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Travellers Int’l Hotel Group & the morality of buying tragedy

TAGs: Editorial, Philippines, Resorts World Manila, travellers international

A gunman walks into a resort and kills 36 people. Unfortunately it’s not a joke. ISIS claims responsibility, though the man, Jessie Javier Carlos, was a government tax man gambling addict $81,000 in debt. He was fired from his job for, get this, not paying taxes. Nevermind that this brings into question every ISIS claim of responsibility for anything. The group is really a bogey man that media can point to in order to get the scared masses glued to news broadcasts so they can charge more for ads. The morality of this sort of journalism, reporting on claims of responsibility for murder without verifying the claim, is rarely questioned, if the group it is pinned on is public enemy #1.

Let’s address a few controversial issues. First, how to prevent these incidents from happening. Second, the morality of buying the dip in Travellers International Hotel Group (RWM) and seemingly profiting off of mass murder.

No doubt anti-gambling moralists are going to blame gambling for this crime and push for more laws against it, much like UK Prime Minister Theresa May is using the recent London attack to push for global government control over the internet. But driving gambling into the underground economy is likely to cost more lives than it saves. A much more reasonable way to prevent mass shootings like this from happening in the future is to put resorts in charge of their own security and liable for damages in the event of a breach. A second option is to relax gun laws and allow responsible gun owners to carry their firearms, which Philippines Republic Act 10591 passed in 2014 makes it very difficult to do for the average nonviolent Filipino, but very easy for violent crazed people to ignore, as happened here. If you’re planning to go out in a blaze, Republic Act 10591 isn’t going to stop you. It’s just going to make it easier for criminals to kill unarmed people.

Travellers Int’l Hotel Group & The Morality of Buying TragedyAs for the second question, is it moral to buy the dip in RWM stock? Let’s do a value-free thought experiment to try to answer that question. Let’s assume it is totally immoral to buy RWM shares within, say, two weeks of the mass shooting, and let’s say everyone in the Philippines is moral and follows this moral code voluntarily. What happens to RWM shares then? They fall to near zero as no buyer is willing to match sell orders and the company and its customers and investors all suffer even more. The better question is, Is it moral to sell RWM shares on the news of an attack? Well, if that’s immoral and everyone is moral then shares skyrocket as nobody sells and buy orders come in as a show of support or what have you. That could be even worse as companies may start benefiting off mass shootings because it would cause their equity to spike higher, in the event that it is perceived that selling shares on tragedy is immoral.

Really, buying and selling shares of anything is an amoral, value free activity. What would be absolutely immoral, obviously, would be shorting the shares, orchestrating a mass shooting, and then covering your short on the news, as Osama bin Laden did surrounding the 9/11 attacks with airline stocks. Or getting news of an imminent mass shooting before it happens, and instead of warning anyone, shorting the shares and covering. But if you’re not involved, buying tragedy can be seen in two different, opposite ways, depending on your mood. It’s either profiting off tragedy, or else showing support for a company that just underwent tragedy.  Two completely opposite ways to look at the same exact move. The ascription is entirely subjective.

Going back to flipping the question around, what about those selling the shares on the news and causing the 8% dip in the first place? Why isn’t that immoral, abandoning the company in its time of need? Why aren’t they attacked on moral grounds for selling? And if they’re selling, somebody is buying. Aren’t the buyers doing their best to support the share price in the resort’s darkest hour? Should they not be applauded rather than frowned upon then? The answers to all these questions only depend on wherever one’s mind wants to go and however they may want to ascribe whatever motives to morally neutral actions.

What about a mandatory two week freeze on the trading of shares following a mass incident like this? Well, that would be more evenhanded, but likely would only hurt the company even more as the inability to buy and sell equity would only harm the share price more than otherwise once trading resumes. Remember what happened to the Dow Jones when it opened up one week after the 9/11 attacks. It fell 7%.

Ultimately, the answer as to the morality of trading tragedy should be left up to the company itself, the actual victim in the equation. If Travellers International or any other company wanted to suspend trading in its stock in order to mourn, they should have the option to do so out of respect for the victims. At that point it actually does become a question of morality in terms of listening to the will of the victims. If a company wants to take the opposite “The Show Must Go On” approach and defy the criminal then its will should be respected just as well and trading should continue.

That said, bottom line, should the dip be bought in Travellers International Hotel Group? If trading tragedy makes anyone personally uncomfortable, then obviously not. If anyone has a personal moral code regarding their own trading behavior then it should be followed for one’s own psychological and spiritual health. But if you see it in the opposite way, as supporting the company in its time of tragedy, then yes, it should be bought, because as horrible as the attack was, Travellers will recover with stronger security and more vigilance in the future.

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