Stocks, shares, morals and ethics

I have given some thought to my own morality and how this corresponds with how I would buy stocks and shares, I shall try to share these thoughts with you, but its around 4am when I'm writing this, so it could be a bit woo.

I used to have morals and stuff, or I thought I did, within my own smartie tube. Moral justification for my actions even when I was being a bit of cunt. But some time around 2003 it all got a bit blurry and I didn't give much thought to such things. But now I'm grasping around for some moral framework. Kropotkin and his mutual aid seems to be a bit unjudgemental, too evolutionary to be a moral framework. I feel more at home with Epictetus and his stoicism, "Men are disturbed not by things, but by the views which they take of them”, by not giving a shit, a shit is not given, or something.

Right now I'm reading Kant, his categorial imperitive sounds cool "Act only according to that maxim whereby you can, at the same time, will that it should become a universal law.".

I'm not sure how it corresponds but I'm quite ambivalent about tax avoidance, its legal but certain quarters frown on it. Tax evasion is illegal, down with that sort of thing. One of UKUncut's things about tax avoidance is that whilst its okay for individuals to have ISA to avoid paying personal taxes, when multi-national corporations do it for hundreds of millions of pounds, then its not okay. The categorical imperitive dictates that this is invalid, tax avoidance is either univerally okay or universally not okay. Maybe its a continuum fallacy, I dunno, I don't care either.

So just to err on the side of caution, I'm going to give the tax avoiding benefits of ISAs a miss and pay full tax on any savings, and be damned. Its the sort of thing that The Man Who Hates Fun would do.

However, that still leaves me trying find something to do with the great piles of wealth I have accumulating around me. So on to stocks and shares.

After reading some Guardian artical on ethical investing, I don't think I trust other people's judgement on what's an ethical investment or not. Is investing in guns and nuclear power bad, but investing in tax avoiding companies good? Is investing in human trafficing bad, but in RyanAir good? I'm not sure.

However, whilst I'm uncertain about investing ethically, I'm absolutely certain that in terms of spending my ethics are the greatest, I know how to spend my money better than anyone else, the more money I have to spend, the better the world will be, on my terms, by my own morals whatever they be. Other people could disagree with that, but then, that's just them saying their morality is superior to mine.

Anyhoo, given that ethically the more money I have to spend, the better, then the return on investment of my investments is more important than the morality of the companies I invest in.

For example, if I buy shares in British American Tobacco, who've been steadily delivering 25% year on year for the past ten years then that is a morally good investment. BATS make their money from willing customers willingly buying their tobacco products, they don't make money out of me buying their shares, I make money out of them. Other people could own their shares, but then other people would be getting that 25% year on year and then possibly spending it in ways that aren't as ethical as me.

On the other hand, shares in QinetiQ, the global defence company, who make weapons that kill people, have given a relatively crap return on investment over the past five years, in fact their price is 40% down over five years. Regardless of whether they sell weapons, they are a morally bad investment.

Of course, all of this is hopelessly naive. I know little about morals, or the difference between morals and ethics. And also, I'm not too good at stocks and shares.

Shares and Stuff: My top tips

Its been a month since I started wading in the murky depths of buying shares, and to date I've made a loss of about £40. As I said before, I bought about £250's worth each of Royal Bank of Scotland(LON:RBS), Kenmare (LON:KMR) and Halfords (LON:HFD) shares

The other week I sold the RBS and Kenmare cos they were looking shite. The taxpayer subsidized banking sector is doing down the swannie, with Lloyds giving up on some court case and now having to set aside £3billion to pay as compensation to folk who they'd mis-sold insurance to. Bear in mind that Lloyds don't have £3billion, its all taxpayers money, they're just moving it from one bunch of taxpayers to another. RBS will have to do the same. They're all just a load of shite. And Kenmare, they announced that all was going well and the prices of their products is going up, but that didn't affect their share price. So both RBS and Kenmare are about 42p a share now, compared to the 45p I bought them at.

Halfords is a bit of a success story, if only I'd just bought shares in Halfords. They're up about 11% in the month I've had them, so that's earned me back the commission fee and then some. I'm going to keep hold of Halfords for the summer.

But could I be doing better?

Sure, the housing market. I'm not quite in a position to but a house right now, I still need to make a my fortune with shares, but housing is where its at. Take a look at RightMove, the property website (LON:RMV) and Savills, the estate agents and property management people (LON:SVS). They've done pretty well over the past month compared to my benchmark Halfords.

And check out the past six months. Yeah, I think RightMove is my next big investment opportunity for shares and stuff. Over the past twelve months they've gone up 59%. Compare that to 3.3% return you'd get for a decent ISA, your money could be earning twenty times as much if you want to take the risk.

Shares and Stuff: A brief introduction

Yeah, so right, cos I'm all grown up now, I thought I'd invest some of my wealth in the stock market, or slightly more specifically, buying shares.

It was a rather pleasant surprise to find that the HSBC, who I've banked with for a number of years, have a share investy account thing which is really easy to set up. Just a few clickety clicks and a patient wait for the paperwork to go through, and I have an InvestDirect sharedealing account. This would enable me to buy and sell shares.

Now all I had to do was find some share to buy.

I've found that the easiest way to find companies to invest in and to track share prices is with Google Finance. To start with you search for companies, it tells you the share price and similar companies. What you want to do is find companies that you think are going to do well.

A brief sojourne...
Twenty or so years ago my mum was getting into the buying shares game and asked my advice, I suggested a company called Virtuality Group Plc, who in the early nineties pioneered virtual reality arcade games. I thought, this is the company of the future, Mother, invest now.

How could they fail? I mean, c'mon, VIRTUAL REALITY!! Sadly, they didn't become the new Microsoft, the new Nintendo, Apple or Google. And as home computer processing power increased, their products became pretty much pointless.

Sorry Mother, you asked the wrong twelve year old for stock market advice.

This time round I thought a bit less imaginatively, Royal Bank of Scotland (LON:RBS), for their shares fell about 95% in the credit crunch and subsequent government bailout, from almost £7.00 to 19p a share. Imagine if you had £10,000 tied up in them in 2007, that would be worth about £300, after the crash. You'd be ruined. But my thinking is that the company is much undervalued now, sure they were a bit over-priced before the crash, but their low price now is more a symptom of investors not wanting to touch them with a barge pole rather than an honest valuation of the company. Get the shares now whilst they're cheap, and give them a year or two and I reckon you'd easily recoup.

Another company that caught my eye was Halfords (LON:HFD), the bike and car parts superstore. We are in a recession, everyone's skint, but we still need summer holidays and the sun is shining. So, instead of jetting off to Malaga, folk are going to be driving to Mallaig. If I'm right then in the middle of the summer Halfords is going to be booming, and I could make a profit.

A third company is Kenmare (LON:KMR), they mine in Mozambique, and since May 2010, their shares have more quadrupled, going from 9p to 40p. £10,000 invested this time last year would be £40,000. I reckon they haven't peaked yet, and once their new mine starts churning out whatever magic metals they can find, then the sky's the limit.

So, I've bought myself shares in all these companies, only £250 in each, and the £12.95 commission on each transaction. But, I hear you ask, where do I get this money from? Well, I'm skint, so this money has come out of my overdraft. Its magic money plucked out of the air. But that's okay, its only if their value falls that anyone loses money.

A week passed. I got scared that Royal Bank of Scotland was going to crash again so I sold my share in them at a loss and bought more in Kenmare.

That was probably a mistake too, they were doing their annual salary negotiations with the workforce in Mozambique, and the workers went on strike and shut the mine down.

No matter, the weather's been good and Halfords shares have gone up by about 10% since I bought them. Wehay!