I’m pretty sure that I’m a good guy.

But all this talk about forcing funds to dump investment assets for environmental, social and governance reasons or to punish Putin has me in a bit of a quandary as an investor. Because I’m in the stock market to make money, and if it’s on the stockmarket it’s already been deemed legal.

And if we all push it down, someone will just buy it on the cheap.

As an investor, I’m not allowed to ‘move’ the market, so it is theoretically illegal for me to have a price effect on a company, and even more highly illegal for me to work as a team to move the price of a stock. Which could put activist ESG investor groups in a bit of a moral bind.

But I’m also highly moral, and don’t like war or the idea that humans will cook this whole planet.

So where is the line with these Russian stock market assets? Is it against the law to force funds to sell assets in a particular sector to push down their prices? Shouldn’t the market decide independently of the AFR opinion pieces or social media? Should Chelsea fans have to suffer this much?

Now. The real bad news, for everyone, regardless of whether you see yourself as an ESG investor or not.

As an Australian, you have always profited from war. And may even be doing so right now. Oil is up. Coal is up. Gas is up. Wages are up, housing is up.

The flow-on from war put more money into the Australian economy than peace.

As a bit of history, September 11 came after the tech crash, into a crappy US economy, and the stockmarket was already falling – weird right? Almost like someone was shorting the market prior to that catastrophic event… Sometimes ‘the market’ just knows, wink wink.

The market rebounded after Sept 11, in an eerily similar way to this recent rebound after Covid. Swift and sharp.

But then there was the uncertainty of war; first in Afghanistan, then in Iraq. The pollies and media had the world whipped up with the possibility of ‘weapons of mass destruction’, and the market hates uncertainty.

That two-year bear market ended with the market down 22%.

Miraculously, the market rebounded as soon as the US decided to bomb Baghdad. Almost to the day! The ‘market’ decreed that the fear of these so-called WMDs was overdone well before the inspectors came out with their clipboards shaking their heads.

The bottom was an end to the uncertainty about ‘whether’ there would be a war. There absolutely would be one, so what would that mean?

Well, firstly, if you blow something up, someone is going to have to rebuild it. So the US building companies were worth a punt. And the vehicle manufacturers, and the aero industry and the munitions industry. And some of the same pollies that were pushing for war were invested in the companies that directly benefited from it, and some of the companies owned by the pollies were first in line for the contracts.

So even though no-one likes to think of war as a good thing, it was certainly a good thing for the flailing US economy. And what is good for the US economy is good for China, as a wealthier US citizen is more likely to buy more Chinese goods.

And of course, what is good for China is good for Australia as they take our dirt and turn it into trinkets.

But it was very different to now, because no-one put sanctions on the US. And their economy boomed.

So we had a mining boom. And all Australians benefited from it with higher wages, higher property prices and a generally better economy with more money in the government coffers.

Gold and silver are going up a bit at the moment, but not by the amount that implies ‘end of days’. But commodities and oil are going through the roof, as they did after the invasion of Iraq. And what is good for commodities is good for the Australia economy and the share market.

What we have this time though is the actuality of nuclear weapons. The actuality of chemical weapons. The uncertainty is around whether they get used, not whether he has them.

And that may mean volatility is here to stay. For a while. Until we know. For sure.

So don’t think that the world is suddenly going to reward companies with good ESG ratings and punish those without, and don’t think that berating companies or super funds or individuals into selling Russian assets will make a lick of difference to the environment, the war or society because most investors in the global stockmarkets are not here to f*ck spiders (to paraphrase an Australian war movie).

You could just be selling them to investors with less morals, at an artificially lower price. Who then make more money of the deal.

Because if you push prices down by dumping assets, someone else is scooping those assets up on the cheap.

Some still say that short selling the market prior to Sept 11 was how Al Qaeda and their supporters funded their cause. So what if slamming the cost of Russian assets is exactly what Putin wants? Maybe he’ll buy Chelsea, at a discount, through an offshore account, and screw Abramovich at the same time.

The US economy is also, once again, in a bit of a toilet. They aren’t currently fighting a war, and war has always been good for their economy. So maybe they will step in, eventually, to help…

There’s a lot in play at the moment, so look to the past to give you a guide. But remember there are always bigger forces at play in the stockmarket, and they don’t respect your morals.

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