UnThreaded | Threaded | Whole Thread (27) | Ignore Thread Prev Thread | Next Thread
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2244  
Subject: The Myth of Socially Responsible Investing Date: 11/22/2004 2:12 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
http://www.fool.com/news/commentary/2004/commentary04112202.htm
Print the post Back To Top
Author: HaltCatchFire Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2052 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/22/2004 2:56 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Interesting article. I imagine most SRI regulars don't agree with the author.

Quoting the article:

Some may not agree with me on this, but I think the process of choosing which companies to invest in based on moral values is inherently flawed. The reason is that most of modern society is governed by moral relativism -- the belief that positions of right or wrong are not absolutes, but can be determined by each individual, and that morals and ethics can vary from one situation, person, or circumstance to the next. Morality thus becomes a slippery slope.

I don't believe in moral relativism. As a Christian, I do beleive in absolute right and absolute wrong. Morality is not a slippery slope for me; rather it is following God's will.


Suppose you want to invest in the chemical industry. What are you going to do, invest in the firm that pollutes the environment the least? If it pollutes at all, why invest at all?

The biggest problem with SRI is that everyone defines it differently. I don't have a problem with the chemical industry because it pollutes. I would prefer that all companies be good stewards of the Earth. I would also prefer that they treat their employees and neighbors fairly, respectfully, and honorably. Some pollution is probably inevitable in the chemical industry. How do they handle it? Do they try to minimize the impact? Or do they do illegal dumping and try to hide what's going on from local residents?


Thus, my conclusion: There is no such thing as a strictly "moral" company, and therefore socially responsible investing is a misnomer, if not an outright myth.

Companies are as moral as toothpaste. The behavior of the officers, on the other hand, can and should be held up to moral standards.

Interesting article, but dead wrong.

Regards,

- HCF

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: krissylou Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2053 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/22/2004 3:47 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Some may not agree with me on this, but I think the process of choosing which companies to invest in based on moral values is inherently flawed. The reason is that most of modern society is governed by moral relativism -- the belief that positions of right or wrong are not absolutes, but can be determined by each individual, and that morals and ethics can vary from one situation, person, or circumstance to the next. Morality thus becomes a slippery slope.

I don't believe in moral relativism. As a Christian, I do beleive in absolute right and absolute wrong. Morality is not a slippery slope for me; rather it is following God's will.

I agree with you, but as I read the article it seemed to me to be using "relativism" in two different ways.

There was the first one, which is quoted above.

And then there's a "where do you draw the line" question. If we only invest in entities that are completely pure, we're never going to invest in anything. So where do we draw the line?

It seems to me that this is a different question from "are there moral absolutes in this world?"

The author concludes that since perfect purity is impossible, the thing to do is to give up on the enterprise.

I think that's a serious mistake. Investing is not the only area of life where it's impossible to remain completely pure. In fact, that's true of every area of life. That's no reason to give up on the enterprise. You do what you can and strike the best balance you can between various good (and dare I say holy) but conflicting values. We don't get to go through this world completely pure. It's not an option. But we can and should and must seek to be as unstained as possible.

KrissyLou

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Imaginistics Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2054 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/22/2004 6:01 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
"The author concludes that since perfect purity is impossible, the thing to do is to give up on the enterprise."

A perfect summary of the stupidity of the article. Like,
"we can't get the number of flu deaths by the elderly down
to zero, so let's not even try" kind of logic. Dumb.
One has to ask, is he that dumb, or does he have
and axe to grind, and if so, what is it? Probably the obvious
one...he's not doing is, feels guilty so needs to bash those who
do SRI...

Print the post Back To Top
Author: Carpian Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2055 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/22/2004 10:02 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
Hmmmm...

a) No company is perfect, therefore all companies must be equally good/bad,

and

b) Investing that incorporates nonfinancial criteria is really difficult, therefore I shouldn't even try.

Sound like handy excuses to avoid taking responsibility for all (including nonfinancial) consequences of one's actions.

I've heard the "all or nothing" argument applied to SRI before, and I don't buy it. One of my favorite sayings, from Dan Millman: "A little bit of something is better than a lot of nothing."

I do applaud the author for at least considering the issues, which is more than can be said for many if not most people. Hopefully he will keep on considering them, and sing a different tune some day.

Print the post Back To Top
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2056 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 1:42 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Somebody on the board said:"The author concludes that since perfect purity is impossible, the thing to do is to give up on the enterprise."

I said no such thing. The poster drew that conclusion himself. What I said that because there is no perfectly moral company, then an investor should not fool himself into thinking they are being "responsible" by choosing certain companies over others on a non-financial basis. If a company pollutes, then that is wrong. Period. You invest in a polluter, you enable the polluter. The End.

Then, Imaginistics says:

<<A perfect summary of the stupidity of the article.>>

Since the summary is erroneous, therefore your statement is erroneous. In fact, I would assert that because you proceeded from a false assumptioni, you are the stupid one. ("Stupid", by the way, being defined as "intellectually lazy")

<<Like,"we can't get the number of flu deaths by the elderly down
to zero, so let's not even try" kind of logic. Dumb.>>

Actually, not only is this a poor analogy because they deal with two entirely different issues, but it doesn't even address the actual content or point of the article.

Read the article again. Maybe three times, and you'll grasp it better.

<<One has to ask, is he that dumb,>>

So far, it appears that is the pot calling the kettle black.

<<or does he have
and axe to grind, and if so, what is it? Probably the obvious
one...he's not doing is [sic], feels guilty so needs to bash those who
do SRI... >>

Oh, now THAT is laughable. I never feel guilty about making money, and I readily accept that every company is ultimately immoral in some way. The difference is that I don't hold my investing style up on a pedestal and call it "responsible".

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2057 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 1:55 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Carpian incorrectly states:

<<a) No company is perfect, therefore all companies must be equally good/bad>>

That is not what I said. First, there can be no evaluating one company's "goodness" or "badness" (which you might try next time expressing as the words "moral" and "immoral") on a relative basis. Second, you incorrectly paraphrase the conclusion made in the article.


<<b) Investing that incorporates nonfinancial criteria is really difficult, therefore I shouldn't even try.>>

Once again, you don't seem to grasp a really simple concept. I'll rephrase what you said to make it clearer for you. "Investing that incorporates nonfinancial criteria is just fine, but holding that method out as somehow being based on a set of moral criteria is arbitrary, and therefore meaningless"

<<Sound like handy excuses to avoid taking responsibility for all (including nonfinancial) consequences of one's actions.>>

LOL! If anything, I expose your hypocrisy that somehow drawing arbitrary lines on what YOU consider right and wrong makes you "responsible".

<<I've heard the "all or nothing" argument applied to SRI before, and I don't buy it. >>

Of course not. As I clearly stated, society is governed by moral relativism. You believe that certain things are right or wrong depending on the circumstance.

<<One of my favorite sayings, from Dan Millman: "A little bit of something is better than a lot of nothing.">>

Okay, so given your stance that moral relativism is just fine, and you don't buy the absolutist approach of "all or nothing", then logically, Dan the Trampoline Man's statement should apply in the following:

You see a man raping a woman. You shout, "Hey, Stop!", but then turn and leave since you've done a little, which is better than nothing. Never mind that the man keeps raping the woman.

It was okay for Chamberlain to ask Hitler politely not to invade any more countries. But he didn't attack Hitler. Better to do a little something than nothing, right?


<< Hopefully he will keep on considering them, and sing a different tune some day. >>

And hopefully you will examine your own logic and philosophy and change your tune as well.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2058 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 2:01 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
HaltCatchFire says:

<<II don't believe in moral relativism. As a Christian, I do beleive in absolute right and absolute wrong. Morality is not a slippery slope for me; rather it is following God's will.>>

Such is my point. Because right and wrong are absolutes (one need not be Christian to understand that), calling an investing style "socially responsible" is not truthful because people operating a company are flawed, will therefore behave immorally, and therefore the company's works become tainted.

<<Some pollution is probably inevitable in the chemical industry. How do they handle it? Do they try to minimize the impact? Or do they do illegal dumping and try to hide what's going on from local residents? The behavior of the officers, on the other hand, can and should be held up to moral standards.>>

Well, I'm glad to see a Christian who understands that a degree of pragmatism exists in the world. Yes, pollution is inevitable. However, i would argue that it is also wrong in the absolute sense. If the officers are polluting, whether or not it is minimized, it is still wrong, correct? And if it is wrong, then how on earth can one call themselves "socially responsible" for investing in a company that pollutes?

<<Interesting article, but dead wrong.>>

Actually, I think we agree on just about everything. That rarely happens when I discuss anything with my Christian friends. :)


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2059 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 2:03 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Krissylou says:

<<It seems to me that this is a different question from "are there moral absolutes in this world?">>

Correct!

<<The author concludes that since perfect purity is impossible, the thing to do is to give up on the enterprise.>>

Incorrect! see my earlier posts.



Print the post Back To Top
Author: GameMaker Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2060 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 12:55 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I wonder if I could take a step back and try to clarify something:

What difference does it make to the company (regardless of how socially responsible investing in it might be) whether its shares are in my hands or someone else's?

Have I in any way "aided and abetted" that company? I guess you could make the argument that I've added to the Demand side of the equation, thereby helping the stock price, and making the folks who run the place (and are theoretically making all these socially irresponsible choices) more money.

Is that the general drift behind it?

I guess I've just always had a hard time with the logic behind SRI. I mean, emotionally, sure...I get it. I understand, at a gut level, not wanting to own a company that does things you don't believe in. But the logic just doesn't jive.

I guess it comes down to why you're in the market. Personally, I'm in it to make money, not moral statements. If you want to make social commentary, donate your profits from the market to a cause you believe in. Go out and volunteer your time. Help make it a better world! Awesome! Go for it!

But don't think that by withholding your piddly buy order from some stock that you're getting any kind of point across. (Keep in mind that institutional buying/selling VASTLY outweighs small-time investors. I'm guessing the difference is so extreme tat if the person on this board with the biggest portfolio decided to bet ALL their money on a particular stock, it would have much less impact on the stock price than if the smallest institution decided to unload half its shares.)

Am I totally way off base?

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: krissylou Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2061 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 1:31 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 5
Have I in any way "aided and abetted" that company? I guess you could make the argument that I've added to the Demand side of the equation, thereby helping the stock price, and making the folks who run the place (and are theoretically making all these socially irresponsible choices) more money.

Is that the general drift behind it?


Well, in my observation there are a couple different philosophies behind SRI.

There's the shareholder activism approach, where you buy some shares in order to have a voice from within and hopefully change business practices. IMHO there's a lot to be said for this, within limits. Buying Altria (formerly known as Phillip Morris) in order to convince it to get out of the tobacco business is a fool's errand. But shareholder activism can be effective for less central issues -- improving working standards and the like.

And then there's the screen-that-company-out approach. Maybe it will have some marginal effect on the stock price, but you're right, it isn't much.

I think of it more in terms of "how do I earn my money." Right now I'm a young 'un and my investing returns are pretty minimal. My money comes from my paycheck. Over time that ratio is going to change. I would not take a job working for Altria. (OK, OK, if it was the *only* job available and otherwise my hypothetical children would starve then yes, I would. But I'd try darned hard to avoid a situation where I was working for Altria.) I don't consider that an acceptable way to support myself. So why would it be any better to support myself through owning Altria? IMHO, if I wouldn't consider working there, I shouldn't own the place either.

(That's talking about stocks. When one is talking about bonds there is more of an effect on the company.)

IMHO, being socially responsible with finances has two facets:
1. Am I obtaining my money in a morally acceptable way?
2. Once I have money, how am I using it? To keep myself in the lap of luxury or to make the world a better place?

I think of SRI as part of #1, not particularly as part of #2.

KrissyLou

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Imaginistics Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2062 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 2:08 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
When a poster starts calling critics stupid, and then continues with

"I never feel guilty about making money"

one has to wonder. If one "never feels guilty about making money" then
one does not feel guilty about making money from insider trading, etc,
another example of sloppy writing rather than writing with precise care.

The issue of analyzing the original article is made easier by this much
shorter item:

Somebody on the board said:"The author concludes that since perfect purity is impossible, the thing to do is to give up on the enterprise."

I said no such thing. The poster drew that conclusion himself. What I said that because there is no perfectly moral company, then an investor should not fool himself into thinking they are being "responsible" by choosing certain companies over others on a non-financial basis. If a company pollutes, then that is wrong. Period. You invest in a polluter, you enable the polluter. The End.


In which motleylorenzo does say presicely "such a thing" by
asserting an investor "should not fool himself into thinking
they are being 'responsible'"

It's one thing to quibble about language, the analog,
for example, of saying "you should not say 'safe sex',
you should say 'safer sex'" which is why the latter
phrase has come into usages not that many years after the former
was popularized. The above paragraph and the article are in
the spirit of "those damn idiots who use condoms,
should not fool themselves into thinking they are [more]
respnosible" Again, it would be one thing (And reasonble)
to say, "should not fool themselves into thinking
they are being 100% perectly 'responsible'/moral/othersuchterm"
but quite another to say one is not being responsible
at all. That IS the all or nothing argument: since polluting
0.00001 miligrams is "wrong" then motley lorenzo would
let the person living in a cave be called responsible but
someone doing anything else, say 99.98% of the way there,
"should not fool himself [sic] into believing he is
being 'responsible'". So there you have it in black
and white in one short paragraph exclaiming he is not of
the all of nothing scool but then going on to say it again.

If the author took criticism better, there would be a point
to dialogue or reading his future articles, but evidently
this is not the case.

Perhaps his "I never feel guilty about making money" [sic]
should be supplemented with "I never feel a need to
re-consider what I had asserted in a previous post"

Imag.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Imaginistics Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2063 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 2:12 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
You see a man raping a woman. You shout, "Hey, Stop!", but then turn and leave since you've done a little, which is better than nothing. Never mind that the man keeps raping the woman.

It was okay for Chamberlain to ask Hitler politely not to invade any more countries. But he didn't attack Hitler. Better to do a little something than nothing, right?


As any logic 101 student can point out, the straw man argument
by lorenzo is a contradition to someone asserting that "doing
a little is ALWAYS ALWAYS useful" when that was not asserted.
Rather, every person in SRI and (close to) every person in
who discusses these issues means that doing something is
often better than doing nothing. So the rape example (even
if we assume the man is not going to call the police on his cellphone once out of stabbing and viewing range of the rapist) proves
nothing other than that _there_exist_ sitautions in which doing
a little is "no better than" doing nothing. Yet it was never
asserted that doing a little is _always_ better than doing nothing
so Lorenzo's example is worth nil.


Print the post Back To Top
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2064 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 5:53 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Imag, you crack me up. You make no sense.

<<When a poster starts calling critics stupid, and then continues with
"I never feel guilty about making money"
one has to wonder.If one "never feels guilty about making money" then
one does not feel guilty about making money from insider trading, etc,
another example of sloppy writing rather than writing with precise care.>>

Any astute reader, and any intelligent one, understands that the context of the above phrase supplies its precise meaning i.e. never feel guilty about making money [in the stock market].

The extent to which you go to try and indict my post indicates how desperate you are to trash my position.



<<The issue of analyzing the original article is made easier by this much
shorter item: Somebody on the board said:"The author concludes that since perfect purity is impossible, the thing to do is to give up on the enterprise."
I said no such thing. . . .In which motleylorenzo does say presicely "such a thing" by asserting an investor "should not fool himself into thinking
they are being 'responsible'">>

Uh....Imag....the two are not equivalent in any manner. Giving up on the enterprise vs. the label one chooses to put on oneself have nothing whatsoever to do with each other.

<<It's one thing to quibble about language. the analog,
for example, of saying "you should not say 'safe sex',
you should say 'safer sex'" blah blah blah>>

Now you're really splitting hairs. I think. I'm not sure because your syntax is all over the place.

<<Perhaps his "I never feel guilty about making money" [sic]
should be supplemented with "I never feel a need to
re-consider what I had asserted in a previous post">>

That's because what I said is accurate and what you said is...well...nonsensical.

<<Rather, every person in SRI and (close to) every person in
who discusses these issues means that doing something is
often better than doing nothing.>>

To which I again reference you back to the article. I have nothing against that. I even encourage it. But to call oneself "responsible" by investing in a company that does something morally wrong is a misnomer.

<<so Lorenzo's example is worth nil.>>

Then, if it's at all possible to be worth less than nil, I think you've accomplished that.


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Carpian Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2066 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 9:07 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Carpian incorrectly states:
<<a) No company is perfect, therefore all companies must be equally good/bad>>
That is not what I said. First, there can be no evaluating one company's "goodness" or "badness" (which you might try next time expressing as the words "moral" and "immoral") on a relative basis. Second, you incorrectly paraphrase the conclusion made in the article.


A relative basis is all we have, in our human bodies on this planet earth. Let's take your excellent example of pollution (which, by the way, I consider "bad" but not necessarily "immoral"). Let's say I don't like pollution. Let's say I adopt the mode of thinking that you use in your article, that if I'm against pollution, I can't support anything that pollutes the least iota in its production. Gee, looks like I pretty much won't be able to eat or drink anything, wear any clothes, live in any kind of man-made structure, or use anything man-made. I might last for a couple weeks in an utterly miserable state of hunger, thirst, cold, and illness, and then die.

Moral or not, that type of all or nothing absolute thinking can be dismissed as impractical among us living folks. Unless you are willing to do ABSOLUTELY ANYTHING for money (maybe you are but I suspect not), we all draw lines somewhere. For some people, those lines may encompass investing in all publicly traded companies. For other people, they may fall somewhere that excludes some companies and not others. It is a decision to be made (hopefully thoughtfully) by each individual, and I applaud you for giving it thought.

But in your article, you seem to state (I don't seem to be the only one who read this into it) that the only possible justifiable place to draw a line is at perfection, and since no company is perfect, you may as well not even try to sort out the better from the worse.

LOL! If anything, I expose your hypocrisy that somehow drawing arbitrary lines on what YOU consider right and wrong makes you "responsible".

Where else am I supposed to draw my lines? Where else could I possibly draw them? I'm not asking you to agree with where I draw my lines--that's a whole different issue that's not even being discussed here. What I'm taking issue with is it seems to me that you're asserting that there is no justifiable way to draw lines in the investment universe without your calling someone a hypocrit or worse.

As I clearly stated, society is governed by moral relativism. You believe that certain things are right or wrong depending on the circumstance.

Couldn't agree more. And investing is part of society. I'm having trouble seeing how you get from here to saying that it is hypocritical to take one's own social values into consideration in the investment process.

You see a man raping a woman. You shout, "Hey, Stop!", but then turn and leave since you've done a little, which is better than nothing. Never mind that the man keeps raping the woman.
It was okay for Chamberlain to ask Hitler politely not to invade any more countries. But he didn't attack Hitler. Better to do a little something than nothing, right?


Yes, absolutely. In the above instances, it's better to do more. I never said it wasn't. I never said "don't do any more than a little bit". What I take issue with is that your article came to the conclusion of "don't do anything" when it comes to incorporating your social values into your investing.

For a more relevant example, let's look at voting. It's a rare day, if ever, that anyone finds a candidate that they are in 100% agreement with. Did you vote? Did you agree 100% with every position of every candidate that you voted for? If not, then you used a different line of reasoning than what you advocate in your article.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Carpian Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2067 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/23/2004 9:44 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
What difference does it make to the company (regardless of how socially responsible investing in it might be) whether its shares are in my hands or someone else's?
Have I in any way "aided and abetted" that company? I guess you could make the argument that I've added to the Demand side of the equation, thereby helping the stock price, and making the folks who run the place (and are theoretically making all these socially irresponsible choices) more money.


I don't feel that my not adding to the demand for a company's stock makes anything other than the most infinitessimally small difference to that company (which, albeit, is still better than nothing.) To use the voting example again, what are the odds of your one single vote ever deciding an election? But you still vote? (Well, maybe you don't vote, but hopefully you see the correlation.)

I understand, at a gut level, not wanting to own a company that does things you don't believe in.

This is more where it's at for me. I don't like aligning my financial goals with, say, people smoking more cigarettes. It doesn't sit well in my gut, and that's very important to me.

And that part of the equation, to my view, does carry more impact than simply "I feel good". The "I feel good" carries over to my dealings with other people, the fact that I hold values above making money becomes a part of my presence and is communicated to others, whether spoken or not, for better or worse (i.e. they may respect me more, or be inspired themselves, or they may simply dismiss me as a hypocrit or a lunatic).

I believe what we do, say, and even think carries more impact on the world around us (and inside us) than is directly observable, and it is in those ways that the practice of SRI is most powerful (though not necessarily observable). OK--enough about that. I'm probably getting too far "out there" now that I'll lose anyone who's still following me and doesn't already agree with me.


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2068 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/27/2004 1:52 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
<<Moral or not, that type of all or nothing absolute thinking can be dismissed as impractical among us living folks.>>

I think you would find quite a bit of disagreement about that among our Christian brothers and sisters.

<<But in your article, you seem to state (I don't seem to be the only one who read this into it) that the only possible justifiable place to draw a line is at perfection, and since no company is perfect, you may as well not even try to sort out the better from the worse.>>

I don't know how many times I have to repeat this: THAT IS NOT WHAT I SAID.

I said that you can go ahead and try to sort out the better from the worse all you want, but that the drawing of a line is arbitrary and therefore meaningless.

<<What I'm taking issue with is it seems to me that you're asserting that there is no justifiable way to draw lines in the investment universe without your calling someone a hypocrit [sic] or worse.>>

That's correct. Come up with any specific example, from any company, and I'll again demonstrate my take.

<<You say it is hypocritical to take one's own social values into consideration in the investment process.>>

Because of the very fact that your social values are based on moral relativism.

<<What I take issue with is that your article came to the conclusion of "don't do anything" when it comes to incorporating your social values into your investing.>>

Still got it wrong, Carp.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2069 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/27/2004 2:06 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
<<I don't like aligning my financial goals with, say, people smoking more cigarettes.>>

What's wrong with aligning financial goals with people smoking more cigarettes? I can't read your mind, but I'll guess it's something like, "I don' t want to support a company whose product..."

Is known to harm the user's health.
Creates an unneccesary burden on our health care system because of smoking-related diseases.
Is annoying and possibly harmful to others.

Okay, so here's my point, Carp. You choose not to align your financial goals with people smoking cigarettes. Fine. So, why stop there? People who eat fast food endanger their health just as badly, if not worse (re: The documentary film "SuperSize Me"). People who drink alcohol harm themselves and others as well. People who drive cars harm others and themselves.

The list goes on and on and they all have the same thing in common with your cigarette example:

The products are known to harm their users
Their users use them of their own free will.
Their companies are public entities.

So, back to my original point -- why draw the line at cigarettes? Why not include all these other products? My point: Any reason you come up with will be arbitrary. Either you should eliminate all these companies from your investment portfolio to have any moral consistency, or include all of them in your investment criteria, or you can pick some and leave out others (but I'll call you a hypocrite because you are valuing each business on different moral criteria).

Smoking is either good or bad. You seem to suggest it is bad, so therefore you won't invest in it.

Fast food consumption. Good or bad?
You see my point now?






I believe what we do, say, and even think carries more impact on the world around us (and inside us) than is directly observable, and it is in those ways that the practice of SRI is most powerful (though not necessarily observable). OK--enough about that. I'm probably getting too far "out there" now that I'll lose anyone who's still following me and doesn't already agree with me.


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Carpian Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2070 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/27/2004 6:41 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I said that you can go ahead and try to sort out the better from the worse all you want, but that the drawing of a line is arbitrary and therefore meaningless.

Arbitrary? Yes. Meaningless? No. Arbitrary doesn't equate to meaningless. My boss may make an arbitrary decision to fire me. Does that mean it's meaningless? Does that mean I still get my paychecks? You may choose to ignore where I draw my line, and in that sense, it is meaningless to you, but it's not meaningless to me.

We agree that no company is perfect. What we don't agree on is where to go from there. I'm advocating making an effort to decide what level of imperfection is acceptable to you, and what isn't. It may well be that somone's level of what's acceptable may encompass all publicly traded securities. It may also be that someone else's level of what's acceptable doesn't.

What you seem to be advocating sounds to me like "do nothing", short of some shareholder activism. That's certainly the net effect of what you're saying, if you didn't use those exact words. I don't know how you could make that statement without rooting it in "if all companies are imperfect, then they are all equally bad". A certain case could be made that excluding companies from your investing really doesn't do anything (directly observable) and that therefore is useless, but that doesn't seem to be the case you're making. You're saying it's hypocritical.

What you seem to be saying is that if driving a car causes pollution, and pollution is undesirable, it makes no difference whether you drive 5,000 miles per year in a hybrid or 50,000 miles per year in an SUV that you don't really need. I'm saying it does make a difference.

You didn't respond to my question of how is this different from voting for a candidate that you don't agree with 100% on every single position of that candidate on every single issue. Any thoughts?

<<What I take issue with is that your article came to the conclusion of "don't do anything" when it comes to incorporating your social values into your investing.>>
Still got it wrong, Carp.


What are you advocating we do?




Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Carpian Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2071 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/27/2004 7:15 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Okay, so here's my point, Carp. You choose not to align your financial goals with people smoking cigarettes. Fine. So, why stop there? People who eat fast food endanger their health just as badly, if not worse (re: The documentary film "SuperSize Me"). People who drink alcohol harm themselves and others as well. People who drive cars harm others and themselves.

First off, now we're getting into the realm of "where to draw the line" as opposed to "can a line be drawn?", and our debate is about "can a line be drawn?" and not "where to draw the line". Nevertheless, I suppose it does provide something of a working example.

Second, since you like to use the term "moral", let me state that to me "morality" is connected much more to intent rather than effect, and I (naively?) don't think that most companies have as a primary intention to kill and sicken people for money. Since most of your arguments are based on effects, I prefer the terms "acceptable/unacceptable" or "desirable/undesirable" for those.

I don't invest in tobacco companies. I don't see that they provide anything beneficial to anybody. I'm sure smokers would disagree with me and say that they provide something pleasurable, but to my view (and remember this is my line to draw wherever I want), whatever pleasure they provide falls in the category of an addiction that the smoker would be better off without.

Fast food companies? I've never invested in any. I just read the book Fast Food Nation, and it ain't a pretty picture (nor does anything short of what you grow in your backyard sound good there). But I do see some plusses to them--they can provide some nourishment to people in need of a quick meal, and used sparingly, I don't think they're as bad as the tobacco companies. I've certainly never sought them out to invest in, but I've never specifically excluded them, either. I don't know which side of my line they would fall on. I think I would have to take a closer look at the particular company--some are not too bad, like In-n-Out (but that one's not publicly traded).

Alcohol? I have included alcohol companies in my investing (in moderation, of course). There are documented beneficial health effects to having a glass of red wine every day. And used wisely, I think alcohol has been a pleasurable item for many people without harming others or themselves. The minuses that you mentioned certainly exist, but there are enough plusses to outweigh them, to my view.

Smoking is either good or bad. You seem to suggest it is bad, so therefore you won't invest in it.
Fast food consumption. Good or bad?
You see my point now?


I've always seen your point (that no company is perfect). Where we differ is in where to go from there.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Imaginistics Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2072 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/28/2004 3:55 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Lorenzo: "Any astute reader, and any intelligent one, understands that
the context of the above phrase supplies its precise meaning
i.e. never feel guilty about making money [in the stock market]"

The astute reader will note that my post did not say you believe those
words, but cited those words as an example of your not being careful
with words. An issue that only came up because of the fact that a long
list of us have pointed out that, at best, this is what you did. At
worst, you are incapable of saying "I see I was apparently not
clear. Maybe I should have said.." instead you send insults towards
anyone who quotes your own words. Enjoy the ignore list and/or
third person referrals; this is the last time I will post writing in
second person because you ignore points made, and send grade school
insults like "if it's at all possible to be worth less than nil, I
think you've accomplished that" that even in second grade got a bit old.

Lorenzo: "But to call oneself "responsible" by investing in a company that does
something morally wrong is a misnomer."

Reality check: SRI is the name out there. Whether an individual SRI
investor uses that term is a separate question. An article urging the
industry use more accurate language would have been welcome. That is
not what the article was about. Just so we're not called 'out of
context' yet again, we can refer to the latest non sequitors,
Imag: "It's one thing to quibble about language. the analog,
for example, of saying "you should not say 'safe sex',
you should say 'safer sex'"..

Lorenzeo: "Now you're really splitting hairs. I think."

The difference is huge between saying "use the term 'safer
sex' which is more accurate than saying 'safe sex'" on the one hand,
and saying "it's meaningless to talk about safe sex" on the other
hand. If that huge difference is 'splitting hairs' then pointing out
that graphite isn't the same as diamonds is also 'splitting hairs'


Lorenzo: "I said that you can go ahead and try to sort out the better
from the worse all you want, but that the drawing of a line is
arbitrary and therefore meaningless."

Mistake #1: 'subjective' is not the same as "arbitrary"

Mistake #2 (much worse), concluding it's the same as "meaningless"

As in, "you can try to sort out the better [potential
significant partners] from the worse all you want but the drawing of hte lien is [subjective] therefore arbitrary and therefore meaningless" type logic. Reader can supply their own examples how wise this
logic is.


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: motleylorenzo Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2073 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 11/29/2004 8:41 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
We agree to disagree.

Print the post Back To Top
Author: CrazyOtto Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2074 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 12/6/2004 8:09 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
Have been away from the board for a while and was surprised to see such a long thread on this otherwise sleepy board. For that, at least, the article might be congratulated. But for little else. I am a bit shocked really at the poor quality of the article; does not seem to stand up to the usual high quality of writing one finds at TMF. And the author's further comments in this thread fall below the type of behaviour normally displayed by TMF writers.

Credit to Imaginistics and the others who bothered to point out the numerous and all too obvious flaws in the article.

Appreciation to TMF for running the rare SRI article, but here's hoping future articles will return to the higher quality we've come to expect.

--Otto

Print the post Back To Top
Author: bigbenjamins2 Two stars, 250 posts Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2076 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 12/8/2004 1:23 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
I have spent a lot of time confronting the problems of moral relativism and nihilism through my exploration of philosophy; however, this article does not present a strong critique of SRI using those intellectual approaches. I have always wondered why TMF doesn't take SRI more seriously. TMF often seems to pretend that horrible working conditions don't exist unless there is a lawsuit, a good environmental record is to be applauded but not required, and the privatization of life-saving medicine does not pose any serious ethical dilemmas. Is their reasoning similar to the reasoning presented in the article, or do they have a better justification for this enormous oversight? Every once in a while TMF will throw out an article that confronts the issue in some peripheral way, but I believe that ethics should play a central role in any business decision. This message board is a voice in the wilderness, drowned out by the enticing call of the unhindered pursuit of wealth. I agree with the intellectual shift in perspective that the article is trying to make; I think it would be good for investors to understand that all investing creates significant moral dilemmas and that it is therefore impossible to say that a certain form of investing does not create these dilemmas. However, I also agree with the other people on this board who claim that the article uses this shift in perspective to say that "morality" is an inherently meaningless term. The article by no means proves this claim. If it did, it would be one of the greatest philosophical masterpieces of our time. And since the author of this article has spent so much time threatening his SRI readers with accusations of hypocrisy, I will say that anyone is a hypocrite who claims to not use any moral criteria when selecting a stock. His or her moral criteria may be broad enough to incorporate almost all publicly traded companies, but everyone except the most sociopathic among us draw the line somewhere. I challenge TMF to address business ethics in a much more serious way. Of course, we all profit off the misery of others to some extent, but just how much misery are we comfortable with exploiting? Finally, I have no tolerance for the argument that investing in companies creates such a minor impact on the stock and the company that we are therefore not morally culpable for the actions of that company. That defense does not have any meaning in court nor does it release anyone from responsibility. In the end, TMF is a great place for investing advice, but not a great place for the exploration of business ethics.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: BergenDog One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2121 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 8/10/2005 5:34 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
I concede the point that a Socially Responsible Index fund is kind of dumb, being that no human being is 100% Socially Responsible (by virtue of being alive we pollute), and I would seriously doubt that any companies on earth are as well.

In my mind, however, SR Investing is more about an individual's personal choices. It can't be applied across the board, it can't be transferred or pushed onto another person, and it certainly cannot remain stagnant. If one chooses to draw some lines in the sand, those lines need to be constantly re-evaluated to make sure they are still valid and that companies on both sides of the line are in there proper areas.

What intrigues me more is whether an individual can be considered a hypocrite for removing all emotion and sense of "morals" from investing. Is it just about dollars and cents? How far removed from the perceived atrocities does one need to be before the blood washes off? If I buy Rule Breakers pick Blue Nile (diamond seller) knowing from first-hand knowledge about the neo-slave trade that exists in African countries which is propogated by the Diamond Industry, am I as vile as the people that hack off the limbs of children in order to restore order in the mining towns? After all, I am giving them my money in order to support their business.

However, I am also an investor in Apple Computer. If it turns out that Apple computer routinely kills puppies in order to use their blood to make iPods, but I didn't know about it.... am I innocent? Ok, that got a bit ridiculous, but hidden among the gore is the point: does my knowledge of the atrocity remove any shroud of innocence?

I don't know the answers to any of these questions. I've decided not to buy Blue Nile. That is also a major point: no one forces me to buy anything, it's up to me. But, I guess the real question here is "How much am I loosing out because I have hang-ups about the industry?" Am I foolish (lowercase f) to not make money where and when I can? Afterall, I invest to make money, not to fix the world.

Sean




Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Imaginistics Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2122 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 8/11/2005 11:58 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 8
One is reminded of the joke in the book The Little Prince
where the businessman explains buys and sells planets and
is asked by the Little Prince why. To make money, he replies!
And what do you want money for asks the Little Prince. The
man replies that by having more money, he'd be able to buy
more planets, of course!

We may "invest to make money, not to save the world" as you say,
but why do we want to make money in the first place? Money
is a means to an end, not an end.

However you define your "ends" it boils down to living well with satisfaction and fulfillment and being at peace with the world around you. It's hard to believe that a (non pathological) person
could ever fully obtain those things if they were fully aware of their close aiding and abetting of things they felt were morally repugnant.

So once you know what you personally classify as morally
repugnant (in this case murderous behavior towards African
children, being the example you provided) then defining
the spectrum from "distant almost impossible to avoid involvement"
to "directly aiding and abetting" is how most folks would probably
end up deciding when they are comfortable investing and when not..

What's sad to me is that we even need to have some of these
discussions (I speak of society and no single poster here)
as it used to be just obvious some decades ago but in recent
decades, probably since the 80s it has been "uncool" to
actually (gasp!) care about the wellbeing of fellow human
beings more than about money...caring about other
human beings more than about money is among the most basic "moral
values" issues I can think of (as well as being a traditional
religious principle) yet those who scream about moral values
and traditional and religious values have (among them) more
than a few who participate in the demeaning of anyone
who actually expresses caring for fellow human beings (or the
planet or...) above money and the profits of corporations.

Corporations were created to serve humankind, and we have
forgotten that to the point that we seem to believe that
humakind was created to serve corporations..and that
is our great confusion. Same with profits, same with money.
When money is used to serve humanity, it is not the
root of all evil. When humanity is serving money on the
other hand...

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: argusdc Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2145 of 2244
Subject: Re: The Myth of Socially Responsible Investing Date: 12/2/2005 6:11 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
An excellent post from Bigbenjamins2. What I suspect is that most people who argue against SRI, do so because they feel uncomfortable(on some level, subconcious or otherwise) in profiting from the misery of others, but yet are unwilling to give up the spoils of exploitation. Otherwise, they would go ahead and continue to invest in companies that make them money irrespective of that company's negative impact on the poor, women, environment, animals,(add your personal cause here); and leave those of us who choose not to invest in those companies alone!

I do agree that there are no absolute criteral for SRI and just because morality is relative, that does not render the concept or approach meaningless. There are those who don't invest in companies that cause environmental degradation but don't give a hoot about employee diversity. Everyone has to figure out what their personal SRI screen is.

Having done that, it is at times very difficult if not impossible to find a company that meets all our criteria, or that remains untainted all the way through the service/supply chain, especially in our global economy. But that does not automatically disqualify a company from consideration. We may find that they are the most responsible/ethical in their particular industry, or that they are making efforts to make their business model more socially repsonsible(beyond the lip service that much corporate social responsiblity has become). In an imperfect world, they may be the most perfect solution we yet have. It seems that the anti-SRI argument is to simply throw the baby out with the bathwater. My measure of success is not achieving a 100% perfect portfolio of SR investments which is impossible. My goal is to move towards that target, and build my portfolio according to my SRI criteria, *to the extent that I can*. Knowing I may not fully realize my target is not a reason to not try at all. It is more than just about "an investment" or "making money", it is about living my life according to my ethical principles, accepting all the dilemmas it brings, and resolving those conflicts the best I can. Is that so difficult to understand?

Lastly I do agree that TMF which attempts to be a little warm and fuzzy does not give as much attention to SRI issues as it might.(I cringe each time one manager gushes about the high dividends that big tobacco has paid out, with nary a mention of the tremendous toll on people's lives and our health care system.) When TMF does, there will be little caveats such as "now I know most of you come to us for investment advice, not socio-economic commentary.." Well, maybe we come for both, or we at least want an acknowledgment that any investment we make has the capacity to do good, or indeed great harm. If TMF has any insights on this, it should share them, and let us figure out what's more important to us.






Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
UnThreaded | Threaded | Whole Thread (27) | Ignore Thread Prev Thread | Next Thread
Advertisement