Sunday, April 12, 2015

Shedding a Little Light on the Path to Darkness

Once upon a time a wise king ruled a tiny mountain country, really no bigger than a postage stamp. He was surrounded by more influential, sometimes dangerously aggressive powers. Beyond the borders of those states, lived dozens of different tribes and nations that were constantly at war with one another. Just like you and I, this king did not live in a safe world. Even though the wise king didn’t possess great armies or wealth, four times every year the servants of many of the world’s great rulers brought him gifts of money. Year by year the servants of these mighty empires gave the king a report prepared by their lord detailing what had transpired in their kingdom in the previous year.

As a young man the king started small. He entered into his first agreement with a nearby nation he knew well and trusted. His father sent him to a fine school in that country. There he met and became friends with young men and women from that foreign nation. As his web of treaties and agreements grew, he avoided kings and nations he knew could not be trusted to keep their word. When the king reached the end of his experience and knowledge, he sent his agents all over the known world to spy out opportunities to increase the wealth and influence of his tiny nation.

I read an article encouraging the reader to fear the growing power of multinational corporations more than the growing power of the Federal Government. My first thought was, “Well last time I checked had a couple of experimental drones, but so far as I know, none of them are equipped with Hellfire missiles and the last time I checked their CEO, Jeff Bezos didn’t have a history of having his enemies assassinated.”

I didn’t immediately respond to the article, but I asked myself, “Why don’t I fear corporations?” I certainly respect them. I understand that they do not have my best interests in their hearts, but I don’t fear them. The answer is found in my little parable that illustrates the path of the value investor. Start small with business you know and trust. One of our first investments was in Johnson & Johnson, a classic widows and orphans stock. My wife was familiar with their products and their admirable reputation for integrity from her job at the hospital. Look at lists of dividend aristocrats, companies that have increased their dividends at least 25 years in a row for early investment possibilities. Continue, step by small step, into more distant opportunities as your portfolio, knowledge, and confidence continues to grow.

Today, a number of corporations, some of them quite large and dangerous, send me money at least four times a year. They also report their activities to me every year. Still, I frequently remind myself that I live in a dangerous world.

Yoda would remind us there is another more general lesson to be learned from that article. Politicians, corporations, and religious leaders want to excite your passions. They don’t want you to think things through for yourself. Any time someone is encouraging you to fear, hate, or become angry with other human beings made, just like you, in the image of God be suspicious. Be very suspicious. They want your money and your freedom. It is up to you to become wise and avoid their traps.

I have decided what should cause me concern is the marriage of political power, money, and military power. When those three forces combine, as in the example of the First Triumvirate consisting of Crassus, Pompey the Great, and Julius Caesar, that alliance will have the potential to basically end the freedom of our republic, just as it did in Roman times.

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