Soundbite: Values-Investing

Well, at the time of recording, it is my Birthday and I am on a short break with my family in New York before heading to Utah for a week of skiing. As a result, today’s episode is going to be a short, yet important one. Warren Buffett and Charlie Munger might be value investors, but they and indeed I am probably also ‘values investors’ too.

That’s what I want to talk a little about today…values-based investing.

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Transcription of the show

Hello, and welcome to another episode of The Property Voice podcast. My name is Richard Brown and as always, it’s a pleasure to have you join me on the show again today.

Well, at the time of recording, it is my Birthday and I am on a short break with my family in New York before heading to Utah for a week of skiing. As a result, today’s episode is going to be a short, yet important one. Warren Buffett and Charlie Munger might be value investors, but they and indeed I are probably also ‘values investors’ too.

That’s what I want to talk a little about today…values-based investing. So, let’s go right now the…

Property Chatter

Super Bowl

Values-based marketing is polarizing and also engaging. Political, social and other issues being taken on by some of the world’s biggest brands.

Nike – Colin Kaepernick tie-up

Gillette – ‘The best a man can get’ became ‘The best men can be’.

Apparently, values-based marketing is a bit of a big deal now and as you can see, many brands are starting to jump on the bandwagon.

However, as I read around the topic earlier this week, what struck me as a missing link was the idea of congruency, or as I like to call it, alignment.

You see our values should reflect who we are, what we believe, how we think and crucially…how we behave.

Turning back to the Nike tie-up with Colin Kaepernick. How will Nike ensure that their stance in thrusting what appears to be a marginalised sportsman that made a stand against racism into the forefront as the face of their new marketing campaign marry up with the accusations of child labour and exploitation in their far-flung factories?

Honestly, I don’t know if Nike have a problem with child labour, that’s not my point or concern here. My point is that a values-lead approach to marketing has to be clearly aligned to who we really are, what we believe in and crucially how we act, even when nobody else is watching.

That’s the acid test of our values – how do we behave when nobody else is watching, or at least when we think nobody else is watching?

Another recent sporting event was the Australian Open tennis of course. I recall someone sharing a CCTV clip inside he stadium where a security guard made one of the world’s most famous tennis players wait before he was allowed into a secured area. It was Roger Federer that was asked to wait, who is quite possibly the most recognisable male tennis player of our generation.

How did he react when asked to produce his security badge and being told to stop when he did not have it on him? He simply waited patiently for a member of his team to turn up and show the required credentials to access the secured area. No fuss, no ‘do you know who I am’, just a calm and patient wait until he could display what he needed to the security guard, who was merely doing his job.

You see, there are lots of marketers out there right now looking at values-based marketing as a means to differentiate and build loyalty with their customer base. However, I strongly believe that you cannot create a values-based marketing campaign, you can only speak the truth of what our values are deep down inside of us.

Now, here’s how it relates to us as property investors…

As landlords – and are our values towards our tenants. Do we see them as a commodity, purely to pay off the debt on our investment properties? Or, do we see them as fellow human beings that have a life, interests, a need for a decent place to call home and also suffer with challenges from time to time, just like the rest of us?

I have recently had a few tenant arrears problems, possibly due to the time of year and all that. But, for those that communicate with me and take responsibility for their actions, I am happy to work with them to help them work through a short-term bump in the road.

As investors – do we see ‘motivated sellers’ as an opportunity to squeeze even harder with sharp practices such as a last-minute price drop just before completion to gain even more from a vulnerable seller? Or, do we recognise that our accepted discounted cash offer is a genuine opportunity for someone to rid themselves of a highly pressurised situation and make a fresh start in life and is sufficient for us at the same time without holding our feet on their neck? These two situations are actually quite different and require a fair and balanced approach to the situation that does not lead to us overstepping the mark.

As property service providers – do we just want to sell our wares with flaky ethics, including masking the truth, downright deception or deliberately breaking the promises we make to our clients? Or are we fair and balanced in highlighting the drawbacks of an investment, hold our hands up if we drop the ball occasionally and simply commit to put right what we promised we would do in the first place, even if things have changed?

You see, a values-based investor is someone that does not just create a marketing campaign with some clever words and imagery or getting behind a worthy cause. A values-based investor lives and breathes what they stand for in both word and deed. They may not be perfect and can make mistakes, but they are genuine, authentic and crucially congruent in their values as much as possible.

I am in the USA, as I mentioned, and right now there seems to be a massive ‘trial by media’ type of movement going on from what I am observing. This may or may not be fair, but regardless of that, people do make mistakes and probably do deserve a second chance…wouldn’t you want that if it were you that slipped up? Yes, there are always consequences, but we are often judged, just as we judge, so why not be an equitable judge?

I will finish with a small example of where my own values went a little off-kilter in the last week, which really bothered me and is a clear sign of my values-alert system kicking in.

Someone sent a connection request to me on Linked In and as it happens sent a follow up message soon afterwards, with their pitch for business. The thing is, this person had invited me to connect with no accompanying cover note, then their message invited me to be interviewed to see if I qualified as one of the best people in the industry for them to deal with!

I reacted quite poorly and with sarcasm in response, which seemed to cause some confusion with the sender. However, in truth, I caught myself acting against some of my core values, especially of fairness and respect. I was very honest with them, but I was not especially fair or respectful in my curt response. After recognising this conflict with my own values, I wrote to the sender again, this time with an apology for my tone and approach with them and wished them well for the future.

You see, they were ultimately just trying to further their business, so there was nothing wrong with that. I didn’t care for the approach and style too much, but that was no excuse for my less than respectful response. But I did the right thing and corrected my part in it quickly, once I had realised my mistake.

Now, I am not saying that I will do business with this person, as clearly our values were at odds with one another in the first place. But that did not justify me deviating from my own values in the way that I responded. So, I reconnected and realigned with my own values and at least I can have peace in that.

Perhaps there is something we could all learn from this encounter and the need for true congruency or alignment of a genuine values-investor approach?

Food for thought isn’t it?

OK, so that’s me done from The Big Apple this week. I am off to enjoy a Birthday brunch now, but don’t forget the show notes are available on our website www.thepropertyvoice.net, including how you can reach me by telephone. Or, if you want to talk about anything from today’s show, or just talk property investing more generally, email me at podcast@thepropertyvoice.net, I would be happy to hear from you!

All that is left to say, is thank you very much for listening once again this week and until next time on The Property Voice Podcast…it’s ciao-ciao.

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