Anti investor activism - cost of living

Freetrade Chat šŸ”„
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Hi

I notice there is some sort of moral outrage over Shell and BP paying (relatively good) dividends to shareholders while cost of living crisi is going on and the petrol prices thing is going on.

I suspect the energy companies and water companies shall be next.

I notice the water board in a county that neighbours mine thinks there might be a shortage of water supply. People are bemoaning it, somewhat rightly so. They are also bemoaning that most water companies pay a dividend.

I have encountered a striking where railway cleaners were striking for Ā£15/hour (ludicrous i know) and their leaflet mentioned they work for a company called churchill that appears to be listed on the stock market.

Their leaflet appears to begrudge the fact they paid a dividend.

Will the cost of living stuff create tension where people who are less well off / or perceive themselves to be less well off will somehow get involved in anti dividend activismā€¦ For want of a better word.

By anti dividend activism I mean armchair activism all the way to protests.

Will in the coming months the stock market and stock market investing be seen as part of the problem by these people?

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I see it as part of the problem for a large number of natural monopolies. Trains, water and some key energy (inc national grid) should all be nationalised imo.

I mean it is wrong for people not to be able to afford water, and the infrastructure to crumble from under investment whilst a select few people profit from it. And I say that as someone whoā€™s had a specialist water fund as a key holding for a few years. I think itā€™s possible to hold both views at the same time.

As for shell and BPā€¦ Well we should all be protesting the way theyā€™ve massively worked to delay the energy transition. Something weā€™re all paying for now in Ā£Ā£ and climate.

I think we will start see more strikes and honestly good. Itā€™s wrong for the bottom of the bottom and middle to have to struggle and economise whilst more and more money flows to the top.

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I do kind of agree with you on all you have said above. I would add that as well as Ā£Ā£ and climate, delay in energy transition has also made some European countries remain dependent on nasty regimes for our energy, not least Russia!

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Iā€™ve seen similar things, and i think there are some issues with how some utility companies might be run. but the bigger issue i think is that most of these people seem to be unaware of how any of these companies operate, or where they money is going. Or more fundamentally, they have little to zero idea of what investing is or how to do it.

A lot of people (not all) are fighting against profits of companies which their own pensions are invested inā€¦ and theyā€™ve no idea.

But ive also had the conversation at least once or twice now where people are insisting investing is for the rich, and the rich are the ones getting rich off of these companiesā€¦ Guess they havenā€™t heard of Freetrade? But even when you tell them they can invest, they insist its out of reach.

Another issue is reporting. People are jumping to polarised conclusions based on reporting that appears to be deliberately inflamatory.

British Gas is a good example of this. Lets have a look

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Whats wrong with this image?

It could be the fact that British Gas made 40% less money this year than the year before. Its barely profitable this year.

So why skyrocketing? Because the parent company Centrica are the one who made the money via other business units, not via British Gas. But ask the public? Who are they mad at? Its british gas, for making obscene profits

image

image

Their profits came from upstream generation

image

Now there is a question there. because to be frank, i donā€™t know anything about nuclear and E&P production and how that leads to a 1000% increase in profit with only a small increase in actual production.

But thats not what people are mad at are they?

And its similar elsewhere. BP and Shell mad at them. despite theyā€™re being global companies with several subsidiaries and a complex income stream. How is the news and armchair activists simply saying ā€˜to much profitā€™? to much profitā€¦ of what exactly?

i could talk more about this , but i have some other things to go do for now :slight_smile:

edit: theres also a numbers problem. people think 100 million is a lot of money. its not. but humans have a hard time understanding these kind of numbers, theyre not really comprehensible. so 100 million may as well be 100 trillion. it seems huge either way even if for these larger companies, its barely anything when you look at some of the projects theyre doing etc.

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I do agree with some of this, but 100
Million is a lot of money however you look at it. Sure, thereā€™s a lot more money than that and lots of things are more expensive but relative to most people experiances Ā£100,000,000 is loads!

Also re investing being accessible. It depends where your cutoff for ā€˜richā€™ is. I can afford to invest a couple of hundred quid a month which is quite decent imo. I know people whoā€™ve been evicted because they couldnā€™t afford their mortgage etc. try telling them that investing is affordable because of brokers like freetrade. There are tons of people who budget down the penny, and that number is rapidly increasing. There are nurses and working families visiting the food bank. I know this because Iā€™ve dropped of donations there and seen them with my own eyes. To them anyone with a couple of hundred quid a month to invest is rich. Which I totally understand even though I donā€™t feel rich. To me youā€™re rich if you own your own home and have a fancy reversing camera or apple CarPlay type thing in your car. Itā€™s all relative.

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Yeah it is a lot of money. But on a scale, its not necessarily actually that much.

If you want to install a new wind farm? The Sofia wind farm thats going to be built is installing 100 SG 14-222 DD wind turbines to create a 1.4 GW wind farm. The project is expected to cost around Ā£3 billion. 30 times the number we were talking.

a million of 3 billion those numbers are really not comprehensible to our brains either way. weā€™re not build to really understand large numbers.

Point being, yes its large, yes 100 million is a lot of money. But often its actually not as large as it seems it should be.

I think when it gets to individual situations we get to a point where its very personal and isnt helpful on an online discussion because we end up talking generics and the issues to solve those individual cases you mention are solvable but very specific to the person and their situation.

Yes, thereā€™s times where people cant do certain things, but it normally shouldnā€™t be all the time.

People forget this. On paper, most of the country is rich and very well off. Weā€™re immensely more well off now than we ever have been, and by comparsion world wide almost all of us live in luxuary.

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All I can say is that were in a position where it might be an interesting time to be a stock market investor.

This time round Iā€™m not referring to the regular ups and downs in the market either.

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What do you mean? that people will go after investors?

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Itā€™s too early to tell. But if people who are low income / or see themselves as low income build resentment over a period of time, itā€™s plausible.

As I say itā€™s too early to tell for now, but I can see some are already having feelings of resentment regarding dividends paid out.

This will either gain traction or it will fizzle out depending how the cost of living thing progresses.

If anything happens I suspect they may campaign to limit our earnings somehow.

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Hm, I see where youā€™re coming from. I get the feeling your original insight was more correct, ā€˜armchair activismā€™ and these types never amount to large issues. Theyā€™d have to give up their pensions, quit their jobs, and convince the majority of workers to do the same. Which just isnt going to happen. Especially in large companies, and especially in small startups.

Many large companies for example almost all employees are themselves investors. Take BT as an example (just because im aware of how they work), 100,000 employs almost all of them have investments (unless they sold them), and they all get dividend payments.

The number of people who are on the side of bringing the system down is generally low. Maybe someone tries to protestā€¦ who knows. but its not going to change the entire financial system because of it. There just isnt the appetite i donā€™t think

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Maybe a bit off topic and correct me if Iā€™m wrong place, but didnā€™t Tom the guy who founded Monzo create a platform or company where they would buy shares in activism and try to get something overturned? Really bad example I just canā€™t remember the name of the company

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The news reporters failed to mention the billions of pounds BP and Shell have written off due to selling investments in Russia.

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Iā€™m not sure. But activist investors are a thing. Usually because they want to make a change in a company. Elon musk would probably fall under an activist investor in terms of his attempt to buy a significant control over Twitter.

The difference is the OP discussion is more around activists who are somewhat against the idea of shareholders existing.

Itā€™s difficult for most people to become activist investors as well. Youā€™d need to form part of a collective group, actually agree with each other, and be willing to put your money to work. Even then, for many companies it would be unlikely your have enough average people for a takeover. But a large stake? Maybe if you managed to actually collectively get everyone to work together

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Blackrock are working on technology to enable the holders of their ETFā€™s to vote at AGMā€™s - with Larry Finkā€™s push for companies to be more ESG compliant it could be a massive change.

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ESG is a bit wushi washy I think, itā€™s not always clear what itā€™s trying to achieve. But maybe if it encourages more companies to improve compensation and benefits Iā€™m all for it.

more access to voting is always a plus as well. Seems like itā€™s often overlooked as not important

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The whole ESG thing is a confused placebo to parented companies are doing something while earning fund managers an nice extra fee.

If Blackrock pull this off that will give voice to $10tr worth of investor capital in pensions and ETF.

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Yeah the issue with ESG is who decides whatā€™s good and bad? Itā€™s somewhat subjective and probably needs something more democratic maybe. Iā€™ve no idea. But I do like the idea of a way to show a companies impact and how they care for employees.

I think the obvious problem is that because thereā€™s no standard API or method itā€™s difficult to trickle down. Blackrock might make it work for their funds but you still canā€™t vote if your broker doesnā€™t support voting

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In what way is that ludicrous?

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In my eyes 15/hour is ludicrous for a non high skilled role. I speak for myself on that one.

I do get they want pay increases. Yea, sure, fine, I get it.

I just think that 15/hour is asking for too much for this sort of role. For the record even I donā€™t get that and I work in financial services sector.

The unions are telling these people to go out and campaign for this sort of money and the picketers are running with it, perhaps not realising they have been set up to fail by asking for too much.

I blame the unions a million percent. They need to bolster Thier image and have led these poor people to believe itā€™s a possibility. The union bosses get paid and the picketers may loose money and the public loose out on service. The only winner (if you could call it that) is the union bosses who are vying for relavence at a time when unions already are relavent, they are just trying too hard.

Also I am a member of a union and am not inherently anti union, Iā€™m perhaps more pro ā€œletā€™s be a realist in our expectationsā€.

All opinions are my own

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Thatā€™s negotiation. Start higher and the end result might sorta in the middle.

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