Virtue signals are the public expression of opinions or feelings intended to demonstrate good character, social consciousness or moral correctness of one’s position on a given issue.
I do not mind giving signs of virtue if the person also lives according to their beliefs. It’s natural to want to show the world your beliefs, especially about a cause you truly believe in.
For example, I think the n minoranza 1 minority we should be helping is ~15% of the population born with a disability. As a result, I will integrate the topic into the relevant posts and donate accordingly.
The problem is being too virtuous until others feel morally inferior. Virtue signalers appreciate the privilege of feeling better by doing very little. It is even worse when people’s actions do not match their beliefs.
Before we get to the curious matter of virtue signals for investors in a capitalist country like America, let’s look at some common examples of virtue signals in everyday life.
Examples of virtue signals with inconsistent actions:
Politicians talk about the importance of supporting public schools while sending their children to private schools.
University administrators talking about the importance of helping people of all races and socioeconomic backgrounds, keeping class sizes artificially small to maintain exclusivity. Then you create a system of personal points to limit certain races.
Vegetarians scold carnivores but wear leather shoes.
Department of Construction inspectors that condemns owners for renovation without permission, but accepts bribes from developers who try to cut corners and increase profits.
Rich people who say how unfair it is to pay so little tax,but do not voluntarily pay more tax.
People who believe that all content should be online for free without ads, but do not work for free.
Personal finance personalities who say it is important to make personal finance education accessible to everyone, while impose more than $2,000 for classes.
However, supporters of more housing (yes in my backyard) oppose the construction of new housing in their neighborhood.
Supporters of illegal immigrants Who Get Angry When illegal immigrants arrive in their city
People who want to fund the police, but expect the police to come as soon as possible if they need help
Companies that are specifically looking for different employees but fire them first during a recession
The List goes on. Signs of virtue are common. Just do not obnoxiously impose your opinions on others without following your beliefs. If your actions follow your beliefs, you’re good to go. If not, leave the city.
An example of honorable virtue signals
After all these negative examples of virtue signals, what about some positive examples?
Here is one that is both sad and honorable.
If you are willing to pass away for your faith, there is no greater sacrifice. The problem with this scenario is what happens if the hijacker decides to kill someone else?
Investor Virtue signaling is an interesting phenomenon
A virtue signal for investors occurs when an investor publicly expresses contempt for a particular investment, usually for ethical or moral reasons. This is good, considering that we live in a free country with capitalism in its heart. We are free to say and invest what we want.
However, as investors, we all want to get a return on our investments. Otherwise, why peril it? Therefore, it seems strange to me that an investor who has other investments thinks that one way of making money is nobler than another.
Yes, of course, it is wrong to take advantage of forced labor or anything illegal. But when an investor owns publicly traded stocks and starts putting signs of virtue against others investing in publicly traded stocks, I start scratching my head. The same goes for real estate investors who put signs of virtue against other types of real estate investors.
If you participate in capitalism, do not bet against capitalism! Depending on the type of virtue signal for investors, I wonder if the virtue signal for investors really understands the nature of the investment.
The type of investment revolves around supply and demand
Anyone who has invested for as long as I have knows that investing can be a treacherous business. Investment always consists of a two-sided market in which if one party earns more, the other party loses more or does not earn as much and vice versa.
One of the most important variables that makes asset classes more valuable is when demand for the asset exceeds supply. Often, the rarer an asset, the higher its value.
For example, properties located in privileged places where it is more difficult to build new homes tend to be more valuable than properties located in areas of endless building land. Think about home prices in San Francisco and Manhattan compared to home prices in Boise.
Joint stock companies that rarely issue new shares tend to be more valuable than companies that always issue new shares to fund their action. A classic example is SNAP SNAP, which has paid a total of $ 8.2 billion in stock-based compensation since going public in 2017, but has since lost $9.2 billion. The share price has not gone anywhere.
A unique work of art tends to be more valuable than a work of art that has been recreated a thousand times. A cryptocurrency with a fixed stock has more value than a cryptocurrency with an infinite stock. The list goes on.
As an investor who understands the concept of scarcity, one of your goals is to buy a given rare asset as much as possible and keep it as long as possible. Over time, you and your family will probably earn a fortune.
Example of virtuous signals from investors
Since 2016, I have invested in private real estate funds such as those offered by Fundrise. My goal is to diversify my concentrated real estate holdings in dear San Francisco and earn more passive income since I became a father in 2017.
One way to achieve this is to invest online in individual private real estate transactions in the Sun Belt. Another option is to invest in private real estate funds focused on the Sunbelt and Heartland area. I chose both because I imagined the future of spreading America.
After interviewing Ben Miller, CEO of Fundrise, on my Podcast for an hour, I received this comment on my article about the interview with D.
I love your posts, Sam, but this is something I disagree with for ethical reasons. Looks like Fundrise is really Blackstone, et.al . These are parasitic organizations that finance American real estate. Future generations will have limited chances of realizing the American dream of home ownership.
I can see that good profits can be made, but I personally do not support this type of investment on an ethical basis. If you think this is not the matter, I would like to hear your reasoning.
The right to think and invest as we want
I completely agree with the fact that D does not want to invest in Fundrise or private real estate funds. This is the beauty of life in America. He has the power to say what he thinks and do what he wants.
In addition, no one is holding a gun to a seller’s head and forcing him to sell to Fundrise or another institutional investor. Meanwhile, Fundrise has the right to seek real estate investment opportunities to try to generate profits for its investors. Fundrise focuses on rental construction, which gives tenants a new housing offer. This is capitalism.
Given D’s beliefs, I asked him what he does for a living and what he invests in. My guess is that he worked for a non-profit organization, the government or a school and did not invest in real estate. Otherwise, his comment would be considered an inconsistent sign of virtue for investors.
Here’s his unexpected answer, which I really appreciate, because most people who feel strong on a topic often don’t share their background or views. They look more like passing marksman.
Libertarian Real Estate Investor