Loyalty is for Dogs

What is loyalty (忠)? Loyalty is faithfulness or a devotion to a person, country, group, or cause. (Source: Wikipedia) Loyalty used to be a virtue, but now it's just plain foolishness - oh wait, has loyalty ever been a virtue? I guess it only happens in the perfect world under Confucius' teaching. Or loyalty is taught as virtue for the politicians to control over us?

In the world we living now, is loyalty a highly praised virtue? Or it just shows plain foolishness? We suppose that life with virtues will lead us to happiness and happiness is what we, every human, ultimately pursue for. However, loyalty, often times, is not rewarding although it is highly praised by the "saints". Let me illustrate a few example:

Kevin Garnett was a loyal basketball player to the Timberwolves franchise in NBA. He spent his prime time in that lousy franchise, which happened to be located in a a cold and deserted lousy place, achieving nothing and ended traded to Boston Celtic due to his age. So what loyalty rewards him? 7 years of losing. He didn't demand for the trade to Celtic but he was traded because he was too old for the franchise. Luckily, Celtic is a better place for him as a player, as he won his first championship on the year he got traded to Celtic.

On the other hand, Lebron James, the most hated NBA player on earth, saw Kevin Garnett's past and decided not to waste his prime in Cleveland (yet another lousy place, cold and deserted). After the Decision, he went to Miami (one of the best cities!!) to join his friends. And here the story of anti-LBJ goes.

Lebron James shows no loyalty at all. The Cleveland Cavaliers did everything they could to retain him but ended up setting records of losing 26 straight games. But he did show reasoning and intellect while making the Decision, making the best choice for himself.

Yet to see how loyalty mistreats players like Dirk Notwizki and Steve Nash. Yes they are white but when the time for decision making comes, they are more emotional and less reasoning than the black (Carmelo Anthony and Lebron James).

Enough for the NBA stories. How about some examples that are happening in our life? Such as brand loyalty? I will show how loyalty plays tricks in our mind and often misguides us from enjoying a better life.

We understand how companies spend tons of resources every year to build up brand loyalty in their customers. For example, Toyota, the leader in automobile industry, builds its brand loyalty through constant marketing, products upgrading and improvement on services. Through such efforts, Toyota successfully make its customers feel that driving a Toyota is driving the best car ever (for the given price of course!) and I was one of the millions brand loyalty victims. When competitors like Honda and Ford improves their products and services even better than Toyotas, Toyota customers, blinded by brand loyalty, refuse to accept or try the products manufactured by the competitors. As the result? These customers (including me) pay more for poorer product and service.

So does loyalty serve us good? Being loyal to Toyota is a good thing for Toyota's profits. And bear in mind, it is ONLY good for Toyota but NOT you. When competitors offer better products with lower price, we refuse to being reasonable and intellectual and make our decision based on emotion and past-ol-good-experience. As the result - we are paying more for less, and forfeit the "could have"/ "would have" enjoyment brought by the new competitors.

Also, loyalty is very often exploited by the politicians. What makes you vote for Party A instead of Party B? Some vote for party A because they like a particular politician figure in Party A. Some vote for party A because they feel that they belong to Party A.. Some vote for party A just because they hate Party B. But very few vote for Party A because they think Party A's policy serve them better in long term or short term.

So what is the purpose of having democracy when loyalty plays a more important role in deciding the country's leader/policy? Why don't we just have our monarchy system where the King and Queen live happily together in their pretty castle and we will be loyal for the emperor forever (as long as he doesn't abuse us)?

So back answering the question: Is loyalty a virtue? My answer is HELL NO because of the following arguments:

1. A virtue is a moral excellence in a person.
2. We practice a moral excellence because by practicing it, we believe we will achieve happiness.
3. Loyalty benefits only the loyalty-receiver, but not the loyalty-offeror.
4. Loyalty does not bring happiness to someone who practice it (the loyalty-offeror).
5. Hence, loyalty is not a virtue!!

Examples and arguments are presented to show how loyalty obstructs our reasoning and intellect to make decision which is best for us, hence hindering us from happiness.

So what makes us loyal? The rewards (often time in monetary form) given by the loyalty-receiver. Thus, loyalty can be bought with a price! You may ask what's the price for a loyalty. Remember the loyalty card given by Starbuck? A free coffee for every 10 coffee bought is what Starbuck paying to get a loyal customer!


We are just human. If you want loyalty, get a dog........ and feed it!

Why We Can NEVER Be the Next Warren Buffet

Yes, there are tons of books selling in the market, teaching you how to be the next Buffet. Ask yourself, have you seen a book written by Warren Buffet? If those authors really know how to be the next Buffet, do they need to spend their time writing such books instead of researching the next big business?

I think that such books are useful in some ways because they provide different perspective of investing theories. However, we are all human and we have our own opinion. We'll hardly find anyone who share the same views even on the same thing. For example, some people think Justin Bieber is cute, some people think Justin Bieber is gay. We are looking at the same Justin Bieber here but we all have different views. And that's the beauty of differences that creates the stock market.

Warren Buffet seems to have the most successful stock picking skills/knowledge. But do his skills/knowledge fit us? The answer is NO. Even if Warren Buffet himself will not able to create such wealth if he is born 50 years later. I will tell you why.

The global population in 1960 was just merely 3 billion. In 40 years, it doubled to 6 billion in 1999 and now according UN, we have 7 billion population on earth. For the given another 40 years, do we expect the population would double again to 14 billion? Highly unlikely as the expected global population by 2045 is 9 billion by the UN.

During the age of Warren Buffet

1. Laws and regulations in the stock market is not as strict.
   
2. Not many people practiced fundamental stock valuation.
3. Relatively low level of education in the world.
4. The sudden boom of population growth.

Just imagine he make $1 for every increase of population. He would make $3 billion in 40 years. But if he make $1 for every new baby born, he would make $300 billion in 40 years (without subtracting off the death rate). How about let's say he make $10 for every new baby born, he would make $3 trillion in 40 years!!!!

One would argue that in another 35 years, the world population is expected to grow for another 2 billion. We could have made $10 for every new baby born too. But here's the trick, to be the smartest in a group of 3 billion is super super super super super tough. And to be the smartest in a group of 7 billion, not to mention that higher education rate among these 7 billion people? x100 toughness......

Furthermore, good companies with good constant earnings can be only bought with a very high price. Let's say now we buy stocks of Warren Buffet's favorite companies such as the consumable giants Coca Cola and HP, they do not generate the same return Warren is enjoying right now because they are just too damn expensive!

So here's the suggestion: Let's look for new companies that share the similar characteristic as Coca Cola and buy them while they are cheap. But the problem is: You're not the only smart guy here. Price war will drive up the stocks without increasing the value. Thus, it generates less return.

So let's face the fact, we'll never be the next Warren Buffet.

However, if we do something different, we are able to create a name for ourselves. The catch here? Following Buffetology will not create the same wealth because we live in the different era. Man, that dude is 84 year old..... We have generation gap!!