, 17:17
Most denominations nowadays have no problem with it but for centuries lending or borrowing money at interest was forbidden by the Catholic Church (iirc on the strength of a few OT verses) which for a strict/old fashioned Christian would make investing in pretty much any company (as they nearly all borrow or lend) problematic.

It's not technically lending with interest is it? Not when interest is not garunteed, like paying into an ISA. Not that I think there's anything wrong with having an ISA.

Hmmm...I'll have to think on this one.

medusa
19-09-2008, 17:25
The concept that only people of faith can have morals or ethics is a bit dodgy actually- I don't believe in any god, but I don't believe that not believing in god makes me amoral or unethical.

I personally have great issues with many investment schemes, since you don't know unless you dig deeper exactly where your money is being used.

metaphoria
19-09-2008, 17:30
The concept that only people of faith can have morals or ethics is a bit dodgy actually- I don't believe in any god, but I don't believe that not believing in god makes me amoral or unethical.

I personally have great issues with many investment schemes, since you don't know unless you dig deeper exactly where your money is being used.

I was just thinking the same. I just started with one thought in my head, and went off in a direction which I realise are not mutually exclusive to each other.

Could you change the thread title to 'Ethical Investments and Share Dealing.' or something similar, please?

medusa
19-09-2008, 17:37
How's that?

metaphoria
19-09-2008, 17:39
How's that?

It's better. Thanks.

sibon
19-09-2008, 19:00
Yes, this is the kind of thing I'm looking for. Thank you.


Most of the big investment supermarkets sell ethical funds. You might want to check out www.fidelity.co.uk or wwwh-l.co.uk to see if they offer lower commission charges. You'd be well advised to read up on the different types of ethical funds before you invest. Good luck - you might well need it at the moment.

Tricky
19-09-2008, 19:16
I have problems with it Metaphoria; as I see it share dealing allows a very limited nuber of people to make huge profit at the expense of the rest of the population. I've been following the latest wave of financial upsets in a not terribly commited sort of way and it appears to me to be entirely possible for those in this business to spread rumour seee shre prices fall and subsequently make enormous profit on the basis of lies.
That sits uneasily with me.

I don't get what this has to do with share dealing. You're talking about insider trading, and spreading false information, both of which are illegal, although they certainly go on.

The fact that shares are owned by a very limited number of people in the UK is one of those strange anomalies, probably connected to the unbelievably low number of people who know how a capitalist economy works despite having an extremely high standard of living due to living in one. When I'm made king, I'll make sure that the basic economic model is taught as part of every schoolchild's education.

The weird thing is, so many people gamble on the pools or on the horses or on the lottery when these are losing bets on average over time whereas share dealing is a net sum gain. (Though now wouldn't be a good time to test that theory).

To answer the question, share ownership is perfectly ethical as long as by buying the shares, you're not encouraging the firm to do something unethical.
And if the company is doing something unethical, becoming a part owner of the firm is a better way than most of getting them to change their habits.

pathman
19-09-2008, 20:04
oh b***er, I was about to type something intelligent but I see Tricky has beat me to it so all I can say is .... I agree 100%

metaphoria
19-09-2008, 20:07
Most of the big investment supermarkets sell ethical funds. You might want to check out www.fidelity.co.uk or wwwh-l.co.uk to see if they offer lower commission charges. You'd be well advised to read up on the different types of ethical funds before you invest. Good luck - you might well need it at the moment.

9 per deal isn't bad. Are monthly admin costs standard, now?

metaphoria
19-09-2008, 20:08
To answer the question, share ownership is perfectly ethical as long as by buying the shares, you're not encouraging the firm to do something unethical.
And if the company is doing something unethical, becoming a part owner of the firm is a better way than most of getting them to change their habits.

Thanks Tricky.

sibon
19-09-2008, 20:17
9 per deal isn't bad. Are monthly admin costs standard, now?


Fidelity typically charge about 1.5% to invest and roughly the same as an annual charge. So it depends upon how much you want to invest. Buying funds is less risky than individual shares... and consequently, it is less rewarding.

Minimo
19-09-2008, 20:18
I think ordinary share dealing is acceptable, but hedge funds, futures and betting on share prices dropping is pure manipulation with only one goal - personal gain and is part of the terrible greed culture today. What on earth any one person wants with a billion plus pound fortune is beyond me. Its all part of this trophy wife, designer label, cosmetic surgery look-at-me I`m richer, better looking blah blah than you.
And you know what? They`re not happy are they because what they`ve got is never enough.
I`ve got just enough to be comfortable (hopefully) and I don`t aspire to anything else.
I know it wouldn`t do for everyone to be like me, people have to have dreams and aspirations, it`s just got out of control for some people and I don`t envy them one bit.

Cyclone
19-09-2008, 20:37
A hedge fund just buys opposing shares, ie such that when one drops the other is likely to rise, it's a way of balancing your position to minimise your risk.

Share dealing as a way of companies attracting outside investment seems perfectly valid to me. Shorting seems to be valid, but is very open to manipulation, but then so is the opposite (it has no name AFAIK, but it's what you normally want to happen).

Share dealing isn't an underlying part of the market crash at the moment, to pick it out as something that should be stopped is a) wrong, b) removes the primary means of investment in companies and a primary means of raising money for companies.

Grahame
20-09-2008, 07:40
Personally I would be against gambling on the grounds you can lose your money, and what are market traders in the stock market for except to get rich themselves at the expence of others, so look out would be my advice and put your money in the Co-Op bank which is supposed to be ethically based?

.

metaphoria
20-09-2008, 11:05
Fidelity typically charge about 1.5% to invest and roughly the same as an annual charge. So it depends upon how much you want to invest. Buying funds is less risky than individual shares... and consequently, it is less rewarding.

Less risky may be a better option during turbulent times, but even then-not completely risk-free. I'd guess they require commitment for a time-period, which takes away flexibility and control.

Still, I think this is an option for me.

Alien
20-09-2008, 11:27
Doesn't matter what you trade in. Isn't it the intention to gain from someone's loss?...By default any financial trading is amoral. That's why it's regulated.

metaphoria
20-09-2008, 11:27
A hedge fund just buys opposing shares, ie such that when one drops the other is likely to rise, it's a way of balancing your position to minimise your risk.

Share dealing as a way of companies attracting outside investment seems perfectly valid to me. Shorting seems to be valid, but is very open to manipulation, but then so is the opposite (it has no name AFAIK, but it's what you normally want to happen).

Share dealing isn't an underlying part of the market crash at the moment, to pick it out as something that should be stopped is a) wrong, b) removes the primary means of investment in companies and a primary means of raising money for companies.

I don't really understand how short-selling works, as I don't understand how profit can be made from stock price going down.

So, I'd probably better not go there.

metaphoria
20-09-2008, 11:34
I think ordinary share dealing is acceptable, but hedge funds, futures and betting on share prices dropping is pure manipulation with only one goal - personal gain and is part of the terrible greed culture today.

Are you saying that it's ethically OK to make profit from profit, but not from losses?

metaphoria
20-09-2008, 11:39
Personally I would be against gambling on the grounds you can lose your money, and what are market traders in the stock market for except to get rich themselves at the expence of others, so look out would be my advice and put your money in the Co-Op bank which is supposed to be ethically based?

.

A bank, is a bank, is a bank-isn't it?

Cyclone
20-09-2008, 14:45
I don't really understand how short-selling works, as I don't understand how profit can be made from stock price going down.

So, I'd probably better not go there.

I sell stock to you at the current price, stock that I don't own yet, but that I promise to deliver in say 24 hrs.
In 22 hrs when the price has fallen by 10% I buy the stock and deliver it to you. I've just made a 10% profit as you paid the price yesterday and I paid the price today.

Of course I could also loose out if the price went up.

Grahame
20-09-2008, 16:21
A bank, is a bank, is a bank-isn't it?

I once heard a talk on Radio four and was most impressed with the Co-Op ethics policy. This is from their web site and I would be interested to know if you can find better.

Our Ethical Policy statements in brief
13708 Ethical Statements In Brief.indd 1 25/3/08 16:47:43
Human rights
Through our investments, we seek to support the principles of the Universal Declaration of Human Rights. In line with this, we will not invest in:
• any government or business which fails to uphold basic human rights within its sphere of influence
• any business whose links to an oppressive regime are a continuing cause for concern.

The arms trade
We will not invest in any business involved in:
• the manufacture or transfer of armaments to oppressive regimes
• the manufacture of torture equipment or other equipment that is
used in the violation of human rights.

13708 Ethical Statements In Brief.indd 2 25/3/08 16:47:43
Corporate responsibility and global trade.
We advocate support for the Fundamental International Labour Organisation Conventions. In line with these, we will seek to support businesses which take a responsible position with regard to:
• fair trade
• labour rights in their own operations and through their supply chains in developing countries.

We will not support:
• irresponsible marketing practices in developing countries
• tobacco product manufacture
• currency speculation.

13708 Ethical Statements In Brief.indd 3 25/3/08 16:47:43
Genetic modification
We will not invest in businesses involved in the development of genetically modified organisms (GMOs), where, in particular, the following issues are evident:
• uncontrolled release of GMOs into the environment
• any negative impacts on developing countries; in particular, the imposition of ‘Terminator’ technologies
• patenting; in particular, of indigenous knowledge
• cloning; in particular, of animals for non-medical purposes.

Social enterprise
We will seek to support charities and the broad range of organisations nvolved in the Social Enterprise sector, including:
• co-operatives
• credit unions
• community finance initiatives.

13708 Ethical Statements In Brief.indd 4 25/3/08 16:47:43
Ecological impact
In line with the principles of our Ecological Mission Statement, we will not invest in any business whose core activity contributes to:
• global climate change, through the extraction or production of
fossil fuels
• the manufacture of chemicals which are persistent in the environment and linked to long term health concerns
• the unsustainable harvest of natural resources, including timber and fish. Furthermore, we will seek to support businesses involved in:
• recycling and sustainable waste management
• renewable energy and energy efficiency
• sustainable natural products and services, including timber and organic produce
• the pursuit of ecological sustainability.

13708 Ethical Statements In Brief.indd 5 25/3/08 16:47:43
Animal welfare
We will not invest in any business involved in:
• animal testing of cosmetic or household products or ingredients
• intensive farming methods, for example, caged egg production
• blood sports, which involve the use of animals or birds to catch, fight or kill each other
• the fur trade.
Furthermore, we will seek to support businesses involved in:
• the development of alternatives to animal experimentation
• farming methods which promote animal welfare, for example, free-range farming.

13708 Ethical Statements In Brief.indd 6 25/3/08 16:47:43
Want to know more?
For further information download the full guides at co‑operativebank.co.uk/ethics Animal welfare, Ecological impact, The arms trade, Genetic modification, Human rights, Global trade, Social enterprise.

The Co-operative Bank p.l.c., P.O. Box 101, 1 Balloon Street, Manchester M60 4EP. Registered in England and Wales No. 990937.
13708 Ethical Statements In Brief.indd 7 25/3/08 16:47:48

John
20-09-2008, 20:36
Share dealing as a way of companies attracting outside investment seems perfectly valid to me. Shorting seems to be valid, but is very open to manipulation, but then so is the opposite (it has no name AFAIK, but it's what you normally want to happen).

Problem with shorting is that most share holders have a nominee account in your broker's name. Your broker can effectively loan out your shares, the very company you've invested in for shorting purposes and you wouldn't know about it.

Opposite of shorting is called long.

Tricky
20-09-2008, 20:52
Doesn't matter what you trade in. Isn't it the intention to gain from someone's loss?...By default any financial trading is amoral. That's why it's regulated.

Does that mean buying a house is immoral?

metaphoria
20-09-2008, 22:24
I sell stock to you at the current price, stock that I don't own yet, but that I promise to deliver in say 24 hrs.
In 22 hrs when the price has fallen by 10% I buy the stock and deliver it to you. I've just made a 10% profit as you paid the price yesterday and I paid the price today.

Of course I could also loose out if the price went up.

So say you sold me stocks worth 1000, then the next day it's at a 10% loss, now worth 900. Why does that mean that you get 10% from selling to me. As I see it, I would have bought a losing stock, and you just sold a stock, that lost the next day-so how does that 10% end up in your pocket?

I paid 1000 to you, and you sold it to me for 900, 22 hours later-so I lose 10%, and all you did was sell a stock that wasn't worth as much as it was yesterday-but how does that mean you've 'made' 10%? All you've done, is prevent yourself from losing 10% (?)

Unless of course, you agree at 1000, that I pay to you. And you pay 900 to sell to me.

That means you are a middle-man between seller and buyer, taking advantage of a time-period, but who are the middle-men? Share dealing is moreorless instantaneous, and straight between buyer/seller isn't it?

And how could you sell to me stock that you don't own-if I buy it from you (and you don't own it) How can I possibly own it?

Hope this makes sense.

P.S. Saying "you" seems a bit personal and attacking, but I see you are trying to explain this in straight-forward terms (which I can understand and appreciate), and I'm just trying to follow that train of thought.

metaphoria
20-09-2008, 22:34
Grahame-there's no point in me quoting your response in full, as it's extremely detailed. I have to say that, it is of interest to me, and appreciate the time you've spent to forward that information. It's something that I'll certainly look into, with thanks.

Cyclone
20-09-2008, 22:34
Because you pay me 1000 and I buy them the next day for 900, so my profit is 100, or 10% of the price that you were charged.

I'm not sure about how it's legal for me to sell stock that I don't yet own, I guess google might help answer that, but the process is basically as I described.

metaphoria
20-09-2008, 22:40
Problem with shorting is that most share holders have a nominee account in your broker's name. Your broker can effectively loan out your shares, the very company you've invested in for shorting purposes and you wouldn't know about it.

Opposite of shorting is called long.

Nominee account-an account where the named holder, holds the assets in it, on behalf of another (the beneficiary).

Just thinking aloud here, to facilitate re-reading...

Question: what are execution-only brokers?