Wednesday, May 24, 2006

Stupid Investment Idea of the Year: Socially Irresponsible Mutual Fund

By way of Atrios, The Unknown Ideal and Deltoid comes this amazing story about the stupidity of some right wingers. You know facts don't faze them and science is good only when it supports their world view, if not it's junk science or some massive liberal conspiracy.

Often times they will simply do something just because you know the progressives do it and it is all stupid and all so let's try and do the exact opposite.

As you probably know there are mutual funds that believe in investing in a socially responsible manner. One of them is the Domini 400 Social Citizens Index Fund.

From the unknown ideal
"Also in the action-packed Sept 19 PI, an item demonstrating that "socially responsible" funds (Domini 400 Social, Citizens Index Fund) have beaten the market (and, by extension, most active portfolio managers) over the past 10 years, ".
I looked up how they did and here it is in comparison to the S&P 500 (pretty much kept pace with it)

So what do the right wingers do? From the unknown ideal

"Right-wing fund managers Steve Milloy and Tom Borelli are grabbing lots of attention for accusing companies of devoting resources to pet causes instead of maximizing profits. Last month they showed up at Goldman Sachs' annual meeting in New York to attack CEO Hank Paulson for, among other things, chairing the Nature Conservancy and authorizing Goldman's donation of land it owned in Chile to the Wildlife Conservation Society. But a look at the returns of the pair's grandly named Free Enterprise Action Fund suggests that their own bottom line could use some help. The $5.6 million fund gained just 2.32 percent from March 1, 2005, its first day in business, through the end of the year, net of expenses. That's well below the S&P 500's 4.72 percent gain during the same period -- and it doesn't hold a candle to the 18 percent appreciation of Goldman shares.
Sure enough, the partners hold their own venture to different standards. Their returns, they say, don't matter as much as their stated cause: counteracting the influence of so-called socially responsible investment firms, like Domini Social Investments and Calvert, on corporate behavior.
"We're not trying to be a high-performing mutual fund," Milloy, 47, tells Institutional Investor. "We are imitating the left. Left-wing social-political activists don't like capitalism. They hide behind human rights. We want to help oppose that."
The pair have plenty of experience standing up for corporate America's right to ignore do-gooders. In his spare time Milloy publishes, a Web site devoted to debunking global warming as a "myth." He formerly ran the Free Enterprise Action Institute, which was funded in part by ExxonMobil. Borelli previously worked as a lobbyist for food and tobacco giant Altria Group.
So far shareholders of Goldman, General Electric and J.P. Morgan Chase -- all targeted by FEA Fund in the past -- don't seem too concerned with the duo's accusations, and they certainly don't see ecological policies as money-wasting distractions. "Being environmentally responsible is the right thing to do," asserts Amy Davidson, J.P. Morgan Chase's director of environmental affairs. "But it's also good risk management."

Somebody please buy Milloy and Borelli a clue. Notice how they use shifting goal posts for themselves. Just like the shifting reasons for going to war in Iraq. Heh! So their whole point of investing is not to try to be a high performer but just counteract socially responsible investing?
Well they are doing a lousy job of trying to imitate the left. Just like their ideology their investment ideas seem to be full of holes that even a sieve would be ashamed of!

But wait there's more from Daniel Gross in Slate...
"Meanwhile, its efforts to stiffen the spine of corporate America have been quixotic and unfocused. A resolution the fund filed with Goldman failed by a margin of about 473 million to 178, in part because "the resolution was unavoidably filed late and so was not included in Goldman's proxy statement."

Quixotic and unfocused? Just like our Iraq strategy ;). They are not imitating the left they are imitating their dear leader. Also guys ..the left does not hate capitalism. I think everyone agrees unfettered and unregulated capitalism serves nobody.
As Daniel Gross says
"Are you a right-wing, free-market type who believes that Fortune 500 CEOs have devolved into a gaggle of eco-friendly squishes? Do you like paying high expenses for stock market returns that lag the S&P 500? Would you trust a former tobacco executive and a critic of junk science to manage your money? Then have I got a mutual fund for you! The Free Enterprise Action Fund."
So go out there and invest they could use your money and faith in them ;)


Dadoji said...

Kaaliram ka baj gaya dhol
Beech bajaria khul gaya pol
Ho gaya uska dabba gol
Bol hari bol hari bol hari bol

For those who don't understand it, it is a famous song from bollywood making fun of the arrogant villain.

karmic_jay said...

Man that is an old song. Heh.. reminded me that I am well on my way to becoming a period piece ;)
It's from an Amitabh movie I think.

Dadoji said...

Yes, it is.
May I add that we are in the same boat wrt mummification. *lol*

karmic_jay said...

lol yep. I think you, me and Masal Chai are the only one's who are not in their 20s.
It's does not bother me, its just something I noticed.

Jordan's Dad said...

Well, gee, there is really nothing to say to this. You really got these millionaire investment guys with quite the zinger! I mean, only up two point something percent? Pathetic!! Now its up only five point something percent since its inception. It may be growing, but certainly no one is getting rich off of it!!

And the whole Iraq/Mutual Fund dichotomy totally makes sense. Bush made the decision to go to Iraq just like two socially irresponsible investment dudes. Why couldnt I see this before? Where were you in Nov 2004??

I'll be back later - gotta go get a new ideology.

Thanks for ruining my day.

And the economy only grew 5.3% in the first quarter of 2006.

Things just keep getting worse!

karmic_jay said...

JD :) Have fun..