Monday, 27 August 2012

Has Bad Debt Killed Market-Cap Weighted Mutual Funds?

Has Bad Debt Killed Market-Cap Weighted Mutual Funds?

Wednesday, 8 August 2012

In pursuit of happiness

Newsletter from Atlantic Asset Management:

Aristotle was a giant amongst philosophers. The Organon, his collected works on logic, served as the foundation in the field for over a thousand years! His ideas covering vast tracts of the human knowledge base in physics and biology, although somewhat flawed, also helped mankind to gain an understanding that would be broadened at a later stage. This all from a man who lived in the period of 384 BC to 322 BC. The world was certainly a better place for him having lived amongst mankind. His views on ethics are also no exception to his multitude of achievements, and in particular, his essay, the Nichomachean Ethics provides an argument as to why happiness is the greatest good we can pursue.

His arguments start with the explanation that all actions are aimed at achieving some goal, and in addition, all goals are desired in order to fulfill other goals. So he would argue then that getting a job is an action with the goal of getting money, which in turn is desired in order to achieve or buy something else. His idea then is that ultimately there is a goal to which all actions are aimed, since without that ultimate aim all actions would be meaningless. As an aside, Viktor Frankl explores this further in his magnificent work “Man’s Search for Meaning.” Frankl’s advice is to : “Live as if you were living a second time, and as though you had acted wrongly the first time.”

At a time when ethics are being questioned across broad swathes of human society and economy, and we search for a path that will lead us away from the crisis that we experience at present, we can go back to the basics of understanding what it is that drives us forward. So if Aristotle was right, and we are all ultimately seeking happiness, that would appear to be a good thing. But it cannot be the only thing. Adam Smith, the author of the legendary “Wealth of Nations” is well known as the supposed founder of free market economics – the laissez-faire style of doing business. We seem then to have forgotten that it is this basis of market economics that has gotten us into so much trouble. Contrary to what one may believe, Smith saw a distinct role for government – that they should for example provide public works such as roads and bridges. (And importantly for us here in South Africa, at this present time, he believed that the users of such public works should pay for such public works in proportion to their use. Toll roads anyone?)

So the lesson we should learn here is that we exist as humans seeking happiness, which is an emotion we experience. That in turn is a means to motivate us to perform actions that enhance our chances of living. So we understand then that our chances of living are enhanced not by destroying others, but in fact by enhancing other humans’ chances of living. This then, is the return to a sense of ethics, and a return to a greater good, that becomes paramount in how we live, act and work. It also means that complete happiness cannot be attained by merely pursuing whatever individual goals one happens to have at any particular moment, but must be attained by bringing one’s individual goals in line with human beings' unique requirements for survival.

The greed and corruption that we spoke of in the past 2 weeks then, in our musings on plagues, falls fully in our sights as far as a call back to the Aristotelian pursuit of happiness is concerned.

So dear reader, whilst you may seek money, seek also happiness in the happiness of others, and be not greedy in your search for happy (investment) returns!