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Buddhism and stock market
Is the Buddha Way compatible with stock market investing? Not just casual low-risk or long term investing (that's ok), but operating on a regular basis to make a significant income integration out of it.:rolleyes:
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Living on profit-taking does not seem right to me. One buys, waits for the price to go up, and then sells and takes profit. This is taking profit from something that is essentially a social illusion, and artificially inflates prices. We're not talking about real value here, but only the prices. Therefore one is taking profit from something that is fundamentally illusory and driving up prices by way of doing that.
Now I've heard everything.
Good grief, whatever next.......? :rolleyes:
The stock market is a great place to practise Buddhism in my opinion, where the players are so prone to attachment to greed and fear.
But don't you think the stock market would make for a tendency for the Buddhist participant to be prone to attachment to greed and fear as well?
Right Livelihood means support yourself and your family in a way that doesn't contradict the rest of the 8-fold path. There are few jobs out there that can't be done with a compassionate view to helping everyone. That small business needs investors to grow and hire more people. Even the dreaded CEO can consider the well being of a company and the work force to both be his responsibility, or choose to worship profit and throw people out of work for a bigger year end bonus.
So as you practice Buddhism, you might find out your job requires actions that conflict with your Buddhist principles and can't be changed. In that case, work on finding another job. Or, you might be the person sitting in the present job who takes your Buddhist principles and applies them and creates miracles.
The biggest winners of the stock market are the "big boys" of the market AND a few who transcended their greed and fear, unattached to the outcome of the game.
I think it depends on what your motivation for doing so is. If your motivation for doing so is to get rich and buy nice things so you can show them off, then it would be incompatible. However, if your motivation is simply to get money to live and eat, etc. then I don't see how it would be incompatible. One could go even further with it. If the motivation for doing so is to get rich so you can open up a homeless shelter, etc. then it would be very compatible. Do you suspect that it may be incompatible? If so, why?
I think it could if one is not being mindful of them and allows oneself to be consumed by them, which is the perfect recipe for failure in this livelihood btw. However, one could use that experience to better understand greed and fear and practice letting go of them. I spent about a year doing this, day-trading stocks, as my sole source of income and I did not find it to be incompatible with Buddhism. In fact, it was very challenging and helpful. Greed and fear were constantly present which gave a very good opportunity to practice overcoming them. In fact, overcoming them is required in order to be successful making money like this and is one of the main concepts the stock market trading "teachers" continually focus on. Like Lostie said, the most successful are "unattached to the outcome of the game." Trying to make money like this, one is continually presented with greed and fear thereby being given numerous opportunities to practice letting them go.
Then there is all the moral stuff:)... like a butcher in a slaughterhouse, it's ok, he cuts and rips, it can be practice, but it doesn't sound right...
I see what you are saying. However, the way I see it, the greed and fear are already present. People act out of greed and fear all the time, even practicing Buddhists in everyday life. They are not caused by the act of trading the stock market. Having them arise during trading is simply waking them up and bringing them to the surface and they can only be properly dealt with once they are out in the open. Simply because they are now out in the open does not necessarily mean that you will act according to them. With proper discipline and practice, one can deliberately chose to not act according to them thereby practicing right action, as opposed by being pushed into wrong action by them. As far as anxiety goes, if you are truly able to not be attached to a particular outcome and have a high probability plan in place, and can stick to it without letting your emotions get in the way, then it does not matter what happens each particular day which lead to an anxiety free experience.
Personally, if you are not a "big boy" then I don't think morality comes into play. Some Joe Shmmoe trading on his own account has no effect on the market as a whole nor on any particular stock. His actions have no consequences for anyone else except his own account balance. Right livelihood is defined as to not engage in trades or occupations which, either directly or indirectly, result in harm for other living beings. Some small guy buying and selling a piece of paper has no affect on any other living beings. Now if you are a fund manager in charge of controlling billions of dollars, then I think it would come into play since his actions could have a negative effect on others.
Another things concerns the "feeling good or bad" about one's role in the society... but this is for full-time traders, not my piece of cake.
Positional trading, however, is a different story. My view on this is that proper livelihood depends on how much homework you do in picking your stocks. If you read the Intelligent Investor, you'd understand the difference between speculating and investing. Investing really means "betting" money on the mean-reverting tendency of the market/stock, and it is the mean that you're trying to determine. Also, that usually takes time. As Warren Buffett's said before, "In the short run, the stock market is a voting machine. In the long run, it's a weighing machine." In fact, the stock market may be a great weighing machine for your patience/character as well...
seeker242, you are right about this, small investors can't move stock prices up significantly so they can't reward bad actions from bad CEO because CEOs' bonuses go up with the stock prices.
However, when we invest in a company, we all hope for its stock price to go up. Even though we are only passive shareholders, we stand to profit from other people's suffering and this contradicts with the Buddha inside us.
I also invest in the stock market and I love doing it. I am new to Buddhism so I can still change my mind later on. But for now, I write down my investment plan at the best of my present knowledge:
Plan:
1. Buy solid companies stocks with good future prospects when they are cheap and hold for the long term.
2. When the market is irrational exuberant, trim the stocks to protect my capital.
3. When I die, I will leave half of my fortune to charities and to Buddhist temples.
Companies to be excluded from my stock portfolio from now on:
1. Weapon-related (including companies that manufacture military weapons and/or weapons systems, war airplanes, military contracts including companies like United Technologies, General Dynamics, SNC Lavalin and Uranium exploration companies...)
2. Companies involved heavily in animal slaughters such as McDonalds...
3. Tobacco
4. Alcohol such as Diageo...
5. Gambling stocks such as Las Vegas Sand...
6. Funeral services companies and companies that sell coffins.
7. Forestry companies.
These industries above are to be excluded from my stock and bond portfolios.
Notes:
1. Funeral services are good and honest business, but I avoid it because I am afraid I might subsconciously wish for more people die.
2. Trees and forest are very important to Buddhism. They are home to endangered wildlife. Cutting down trees harm animals so they go against Buddhist compassion.
3. I don't include pipelines in my list because all they have to do is to prevent oil and gas from leaking out. Pipelines don't just transport oil, they also transport gas. Pipelines are the safest gas and oil transportation mode.
4. I invest in sweet, light, cleaner oil companies from the Bakken such as Crescent Point Energy. I avoid Tar Sand oil companies for now. I hope they will develop new technology that will help them to produce cleaner oil sand in a more efficient way in the future.
Many contributors are no longer here.
Perhaps a new thread may be more appropriate. In the appropriate forum, too, of course.