| June 3, 2014 | | | | |  | | | One Devil You Might Want to Deal With | | | - A reader story: "I am 55 years old. I have no job and no investment capital, all precisely because of the way I thought. I lost all my money thinking I was investing in what was right morally, instead of what was the best investment"...
- It's an example of doing badly by "doing good." There are plays that can earn you fat returns of 50%, 80% or 225% if you can check your political notions at the door. Another reader disagrees wholeheartedly and tells us why...
- Then, part deux of Bill Bonner's 2007 classique on individual action and how things in the world are really affected. Instead of fretting over technical arguments about whether your stock portfolio is helping to promote the things you want, read Bill's essay and learn the real way you can go about affecting change...
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June 3, 2014
 Peter Coyne, with a real-life example of doing badly by doing good...
"Peter and Bill… you nailed it," writes a reader to kick off today's episode. "Your reckoning yesterday perfectly describes my current situation." Here's how he explained it: "I am 55 years old. I have no job and no investment capital, all precisely because of the way I thought. I lost all my money thinking I was investing in what was right morally, instead of what was the best investment. Had I invested like you said, I'd be doing well today! Instead, at my age, I cannot find a job that pays here in California. "Even if I did, it would not be enough to get ahead of cost of living. My business failed in 2006. I attempted another business during the crash. That failed too. "I recently reflected just the same idea of doing good or bad in the name of morality. My conclusion was I would not be eating Oscar Mayer wieners each day if I had bought alongside the big boys who own and move the (rigged) market, morality aside. "I now have to get a job in a Texas oil patch and bust my f**king ass for two-three years. Every penny I save will be going to the Hard Assets Alliance until I have enough to start another business in Central or South America. I'd like to start an online sales company, take advantage of foreign-earned income, marry a gorgeous Brazilian I've met and dump my POS citizenship for a whole new life." Sadly, this is an example of doing badly by doing good. It's one of the three basic philosophies you have to choose from in order to successfully meet your investment goals: 1) Doing badly by "doing good"
2) Doing well by doing bad or… 3) Doing well by doing good Let's stick with the first again today… and get to the other two tomorrow... Doing badly by doing good -- is when you say, "No, thanks," to big investment returns (hence, doing badly) from sectors you find morally questionable, like the military-industrial complex… the fracking industry… or maybe even fast-food companies, depending on your logic. As specific examples, we highlighted MarkWest Energy (NYSE: MWE) and the iShares Aerospace and Defense ETF (NYSE: ITA) yesterday. We know from reading reckoners' emails that some feel squeamish gaining from these sectors. But they have returned 225% and 80%, respectively, since our editors recommended them to readers. (We believe they have some room to run, too, if you want to investigate them further.) And we see nothing wrong with dispassionately cashing in on plays like them. Consider another example -- multinational agro-biotech monstrosity Monsanto (NYSE: MON). Talk about a bunch of crony capitalist bastards. | We know from reading reckoners' emails that some feel squeamish gaining from these sectors. | Pick what you despise most about them: producing Agent Orange used in Vietnam? Peddling genetically modified organisms or "Frankenfood"? Pesticides? The declining bee and butterfly populations? The way they wine and dine politicians to continue lapping from the public trough? So be it. But why let any of that stop you from investing in it? One has nothing to do with the other. One of our experts thinks MON could head 50% higher in the next year due to demographics, demand for corn and new projects underway. Perhaps you should check it out. And guess what? It heading higher will have had nothing to do you with you, the individual investor, buying in. So don't worry about "being complicit" in their dirty work or "being associated" with them. That's BS. "I'm not 'trying to change the world' by not buying stock in companies that commit criminal acts and poison kids," rebuts a regular reader that we quoted yesterday... "I just don't want to be associated with criminals and lowlifes, because nothing is more important in life and business than associating with people of integrity and good character.
"It's not as if one has to invest in the companies you mention to make money. Last time I checked, there were thousands of listed stocks. Your argument is like saying, unless you affiliate with the Mafia, you can't make money in 'business.' That's nonsense. There are plenty of legitimate, honorable and profitable businesses you can take a stake in... and I do.
"You guys rail against the corporatist state, rightly so, and then rush to become its partner and feed at the trough yourselves. That doesn't strike you as hypocritical? If you can't beat 'em, join 'em.
"There is a middle ground, though. I don't expect to beat them. Been there, done that. But I sure as hell don't want to join them by being a shareholder, i.e., part-owner. So I simply cross them off my list. I make a conscious choice to own and support only those businesses that behave in a commendable fashion.
"The harm done is when you buy their shares. You not only condone what they do; you encourage them to do more of it. Raytheon, for example, has to make more drones and lobby for more killings in order to satisfy you, the shareholder, with increased earnings. Ditto peddling Happy Meals to kids. The result? More suffering and death, with you as a partner. Don't make deals with the devil. He always wins. "And this subjects me to a lecture about how curmudgeonly, stubborn or pigheaded I am? "I'm tempted to say, fold it six ways and put it where the moon don't shine, but that wouldn't be very nice. No hard feelings… I'd just like to think we could count on the DR to uphold truth, justice and the American way. "I'll give you this, though: Whether it's crazy or not, you don't shy away from presenting the counterarguments." Thanks -- we respect your opinion. We don't buy your earnings argument, though. Companies try to increase earnings either way -- trading shares doesn't affect that. By buying a company's stock, you don't condone what that company does. You condone someone else buying those shares from you at a higher price later. No crime there. You're right, however, that the Monsantos and Raytheons of the world are hardly the only investments out there. We get that (in fact, we recommend peeking at these five Silicon Valley plays if you have a moment). Our point is that by virtue of their connections, they have an advantage over other businesses that stake it out on their own. Namely, they have the backing of government in some form -- whether it be subsidies, guarantees, contracts or the power to affect laws that govern them. That often means they can generate better, more stable and foreseeable returns for you as an investor. [Ed. note: That's the driving principle behind our popular investment presentation: "Leaked: The Investment Blueprint Inside the Pentagon's Black Budget."]
"These pages are so entertaining," writes a third reader, no doubt grinning from the sidelines, "as well as very informative. I cannot wait to peruse them each day and be entertained by the reader comments always taking you to task for something." Heh… c'est la vie… We'll pass it back over to Bill for part deux of his 2007 classique now. Below, he'll tell you the inspiring story of a shepherd who took it upon himself to restore a forest on his own, armed with a bag of acorns and some determination. Read on… and write in with your thoughts. Tomorrow, we'll stir the pot by helping you consider whether you should become a criminal (no joke). We call it doing well by doing bad. Be sure to open our email and tune in... | | | | | | | | | Secret Wealth-Builder of America's Richest People
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Click here to learn the secret. | | | | | | | | | The Daily Reckoning Presents... Yesterday, in part one of his 2007 classique, Bill wrote that "real heroes do what they can to improve the world around them." Today, he picks up where he left off -- telling the story of a man who took action to impact what was within his control. We've been talking this week about generating the greatest investment returns, instead of worrying about making political statements with your portfolio. But we should add that investing is a means, and the actions you take with your money are the ends. Between Peter's lead and Bill's essay, hopefully, you'll be able to decide for yourself how the two pieces fit together. What you do outside of these pages is your decision. Read on for some helpful guidance... ****************************** | | | | The "Justes" and the Good: More Real Heroes Part II | | | | by Bill Bonner | | | |  It is a small and thankless matter to plant a tree. Oaks, for example, usually grow so slowly that the planter rarely lives to see them in graceful maturity. Still, people plant trees.
Jean Giono tells the story of a man who – for no reasons but his own – began planting oak trees in the South of France. "About forty years ago I was taking a long trip on foot over mountain heights quite unknown to tourists in that ancient region where the Alps thrust down into Provence. All this, at the time I embarked upon my long walk through these deserted regions, was barren and colourless land. Nothing grew there but wild lavender." There were few trees and fewer men in that desolate area. But a solitary shepherd had an idea. He began carrying with him a bag of acorns and a heavy iron rod. As he tended his sheep, he poked the iron bar into the ground and dropped an acorn into the hole. This he did for decades. There was no re-forestry program. There were no government grants. There were no parks commissions, no botanists, no taxes, no fees. There was just a lone shepherd, aged 55. Mr. Giono met him before World War I. | The area had been rich in grass and trees…animals…and human beings. | His name was Elzeard Bouffier. He had only the company of his sheep and his dog. He had never studied environmental science, nor perhaps ever even gone to school. But he could see that the land had changed since his youth. The area had been rich in grass and trees…animals…and human beings. You could tell because whoever had once lived there had left behind their stone houses on the hillsides. They had apparently overgrazed the grass and overworked the land. Worst of all, they had over-cut the forests that once grew there. Of the twisted oaks that used to provide shade and hold the moisture close to the ground…only a few remained. Bouffier asked no one's permission. He put no issues or referendums on the ballot. He rallied no citizens and spoke to no town meetings. As far as we know his name never appeared in the paper – until after he was dead. But he went about the work that he had taken up himself…with no pay, no thanks, and not even any notice. He planted thousands of oak trees, many of which died at first. And for the rest too, progress was as slow as an oak. But gradually, more and more took root. And each one provided more shade…more moisture…and a more hospitable place for other life to take root. Animals returned…and then hunters…and then game wardens. "In 1933 [Bouffier] received a visit from a forest ranger who notified him of an order against lighting fires out of doors for fear of endangering the growth of this natural forest," Giono reported. "It was the first time, the man told him naively, that he had ever heard of a forest growing of its own accord. At that time Bouffier was about to plant beeches at a spot some twelve kilometers from his cottage. In order to avoid traveling back and forth – for he was then seventy-five – he planned to build a stone cabin right at the plantation. The next year he did so." The re-growth of the 'natural forest,' was a wonder to everyone. In 1935 a government delegation came to examine it. They didn't know what to make of it. They merely placed it under government protection. | | | | | | |
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 Watch THIS Now >> | | | | | | | | By now the oaks were 20 to 25 feet tall. The slopes were covered with them. And the old man was still at work, planting his stealth forest. "I remembered how the land had looked in 1913," Giono wrote. "A desert…[but] Peaceful, regular toil, the vigorous mountain air, frugality and, above all, serenity in the spirit had endowed this old man with awe-inspiring health. He was one of God's athletes. I wondered how many more acres he was going to cover with trees." By 1945, another war had passed. Bouffier was 87 years old and still at it. He had spent the second war as he had spent the first one. While millions of armed men tried to improve the world by killing each other, the good shepherd continued to improve his world. And in the process he improved ours. "In 1913 this hamlet of ten or twelve houses had three inhabitants. They had been savage creatures, hating one another, living by trapping game, little removed, physically and morally, from the conditions of prehistoric man. All about them nettles were feeding upon the remains of abandoned houses. Their condition had been beyond hope. For them, nothing but to await death – a situation which rarely predisposes to virtue. | "On the site of the ruins I had seen in 1913 now stand neat farms, cleanly plastered" | "[Now] everything was changed. Even the air. Instead of the harsh dry winds that used to attack me, a gentle breeze was blowing, laden with scents. A sound like water came from the mountains; it was the wind in the forest; most amazing of all, I heard the actual sound of water falling into a pool. I saw that a fountain had been built, that it flowed freely and – what touched me most – that someone had planted a linden beside it, a linden that must have been four years old, already in full leaf, the incontestable symbol of resurrection. "On the site of the ruins I had seen in 1913 now stand neat farms, cleanly plastered, testifying to a happy and comfortable life. The old streams, fed by the rains and snows that the forest conserves, are flowing again. Their waters have been channeled. On each farm, in groves of maples, fountain pools overflow on to carpets of fresh mint. Little by little the villages have been rebuilt. People from the plains, where land is costly, have settled here, bringing youth, motion, the spirit of adventure. Along the roads you meet hearty men and women, boys and girls who understand laughter and have recovered a taste for picnics. Counting the former population, unrecognizable now that they live in comfort, more than 10,000 people owe their happiness to Elzeard Bouffier. "When I reflect that one man, armed only with his own physical and moral resources, was able to cause this land of Canaan to spring from the wasteland, I am convinced that, in spite of everything, humanity is admirable. But when I compute the unfailing greatness of spirit and the tenacity of benevolence that it must have taken to achieve this result, I am taken with an immense respect for that old and unlearned peasant who was able to complete a work worthy of God. "Elzeard Bouffier died peacefully in 1947 at the hospice in Banon." R.I.P. Regards, Bill Bonner
for The Daily Reckoning
2007 | | | | | | | | |  Bill Bonner is the founder of Agora Inc. and cofounder of The Daily Reckoning. He is also a three-time New York Times best selling author. | | | | | | | | | BE SURE TO ADD dr@dailyreckoning.com to your address book.
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