Socially Responsible Investing's Bull's Rebuttal
by Rick Munarriz ([email protected])

I guess you won't find a seal-clubber vs. tree-hugger slugfest here this week. Selena and I tend to agree on many points, chief among them that socially responsible investing is an individual art, not a general science. I, too, can fathom an investor, after surviving a heart attack, chuckling at his brokerage statement as he calls to sell his stake in McDonald's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MCD)") else Response.Write("(NYSE: MCD)") end if %>.

Yet, I do have to disagree with her fight over flight conclusion. I think buying a personally objectionable company, looking for a win-win situation in that either you will be rewarded spiritually or fiscally is flawed. Living on the fence of a zero sum game accomplishes nothing. Poor and happy. Rich and miserable. Choose one?

Please. Just like a vegetarian, who over the course of meatless living may very well alter the demand and spare a cow or two, an investor who refuses to buy shares of a company is contributing at least a drop into the bucket of market pricing. Sure, you can vote as a shareholder, but in the process you are holding back the float, supporting the share price, and giving the company better access to raise additional funds through secondary stock offerings to continue the business you allegedly abhor. In a nutshell, if you own you condone. I can't imagine a fur protester picketing with a mink stole. It's just plain wishy-washy to aspire to implode rather than explode. Kamikaze investing? Next position please.

Goldilocks was the perfect investor. Too hot? Pass. Too cold? Pass. Just right? Dig in. The universe of stock choices is too wide to settle for anything less than a tailor-made portfolio. Choosing flight over fight is not an act of cowardice as long as you know where you are flying to.

Selena is correct in implying that every stock is offensive to some extent. But when we begin to consider the more vanilla sin stocks, the road to socially responsible investing has been paved with success. As the bull market has roared forward, tobacco stocks have lost their luster. Defense contractors, if not for the mandatory mergers, have also lagged the bull rush. We may not be smoking less, but the addictive facts have been damning. We may not be any less prone to war, but stateside we have now gone decades without a prolonged military standoff.

Jerry Falwell is no Warren Buffett. However, buying a company, any company, demands more than a quick glance at earnings and growth rates. Everybody knows that. That is the efficient part of the market. From there one has to take a leap of faith and assume that various socioeconomic variables will play out to improve a company's fundamentals and share price. Don't let it get to your head, but what I am saying is that every time you decide to buy a stock you are acting as a visionary. You are projecting your beliefs on what you hope the market will eventually come to perceive. That being the case, you might as well be an optimist all the way through, no?

Next: The Bear Responds