Scuba Fork
2 min readOct 29, 2020

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You're deluding yourself into believing that your investments are a magnanimous gift that needs to be rewarded outsizedly, and are participating in a system that captures more than it frees.

Consider what makes the valuation of a stock go up. Long term or short term profitability. And how do companies maintain this? By producing something for less than it costs to make it. What does that mean? Bringing opex and capex down, and increasing marginal profit per unit. How do you bring opex down? Lots of ways, but the most common is to remove or reduce the workforce.

While your investments may infuse cash into an operation, the sole motivation for every large company is to increase shareholder value. This is beyond all other aspects, the reason anyone would purchase ownership in a company. If a company didn't intend to be profitable, would you invest in it? No, and who would blame you?

Investors, at least those who have no tangible connection to the companies they invest in, do not care if the employees of a company they are a part owner in are working in unhealthy conditions, or if they need a supplemental job to afford rent and feed their families. They only care that at the end of the day, the company continues to be profitable.

When a company shutters it's doors on a US plant that provided a small town with jobs that had solid pay and benefits and moves that operation overseas, the value of their share rises. Layoffs of expensive workers and replacing them with low cost workers always increase shareholder value. This seldom results in the products being delivered being sold cheaper, but it does increase revenue. And who does that revenue benefit? The ownership class.

Thomas Jefferson was a slave owner, and actively used slave labor to run his plantation-the source of his wealth. But at the same time, he referred to it as a "hideous blot and a moral depravity", that the slave trade continued. Still, this moral convictions were not enough to dissuade him against maintaining slavery in order to benefit himself, because his vested interest in his own comforts was superior to the moral discomfort he felt about slavery.

Again, if it helps you to sleep to believe that the source of your continually rising passive income is somehow benefitting others, continue on with that. You're in good company.

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