Re: questions about audit and budget processes
On 03/03/16 20:47, Jeroen Dekkers wrote:
> At Thu, 3 Mar 2016 19:29:32 +0100,
> Daniel Pocock wrote:
>>
>> On 03/03/16 19:16, martin f krafft wrote:
>>> also sprach Daniel Pocock <daniel@pocock.pro> [2016-03-03 15:18
>>> +0100]:
>>>> Why wouldn't people also potentially volunteer some time for
>>>> portfolio management?
>>>
>>> I'd consider this a really bad idea. Portfolio management is
>>> perhaps *the* profession that benefits the most from a professional
>>> (or at least one of them), contract-based separation between client
>>> and actor, with extrinsic motivation of the actor. Even that's
>>> impossible to properly tie down, but I certainly would never want
>>> to see some people point fingers at others and claiming that they
>>> have lost us money because the markets didn't do as they'd have
>>> hoped.
>>>
>>> Would these volunteers invest in Microsoft? Google? Apple? Nestlé?
>>> Weapons manufacturers? Companies that exploit resources?
>>>
>>
>> That's not fair, you shouldn't make a list like that without including
>> tobacco companies.
>>
>> Anyhow, I understand the point you are making, I'd be interested to
>> know if many other people feel the same reluctance or have other opinions.
>
> Instead of managing a portfolio, we can just choose one or a few ETF's
> that track global indices such as the MSCI World Index and the STOXX
> Global 1800. Then you can blame nobody for picking the wrong
> stock. Those still can go down, but the long term gross return is
> higher than the standard interest rates on savings. We indirectly do
> invest in corporations people might consider evil, but the money on a
> savings account can also be lent out to an evil corporation by the
> bank.
>
Well, that last bit is not quite correct: banks don't just lend out the
money people deposit, they lend it out several times over[1].
E.g. if Debian has $250k in the bank, the bank can lend out $1 million
or more to somebody else and the interest they collect on that $1
million loan is many multiples of the interest they give back to Debian.
For better or worse, that is the wonder of the fractional reserve system.
Regards,
Daniel
1. https://en.wikipedia.org/wiki/Fractional-reserve_banking#Money_multiplier
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