Radical Responsibility = Good for the USA

A few weeks ago, my brother Bobby (founder/chief cherry guy at Cherry Republic) and I were chasing our boys through the woods near Glen Arbor, Michigan, where we grew up. Bobby and his family live near his store in Glen Arbor, not too far from Mom and our childhood home. As we were playing “hide and seek,” Bobby stopped by an area where the trees had been blown down by the “storm of the century” this past August. He said, “You know, Paul, I’ve helped raise money and have worked with the park service and county officials to help clean up after this devastation.” He thoughtfully looked around and said, “We grew up here … and planting trees seems like the right thing to do. We have a responsibility.” 

M22May.png

I thought about “responsibility” a lot afterward, and I am fascinated by what motivates people to think and act beyond the “here and now.” What motivates someone to spend time in meetings to replant trees rather than watching Michigan vs. Purdue? Or more simply to invest resources today for returns that may not accrue to their families, communities and fellow earthlings until many years down the road.

Statistics show more and more that people are investing instead of spending. We are learning and gaining wisdom instead of merely being entertained (see page 2). In his book 7 Habits of Highly Effective People, Stephen R. Covey refers to building one’s own skills and staying current as “sharpening your saw.” College enrollment is robust despite the cost, continuing education is on the rise, and it seems we’re getting more responsible about our own and the world’s futures. I wonder if it’s due to DNA/nature or nurturing that motivates us to create a better future for ourselves, our families and others. Bobby is 54 years old, so planting trees that won’t mature for 50 years certainly isn’t about making things better for himself. Clients who wish to leave a legacy for their children, grandchildren and others after they are gone certainly are not engaging in a selfish pursuit. I wonder if responsibility is part habit … or perhaps perspective? The current perspective seems to be that we must take responsibility for our own well-being, but not in a selfish way that allows others to fall through the cracks. Rather, more like what I call being a “responsible citizen” – a person who feels responsible for himself/herself, family, friends, social networks, future generations and those less fortunate. This is a positive trend, and it is good for the stability of nations. Lately, when I hear political candidates speak, I hear a call toward responsibility. Forward-thinking, educated citizens are good for the nation, our future generations, our world and the global economy.

Perspective

Volkswagen has defrauded the world. Its employees lied, covered up and created a culture where misinformation was acceptable. Bringing this to light 10 years ago would have been much better than today as this fraud might destroy jobs, villages and a brand. Volkswagen employees’ behaviors were not what many would call “responsible.” Companies are not “people,” they are made up of people who have a moral code embedded in their DNA and who know right from wrong. Lying is wrong. Just because we see constant lying – in presidential debates, on talk radio and about one’s supposed 15-minute private meeting with the Pope – is not anchoring on a responsibility to truth. It is not helpful for society or the long-term sustainability of a society, business or family. The World Health Organization (WHO) recently brought to light an ingredient in the weed killer RoundUp (produced by the company Monsanto) that might cause cancer. Naturally, we do not yet know the truth, but I hope for the sake of our kids’ health that Monsanto did not hide evidence that RoundUp is carcinogenic.

At FIM Group, we try to get to the truth by assessing companies and looking for integrity and virtue in their employees and culture. We believe values matter (which is why we do not invest in Monsanto, Volkswagen or tobacco companies). Making value judgments is not easy because there are always shades of gray. We can rationalize almost any behavior, but it’s all about gathering perspective. I heat my home with natural gas, though it still pollutes. But it is cleaner than coal and fuel oil and not as smelly as my neighbor who heats with wood. I suspect many of my brother’s neighbors will be heating with wood this winter. They will make good use of the thousands of downed trees. But while burning the logs might not be perfect, it seems rational and proper, even responsible. But that is my perspective. Like all of us, my perspective is clouded by my life experiences, education and such, so to some, wood heat might be “fantastic,” while others might vilify anything but hydro power and wearing a wool sweater and gloves to bed on a cold Northern Michigan winter’s night.

 
CollegeEnrollment.png
USA Aging Population.png
 

Older and Wiser

All decisions are made with incomplete information about an uncertain future, but they must still be made responsibly with facts and the understanding to weigh the decision to likely end up successful. Lying about a product is not compromising, it is irresponsible. Lying is not a corporate thing, it’s an individual thing, made by people discussing how to “frame” something in a conference room. Hopefully, those who looked away, nodded their heads and went along as part of Volkswagen’s hoodwinking of consumers will learn a lesson that virtue and values matter. Others, learning from Volkswagen, will hopefully come to understand that honesty is the best policy.

Guns or Butter? Choices Decide Which Way We Go

As a society we can look at our current state of affairs in the U.S. and world and see nothing but problems. We can blame these problems on political parties (very popular today), or we can accept them and look at them as opportunities to learn, apply wisdom and act. The two front-running presidential candidates seem geared to act, which scares the status quo lovers and anyone who might have to give a little up. It’s good that we are embracing candidates who are about action. The older and wiser among us know that what will take place is a steady muddle-through of mistakes, miscalculations and some good ideas that take root toward what we call “progress.” Business will go on. And if we and businesses are taxed a bit more, no big deal. We will still use our cell phones and buy stuff. We will buy less stuff, but that is not the economy’s fault – we are aging, and we don’t need to outfit a new home. As always, we are migrating in ways that are causing booms and busts. Just look at Detroit, Los Angeles, Miami or Las Vegas home price gyrations to see the current trends. Our economy in some way will gain a resilience from the belt-tightening U.S. households are engaging in – and it should allow for more steady economic statistics once we get our bearings on what our priorities are … which basically is the natural tension of “guns or butter.” Today, it would be “big government defense vs. education, infrastructure, jobs and family well-being.” 

Wisdom Not Wasted 

For fun this month we have put two numbers on each of the employees’ photos on the front of this month’s newsletter. The first number represents years in the industry and the second represents years at FIM Group. I feel old thinking there will be a “40/30” on my photo. Thankfully, there’ll be everything in between, because a successful firm is built on diversity of experience, training, age and nurture/nature, a fact I am become more aware of in our Investment Committee meetings. 

Recently, a younger associate told me Facebook was “old-school” and that I should use Twitter, LinkedIn or other sites to stay connected to family and friends. I also still like to send old-fashioned handwritten postcards, notes and such. But Facebook is useful to me and our younger associates. I can tell Mom, family and friends all at once that my wife Amy is in Uganda, show the boys looking so distinguished as they go off to their first day of kindergarten and second grade in their St. Mary’s school uniforms, and see postings of the trees downed in Glen Arbor. 

A simple discussion about how we communicate turns quickly into a lively discussion for advertising companies leading to Google and Facebook about how we communicate and where advertising monies will go. I was recently told by an app creator that more money is spent on apps than on feature films, and that we spend more time on social media than watching TV (both stats have not been verified). That information is important, at least directionally, because how companies advertise, how we communicate and how we spend time all translates into how we will spend our resources, how we will make choices, etc. Companies that help us communicate and access each other through the Internet, for example, will prosper. On behalf of clients we have purchased directly Alphabet (Google), Tiso Black-star, CK Hutchison, TiVo and others through closed-end trusts in the entertainment, communication and advertising spaces. We see this as a good area of growth regardless of whether the economy is growing slow or fast. We also like healthcare, travel, energy, real estate, income securities and other areas that benefit from an aging population and slow growth. 

Perspective

The guy who fell off the Empire State Building and was heard to have said as he flew past the 17th floor, “So far so good,” had his perspective. And FIM Group’s team also has a collective perspective, which is why we try to be transparent and communicate the why, what and how of what we do, so clients feel informed and knowledgeable. Right now, for example, clients with taxable accounts will notice an increase in transactions as we take advantage of tax losses and allow Uncle Sam to share in the pain of any (hopefully temporary) losses. Perspectives are going to be different. The guest pastor at church last Sunday told a story about a young brother and sister who bought ice cream, and as the boy turned around from the counter, his cone brushed against a lady’s fancy fur coat. The young sister looked at him and said, “Now see what you have done ... you got fur in your ice cream!” Perspective is everything, and as we move into Thanksgiving time, my favorite holiday time of year, we wish to say to our clients – those full of wisdom, those full of youth and those in-between – thank you and happy holidays!