Does anyone happen to have any information or ideas about socially responsible investing? I don't exactly know what I mean by this because that could include so many different things (e.g., investing in more responsible companies, staying out of speculative and/or short term funds, emerging market investment, rewarding positive governance practices etc.), but I just was curious if anyone had any ideas.
For example, I am under the impression that Target and Costco have much more humane and sustainable employment practices than Wal-Mart and Sam's Club...but that's about as much as I know. Stuff like that... I mean, there's so many movements and thinkers who have ideas about more responsible consumption and that sorta thing, so there's gotta be people who do this for investment, right?
Even though there should be negative effects on the expected growth rate of whatever "responsible" portfolio is put together, I think if consumers eventually respond to corporate practices in a manner that reflects the costs of externalities and social values (that is, if we regulate information and markets in such a manner so that markets ACTUALLY FUNCTION correctly), maybe the effect won't be too pronounced.
(For the record, RS, I am saying that deregulation allows corporate practices and information to become more opaque. As a result, deregulation is actually damaging to well-functioning markets since the underlying assumption for ANY efficient market is perfect information. I don't think that markets naturally produce the correct incentives and sanctions to disclose optimal information. In short, as usual, I am arguing that the central question is not whether we need more or less regulation, but how we should regulate.)
11 comments:
I would not recommend you venture into the market. Ignoring your socially responsible nonsense(and by the way, the most socially responsible thing a company can do is simply to make money for its investors), you should look at it this way:
The people who spend the most time analyzing it, and who are the so-called experts are stock brokers right? OK, then why aren't there lots of rich brokers?
Investment in individual stocks is a crapshoot. If you must invest, go with the Vanguard 500. But really, there are better places to put your money.
RS
1) I think your main point is exactly why I think it's fine to try to pick companies who operate responsibly. If it's a crapshoot on returns between Wal-Mart and Target, then why not feed capital towards Target?
2) I agree that I'm basically going to throw large portions of my money into index funds and the like, but I guess I'm speaking here for the smaller "more disposable" and high-risk investments...like investing in Tata (Indian carmaker) which will boost growth in India instead of GM.
3) "The most socially responsible thing a company can do is simply make money for its investors."
Two responses: a) Come on. Really?
b) In order for that statement to make any sense at all, that would assume that companies can never do bad things in the world. But that's moronic. Companies like Enron and UFC (Chiquita?) have done affirmatively BAD THINGS. Companies that...say, DON'T do that? I would call them socially responsible. They made money for their investors. What do you call the rest of that shit?
I remain surprised by your adherence to a philosophy that I don't think anyone actually believes at the top...but is merely packaged and sold so that interested parties can benefit.
Where have you been?
:)
ahhh, . . . a throwback to the 17th Amendment rants.
j
j: I'm not sure I follow?
1.) Yes, really.
2.) Real estate over the stock market on your disposable income. Actually, you are really better off buying wine. Seriously. The returns are higher. But you have to be not stupid and drink your investment.
3.) Philosophical discussion re profits, Enron, United Fruit, later. Important thing to remember, those companies violated the freedom of contract that I hold dear. Like Elton Brandt.
4.) The 17th Amendment blows. Thanks for remembering J.A. But the 19th Amendment is fantastic, I've had fun with a cute little blonde in a voting booth.
RS
oh and
5: I've been working/studying like 16 hours per day. That's where I've been.
Elton Brand, like, the basketball player?
I think I now understand your entire political philosophy: It makes perfect sense if people never do bad things.
That's a pretty big Matzoh ball hanging out there.
Right-o. My concept makes perfect sense if people don't do anything wrong. But indeed, couldn't that be said about any other economic order, e.g. Socialism and COmmunism.
The question, and I haven't resolved the answer yet, is what happens when people do "wrong" i.e. violate the freedom of contract. Certainly, for those who can afford it, lawyers do the trick, but how to protect those who cannot. I'm still working on it.
But it still makes more sense than your ad hoc lets give everyone my money idea.
RS
That was unresponsive rhetoric.
You set up strawmen that are not relevant to the issues at hand, and then you swing and then you MISS. It's bizarre.
Sorry, that didn't make sense probably...
Just to start, I am not advocating communism. Never have, never will. So "Communism is Stupid too" is not a defense. I agree. That's your irrelevant strawman.
When I drag the argument into the grey areas ("some taxation and spending is practical and necessary"), you attack the extreme (communism). That's also the irrelevant strawman, again.
Communism didn't assume that people would do no wrong. That's why they (stupidly) tried to exterminate so many people and thought forced control was the way to deal with with people's evil tendencies. That's the swing and a miss.
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