How can you tell whether an investment is a good investment?
It seems we can’t always trust watchdogs like the Securities and Exchange Commission. A lot of people seem rather upset that the SEC missed signs that Bernard Madoff’s scheme wasn’t all it was promised to be.
Madoff was apparently a former head of the Nasdaq stock market, so had great credentials. And I am sure if I had met him he would have seemed very respectable and would have charmed me like he did so many others.
Would I trust a bank? Perhaps not as much as I might have a few years ago. Does a glossy shop-front, impressive numbers, shiny badges or powerful technology mean that our money is in safe hands? None of these things seems to have stopped some of our banks fumbling the ball.
So maybe it’s better to assume the worst. Human nature being what it is, most of us at one time or another fall victim to greed, or other unhelpful motivations. And it only takes a moment for something to start going horribly wrong.
Past history isn’t always a good predictor of how things will go in the future. My track record helps but it really doesn’t say that much about what I will do tomorrow.
Working together in a community is one way to combat these all too natural human failings. If the community creates, agrees and implements the right checks and balances, then any momentary lapse is much less likely.
And another good indicator seems to me to ensure your motivations are aligned with those in whom you put your trust. If your goal is to look after the planet, and so is mine, then we surely can expect that some of our behaviours will be aligned too.
That seems to me to be a huge and global opportunity. The more we share motivation with others the more likely we are to be able to trust each other. This is good because, simply put, people who trust each other get more done more quickly.
Wouldn’t it be great if we all shared the motivation of making the world a better place. We’d get a lot more done, more quickly, partly because we’d trust each other more. What a lovely, though perhaps impossibly naive, thought.
If it can’t work globally, perhaps it would work locally. And to find out whether we share motivation, we often simply have to ask. I don’t always find it easy to say what my motivations are, probably because they are quite complex. But if you give me time, I’ll certainly give it a go.
And I find people who are honest and open, and who tell me the full and complete story, however much grey there is, much easier to trust. That’s where I’ll always invest my time, and the little money I have.