Your opinions on "Socially responsible investing" and "Divestment from fossil fuels"

B

butterfacetrader

Recently there has been quite a lot of groups jumping onto the bandwagon of so called "socially responsible investing". More specifically of late, its been all about divesting from fossil fuels and oil and gas companies.

E.g.:

-http://www.nytimes.com/2014/09/22/us/heirs-to-an-oil-fortune-join-the-divestment-drive.html?_r=0
-http://www.bloomberg.com/bw/articles/2014-11-24/the-fossil-fuel-divestment-movement-takes-harvard-to-court

This is of course different to what we know as "activist investing" or "shareholder activism" which is when shareholders get together to shakeup a board room for the benefit of all shareholders. So I suppose we can give it a similar sounding name "social activism by way of divesting/investing".

Anyway, I think its just retarded. Its retarded when you put emotions ahead of making money. Its retarded because in many cases, particularly university students advocating that their university divest, they have no skin in the game and bear no market risk for bad investment decisions. Its doubly retarded because they are divesting at a time when oil prices are low. Dumb money basically. Buy high sell low. Real smart.

Divesting from something because you've done due diligence and found out its a bad investment? By all means. Thats how everyone invests. But divesting because you want less carbon emissions while selling at record low asset prices? Thats just stupid.
 
I know a few of the socially responsible crowd. And believe me, you sound just as dumb to them as they sound to you. They do have some legitimate points. As I buy oil stocks, I'm helping to put $$ into the pockets of those who rape the earth and take advantage of people in less fortunate locations. I know the companies do some good in those places, too, but there is still the raping and ripping off going on.

I'm on the same side as you, for the record. I'm buying oils right now. My preference is to make money however I can. Then I can use some of my profits for charitable purposes. In my mind, since I'm too small to rock the price of anything, and the raping will go on with or without me and my little few thousand shares, I figure I might as well profit from it.

However, I do see the point that the SR crowd is trying to make. It's not retarded, it's just another way of looking at things. Maybe the idea that the world can really change if we all band together is more positive than my jaded belief that money makes the world go round and always will, because greed is a staple of human nature.

The student activism thing has always puzzled me, even when I was a student. Students have no power. I don't think the schools even care about their tuition dollars that much. It's all about big donors. Student government always seemed like such a farce to me. The schools don't care what the students think. I always figured I was better off to stay away from all that, study instead, grow up, get a good job, make some money, buy some oil stocks, and so forth.
 
drcha said:
I know a few of the socially responsible crowd. And believe me, you sound just as dumb to them as they sound to you. They do have some legitimate points. As I buy oil stocks, I'm helping to put $$ into the pockets of those who rape the earth and take advantage of people in less fortunate locations. I know the companies do some good in those places, too, but there is still the raping and ripping off going on.

I'm on the same side as you, for the record. I'm buying oils right now. My preference is to make money however I can. Then I can use some of my profits for charitable purposes. In my mind, since I'm too small to rock the price of anything, and the raping will go on with or without me and my little few thousand shares, I figure I might as well profit from it.

However, I do see the point that the SR crowd is trying to make. It's not retarded, it's just another way of looking at things. Maybe the idea that the world can really change if we all band together is more positive than my jaded belief that money makes the world go round and always will, because greed is a staple of human nature.

The student activism thing has always puzzled me, even when I was a student. Students have no power. I don't think the schools even care about their tuition dollars that much. It's all about big donors. Student government always seemed like such a farce to me. The schools don't care what the students think. I always figured I was better off to stay away from all that, study instead, grow up, get a good job, make some money, buy some oil stocks, and so forth.
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yeah well, same thing, meet the new boss, same as the old boss. Now you are just betting on SR. Can they depress the price of a stock?
 
"Social responsible" could accurately be argued as "the only long term successful model". I don't do it at a trading level, but I do try to vote with my wallet in general life.

If people want to buy fair trade coffee it makes sense they wouldn't want to invest in XOM.

There's more to life than alpha.
 
loyek590 said:
yeah well, same thing, meet the new boss, same as the old boss. Now you are just betting on SR. Can they depress the price of a stock?
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No, I don't think they can depress the price of a stock. I think the effect of greed is much stronger than the effect of responsibility.
 
Risk619 said:
"Social responsible" could accurately be argued as "the only long term successful model". I don't do it at a trading level, but I do try to vote with my wallet in general life.

If people want to buy fair trade coffee it makes sense they wouldn't want to invest in XOM.

There's more to life than alpha.
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Yes, agreed. There are companies I have invested in willingly even though I hated doing business with them. Bank of America and Comcast come to mind.
 
drcha said:
Yes, agreed. There are companies I have invested in willingly even though I hated doing business with them. Bank of America and Comcast come to mind.
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I crossed the Rubicon in trading when I took a long position in HAL.
 
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