Share and share alike

Yes, I turn my gimlet eye to the world of finance....

What prompted this was the annoucement that Tesco had posted billion pound profits, mainly on the back of stellar growth in Asia but still, the UK arm suffered only a small decline in profit of 0.1 billion (2.1 billion profit). Now, I ask myself, who provided that profit, and where did it go? I am glad you asked that, the answer may well be out of the pockets of those who can ill afford it and into the pockets of those who would not likely notice the extra.

Which makes one think, does it not? Those with pots of money frequently stash it away as 'shares' in good, profitable, companies as Tesco. And watch value grow - due, in part, to profitable companies returning dividends, but also because shares (pieces of paper) in good, profitable companies, especially those in essential services like food (and funerals) appear to become more valuable as time passes. Nothing to do with the holders of the shares doing anything of any relevance to the comapny (unless you are talking millions of shares). So, the shareholders are parasites, sucking the blood of the consumer, the poor, the children. I bet you also find, if you care to scratch the festering sore, that dividends and profits on sale of shares is quite easy to hide from the taxman. Hold the shares in a trust account and apply money from that to send a sprog to public school and no taxes are due, in fact there may even be a refund on offer for the sharp accountant.

Shares were once meant to indicate that the holder had contributed to the creation of a manufacturer of something. Making jobs and adding to the great economic engine of a productive economy, based on stuff that you can touch and feel. The holder of the shares in the company benefited from the prosperity of the company and all was fine and reasonable. When the holder of the shares decides to cash out, to take his stake out of one company, as is his right, the wheels come off. The buyer (at a fat profit to the seller, one assumes) has made no contribution to the company itself and the shares become currency to be traded almost independent of the company that is making real stuff. There is no longer a connection, just to belabour the point, between the holder of the shares and the creation of jobs and productive economic growth. Those who profit from buying and selling shares are parasites, sucking the blood from the companies which support the profitability of the shares. Investment is lost, and decisions are made on the basis of share price, not necessarily on what is best for the company.

What to do? I have to suggest something else I will be justifiably be called out as a crabbit old curmudgeon, all bitter and twisted that I am not rich, nor do I own many shares, except in a company to which I add value and which is 'worth' not much at the moment. What about making each share transaction pass through the company itself? That is, when M. Groschat wants to sell his shares, he does so back to the company which takes a cut and then sells forward to another buyer. The profit comes available for investment in the company and organic growth is fostered. [btw don't you just love how easily the words just drip from the pen? 'Organic growth' - whatever does that mean, really? I think it measn sustainable, renewable growth, which is good.]