This article will describe how utilitarianism can change your perspective as an investor and how it could make you a better investor.
Utilitarianism is the view that the right moral action is the one that maximises happiness for all. However, in medieval India, the philosopher Shantideva (an early adopter of utilitarianism), describes the aim of this article the best, writing what we ought “to stop all the present and future pain and suffering of all sentient beings, and to bring about all present and future pleasure and happiness.”
Adopting the utilitarian moral theory will change your long term views on investments, as you will become aware of the effects the companies might have on everyone’s future. You might not want to invest in certain companies, because they will worsen the climate, or maybe because many people might have to lose their jobs.
By trying to maximise “happiness”, you are not mainly focused on money, but more so on the companies and their views. This will make us better investors, as it makes sure that we will get more in-depth with the companies, which will lead to more knowledge.
Hence, following the utilitarian views, you should mainly be focused on improving the world that we live in, not only in the present but also in the future. Instead of focusing too much on the short term price quotation, why not ask yourself what the company can do a couple of years further down the road? Identifying a company’s moral values is key in knowing the intrinsic value, and can strengthen your conviction that will lead to more returns.