Socially Responsible Investing's Bear's Rebuttal
by Selena Maranjian

I suspect that we may agree on more points than we disagree. But I do still have some bones to pick.

Rick argued that if you think cigarettes are pretty much express tickets for the ferryboat ride across the river Styx, you might as well shun tobacco companies, thinking that people will eventually come around to your way of thinking. Well, I've noticed too many times that people rarely seem to come around to my eminently logical way of thinking. I'm against war and hate cigarettes, but I wouldn't bet on either of them going away.

Rick doesn't see the appeal in buying into companies one finds ethically objectionable. I used to agree with this, until Microsoft <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MSFT)") else Response.Write("(NASDAQ: MSFT)") end if %>. I've long been a fan of Apple computers (and long a disheartened and discouraged one). For me, just as objectionable as Philip Morris <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %>, was the evil empire of Microsoft. So as Microsoft stock soared and soared, I stood on the sidelines pouting. Then I devised a rationalization. I bought Microsoft stock, creating a win-win situation. If the stock continues its advance, I profit. If the company implodes and the stock crashes, well, yes, I do lose money, but I'll be compensated by a sense of satisfaction. Perhaps that's a good solution. Buy stock in companies distasteful to you and you can't lose. Either you make money, or your dreams come true.

I think that ultimately, though, it's impossible to be truly and consistently socially responsible when investing. The best we can do is take into account the issues that mean the most to us, and if the idea of owning part of some company turns our stomach, then perhaps we should move on and invest elsewhere. There are certainly plenty of companies out there.

Consider the thoughts of Warren Buffett on the matter (From Outstanding Investor Digest, August 8, 1997):

"People have written me about whether we should [own tobacco stocks]. [But] we own a newspaper in Buffalo, the Buffalo News, that carries tobacco advertising... we made a decision some years ago that we didn't want to be in the [business of manufacturing] chewing tobacco. We were offered the chance to buy a company that has done sensationally well subsequently. And we sat in [the lobby of] a hotel in Memphis, talked about it and finally decided that we didn't want to do it.... Now why would we take the ads for those companies or why would we own a supermarket or a Seven Eleven or a convenience store that sells 'em or something of that sort and not want to manufacture 'em? I really can't give you the answer to that precisely. I just know that one bothers me and the other doesn't. And I'm sure [that] other people would draw the line in a different way."

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