I love my toddler son, but he has a lot to learn. I love Wall Street too, but it also has a lot to learn. This analogy occurred to me while dealing with one of my son’s tantrums – our venerable icon of American capitalism often behaves like our toddlers. Some examples:
I want candy!
It did not matter to my son that, in the shopping cart were three new toys and an ice cream cake. No, he saw candy at the checkout and he wanted it now. It does not matter to Wall Street what you did last quarter, year or decade. Nor does it matter what you are developing for next quarter, year or decade. This quarter’s results are often all that matters.
I don’t want to go to bed!
His bad attitude, tears and stomping all pointed to one thing – my toddler needed rest. Regardless, he resisted any attempt to go to bed. Wall Street also may not care what storm you just weathered or economic condition you’re battling. The thought of a rebuilding period or reinvesting in the employee corps to prepare for the next storm is unacceptable.
I don’t like you Daddy. I want Mommy!
If I tell my toddler something he doesn’t like, there is no hesitation – he’s off to his mother. Wall Street doesn’t flinch either. When one corporation has bad news, there is a migration of investors to the competition. Although, the competition only wins until they too have a bad quarter.
I want to watch TV!
At the tender age of 3, children don’t want to work for their entertainment. Toddlers today have learned there is free entertainment streaming from the idiot box. Similarly, Wall Street loves being entertained. Investment cash often follows entertainment news.
Critics will point out that investors deserve a return on their investment. They’ll highlight that without such reaction to poor results, the markets would fail. I agree. My concern is not for a lack of consequences, but in support of a greater emphasis on long-term results. For, just as my toddler does not think of the future or consequences of his actions, Wall Street also fails to invest for the long haul.
Because I love my son, I continue to teach him right from wrong. I will do what he needs and what is right for him and our family. Unfortunately, it’s not as easy to do this for Wall Street. To be certain, I am generalizing. There are many brilliant, caring investors who seek out socially responsible organizations and invest for sustainability. Yet, I fear these individuals are increasingly the minority. I pray this changes and believe if anyone can be successful in driving such a swing, it will be our servant leaders. In the meantime, I hope Wall Street matures beyond the toddler age.
Question: Do you believe Wall Street acts like a toddler? Why or why not?