Harbus

Issue date: 10/20/08 Section: Viewpoints

The piece is about how stocks and share brokers have impacted the operations of corporations across the world. Investment firms and brokers have such large stakes in corporations, that they try to impact every aspect of the latter. At times, this takes the focus of the company away from its basic goals.

The piece also covers how the desire to grow rich quickly, by investors across the world, is now impacting commodity markets. Many investment brokers do advise that commodities should form a part of an investment portfolio due to rising prices. Is this right? How will it impact the prices of food for the common man?

"You must add some commodities to your investment portfolio," advised the MBA working with an investment firm. Flabbergasted, I asked "Why?" "You must lock some money in future commodities; the market is buoyant," he replied.

I reflected. There is a worldwide shortage of food grains and prices have escalated by 50%. Oil prices have been menacing! Some of these increases must be due to speculator-investors, like my advisor.

When I was young, I learned, "If wishes are horses, then beggars are riders." Now, working in the corporate sector, I learned that corporations are horses and corporate gamblers are riders. There was a time when companies made products i.e. tea, soft drinks, biscuits, soaps, etc. They also provided livelihood. Now, corporations are frequently condensed to manufacturing returns for shareholders and brokers!

Hundreds of years ago, these companies were accused of using people as industrial slave labor. They made workers slog long hours, on mingy money. Some construction companies in the Gulf are a modern hangover of that bygone era. Marxism, came as an antidote to industrial exploitation. Socialism emerged. Finally, enlightened self-interest sensitized company-owners towards human beings. Labor laws took birth with annual leave, casual leave, sick leave, medical leave, refreshments, lunch etc.

Thus, parts of the world grew richer. The Rockefellers, Fords, Gates, etc., have money for their next 2-3 generations. They do not need to work at all. These people invested their surplus money in properties, companies, lands in villages and cities, built buildings and offices for rentals. Many of them also invested in metals, viz. gold, silver, etc. But, they had surplus moneys, even after investing in properties, metals. Money, allures more money. Then, they discovered corporate stocks.

Continued...

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