For a long time, I have regarded socially responsible investing with mirth. (Just as some people are addicted to tobacco. I am addicted to mirthful regarding.)
As a maudlin, soft-minded person, I do have a certain attachment to the concept of socially responsible purchasing. For example, I do not purchase cigarettes, as that would only encourage companies that might be regarded as cynical purveyors of death. (It's merely a coincidence that I don't smoke and I am not addicted to tobacco.) However, I am not sure of the point of refusing to purchase stocks (investment securities) in cigarette companies. Such virtuous restraint will not stop people from purchasing cigarettes, cigars, chewing tobacco, or snuff. (Was ever a product so aptly named?)
Consider how stock markets work. (Caution: I will now talk as if I know what I am talking about. If you fall for that, you will lose your life's savings and not be able to get it back by suing me.)
When a company wants to raise money to start or expand a business, it issues an Initial Public Offering (IPO) to raise CAPITAL. (Capital means money to buy cigarette rolling machines or sacks of tobacco leaves.) Some of the people who purchase IPO offerings become Microsoft or Google or RJ Reynolds or Marlboro millionaires. Some of the people who purchase IPO offerings become Enron or Worldcom paupers. Maybe there's a Brown and Williamson pauper here and there, but don't hold your breath, at least not while you've got a cigarette in your mouth at the same time.
After the initial offering, people just trade stocks back and forth in a big flea market called a stock exchange. The stock market doesn't have much to do with raising money to expand businesses; it's just a big game to keep billionaires off the street where they might use their money to pick up nubile underage girls. (I'm sure you will be astonished to learn that the millionaires do that as they drive home in their Mercedes and BMWs after the stock exchanges closed This is known as the life is unfair principle.)
If an organization has a product people want, it will find a way to raise capital. For example, organizations that sell products such as marijuana, cocaine, heroin, Ecstasy, methamphetamine, magic mushrooms and services from nubile young ladies who will do naughty things at your request do not have Initial Public Offerings. In fact they don't bother to get business licenses, do not join the New York Stock Exchange, or even get MBA's from the Harvard Business School. Well, maybe they do the latter, especially if the young executives come from the right families.
In other words, whether or not you buy a cigarette stock, some people will still inhale cigarette smoke and tobacco companies will flourish. Only when people stop smoking will tobacco stocks stop smokin'.
In fact, it might make sense to follow an investment strategy of investing in stocks of companies that pursue wicked market strategies. Even if you are a cautious, dull person as myself--n other words-a chicken--you can still invest in markets that are legal but still naughty. Which I did, but unfortunately, I am going to ruin my moderately titillating tale of wicked investing by telling you about how I fell onto the wagon.
[To be continued in a demoralizing tale of sin gone straight instead of astay.]
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Comments: 11
Now, I smoke . Ordinary tobacco. I avoid the major companies products , which have nearly 300 additives and are now less than 40% real tobacco. 20 years ago Camels were something like 70% ? Anyway, the manufacturers have developed ways to use leavings and add fillers to make their product similar to processed foods , which are largely "non-foods." Better living through chemistry produces profits. If it has a label claiming it's "nutritional," run away. That's doublespeak, for sure.
Now the whistle blowers have revealed the cigarette companies have been increasing the nicotine content of the product. Obviously, it's in their interest to do so.
Addiction is addiction. It is part of how the government maintains control in many ways. The "War on Drugs" is about money. There is more money made in the United States producing "weed" than corn and most anything else. Pornography is probably very high on the list. The government goes along, as governments must. Organized crime makes its deals with governments as it always has. One hand washes another. It doesn't have to be that way in any society. It hasn't always been the case.
When we look at the United States' budget, which is not , today, "transparent" the "military-industrial - big pharma companies - congressional complex" controls big time. They aren't the big enemy. They have intelligent, very intelligent people who have the power to make a better world. Aren't we are own worst enemy?
Anyway , little me, who smokes, and doesn't agree with some of the scientific studies on cancer and tobacco etc when it applies to say, organic tobacco , I do not claim to know their value. In perspective, I do know- not in relation to smoking at all - that a lot of scientific journals and money funding scientific research , protocols demanded by the medical establishment, stuff put out by the Amercian Cancer Society and so on heavily biased and controlled because of money.
The current mess over our addiction to fossil fuels goes way, way back based on the interests of powerful groups. Perhaps a century ago we had the possibility of developing technology to not be dependent on fossil fuels. It has been obvious for half a century we had better do so. It isn't the fault of the best and the brightest we haven't.
Other nations are doing better than us in addressing their dependence on fossil fuels. We have the means to get to it.
If smoking is your issue, I certainly agree it is a good one. People who choose issues are what we need. I am concerned with this warmongering administration and its militaristic, hegemonic aims.
You mentioned the possibility of a series: How about those new highly caffeinated doughnuts -- hopefully they'll have chocolate in them, "real" chocolate -- else I'm not buying them, and I certainly wouldn't invest in anything that doesn't contain pure chocolate.
Clarke, et al re organic tobacco -- but do you grow your own? I live in an area bordered on one side by wine country and on the other by the Emerald Triangle, as the 'weed' growing area here is known. Even our local sheriff [immensely popular curmudgeon,now deceased] had his very own little "legal" patch. His opponents in the recent election staged a raid on his back yard to make a proper count; hence, in part perhaps, his untimely demise from heart attack as he was headed to the office to deal with same.
To hear something from the executive branch besides "lies" and variants thereof; i.e., "spin." Now there's an issue to sink one's teeth into or perhaps chug a lug, because I'm sure they will figure out how to bottle it or otherwise package it. Actually, they have done a remarkable packaging and marketing job. Jay Rockefeller tells Bloomberg he's not too happy with the results and will be asking for a "National Intelligence Estimate, among other things, by subponea if he has to. [Negroponte says they've just been too busy helping the prez with the surge to do a timely NIE]. Watch the "mythical beast" that is the stock market to see where heads and hearts and minds are really at.
I am with you regarding investing in socially responsible companies - but for some reason sin stocks do better and they are against my religion!