In a recent interview on the Invest by Design podcast, Eventide CEO Robin John shares his view that investors are inevitably rooting for a company’s success when investing. This should ultimately shape how we approach investing.
So what were the problems that you saw with investing and how did you think they needed to be fixed?
Shaun, when I was starting Eventide with Finny one of the biggest issues I saw in the investment world is that people didn’t even understand what investing is. I think that the number is that 150 million investment accounts exist in this country, but I don’t think most of those people have really thought through the purpose of business or of investing.
I was actually recently speaking to a professional money manager and that person couldn’t explain to me what the purpose of investing is, but a couple of weeks ago I was at…speaking to a class of undergraduate students and I asked them “what is the purpose of investing?”
And they said “to allocate capital” and I said to them,
“Where would you want to allocate capital?”
And they started giving me examples of the types of things that they would…where they would want to allocate capital.
And so one of the things I often remind people is that we also root for the success of the companies we’re investing in. So it’s not just about avoiding ill-gotten gain, but really like what do you want to see in the world? Those are the areas we should be putting our capital.
So if you if you are investing in tobacco, an investor is happiest if everybody in the world smoked tobacco; you want more and more people to be customers in tobacco companies. Vice versa, if you are investing in a cancer drug, you want everybody with cancer to have access to that drug, right? So what are we rooting for in the world? Most investors haven’t really thought through the purpose of investing or the power of investing to change the world.