The Investor’s Role in Society — What Are We Actually Doing?

There’s a strange guilt that sometimes creeps into the mind of the long-term investor.

We don’t build things. We don’t invent products or hire workers. We don’t set prices, run factories, or meet customers. At dinner parties, we can’t point to a building or a billboard and say, “I made that.” And if we’re honest, most of us don’t invest directly into new companies or provide the capital for someone’s first factory — we buy our shares off someone else, in the so-called “secondary market.”

So what are we actually doing?

It’s a fair question. One most long-term investors like ourselves have wrestled with over the years. And we think the answer begins not in the spreadsheets or the screens, but in a deeper understanding of time, risk, and responsibility.

Primary vs. Secondary — And Why It’s Misunderstood

Let’s begin with a simple distinction. When you buy a share directly from a company — say, in an IPO or capital raise — that’s the primary market. You’re literally giving that company new money to use for its operations or growth.

When you buy a share from another investor — which is what most of us do 99% of the time — that’s the secondary market. You’re just exchanging ownership. No new money flows to the business.

And this is where most people dismiss the role of investors as “just speculation.” But that’s an overly narrow — and historically incorrect — view of capital markets.

Every company starts its life with a fixed number of shares. From that point forward, ownership changes hands. The primary investors — maybe venture capitalists, founders, or early backers — pass along their stakes to others. This happens through sale, through inheritance, through gifting. And with each new owner comes a fresh decision: to hold, to buy more, or to sell.

That chain of ownership is not meaningless. It’s not neutral. Every investor is choosing — with their own balance sheet — to tie their household’s future to the future of that company. That is capital allocation in its most fundamental sense.

The Capital Still Belongs to You and Me

It’s important to remember that even in the secondary market, the company is still using that capital. The money raised in its early days may have built factories, signed leases, bought machinery — but that capital is still working. It hasn’t vanished.

And more importantly, the ownership claim that a share represents still grants the holder a right to that business’s future earnings and in most cases, voting power.

You and I might not be handing a cheque to the CEO, but if we choose to hold a stock for ten years, we are in effect saying: I believe in this business enough to let my personal capital sit here, while it attempts to grow and serve the world.

And if we get it right — if the business succeeds — society rewards it. Through profits. Through dividends and capital appreciation.

Those rewards, in turn, are a signal. They guide us. They help capital migrate toward efficiency. And slowly — often invisibly — the decisions of long-term investors shape what types of businesses are built, which survive, and which fade.

The Judgement We Make

Investors are not entrepreneurs. We haven't come up with the idea. But we do something else — we make a judgement call.

We ask:

• Is this product or service valuable to society?

• Will it endure

• Are the economics sound?

• Is the price fair for what it might return over a decade or more?
  
  

These are not trivial questions. They are deeply tied to human behaviour, to technological shifts, to global supply chains and labour trends and policy decisions.

In essence, long-term investors make bets on the future shape of the world. That’s no small thing. And the world changes constantly — which means our understanding must too.

We must study. History. Philosophy. Human behaviour. Industry and household economics. Consumer psychology. And we must do so not to find a “hot tip,” but to understand how the world is working — and how it might work tomorrow. That is capital stewardship.

The Risks We Carry

There’s a Stoic element to investing — Marcus Aurelius would’ve appreciated the investor’s reality: that outcomes lie outside our control, but preparation and discipline do not.

We cannot control what a business does after we buy it. Management may falter. A competitor may rise. A black swan event may turn the world upside down.

But we can control the reasoning behind our investment.

We can accept that we might be wrong. And we can design our portfolios — and our lives — to absorb those blows when they come.

The long-term investor is a student of both probability and temperament. If they do their job well, they compound both capital and understanding.

And over the long arc of time, that can be tremendously valuable — not just for the investor, but for the society their capital supports.

The Role of the Trader

It’s worth contrasting all this with short-term trading.

Traders serve a purpose — they provide liquidity, which helps markets function more efficiently. Prices become more accurate. Spreads tighten. The cost of capital, in theory, comes down.

But traders are not allocating capital for the long-term. They are not judging the enduring value of a business. They are surfing volatility.

There’s nothing morally wrong with that — but let’s be clear: it’s a different game. And a different role in the economic system.

The Role of Patient Capital in a Short-Term World

One of the least appreciated — yet most vital — roles investors play is that of time arbitrage.

In the 1960s, the average holding period for a publicly traded stock on the NYSE was over eight years. Today, it’s measured in months. In some cases, especially among institutional and algorithmic traders, it’s measured in days — even minutes. 

That shift has consequences.

Short-term ownership incentivises short-term thinking. It creates a culture of quarterly earnings obsession, where businesses feel pressured to beat short-term expectations at the expense of long-term value. Companies cut research budgets. Delay product improvements. Avoid bold bets. Play it safe. Worse still, some engineer their numbers to meet analyst estimates, sacrificing real progress for optical performance.

It’s a fragile way to build businesses — and a fragile way to build economies.

Patient capital, on the other hand, gives companies the breathing room to think long-term. To take risks. To innovate. To endure the early losses that often accompany the development of something new. If a business knows its shareholders are thinking in decades, not quarters, it can operate with courage instead of anxiety.

This is why the presence of long-term investors matters.

They act as a counterweight to the hyperactive pulse of markets. They bring a kind of ballast to the system — providing stability not through control, but through commitment.

Behavioural finance has long shown that markets are prone to mood swings — to herd behaviour, panic selling, euphoric buying. Long-term investors help anchor valuation to fundamentals. They reduce volatility. They remind companies that they’re not alone — that someone believes in the plan, even when the plan isn’t yet profitable.

In this way, the investor becomes more than a capital allocator — they become a partner in time.

Investing Is a Vote — With Your Balance Sheet

In the end, every dollar we invest is a vote. Not just for which business we want to own, but for the kind of future we believe in.

That may sound lofty, but it’s practically true. If you consistently invest in companies that pollute the environment, treat labour poorly, or extract value instead of creating it — then that’s the future you are underwriting.

Likewise, if you invest in businesses that treat customers well, innovate responsibly, and build durable value — then your capital is supporting a better model.

Long-term investors are not passive. They are quiet participants in shaping the world. Their votes matter — not once, but every day they choose to hold a company on their balance sheet.

Final Reflection

So what are we actually doing as investors?

We are absorbing uncertainty on behalf of others. We are choosing what businesses deserve our trust. We are putting real money behind our view of what is valuable, useful, and enduring.

That is not nothing. That is stewardship.

But like all forms of stewardship, it requires care. It demands knowledge. And it rewards patience.

In Marcus Aurelius’s words: “The soul becomes dyed with the colour of its thoughts.”

In investing, perhaps we can say: Our portfolios become dyed with the quality of our judgments.

Let’s make them count.