

Can you ethically invest in unethical companies? - cwan
http://blogs.reuters.com/felix-salmon/2010/10/22/can-you-ethically-invest-in-unethical-companies/

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maxharris
No, you can't ethically invest in an unethical company. However, you still
need to answer the question: what is ethical? Next, if you have an answer, how
do you know it? Don't forget to follow Mrs. Rand's immortal adage: _check your
premises._

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billybob
Also, you need to answer the question, "what if I don't really exist?"

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maxharris
You cannot answer that question with "I don't" or even "I don't know" because
existence is axiomatic. Any answer you give to this question (or any other)
subsumes existence, consciousness and identity. So the only answer is "I
exist, I know that I do, and all things are what they are, so I am what I am."

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wazoox
Tldr: according to the article, the answer is a resounding "no".

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zck
While accompanying my father to his financial advisor, I had the opportunity
to decide what to do with some funds I had inherited. The advisor had given me
several prospectuses to look over, and I had ruled out some funds because they
had Altria (the former Philip Morris) as one of their largest ten holdings. I
told him of my choices, and he laughed, saying that there was no way to get
away from such companies.

Quite sad, but that's reality.

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BrandonM
Everyone else doing it doesn't make it right.

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blahblahblah
A bit part of the problem is that you don't get to vote the shares held by
your mutual funds. The fund manager gets those votes and he/she is obligated
to vote solely on the basis of profit motive. And because of 401(k) and
403(b), the vast majority of the workforce is at least partially invested in
mutual funds. Most employer-based retirement plans do not offer the option to
invest in individual stocks.

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Nick_C
Here in Australia employers have to offer several choices of investment plans
for superannuation, and ethical mutual funds have sprung up as a result. You
can pretty much invest ethically if you want. You're still stuck with the
problem that you don't get to define what "ethical" means though, you usually
have to accept the mutual fund manager's definition.

The other problem with ethical investing in a constrained universe of stocks
is whether you are inadvertently increasing risk (i.e. price variance to
benchmark) by the selection constraint. I'm not up with the latest research,
but by the early 2000s there were sufficient ethical funds in the U.S. to
pretty much ameliorate that risk and I'd be surprised if it was a real factor
today for the U.S. (I don't have the latest data for Australia.)

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rbanffy
There is one situation when you can ethically invest in an unethical company -
to use your investor power to change their behavior.

Most probably that's not easy unless you happen to have a couple billions
lying around (or a particularly undervalued unethical company at hand).

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julius_geezer
If you can find a copy of Murray Kempton's _Rebellions, Perversities, and Main
Events_, there is an essay "The Confusions of Conscience" about just this. (I
mention this mainly because the book is well worth having--the man had a way
with a sentence.)

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jerf
Interesting follow up question that I have no particular answer to: If you
accept that it is unethical to invest in companies that are behaving in a
manner you believe is unethical, is it ethical to _short_ them?

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lionhearted
I won't in a company I don't want to succeed. I don't want to have conflicted
motives about wanting to see an organization succeed or fail.

But that's pragmatism more than ethics - I don't want to be in a position
where, say, advocating publicly that smoking is bad makes me lose money on
tobacco shares.

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Mz
Yeah, unemployment and zero services. That's the way to make the world a
better place.

Mz, who owns no stocks at all because nothing is good enough for my picky
ethical standards. Has nothing to do with lack of funds. I swear! It's solely
because of my Lawful Awful alignment 1 orientation.

(oops, I have nearly $50 in a retirement account invested in stocks -- need to
divest myself of that)

