Investment in stock market

General discussion of issues related to Theravada Training of Sila, the Five Precepts (Pañcasikkhāpada), and Eightfold Ethical Conduct (Aṭṭhasīla).

Investment in stock market

Postby barcsimalsi » Fri May 31, 2013 12:07 pm

The more i practice the dhamma the more i don't feel like working, and business became quite a phobia to me. I'm not young anymore and was planning to use my savings to invest in stock market as a mean to maintain a simple single laylife.

Reading from Islamic teaching which is expected to be "ban the hell out of it", it is surprising that such kind of investment is allow but not without the admonition of buy only from companies trading halal stuff.

Now, what buddhist think about this? Is it consider gambling? Is it ok to buy share of companies conducting wrong livelihood like Carlsberg Group?
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Re: Investment in stock market

Postby David N. Snyder » Fri May 31, 2013 4:29 pm

By purchasing shares, you are owning a tiny fraction of that company, so it is not entirely gambling, especially if it is for the long-term investment. And yes, I would avoid those companies that engage in wrong livelihood, but that's about it.

But be careful! Many have lost fortunes in the stock market.
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Re: Investment in stock market

Postby Sekha » Fri May 31, 2013 5:23 pm

There's nothing wrong in doing business per se. But since it is business men who shape the world today, they have a very heavy responsibility on their shoulders.

I think I would go by this very simple guideline: whatever happens, never harm others, even if that means making much less money.
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Re: Investment in stock market

Postby barcsimalsi » Sat Jun 01, 2013 3:30 am

Thanks for the advice David and Sekha.
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Re: Investment in stock market

Postby Ben » Sat Jun 01, 2013 4:52 am

There's nothing wrong with investing in the stock market. The only proviso is to try to invest in those companies that are engaged in right livelihood.
kind regards,

Ben
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Re: Investment in stock market

Postby BlackBird » Sat Jun 01, 2013 5:00 am

In fact, if you use your money to invest in eco friendly businesses, you're actually doing something positive :)
"For a disciple who has conviction in the Teacher's message & lives to penetrate it, what accords with the Dhamma is this:
'The Blessed One is the Teacher, I am a disciple. He is the one who knows, not I." - MN. 70 Kitagiri Sutta
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Re: Investment in stock market

Postby Kim OHara » Sat Jun 01, 2013 5:57 am

Ben wrote:There's nothing wrong with investing in the stock market. The only proviso is to try to invest in those companies that are engaged in right livelihood.
kind regards,

Ben

BlackBird wrote:In fact, if you use your money to invest in eco friendly businesses, you're actually doing something positive :)


:twothumbsup:

There are various sets of guidelines for this sort of thing, since (as usual) others have been there before us.
Try "ethical investing" (results of a search on this term will include lots of fund management companies ... don't belief all they say, even if they are the (relatively) good guys!) and "triple bottom line" :
http://en.wikipedia.org/wiki/Socially_responsible_investing
http://www.economist.com/node/14301663

:namaste:
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Re: Investment in stock market

Postby barcsimalsi » Sat Jun 01, 2013 12:53 pm

Thank you for the guides everyone.
Another question, what if i don't actually own the shares of the "bad company" but rather paying to the buying call options strategy?
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Re: Investment in stock market

Postby Ben » Sat Jun 01, 2013 1:16 pm

Derivatives are a form of investment, albeit high risk, but still an investment.
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Re: Investment in stock market

Postby Mr Man » Sat Jun 01, 2013 1:45 pm

In my opinion if you are "playing" the stock market it is gambling. Buying call options is gambling.
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Re: Investment in stock market

Postby Schaublin » Sat Jun 01, 2013 10:15 pm

barcsimalsi wrote:The more i practice the dhamma the more i don't feel like working, and business became quite a phobia to me. I'm not young anymore and was planning to use my savings to invest in stock market as a mean to maintain a simple single laylife.

Reading from Islamic teaching which is expected to be "ban the hell out of it", it is surprising that such kind of investment is allow but not without the admonition of buy only from companies trading halal stuff.

Now, what buddhist think about this? Is it consider gambling? Is it ok to buy share of companies conducting wrong livelihood like Carlsberg Group?


The Stock Market is (and has been for some years now), a completely manipulated farce. Small investors almost always lose - that is their role in the market.

"Savings" if denominated in a fiat currency which is being debased in an unsustainable way, is no savings at all.

Gold is the only money without counter-party risk and has seen many empires, political systems and paper currencies come and go. This fact is rapidly being grasped, and acted upon by countless millions in the East.
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Re: Investment in stock market

Postby barcsimalsi » Sun Jun 02, 2013 11:53 am

Mr Man wrote:In my opinion if you are "playing" the stock market it is gambling.

Can you define what you mean by "playing" or "not playing"?

From my understanding, the main objective of buying shares is as simple as starting a business with the principle of gaining profits by buying stocks/goods at low value and sell them at higher value. The difference is the rising value of a stock has no limit.

Sometimes i think it makes sense too to say that to start a business with a capital is like gambling. Perhaps i had a confusion of the meaning of investment and gambling. :rolleye:
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Re: Investment in stock market

Postby barcsimalsi » Sun Jun 02, 2013 12:07 pm

Schaublin wrote:Gold is the only money without counter-party risk and has seen many empires, political systems and paper currencies come and go. This fact is rapidly being grasped, and acted upon by countless millions in the East.

Thanks for the suggestion, i have no experience in neither gold nor stock investment.

Folks, is this bias?
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Re: Investment in stock market

Postby Schaublin » Sun Jun 02, 2013 1:48 pm

have a look here http://srsroccoreport.com/the-greatest- ... us-metals/

In the article, Evidence that Oil Limits are Leading to Declining Economic Growth, Tverberg states that the real down-trend of global GDP growth may indeed be understated. This is due to countries understating true inflation rates as well as adding increasing amounts of debt.
Image

As the world’s global oil supply peaks and starts to decline, global GDP growth will turn negative putting more pressure on all the trillions of dollars of global conventional assets under management described in the beginning of the article.

All systems need energy for growth. The debt based fiat money architecture needs growth in order to service the debt that was issued. Central Bank printing (QE) has filled the hole left by lack of borrowing since 2008. That system is broken and cannot be fixed.

Gold should not be seen as an "investment", it is not - it pays no dividends but it does what it always has, preserves purchasing power through time
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Re: Investment in stock market

Postby Kim OHara » Sun Jun 02, 2013 11:13 pm

Schaublin wrote:have a look here ...
Gold should not be seen as an "investment", it is not - it pays no dividends but it does what it always has, preserves purchasing power through time

Schaublin, you have pulled the thread off-topic - unintentionally, I'm sure, but it would be good to get back back to the the ethics of investing. Just one thing before we do: Tverberg is smart but one-eyed (oil-mad) so she is misleading.
Barcimalsi, can I suggest that asking a random bunch of Buddhists about investment strategies is about as usual as asking a random bunch of financial planners about Buddhism :tongue: and that you would be better off asking that sort of thing elsewhere? I'm sure there are forums on the subject, and of course there are professionals intent on enriching themselves by convincing you they can enrich you ... :juggling:

Now ... :focus: if there is more to be said on it.

:namaste:
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Re: Investment in stock market

Postby barcsimalsi » Mon Jun 03, 2013 4:00 am

Kim O'Hara wrote:Barcimalsi, can I suggest that asking a random bunch of Buddhists about investment strategies is about as usual as asking a random bunch of financial planners about Buddhism :tongue: and that you would be better off asking that sort of thing elsewhere? I'm sure there are forums on the subject, and of course there are professionals intent on enriching themselves by convincing you they can enrich you ... :juggling:

Now ... :focus: if there is more to be said on it.

:namaste:
Kim

No problem with that, thanks.
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Re: Investment in stock market

Postby Mr Man » Mon Jun 03, 2013 6:57 am

barcsimalsi wrote:
Mr Man wrote:In my opinion if you are "playing" the stock market it is gambling.

Can you define what you mean by "playing" or "not playing"?

From my understanding, the main objective of buying shares is as simple as starting a business with the principle of gaining profits by buying stocks/goods at low value and sell them at higher value. The difference is the rising value of a stock has no limit.

Sometimes i think it makes sense too to say that to start a business with a capital is like gambling. Perhaps i had a confusion of the meaning of investment and gambling. :rolleye:


It is difficult (for me) to define precisely because the risk element is always there with investment. I think the degree of recklessness, which isn't always immediately apparent, involved and our attitude towards the investment are indicators + motivation.
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Re: Investment in stock market

Postby Schaublin » Mon Jun 03, 2013 4:58 pm

Kim O'Hara wrote:
Schaublin wrote:have a look here ...
Gold should not be seen as an "investment", it is not - it pays no dividends but it does what it always has, preserves purchasing power through time

Schaublin, you have pulled the thread off-topic - unintentionally, I'm sure, but it would be good to get back back to the the ethics of investing. Just one thing before we do: Tverberg is smart but one-eyed (oil-mad) so she is misleading.
Barcimalsi, can I suggest that asking a random bunch of Buddhists about investment strategies is about as usual as asking a random bunch of financial planners about Buddhism :tongue: and that you would be better off asking that sort of thing elsewhere? I'm sure there are forums on the subject, and of course there are professionals intent on enriching themselves by convincing you they can enrich you ... :juggling:

Now ... :focus: if there is more to be said on it.

:namaste:
Kim


Yes, sorry about that.

On topic:

Unless one is able to directly provide for oneself, it is impossible to avoid using the debt based fiat system. So, irrespective of the wholesomeness of any commercial activity, participating in usury (which is what the current system is based on ) is unavoidable. I know this opinion may seem extreme but if one goes down the rabbit hole far enough, one has to accept what one finds.

Usury is predation.
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Re: Investment in stock market

Postby barcsimalsi » Tue Jun 04, 2013 12:50 pm

An article about distinguishing investing and gambling.
http://www.investorguide.com/article/12 ... investing/
So what’s my resolution to this definition conundrum? Well, the purpose of words is to communicate concepts. So it doesn’t really matter what definitions you use, as long as you and the person(s) you’re communicating with are clear about what is meant by those words. And even more importantly, as long as you know what you’re doing, investing or gambling, before you do it.

But with that said, it would be beneficial if everyone could agree on what the terms mean, so we don’t need to make our definitions explicit every time we want to use them. To this end, I offer the following definitions, which are built from the various characterizations in the above section:
Investing:

“Any activity in which money is put at risk for the purpose of making a profit, and which is characterized by some or most of the following (in approximately descending order of importance): sufficient research has been conducted; the odds are favorable; the behavior is risk-averse; a systematic approach is being taken; emotions such as greed and fear play no role; the activity is ongoing and done as part of a long-term plan; the activity is not motivated solely by entertainment or compulsion; ownership of something tangible is involved; a net positive economic effect results.”

Gambling:

“Any activity in which money is put at risk for the purpose of making a profit, and which is characterized by some or most of the following (in approximately descending order of importance): little or no research has been conducted; the odds are unfavorable; the behavior is risk-seeking; an unsystematic approach is being taken; emotions such as greed and fear play a role; the activity is a discrete event or series of discrete events not done as part of a long-term plan; the activity is significantly motivated by entertainment or compulsion; ownership of something tangible is not involved; no net economic effect results.”

Though it isn't accurate, it points out every possible aspects on the subject.

Sigalovada Sutta:
"There are, young householder, these six evil consequences in indulging in gambling:
(i) the winner begets hate, (ii) the loser grieves for lost wealth, (iii) loss of wealth, (iv) his word is not relied upon in a court of law, (v) he is despised by his friends and associates, (vi) he is not sought after for matrimony; for people would say he is a gambler and is not fit to look after a wife.

Besides the second and third, the consequences of investment does not really comply to the Buddha's warning of gambling so i think this is how buddhists distinguish investing from gambling.
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Re: Investment in stock market

Postby puppha » Mon Jun 10, 2013 2:47 pm

Hi Barcsimalsi,

barcsimalsi wrote:Thank you for the guides everyone.
Another question, what if i don't actually own the shares of the "bad company" but rather paying to the buying call options strategy?


If you trade your job for stock gambling, you are likely to lose your sleep and significant amounts of money.

If you want to invest to provide your some income, invest in big blue-chip companies that pay good dividends with a low P/E ratio (less than 15 is good generally speaking).
Rationale:
- big blue-chip => less chance to go bust
- pay good dividends => less chance they cook the books + this is your income
- low P/E => you don't overpay for what you get

Time horizon: you buy and never sell (unless the company gets into very significant troubles and you risk: dividends being cut and/or permanent loss of capital). Proceed slowly and cautiously. Don't look at the prices of your shares, just look at the dividends coming in.

If you want to do anything else, you need to get properly educated on investing and financial analysis.
Call-options, CFD, trying to find the next Microsoft/Google/Apple with 1000% share price increase in a year are an excellent way to lose money very fast. Don't believe you're smart when it comes to investing. You're dumb and accept it. Small investors who think they're smart do lose a lot of money. I am talking from experience, now I am very cautious with very decent results.

Good luck!

With Metta

PS: I am not qualified to give any advice, including everything posted in this email! Follow at your own risk!
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