When I was very young our family always watched the 7pm news on the ABC.
Back then they would have a formal sports segment, with either Joe Brown, or his protégé Greg Miles, talking us through the 8 horse races of the day from Randwick, Sandown, Flemington, wherever, every week-night (or it seemed like it!).
Funny, our family used to watch this segment with interest. We weren’t gamblers at all, but it was entertaining. We watched Joe retire and a baby-faced Greg go bald over the years that followed and we never won or lost a cent!
Fast forward to now. We still watch the 7pm news, but now Greg & Joe have been replaced by Alan (Kohler), who goes through the 8 graphs of the day (or it seems like it!).
Other than our super funds, our family has no great connection to the stock market, but we watch with intrigue and It is also entertaining. Equally, we haven’t changed our investment habits.
So, why show it?
Do we really care about daily fluctuations in the US$, or the Hang Seng, or the Volatility Index? Is it productive information that builds compounding wisdom so that one day we will suddenly ‘bring home the bacon’?
More importantly, does it help our growing anxiety about how helpless we seem to be in influencing any of this, or what it is going to mean to us?
Or, is it just flotsam and jetsam cast overboard from a narrow view of the world. A financial world. Like horse racing. Great if you work or play every day in it. Otherwise…. I’m not so sure.
But, the effect has been, undeniably, short-termism.
No more Mums and Dads patiently parking their hard earned in blue chippers and waiting for retirement.
Now we have professional funds managers who are incentivised extremely well to drive returns for their members. It’s become a highly competitive 100 metre dash to get returns, by hook or otherwise. Bugger waiting patiently, they now trade by the minute; short selling; speculating on futures; putting massive pressure on listed companies to come up with news that will excite or placate the ‘market’.
And that’s the biggest problem as I see it. The stock market news cycle. A CEO resigns, a new strategy announced, mass redundancies, significant hiring’s, day in day out. Shares up 5, down 8. On and on it goes.
Remember Alan Kohler saying, with heightened eyebrows, ‘Buy on the rumour, sell on the fact’? Or, 'I’m just not sure what that all means?'. Irony and Alan could be relatives…
What if, in that segment or some of it, Alan showed how businesses were really contributing, constructively, tangibly, to society. Highlighting those that go above and beyond a narrow financial focus to move us forward as individuals, as communities, as a globe?
We know some are already excelling and more are looking to. Wouldn’t that be worth watching. We mightn’t all be gamblers, or stock market junkies, but we all hold shares in our future, so let’s celebrate a broader interpretation of ‘they’re paying great dividends’.
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