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Author: 5000fingers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2244  
Subject: Re: Why SRI? Date: 11/3/2007 11:55 AM
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I feel naïve to hope that if I sold my 10K of irresponsible company X and others sold theirs and the price dropped over time, company X wouldn’t have as much stock capital to grow and wouldn’t be able to cause as much damage.

But that just will never happen. Even if you were able to convince all of the 50% of investors who shared your values to do the same, that would only cause a temporary dip in the share prices. Which of course would lower the PE ratio of the company and make it all the more attractive to the rest of the investors, who would bid the shares right back up. Inevitably, the market, the economic cycle, and the company's business model would assert themselves.

Not only does selling shares of bad companies not hurt them in any way at all, but buying companies of "good" companies does not help them either. The demand for their products is the only real way to influence companies in either direction. "Socially responsible investing" hasn't accomplished on iota of real-world influence. But successful consumer boycotts have saved rainforests and endangered species, closed down sweat shops, thrown pollutors out of business, and have changed the practices of repressive governments around the globe. In fact boycotts are so successful and so powerful that it's hard to imagine why this tool is not utilized more often by advocacy groups.
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