Ep. 052 - Investing with Stewardship in Mind: “Keeping the Garden"

Episode Transcript

Spencer
If we are to cultivate and keep the garden. The question is, what companies do we invest in and how do we think about the products and services that they deliver? Today, we'll be talking more about what it is to keep the garden, what those limits are in terms of the way that we look at those products and services and how we select those as an investor.

Austin
So, Spencer, if we're going to look back at what we have been talking about for the last couple episodes, really we want to peel back the layers of the onion and really see investing clearly. We as investors are not just investing in this ethereal market. We're actually deploying capital. We're clothing companies and capital for them to then deliver goods and services to the communities around them.

Austin
And so if we think about the story of the garden, God is a worker. He created a world. He then placed man in it. And in our last episode, we talked about what does that mean to cultivate the land. And I think there's some real nuance here of God gives us dominion, but he doesn't ask us to take domination.

Austin
A dominating approach to it of this is mine. I get to do whatever I want. And similarly, when we think about this idea of cultivating and keeping, God wants us to bring about goodness and truth and beauty from the world that he's created. We talked last week about the reality that God gives grain, but he empowers humans to then make bread, to put our hands to the soil, to cultivate it, to bring about goods and services from the the world that God has made.

Austin
So when we think about keeping, what are some things that we need to know about keeping the garden?

Spencer
Well, again, we go back to this idea that everything that God made was good and humans very good, and that the fall has tainted or corrupted that in some ways. But there's still a level of goodness in all that he made. So as we think about what our job is, he has put boundaries on how we cultivate, how we innovate.

Spencer
He doesn't want us to just say everything's on the table. It just as long as we have efficiency, just as we get more and more and more. Now the the actual way that we think about that is there is a keeping of the garden. And so as we look at that in particular there, that instruction really is keeping is to cherish and to safeguard that beauty and goodness that is inherent in creation.

Spencer
when we're cultivating it matters what we make. It's that beauty, goodness construct that, that we talk about. And so with creation, you can kind of think about this. There is a level of beauty and goodness that is manifest that's already there. that all we have to do is say, okay, well, if we just plant a few more flowers, you know, we're going to see that beauty, displayed.

Spencer
there is a level of innovation, you know, that we can apply to that so that we can plant more flowers and maybe have a greater, beauty to that. There are also some practices, though, that we could put in place that would be detrimental. It might produce more flowers, but it would harm other elements, could harm people.

Spencer
Even with some of the pesticides, you know, that we would use. So we have to be very careful. There's also hidden things within what God has created. And so there is goodness there with within his world that maybe we don't see, that is immediately manifest. And so part of what we do is we cultivate and innovate like we were talking about last time with George Washington Carver.

Spencer
He figured out that there were, some of these plants that he could use for products and services that no one had ever thought of. And so he took some of that hidden beauty, and he made it manifest. Now, he did so, though in a way that he was still in keeping with God's original intent and design. You know, when you think about, say, peanuts, just being able to move a peanut, which is, you know, delicious food, for many of us into peanut butter.

Spencer
Well, that becomes now a product that's far easier then to distribute to use. and, and, you know, particularly with peanuts being able to help replenish the soil that had been damaged by over, use with cotton and other types of, of cash crops. he was able then to kind of take that and move. So we think about that keeping though, that is making sure that we're innovating in a way that is not then, diminishing God's creation.

Austin
Yeah. Well, and I think that comes back to this broad idea of stewardship that we've talked about when God employs us as stewards. He doesn't say, you get to use the resources however you want. We are entrusted with God's resources to utilize them, how God would want them to be used. It's not merely me as a steward. I get to do whatever I want to do with it.

Austin
It is I and put in charge of these things for a temporary time, to then offer them back to the master. And so as we think about the garden, as we think about cultivate, as we think about keeping, we have to think about that in light of what is honoring to the Lord with those resources. Is he going to in how we are bringing some of that hidden beauty out of the ground?

Austin
Is the way in which we are doing it, the way that God would want us to do it. Is the way that we are doing it in a posture of stewardship or is it a posture of, I just need to get what I need to get. And I think that's the, the difference here is that when we look at good products versus bad products, when we look at what brings about beauty in goodness, it's am I taking advantage of someone else just so that I can make more money?

Austin
Or is it actually offering something to the world that that brings about restoration and flourishing in goodness?

Spencer
Right. And I think we have to acknowledge that there's always some level of gray among most companies. you know, when we have, say, a fast food company, you know, there is a product or service that's being offered, it saves us some time. you know, some of the other practices maybe that they utilize in terms of creating or growing the food, maybe are not quite as, you know, desirable in some companies in particular, although with other companies, those practices are far stronger.

Spencer
But there's some level of gray that we have to acknowledge. But I think one of the things that we want to talk about today is getting into Will. Are there are there companies that are out there that their products and services? It's hard to see any level of beauty and goodness come from them. Instead, it just seems like it's leading to a diminishment of people, of the world, of, you know, God's creation overall.

Austin
Yeah. As we come back to kind of this general thesis, we look back at where we've come from before, and we see throughout Scripture God says, do not take the profits that you've made off of these unjust means and try to bring them into the temple. They're an abomination. When Judas brought the blood money from betraying Jesus to the Pharisees.

Austin
They didn't accept it back. They knew it was blood money. They knew it was ill gotten gain. And so as we think about this, this idea of we have fallen into sin, our work has fallen into sin. The entirety of our being has fallen into sin. And so when we think about the companies that we own, who are we clothing and capital?

Austin
Are we empowering them by our investment decisions to then bring about goodness and beauty to the world? Or are we empowering them to bring about destruction? And like you said, there is a whole lot of nuance and a whole lot of gray to this. But there are certain places where you could say, yeah, this is almost purely ill gotten gain.

Austin
This is almost purely a destructive behavior, right? Those companies, yeah, they may give to a charity that I love and support, but that doesn't give them justification. If they're creating a product that actively kills people. Right. So I think that that's the tension that we want to to sit in here. It's that yes, I cannot control what another human does.

Austin
I cannot decide for you whether you smoke or drink or do any of these other vices. But what I can't control is am I profiting off of your destruction? And that's really the linchpin here, is am I profiting off your destruction? And then just trying to close my eyes to where that profit comes from and saying, well, I'm just going to give it to God because God doesn't want it.

Austin
He doesn't want the blood money, right?

Spencer
Right. Well, and we see that, you know, like you were talking about in the temple leaders, even those who were hypocrites in paying for Jesus's betrayal and demise. as we think about this, I think part of what we reflect on is are these products and services. This level of diminishment, is it just primary? Is it just intrinsic to what this offering is?

Spencer
so, you know, if we think about it, whether it is, diminishing our neighbor, whether it is diminishing the environment, I mean, there's a lot of folks, I think that would say, well, I'm skeptical about, you know, all of the environmental regulations. Do I really care if one animal or another is protected and, you know, one part of the country or another, but at the end of the day, you know, I remember, a couple decades ago when my parents had a place on the Tennessee River and could go out, you know, water skiing.

Spencer
Well, the water skiing experience was not all that pleasant because there had been so much dumped in the Tennessee River. And, you know, you can't fish from the Tennessee River, basically. you know, you wouldn't want to eat fish from it because of the level of toxins, you know, that are that are held there. But even you get in the Tennessee River for, you know, water skiing, and you have this film on you.

Spencer
Yeah. You know, at the end of the experience and you wonder, how much did I ingest here? I've just, you know, all of these chemicals and such, and you just say, this doesn't feel great. Yeah. You know, but we we tend to turn away maybe if, if that happens in someone else's backyard, you know, if we've got a polluter that is, you know, 100 miles away or a thousand miles away or across the globe, we tend to, you know, say, well, you know, that's just part of doing business.

Spencer
Well, I can tell you, if it's one mile up from where we were on the Tennessee River, and they're just dumping all kinds of stuff in, I would have felt far different because I like to get out on, you know, the river in a kayak or canoe or fishing or, you know, water skiing, these fun, different things, because there's no capacity to do that.

Spencer
In that same way, if you've got, you know, companies that are just dumping their chemicals in. Right. So, Austin, as we think about this, what are some of the categories or ways that we would segment these bad products or bad services?

Austin
Yeah. So when we think about bad products and services, we think about things that actually destroy, that create addiction, that create death. And three, that I think are fairly easy to to set apart. These are not going to be comprehensive, but things that are like casinos, tobacco and pornography. And again, when you look at it on the outset, you can say, well I don't care if somebody else gambles.

Austin
I don't care if somebody else smokes or watches pornography. What does that harm me? And I think, yes, that is an okay way to think. But I don't want to profit from their destruction. Again, I cannot choose whether you decide to participate in that, but I can choose whether I get money from that. Right. And so let's just take a look at each of those kind of in a more deep level to see what does each of these areas produce and how does it make its money, and then how am I participating in that?

Austin
And so we look at casinos. And the reality is casinos are highly addictive. And I would even push this to sports betting when casinos make money, they make a lot of money off of slot machines. In slot machines there is a real return that happens immediately. You push a button, you pull a lever and you see, did you win or you did you lose.

Austin
And the casino is going to make it so that at some times you win and it's sometimes you lose, but it's going to spike your winnings so that that dopamine hits and so that you keep playing. But over a long period of time you're guaranteed to lose. And casinos are like a funnel. They have 75% of the people practice what is socially responsible.

Austin
Gambling is what the industry would call it, but that only makes about 4% of the profit. Whereas the people that are addicted to gambling, it's about 25% of the population. They make about 95% of the profits for casinos. So they know that they're only making money off of those people that are going to just continue to push that button, push the button, push the button, and waste away their life savings.

Austin
But as we've talked about, it's a funnel where in those 25% they're going to lose their money. It's a higher rate of suicide than the general population of those who are addicted to gambling. You're going to go bankrupt. You're going to lose more marriages. You're going to lose your homes. It's it's horrific. And then those people that may start off as responsible gamblers will they have to funnel into that place of addiction.

Austin
And so really you're profiting off of the reality that people are going to not go to work. People are in Georgia, 61% of pathological gamblers in 2017 reported missing up to five days a month of work every month because of their addiction to gambling. And so we look at it and we say with online sportsbooks, it's kind of you're starting to get that same dopamine response that you would get from a, from a slot machine where you used to only be able to gamble on a game or what, who got more passing yards in a game.

Austin
But now you've got these prop bets where it's who's going to catch the next ball, is it going to be a run or a pass? And so you've got this instant hit to where it it just sucks you in. I was looking at, one of these sports books, and from 2021 to 2023, they have nearly doubled the amount of monthly users.

Austin
And at the same time, their revenue per users has increased from about $67 per user on a month to month basis to $113 per user on that same period. And so we're seeing that gambling is addictive and people are constantly losing money as they're playing. And so by me investing in that company, by me clothing them with capital, when those people get addicted, when they go bankrupt, when they lose all of their life savings.

Austin
I get their money. Right. I don't like how that feels.

Spencer
Right. Well any company that we invest in, we should be able to root for on some level because we want their revenue to increase, their profitability increase. We want them to expand their operations. But if we think about a casino online gambling, one of one of these businesses, the way that we get paid is that addiction increases. It's very linear.

Spencer
You know, you need more addicted people. You need more people using more revenue, pushing more money into that system. And and then you will get, a higher level of profitability, higher level of dividends, a higher level of, you know, growth within that stock, but you're profiting from the outright destruction of people like we talk about, because it's not like you said.

Spencer
It's not the people who are doing things in a very moderate way that, makes money. Yeah. By and large, it's the folks that they are addicted. Yeah. And they cannot get out.

Austin
Right. And what we'll see about both this and the others is it's really exploitative in nature and it's predatory in a lot of ways. And casinos, sports betting, all of these things know how to prey on our natural instinct of thinking, I'm going to win. When we look at other products or services that you buy and consume. There is a linear agreement.

Austin
If I buy shampoo, I know that what I'm going to get is going to wash my hair.

Spencer
But you're not going to take 90 showers a day, no matter how good that shampoo feels, right?

Austin
But with gambling, it's the lure that you might win, right? You're not actually putting money in with some sort of, quid pro quo, per se. It is this lure. And so even these casino companies are doing much better at advertising to kids. They have apps on the App Store that kind of start pinging them of, well, if you buy this treasure chest, then you may get 50 extra coins to buy more treasure chest.

Austin
So these companies are starting to really think about how do I instill in children an addictive behavior so that later in life then we can exploit their vulnerability.

Spencer
And you know, we look at that and it's amazing how thoughtful they are in fostering this addiction. You know, one of the things that's often cited and noted about casinos in particular is when you were playing that slot machine, there are no windows, there are no clocks, there's no nothing outside that would distract you from pulling that lever or hitting that button.

Spencer
Yeah, because that's what they want you to do. And even if, you know, I mean, there are people that have died because they have played this three and 4 or 5 days at a time and not slept. Yeah. It's that addictive. Yeah. For some people. And it's, it's a, it's a gradient. It's a pathway. Right. So you know there's no there's no amount I think that you could say that's out there that's like oh well this will never hurt you.

Spencer
Yeah. No it's like smoking, you know it's going to lead you potentially down that path. Now, it may not kill you. And, you know, there may not be, you know, all that much harm, you know, to to a one person. But as a population, there's no denying that they're trying to create a level of addiction. That's how they make their money.

Spencer
And anyone who enters there and begins puts themselves at greater risk.

Austin
Right. Well, and you mentioned smoking. So let's go to that tobacco industry. tobacco is directly linked to numerous health related issues. About 8 million people die every year from smoking, about 1.2 million are caused by secondhand smoke exposure. On average, smokers lose 15 years of life. It is one of the most direct causes of cancer. And so when we think about smoking to pack industry tobacco you can invest in tobacco companies.

Austin
And again it's one of these things where it seems innocuous. It seems like yeah it's just tobacco. Why why do I want to avoid that. It can generate returns. Well tobacco. Yes it is more regulated here in the States. But we look at abroad and the World Health Organization and other studies have been done that have looked at globally and they looked at 40 countries across the globe, from Latin America to Asia to Africa, and they started looking at where cigaret advertisements are in these countries by sugary drinks and candy.

Austin
And one meter three feet off the ground. I don't know about your eye level Spencer, but my eye level has not been three feet off the ground since I was oh maybe six years old. Right. And they're in these places. They are targeting children. Right. Because they know that they can exploit children and get them addicted to smoking.

Austin
And then they profit off of that for years to come. They profit off of the destruction of humans. So when you put your money into a tobacco company, you are reducing the life of a smoker by 15 years. You are making money off of their death.

Austin
There's just not a whole lot of way to get around. I don't want to profit off of the death of other people.

Spencer
Right. Well it's like you said it's easier to maybe rationalize it when we look at it in the States or in Europe or the West, because you say, okay, people, unless you've been living under a rock for the last 30 years, you've heard that smoking is bad for you. you know, there's all kinds of different disclosures, there's all kinds of different lawsuits, but it's really the profitability.

Spencer
It's the same kind of thing with casinos. The profitability of these companies is no longer in the West, and it's no longer in the States. The lion's share of the profitability is in the developing world, where they can go to a, you know, soccer match and hand out, you know, cigarets to seven year olds. Yeah. Because they're not being regulated in the same fashion.

Spencer
And so you're maybe not contributing quite as directly to the, detriment to the destruction of your brother and sister locally. You certainly are doing that globally. Yeah. You know, by investing in tobacco companies. Yeah.

Austin
And again, when we think about closing them in capital in the United States, smoking related health care costs are about $170 billion. So we're clothing a tobacco company in capital to produce destructive behavior, but then actually comes back and costs us more in the long run.

Spencer
Well, and it's so interesting. You know, we think about not just the direct impact like you were talking about to people when we've got, you know, a loss of life and all kinds of different things, but it's also hurting second and third hand. You have people so we've all heard of secondhand smoke where, you know, you're like my mom, you know, grew up in a in a family where her dad would go on long Sunday drives and would have the windows up and smoking, you know, for two and three hours at a time.

Spencer
And she's in the backseat. Tons of secondhand smoke, you know, that she's exposed to. But it's even the third hand smoke that people are exposed to where, you know, somebody is just puffing away in the car. They get out of the car, they go into work, and they're right next to you. Yeah. And so all of that smoke that's coming off of them actually has health impacts for you.

Spencer
Yeah. You know as well. So even if we could say, well, you know, that person knows what they're getting into. Still societally. Yeah. We are still harming second and third hand, you know, people, by those first decisions that are made, in the West.

Austin
Right. And so the last one we're going to just touch on real briefly is pornography. The reality here is again, we can go through it's addictive. It's destructive. there's websites that we'll will link to for all three of these. one is called Fight the New Drug. But what they talk about, one of the things is porn, in a lot of ways fuels sex trafficking.

Austin
People that are hired to create these films have often been trafficked into creating them. It's not a neutral industry, right? It profits off of the destruction of people. We've talked about it before that when you start watching pornography. there have been studies that have been done that as you watch you become desensitized to what you're watching. And so you need something more and you need something more to continue to get that dopamine response.

Austin
And so there's this addictive behavior that comes about by watching it. And then it becomes worse and worse. And so there's often a correlation between escalating behavior and then objectifying the other, seeing women as objects of your desire. And so there's a higher likelihood of violence against women or these other things that pornography is not neutral. Right. And so again, as we think about how do we invest, how do we close companies and capital?

Austin
Am I doing so in a way that exploits others, that leads to addiction, that leads to violence? If I'm getting money from that, I don't want anything to do with it. Right. And and God doesn't want it either. He does not want those earnings then pushed back into the temple.

Spencer
Right. You don't fundamentally want that company again. You're not rooting for that company, are you really, you know, investing in a company that you hope will ensnare more people in, you know, just blatant lust, pornography, things, you know, practices and pull of the heart away from God, away from loving God's creation, from his creatures. you know, from your fellow human beings.

Spencer
It's there's it's it's virtually impossible to make an argument that this is a benefit to anybody that's out there.

Austin
Yeah. So, Spencer, what are some of those other areas that we want to try to avoid?

Spencer
Well, we've talked about those areas that lead to addiction that lead to the detriment of people, generally speaking. Another area that we would, look at would be those areas that lead to death. and the two main ones here would be, abortion and weapons manufacturing. So, those companies that, manufacture products, services, that would lead to, abortion, that would facilitate abortion.

Spencer
companies that, would offer those services. we would want to steer clear, from those, even for people who they, may not have as much of a personal objection, you know, to that. I think, many of us could at least say that we don't want a company to be profit off of maybe the most difficult decision that a woman will ever make in her life.

Spencer
Yeah. And certainly for those of us who look at abortion as a scourge and as an evil and as contrary to the biblical wisdom, there we certainly want to avoid, you know, anything that has to do with that. the other side of things, though, is, is death. Just generally speaking, do we want to invest in products, services in in companies that will contribute to death?

Spencer
whether that is weapons manufacturing, whether that is, you know, even companies that they may, have a stated purpose of, of trying to contribute to the national defense, which, you know, every country is going to need to have, a defense mechanism. defense, complex and such. Again, the question would be, do we want to have companies that are really focused on defense, focused on creating, weapons that kill people really efficiently?

Spencer
the government may say, okay, we must have a defense. We must have a way of, you know, solidifying that. But do I want to profit from that? Yeah. if we look at the early church in particular, one could not even participate in the army. Early church wanted to stay as far away from the potential to kill anyone as possible, and really was very willing to lay down their lives rather than get into, you know, conflict where you're going to, have the potential of killing someone.

Spencer
So I think if we go back to, you know, a big picture of the trajectory of Christianity and I think even, you know, if you look at what Augustine put together in a “Just War Theory”, there are very, very narrow constraints in terms of using force in ways that would harm other people. And it's it's really hard to get excited about investing in companies that their sole mission is putting together weapons that will kill people efficiently.

Spencer
Yeah. you know, no matter who is is behind, you know, that whether it's a, it's a country that we would align with or not, you know, aligned with profiting off of that. you know, has has some, some challenges. and we recognize that there are a, a variety of opinions about that particular one. I think the earlier ones, it's, it's easy to say, hey, we want to stay away from anything that will create addiction harm, because it's hard to argue that there's any good.

Spencer
Yeah, that comes from that or, abortion. You know, I would say the same thing. you know, with weapons, again, that may be an area that is a little bit more debated. But anything really to me, I think to us that creates that level of harm. Right.

Austin
So and so I think the reality here is, like you were saying, this is really nuanced. It's hard in some ways to navigate the weapons, but the reality is it's how am I generating gains? How am I generating profits? Am I participating with companies whose focus is bringing about harm? and that that is just that's where I have to start really wrestling with.

Austin
Can I bring those things, those gains into the temple of the Lord? Can I bring money that has been made from the destruction of other humans into the temple? And that's what we have to wrestle with. So when when you think about that, how do we how do we seek wisdom from the Lord? How do we really start answering these questions of, okay, we've seen bad products and and how do we then look at what is a good product?

Austin
How do we discern, where do we deploy capital, how do we clothe those companies in capital to make good products?

Spencer
Well, I think we start here with an admission that we need wisdom. Yeah. So, James one five, if any of you asks, if any of you lacks wisdom, let him ask God, who gives generously to all without finding fault, and it will be given to him. So we want to go to Scripture and we want to say, I need wisdom, Lord.

Spencer
There is a lot to navigate here, but I think, generally speaking, there's a few questions that we can ask ourselves, that are good markers of whether the company is producing goods and services that we really get excited about, that we can get behind. we want to invest in companies that enable humans to flourish and to provide meaningful work that will allow employees to kind of use their God given gifts and creativity and creativity, I should say.

Spencer
So as we as we do that, one of the questions that we would come back to typically would be, is this product or service meeting an important human need? And then secondarily, is this product a development that enhances the world and enhances, people's lives? You know, generally speaking, if we can answer yes to those two or yes in many circumstances, to those two, then perhaps it's, it's something, again, that's worth at least considering.

Spencer
So again, there's a lot of gray area here. There are, you know, ways that food could be created or that services can be created, that there's some good and there's some bad in there. But it's those that you say this isn't really an unmitigated harm. Yeah. To people. Yeah. it, it at least the end result to people, that we would want to steer clear from.

Spencer
Yeah. Again, at the end of the day, what we see is that God made the world very good and that he's instructed us to make it even better. Yeah. So let's invest in companies that give us that sense that we're going to make it even better. We hope that you've enjoyed this discussion, as always. If you have any questions, want to talk further?

Spencer
Reach out to us. And until next time, take care. We want to thank our friends at the Eventide Center for Faith and investing. Jason Meyer and his team did a fantastic job helping us to grapple with the biblical wisdom on investing. Many of the quotes and thought leaders that we cite come from their original research.

Austin
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Disclosures
This content was provided by Second Half Stewardship. We are in Knoxville, Tennessee and you can visit our website at www.SecondHalfStewardship.com. The information in this recording is intended for general, educational and informational purposes only, and should not be construed as investment advisory, financial planning, legal, tax, or other professional advice based on your specific situation. Please consult your professional advisor before taking any action based on its contents.