Personal ethics and the Rise of Greed

[Senator Jack]

I'm not going to go into detail on this one - just opening a topic for discussion.

Considering this whole Exxon/Mobil gouging the average American to line their pockets fiasco that's going on right now, I'm at war with my ethics. I'm self-employed and have an IRA that I contribute to. I'm not one to play the stock market, nor do I have any interest in self-managing/growing the little money I have. So the bank has my money in a fund, and I suppose this fund is buying and selling stocks that are, in turn, increasing the value of my IRA. I have to presume that some of these investments are in companies that are everything I'm against, including Exxon/Mobil, WalMart, etc. Thus, my ethical dilemma.

So the question is:

How can one rail against the greed of Exxon/Mobil while their IRA/401K plans are undoubtedly invested in the company?

Regards,

Senator Jack

 

[Lincsong]

Look for the "responsible" funds.

Well, what you are going to have to do is to find a fund that invests only in companies that you agree with their corporate policies. It is going to take a little effort on your part, but I'm sure there must be some fund out there that would invest in what you consider "responsible". companies
(As for me personally I own stocks in tobacco and oil companies.)

 

[scotrace]

How can one rail against the greed of Exxon/Mobil while their IRA/401K plans are undoubtedly invested in the company?

One does this, my dear fellow, with a Martini.

 

[Salv]

Jack - as Lincsong says you can move your money to more ethical investors. Start at http://www.ethicalinvesting.com/ - they have a page with a short international list of ethical investors. Beyond that, just google for ethical investments - most of the pages my search turned up were UK-based, but there should be more US-based sites out there.

 

[Mike in Seattle]

Unless you find out what the fund is investing in, it's very possible if not likely they aren't invested in one of the oil companies. Just assuming the fund has certain investments simply because the oil companies are in the news currently for having record sales (which doesn't necessarily mean record profits) doesn't necessarily mean that they're making a consistently high enough return for the fund managers to want to invest in. There are "socially conscious" funds that won't invest in things like oil, tobacco, companies that use low-paid foreign labor and the like...but the trade off is the returns are minimal or non-existant. Oil company stocks are usually overpriced or overvalued because everyone jumps on them the minute fuel prices rise even slightly, or there's any threat of disruption to oil supply. There are plenty of other companies or industries that have better, more consistent returns that most funds invest in. But as you say - the only way you'll know your monies aren't invested in particular companies or industries is to do the research and make the decisions on where exactly the funds are invested.

 

[Baron Kurtz]

The baroness has her pension in an ethical fund ... Seems to work okay. But if you're gonna leave the decision up to your bank, they're going to do whatever it takes to maximise their cut.

See, i rail against the banks, but they've made it so i have to have a bank account (receive wages etc.). If ever there was a self-serving industry, it's the banks. I minimise my ethical issues by using a small local bank.

bk

 

[Paisley]

How Much Due Diligence?

Sen. Jack, even if you invest in a socially conscious fund, how do you know that none of the companies--among hundreds, probably--in the fund are not cheating the IRS, or their customers, or violating SEC rules, employing illegal immigrants, or giving money to organizations you might not approve of, or--well, you get the idea. Mutual funds are, by design, set-it-and-forget-it investments.

I would suggest to you buying some real estate and being a responsible landlord, but you say you don't want to do a lot of legwork growing your money.

Another alternative is to become part-owner of a small business whose practices you approve of. Of course, you would have to do a lot of homework, have your own top-notch CPA, and stay on top of how the company is doing. (These companies are often S corporations to give the owners some tax benefits.) However, this option has a far greater risk than a mutual fund: all your eggs will be in one basket. But, as one financier once advised, "Put all your eggs into one basket, and then watch the basket."

 

[Etienne]

I guess I'm feeling willing to be unpopular...but from everything I've read and listened to, I don't think this is a simple matter of "greed". We live in a capitalist society and supply and demand are part of the equation. I haven't heard one person complain about the huge jumps in equity their homes have accrued in the last couple of years--talk about windfalls! Yet proportionately, gas price increases haven't come anywhere close to the increases in the housing market. Okay, take your shots! (But remember, I'm a lady!)

 

[Lincsong]

Not a pot shot by far.

I guess I'm feeling willing to be unpopular...but from everything I've read and listened to, I don't think this is a simple matter of "greed". We live in a capitalist society and supply and demand are part of the equation. I haven't heard one person complain about the huge jumps in equity their homes have accrued in the last couple of years--talk about windfalls! Yet proportionately, gas price increases haven't come anywhere close to the increases in the housing market. Okay, take your shots! (But remember, I'm a lady!)

If you look at the run up in the housing market one thing is for sure; as interest rates dropped housing prices rose. For instance; when rates were 9% the payment on a $200,000 loan would have been say $1900 a month. As rates dropped, because people are on a monthly payment mentality realtors got sellers to raise the price, then tell buyers; "don't worry at 6% interest this $300,000 house will only be $1900 a month." (These are guesses not real rates) When the prices got higher, mortgage companies came out with the interest only adjustable rate deals. "Don't worry pay $2000 a month for 5 years and then you can just sell and think of all that equity".

Now that interest rates are rising and people who took those 5 year interest rate loans are having their rates adjusted every six months. In some instances the monthly mortgage has gone up $600 or $800 a month. Since most people didn't have that kind of pay raise what are the choices?
1. Get a transfer to a lower cost area and reap the rewards of the appreciation.
2. Refinance into another 5 year interest only loan. "but remember; you can take XXX amount mortgage interest deduction".

 

[jamespowers]

My investment strategy? Simple. Invest in vices my friend. They will always be with us. Gambling, liquor and cigarettes will never let you down. They are perfectly legal and you can make a fortune. Are they ethical? I don't see how they can be any worse than any other business as Paisley mentioned. In some sense, I am investing in myself and recapturing some of my own money. Everyone goes in with their eyes open now. :cheers1:

Regards,

J

 

[Baron Kurtz]

Those would indeed give good returns. And i'd have no problem investing in them ...

Now, when it comes to international arms dealers - the ones who sell to, erm, interesting regimes (legally) around the world. That might create an ethical dilemma ... though that investment would probably give a pretty good return.

bk

 

[matei]

I would suggest to you buying some real estate and being a responsible landlord, but you say you don't want to do a lot of legwork growing your money.
"

This is what we did. We have several apartments, which will one day (hopefully) serve as or suppliment our pensions.

We're not interested in the stock market and are in no way out to make a killing. We want to make sure we're not begging on the corner in our golden years, however we don't want to get over at the expense of others.

There was an interesting article in the Guardian yesterday (sadly I can't find it) where a large portion of the money in popular funds was invested in American defence industry firms (Lockheed-Martin, Raytheon etc). I think the upshot was that the investors themselves weren't aware and upon this revelation a large portion were shocked. [huh]

 

[Miss Neecerie]

This is what we did. We have several apartments, which will one day (hopefully) serve as or suppliment our pensions.

We're not interested in the stock market and are in no way out to make a killing. We want to make sure we're not begging on the corner in our golden years, however we don't want to get over at the expense of others.

There was an interesting article in the Guardian yesterday (sadly I can't find it) where a large portion of the money in popular funds was invested in American defence industry firms (Lockheed-Martin, Raytheon etc). I think the upshot was that the investors themselves weren't aware and upon this revelation a large portion were shocked. [huh]

Hey...some of us make our money in companies that are defence related. I work for one......granted I don't work in the weapons divisions ...but still...no more evil then any other industry....

 

[Senator Jack]

Thanks for the link to the ethical fund website. Unfortunately, I did find my fund on the Monsanto investors' list. (Frankenfood, ugh.) I'm going to have to go to the bank at some point and see what I can do. I hate being a hypocrite.

Regards,

Senator Jack

 

[Paisley]

Plants have been genetically engineered for centuries. Long ago, hybridizers would simply plant two plants next to each other and let nature take its course. Genes were randomly mixed.

Having grown more sophisticated, hybridizers then pollenated individual plants and collected the seeds (they still do this). Then they planted thousands of seeds and monitor them. Perhaps one of those plants would show enough promise to propagate, patent, and market. Growing those thousands of plants, though, takes acres of cleared land, water, fertilizer, labor, etc. Again, genes are randomly mixed.

Now that the genes of some plants have been mapped, scientists know which genes they want. They can hybridize the plants in a lab. Hybridizers don't need to grow so many plants to get one good one. They can introduce genes to make the produce more nutritious (e.g., golden rice, with Vitamin A) or make plants more resilient to disease (read: needing less pesticide).

Sometimes I read on a box of food, "No genetically engineered ingredients." What if I want genetically engineered ingredients?

Here is a link for further reading: http://www.hooverdigest.org/042/miller.html

 

[jamespowers]

Those would indeed give good returns. And i'd have no problem investing in them ...

I am shocked. Really?

Regards,

J

 

[Lincsong]

CALPERS

It seems that the California Public Employees Retirement System (CALPERS) wanted to be responsible and pull all their investments out of tobacco companies a couple years ago. Now CALPERS is demanding that all government agencies in California come up with the hard cash to make up for the lost in value of the CALPERS portfolio. While the value of tobacco giants like R.J. Reynolds and Phillip Morris has quadrupled and the yearly dividend has doubled. I would guess that since CALPERS isn't there meddling with corporate governance then those companies can focus on running a company and not a social experiment.

 

[scotrace]

It seems that the California Public Employees Retirement System (CALPERS) wanted to be responsible and pull all their investments out of tobacco companies a couple years ago. Now CALPERS is demanding that all government agencies in California come up with the hard cash to make up for the lost in value of the CALPERS portfolio. While the value of tobacco giants like R.J. Reynolds and Phillip Morris has quadrupled and the yearly dividend has doubled. I would guess that since CALPERS isn't there meddling with corporate governance then those companies can focus on running a company and not a social experiment.

Somehow this doesn't surprise me.
And WOW! I've go to add some big tobacoo companies to my 'watch' stock list.

 

[jake_fink]

Plants have been genetically engineered for centuries. Long ago, hybridizers would simply plant two plants next to each other and let nature take its course. Genes were randomly mixed.

That's not genetic engineering. As far as I know there were few if any "hybridizers" who put a tomato and a fish next each other to produce a random mixing of genes.

 

[jamespowers]

It seems that the California Public Employees Retirement System (CALPERS) wanted to be responsible and pull all their investments out of tobacco companies a couple years ago. Now CALPERS is demanding that all government agencies in California come up with the hard cash to make up for the lost in value of the CALPERS portfolio. While the value of tobacco giants like R.J. Reynolds and Phillip Morris has quadrupled and the yearly dividend has doubled. I would guess that since CALPERS isn't there meddling with corporate governance then those companies can focus on running a company and not a social experiment.

Just like everything else, when you get government out of the way people prosper.
I remember when RAI was $18 a share and a sap friend of mine asked if he should invest in it. My response: "sell every other hunk of junk stock you have and buy this one because it is going to make you some money." The fool only bought a measly grand worth. The stock is now at $130 a share! If he had listened to me he would be well on his way to being a millionaire now. Instead he made a decent investment but he still has to sling lousy coffee for a living. [huh] Oh well. I sold mine too soon and bought MO its only at $73 now.

Regards to all,

J