Let Me Show You My Virtue(s)
Why “Looking Good” pervades the social fabric today…
“In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.” — Benjamin Graham
“Temperament is also important. Independent thinking, emotional stability, and a keen understanding of both human and institutional behavior are vital to long-term investment success. I’ve seen a lot of very smart people who have lacked these virtues.” — Warren Buffet
What is Virtue exactly? What does this even mean?
Google Gods define Virtue as ‘behavior showing high moral standards’ or ‘quality considered morally good or desirable in a person.’ Aristotle provided a list of 12 virtues and these are as follows #
1) Courage — bravery and valor
2) Temperance — self-control and restraint
3) Liberality — bigheartedness, charity, and generosity
4) Magnificence — radiance, joie de vivre
5) Pride — self-satisfaction
6) Honor — respect, reverence, admiration
7) Good Temper — equanimity, level-headedness
8) Friendliness — conviviality and sociability
9) Truthfulness — straightforwardness, frankness, and candor
10) Wit — a sense of humor — meaninglessness and absurdity
11) Friendship — camaraderie and companionship
12) Justice — impartiality, evenhandedness, and fairness
These virtues, when lived up to earnestly, can bring huge rewards to anybody. Health, Wealth, Relationships, and all other domains of one’s life could experience quantum leaps with these 12 virtues. It ain’t an easy path to walk on as human beings are messy with their biases and emotions playing havoc on their decision-making abilities. But this path has been walked upon by many before.
The clearest expression of virtue for me is Ben Kingsley enacting Mahatma Gandhi’s first speech after his return to India. The virtue of courage shines in this clipping from the movie Gandhi. The most profound aspect is the indifference Gandhi shows to those not paying any attention to him, he still goes on, unperturbed and determined.
In case you are thinking that Gandhi is an extreme example of virtuous life, then let me make it easier for you. Doing what you said you will do is also a virtue. Keeping your promises, implicit ones too, is also a virtue. Being the beacon of hope for those around you is also a virtue. Not giving up on your goals or dreams is also a virtue. Being a dependable individual to work with is also a virtue. Not cutting corners or taking short cuts is also a virtue.
But living a virtuous life is the path least walked upon. It hurts, in the short term for sure. It makes you look bad, in front of some people if not all. It isn’t exciting. It requires you to let go off the comfort or the easy/lazy stuff. It requires discipline and who wants that. But lacking virtues in your personality will result into you losing economic and social opportunities and there got to be a way through the discomfort of a virtuous life.
And this is where ‘Virtue Signalling’ comes in.
Also known as moral posturing, this refers to the act of expressing opinions in a deliberately conspicuous manner in order to signal to others about one’s virtues. A politician, for instance, might express disgust against an ideology just for the sake of sending across the message that he stands against regressive social ideas. He may not, however, genuinely believe or stand by the virtues that he claims to possess in public.
The term, coined by British writer James Bartholomew, is now often used in a pejorative sense to attack the expression of one’s opinion merely as a token act to advertise one’s virtuousness to the world. — THE HINDU
If you follow politics in any country, you would see press coverage of politicians who have a Masters Degree in Virtue Signalling. It’s their job to look good and paint a picture that they are striving for the general good and deeply care for it’s populace.
I was seeing the documentary of Li Lu called “Moving the Mountain” and many clippings are from Beijing’s 1989 Democracy Movement. It’s amazing to see the calmness and grandeur shown by political leaders in front of the press even if their policies reek of suppressing accountability, constitutional due process, democracy, freedom of the press, and freedom of speech. This is a brilliant expression of Virtue Signalling Expertise at display in China, and also prevalent in all political circles.
But, it isn’t limited to politics. It is on a parabolic rise across all fragments of society i.e. individuals, companies, politicians, countries, brands, almost everything. I say almost because human beings are a complicated species with one common trait across all of them — they all want to look good in the eyes of others.
And if living virtuously requires commitment to goals that are bigger than your personal likes/wants/desires, then you are not going to be surprised with the choices most mortal souls make when placed in a decision making authority.
COVID19 Outbreak was the most creative period for many brands to resort to virtue signalling.
😃 This ad got me cracking. Either it was made for really dumb indians who respond to these advertisements or it was made by a genius who provides a military grade mask in all the pockets and calls it anti-corona.
Since COVID theme is the in thing, why not piggy back on the situation and market the product with an over riding theme of ‘social distancing’. That way the product gets marketed and what also gets communicated is that ‘we care’.
The most epic COVID related ad comes from Biryani Blues. You have to check this whole ad, pls do 🧐 It has to be a genius agency to highlight the antiviral and immunity boosting powers of herbs and spices to promote this brand. By this logic, even wada pav is antiviral since it uses many of these herbs and spices to make its chatneys, masalas, etc.
This isn’t where vitue signalling stops. You deal with it every day but may not have a word for it. So let me share —
How do you explain to many people wishing you Happy New Year in spite of not making any effort to stay in touch with you during the preceding 365 days? How do you explain many gossiping about you behind your back without giving you any hint of their irritation with you when in front of you? How do you explain the courtesy and warmth extended by Sales people from every organization, while their incentive comes from swinging the biggest buck from your wallet, sooner the better (before customer changes his mind).
So how does this relate to Investing, which is so far removed from Politics (at least seems to be for non investors) ?
Well, let’s see the Virtue Signalling that goes on in our community —
You see so many mutual fund and index fund launches that soon the number of funds will outnumber the no. of stocks listed. And the one way that most have in their arsenal to distinguish themselves from others is their name. Like All Seasons Debt Fund, Vice Funds, Congressional Effect Fund, Celebrity Stock Index and the craziest, Anti-Terror Multi Cap Fund.
The naming of ETFs and SPACs in the new craze in town and a lot rides on the naming, as it is an initial cue to investors for what virtue/theme it stands for. Some examples — NERD ETF , iShares MSCI Kokusai ETF, Obesity ETF (SLIM) and ofcourse Chamath’s SPAC registrations from IPOA — IPOZ.
Shakespeare once said “What’s in a name?” . Guess he was very wrong 😃
This is the new buzzword that has taken over financial circles and has even gathered quite a bit of momentum. State Street estimated global ESG ETF and index mutual fund assets will increase from $170 billion as of May 31, 2020, to more than $1.3 trillion by 2030.
In its outlook for 2021 JP Morgan Asset Management expects a “flood of green infrastructure projects in the next few years to the tune of several trillion dollars” which will present significant opportunities for investors. No wonder, I have already started seeing new launches with the words ‘Green’, ‘Sustainable’, ‘Social’, ‘Impact’ , ‘ESG’ , ‘Fossil Fuel Free’ and more.
When information and data becomes commodified, conflict and narrative become the easiest way to differentiate yourself from competitors.
Since this is a financial newsletter, let us consider an example from the world of investing: ESG. Investing strategies that incorporate some element of focus on issues pertaining to Environmental, Social & Governance (ESG) have soared in popularity as of late. While there are many that still hold their doubts about the legitimacy of ESG’s value-add to one’s ROI, the influence of ESG is getting harder to ignore. While rooted in specific issues and injustices, ESG investing is heavily reliant upon the power of “conflict within a narrative” in it’s quest to make an impact. Again, it is important to remember that utilizing conflict and narrative is not always a bad thing. The push from ESG proponents for greater diversity in Corporate America has directly led to the developments at places like NASDAQ and Goldman Sachs mentioned earlier.
However, we must acknowledge that some entities will utilize the strength and influence of a narrative to their own advantage in a way that is disingenuous. For instance, one of the main complaints about investment manager’s adoption of ESG is that they are merely adopting the philosophy as a marketing tool in the objective of raising assets. In an OSAM paper my colleague Travis Fairchild wrote last year he pointed out that many of the leading ESG ETFs do not adhere to the ESG approach they are preaching. — Jamie Catherwood in 17th Jan Newsletter
Last week, I was reading the annual report of QuickHeal Technologies and from the word go, I could see the posturing that the company was up to. The theme highlighted across many pages referred to the Power of 2 i.e. 2 visionaries at Apple, Google and the first flight at Kitty Hawk in 1903 by Wright Brothers.
If you have sensed the kind of Virtue Signalling that goes on around you, you will realise that there is no escape and it is easy to get seduced in the stories/narratives that companies/brands and people build around their communication (verbal/oral/print/any other media).
The funniest virtue signalling I have seen comes from Investors who turned Pro 🤠 only after Social Distancing measures kicked in. You have so many millennials now recommending stocks and bitcoins in a way that belittles the work put in by all the Harvard/Stanford Graduates/CFAs/CAs/Practioners who have learned the art of valuation and trading after years of preparation and practice.
Foll. video is a class on Mixing Divine Intervention and Investing —
😬 If you liked the previous one, foll. is a class on Decicion Making regarding Bitcoin Investing —
And surprising, they have thousands and thousands of followers, which gives them the right to display/flaunt their good luck as their skillset/mindset that has gone in making their strategies work.
“In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond.” — Warren Buffet
Though the word ‘virtue’ may be getting used a lot less, the signaling of virtue has been on a steady rise across. And the smart thing you can do, is not to get seduced in the stories and narratives people want you to build about them.
You can check Apple or Ikea ads, most have the product mainly and hardly anything else. When the product is good, it shows. When the company is good, the revenues and profits show. When the management is good, their communication and authenticity shows. When the services is good, the reviews/ratings online shows. When the character is good, just the look in the eye, just a plain ‘hi’ or a ‘handshake’ speaks quite a bit.
Ron Howard (Osacar Winning Director) made few profound statements in his podcast on Infinite Loops with Jim O’Shaughnessy and Jamie Catherwood and I urge you to read it twice if not more —
“I think the trap that we all fall into as the endorphins fire is that we have been taught to learn or naturally do learn based on our wiring, through narratives. And what holds our attention the most is conflict within a narrative.
Again, this is one of my fears about society, is we’re “jonesing” for the conflict, whether we know it or not. It has this subversive effect. And so people who want to get things done, for noble reasons or selfish reasons, if they need to move society’s attention one way or another, they know that the only way to really do it is to stir up conflict.
And suddenly the whole world becomes like the way you promote wrestling, or cable news with its panel of guests who have to argue with one another. I get it. That kind of conversation is important on the one hand. In the realm of having to hold people’s attention to generate earnings or to gain power and hold a position, it’s a little frightening that we’ve lost this […] division between what’s entertainment and how do we really make decisions in society about the way we want to live and what’s important.”
Virtue signallers operate in many other arenas. They show their support for Paralympics in their social feeds (though chances are they have never watched any Paralympics Event on TV in their lives).
Virtue signallers would comment on Virat Kohli not being available in India’s Test match with Australia but themselves will apply for 2 weeks leave when they become a parent.
Virtue signallers will call others a show off / put off when they themselves swipe their credit cards for their Guccis and Rolex to create an impression.
Beware of such people/brands/companies who lack depth and substance, who lack virtues, who do not have their skin in the game, who do not walk the talk. The only game they are up to is Looking Good and if you play with them, it is you who will be Looking Bad & Feeling Bad in times to come.
Two of the richest people in the world here and there is no Gucci, Rolex, Private Jet, Louis Vuitton or anything sexy looking. Just simplicity in their being and a grand vision as their pursuit. Simplicity and Vision are virtues that you rarely see together, hence I provide you an epitome of an example.
“Out of all virtues simplicity is my most favorite virtue. So much so that I tend to believe that simplicity can solve most of the problems, personal as well as the world problems. If the life approach is simple one need not lie so frequently, nor quarrel nor steal, nor envy, anger, abuse, kill. Everyone will have enough and plenty so need not hoard, speculate, gamble, hate. When character is beautiful, you are beautiful. That is the beauty of simplicity.” — Ela Bhatt
“If you have a reputation for being decent to work with and unselfish, you make more money , not less. Good morals and reputation for good morals are enormously valuable, and it’s just so simple.. The right way to go through life is win-win. Just anything else is crazy. To be all take and no give is just an absolute disaster.” — Charlie Munger
Loads of Love & Luck.
Warm Regards
Manish