What Is Your Investing Values' System

Like it or not, we all practice some sort of value system when we buy and sell shares, knowingly or otherwise. If you have no value system, then you are among a small group of people, your mantra would be: "As long as I can make money, then its my value system".

At the one extreme is Zero Value System, whereby anything goes, you don't care whether its syndicated ramping or the owner is a bastard, or anything, as long as you can buy and sell at a profit, thats all that matters. Anything beyond that is superfluous to you.


Legality - This should be first level of screening. Most of us would not touch something even if it makes us money if its illegal, e.g. money laundering, Ponzi schemes, etc.


Religion - The most well known is the Shariah compliant investing, self explanatory, no harm industries. We may not see this is Asia but its popular in the US, Christian based funds. Generally, they stay away from porn, tobacco, liquor, gaming and firearms. There are also Catholic Funds, specifically, this means the fund never invests in companies involved in abortion or pornography, nor does it invest in any company that contributes to Planned Parenthood. The fund also screens out companies that offer nonmarital partner benefits. These funds certainly give a new meaning to the "value investing", or rather "values investing".

Green Values - So you may not be so religiously inclined, but you may feel strongly about investing in companies that "behaves properly" in terms of maintaining a sustainable ecosystem, minimal damage to the environment, green corporate philosophies, into renewable energies, promotes resource efficiencies, etc. 


Moralistic Fine Lines - Are you OK buying gaming companies, knowing full well that many families would have been wrecked by excessive gaming addiction, and these companies prey on these exact people to maintain their profits? How about if a a company operated brothels professionally, do you want to participate and support a company that reaps profits from "exploitation of the flesh"?


GLCs - Maybe this applies just to Malaysia, but Mr. Koon and I have the same "value system", we stay away from GLCs. This is because the whole structure of GLCs in Malaysia feeds mostly from patronage and contracts awardment. We have not seen a good display of management superiority or the ability to galvanise resources and advantages to move to the next level. So, generally we stay away from investing in GLCs.


Political - Obvious reasons. If you strongly political, you will not want to participate in the companies that benefit from the "ties and advantages" of being in bed with certain political heavyweights.

Syndicate Stocks - Most Malaysians have no qualms about touching syndicated stocks, they say that if they don't trade in them, there'd be nothing left to trade!!?? Then there are those who strongly abhor these stocks, by virtue of participating in them, you are akin to supporting their manipulative behaviour. Most Malaysians think this is a grey area or necessary evil, rather than a sinister behaviour.


Treatment of  Minority Interests - This one again eludes most Malaysians investors as an issue of concern. To me, this is a major concern. To cite examples, some may think that the privatisation and relisting of Bumi Armada  may have "over-trampled" on minority interests. Some would say the same for Felda Global Ventures. In my case, I won't be buying any of the two until I feel that MI has been properly treated. 


So, what is your personal investing values' system?

Posted in: Fiona Xie Wan Yu