How to avoid industries I do not want to invest in?

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9-5 Suited
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Re: How to avoid industries I do not want to invest in?

Post by 9-5 Suited » Wed Jul 10, 2019 3:45 pm

HEDGEFUNDIE wrote:
Wed Jul 10, 2019 1:59 pm
9-5 Suited wrote:
Wed Jul 10, 2019 12:59 pm
This is an expensive way to get a false sense of feeling good IMO. There are thousands of companies in TSM and you haven't heard of 95% of them. Who knows how many companies you'll be invested in with whom you disagree about something if you use any kind of broad-based, diversified mutual fund.

I used to own Philip Morris and Altria stock despite being generally anti-smoking in my personal life. I didn't contribute to a single person's choice to smoke. I bought and sold shares in a secondary market, gave no money to Philip Morris, and their products are sold because of legal customer demand for them.
Again, this completely ignores your increase in wealth directly attributable to tobacco products.
It's a fair enough point that there's some degree of embedded hypocrisy in the argument, but the slope is indeed slippery here. Many retail stores sell billions of dollars of cigarettes every year. Paper companies make money supplying PM with raw materials. Purity just seems not worth pursuing. Looking for a "TSM minus any company that touches cigarette revenue" seems like a virtue signal, not an actual way to work toward a cause. A legal, free market exchange is occurring and yes I'm benefiting from that, but it's not clear to me why I should be ethically concerned about that.

HEDGEFUNDIE
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Joined: Sun Oct 22, 2017 2:06 pm

Re: How to avoid industries I do not want to invest in?

Post by HEDGEFUNDIE » Wed Jul 10, 2019 5:25 pm

9-5 Suited wrote:
Wed Jul 10, 2019 3:45 pm
HEDGEFUNDIE wrote:
Wed Jul 10, 2019 1:59 pm
9-5 Suited wrote:
Wed Jul 10, 2019 12:59 pm
This is an expensive way to get a false sense of feeling good IMO. There are thousands of companies in TSM and you haven't heard of 95% of them. Who knows how many companies you'll be invested in with whom you disagree about something if you use any kind of broad-based, diversified mutual fund.

I used to own Philip Morris and Altria stock despite being generally anti-smoking in my personal life. I didn't contribute to a single person's choice to smoke. I bought and sold shares in a secondary market, gave no money to Philip Morris, and their products are sold because of legal customer demand for them.
Again, this completely ignores your increase in wealth directly attributable to tobacco products.
It's a fair enough point that there's some degree of embedded hypocrisy in the argument, but the slope is indeed slippery here. Many retail stores sell billions of dollars of cigarettes every year. Paper companies make money supplying PM with raw materials. Purity just seems not worth pursuing. Looking for a "TSM minus any company that touches cigarette revenue" seems like a virtue signal, not an actual way to work toward a cause. A legal, free market exchange is occurring and yes I'm benefiting from that, but it's not clear to me why I should be ethically concerned about that.
Historically, how many morally deplorable things continued until enough people called them out as such, and made association with them unacceptable? When enough people virtue signal, the world can and has changed.

There was an article recently about Juul having problems recruiting scientists to run the safety trials that the FDA is mandating that they run to continue operating. In Silicon Valley it is well-known that they pay higher comp than even FAANG, and yet they are still having trouble with recruiting, likely because having Juul on your resume in a "Do No Evil" tech ethos is detrimental to one's future career prospects.

There are many ways to influence change in the real world, and also many ways to sleep well at night knowing that you're not benefiting from activities that go against your values. The first choice one makes is whether to actually live one's values, to walk the talk. Everything after that is just implementation. When even Vanguard has launched ESG index funds, the only question that remains is, are you willing to put your money where your mouth is?

barnaclebob
Posts: 4139
Joined: Thu Aug 09, 2012 10:54 am

Re: How to avoid industries I do not want to invest in?

Post by barnaclebob » Wed Jul 10, 2019 5:38 pm

HEDGEFUNDIE wrote:
Wed Jul 10, 2019 5:25 pm
9-5 Suited wrote:
Wed Jul 10, 2019 3:45 pm
It's a fair enough point that there's some degree of embedded hypocrisy in the argument, but the slope is indeed slippery here. Many retail stores sell billions of dollars of cigarettes every year. Paper companies make money supplying PM with raw materials. Purity just seems not worth pursuing. Looking for a "TSM minus any company that touches cigarette revenue" seems like a virtue signal, not an actual way to work toward a cause. A legal, free market exchange is occurring and yes I'm benefiting from that, but it's not clear to me why I should be ethically concerned about that.
...the only question that remains is, are you willing to put your money where your mouth is?
There are many noble causes in the world but that doesn't mean changing your investing strategy is an effective way of helping them. Its still possible to feel strongly and do things about climate change, cigarettes, clean water etc and sleep at night while still investing in TSM.

User avatar
9-5 Suited
Posts: 573
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Re: How to avoid industries I do not want to invest in?

Post by 9-5 Suited » Wed Jul 10, 2019 5:52 pm

HEDGEFUNDIE wrote:
Wed Jul 10, 2019 5:25 pm
9-5 Suited wrote:
Wed Jul 10, 2019 3:45 pm
HEDGEFUNDIE wrote:
Wed Jul 10, 2019 1:59 pm
9-5 Suited wrote:
Wed Jul 10, 2019 12:59 pm
This is an expensive way to get a false sense of feeling good IMO. There are thousands of companies in TSM and you haven't heard of 95% of them. Who knows how many companies you'll be invested in with whom you disagree about something if you use any kind of broad-based, diversified mutual fund.

I used to own Philip Morris and Altria stock despite being generally anti-smoking in my personal life. I didn't contribute to a single person's choice to smoke. I bought and sold shares in a secondary market, gave no money to Philip Morris, and their products are sold because of legal customer demand for them.
Again, this completely ignores your increase in wealth directly attributable to tobacco products.
It's a fair enough point that there's some degree of embedded hypocrisy in the argument, but the slope is indeed slippery here. Many retail stores sell billions of dollars of cigarettes every year. Paper companies make money supplying PM with raw materials. Purity just seems not worth pursuing. Looking for a "TSM minus any company that touches cigarette revenue" seems like a virtue signal, not an actual way to work toward a cause. A legal, free market exchange is occurring and yes I'm benefiting from that, but it's not clear to me why I should be ethically concerned about that.
Historically, how many morally deplorable things continued until enough people called them out as such, and made association with them unacceptable? When enough people virtue signal, the world can and has changed.

There was an article recently about Juul having problems recruiting scientists to run the safety trials that the FDA is mandating that they run to continue operating. In Silicon Valley it is well-known that they pay higher comp than even FAANG, and yet they are still having trouble with recruiting, likely because having Juul on your resume in a "Do No Evil" tech ethos is detrimental to one's future career prospects.

There are many ways to influence change in the real world, and also many ways to sleep well at night knowing that you're not benefiting from activities that go against your values. The first choice one makes is whether to actually live one's values, to walk the talk. Everything after that is just implementation. When even Vanguard has launched ESG index funds, the only question that remains is, are you willing to put your money where your mouth is?
1. Exactly my point. Social justice movements have made many changes. None of those changes has come from individual investors excluding companies from their mutual funds. That’s what makes it a virtue signal vs. a meaningful action.

2. The choice to work for a company and derive your labor capital from it is order of magnitude different than having that company represented in your market index fund.

3. Why should I care about Vanguard’s ethics? It’s not like I get to pick the companies I exclude. They have criteria listed on that ETF that I don’t care about at all. And take a look at the top 10 holdings ... if you think that’s a list of companies that always act according to your ethical principles you’re kidding yourself.

4. I sleep fine at night with my investments already, as I’m guessing you do with your well publicized UPRO investment. But how could you when it doesn’t screen for all your ethical principles? Are you putting your money where your mouth is? Seems like you may be writing about a virtuous self you would like to be but aren’t practicing.

bhsince87
Posts: 2656
Joined: Thu Oct 03, 2013 1:08 pm

Re: How to avoid industries I do not want to invest in?

Post by bhsince87 » Wed Jul 10, 2019 8:48 pm

There are things the US government does that I despise. And I bet everyone on here can think of something they don't like either.

But does that stop you from loaning money to them? IE, from investing in government bonds?

Or taken to another extreme, does that stop you from paying taxes?

And even if you don't own stock in a company you don't like, do you loan them money through a bond fund?

What about investments in something liek Prime MMF. Do you know which companies Vanguard loans short term money to?

And what about your bank? Do you know where your deposits end up as loans?

My point is, this is an exercise in futility.

As others have said, donate as much of your profits as possible to causes you believe in.

And then, don't retire early! Keep working to earn as much as possible as long as you can so you can donate even more!

(OK, just joking on the last part. Maybe.)
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

NMBob
Posts: 327
Joined: Thu Apr 23, 2015 8:13 pm

Re: How to avoid industries I do not want to invest in?

Post by NMBob » Thu Jul 25, 2019 12:52 pm

ruchei wrote:
Thu Jul 04, 2019 6:21 pm
Hello, all.

I have all my retirement funds in Vanguard funds. Once I set up a desired allocation, I left them alone with an occasional rebalance. However, as I am becoming more aware of how my choices impact the world around me I decided to check the list of companies that I am investing in. As I was fearing, I am contributing to the well-being of industries I want nothing to do with, <deleted mention of specific industry/company -mighty72> So, now I need to make my choices.

Anyone else has grappled with this question? If so, what is your solution? Thank you.
1) while i do not grapple with the issue, i note schwab carries 3 ESG etfs in its no fee/load program. It looks like ESGU has the lowest ER of .15.

ESGU Shares MSCI USA ESG Optimized ETF
SUSA iShares MSCI USA ESG Select ETF
ESGL Invesco ESG Revenue ETF

2) It appears that there may be some new brokerage account apps that actually make it easy for you to design your own custom portfolio of many stocks (80-100?) and/or sectors you choose and proportion, and then it will run (buy and balance) that portfolio without sales fees and can even buy partial shares. M1 finance appears to be one. https://www.m1finance.com/how-it-works/invest/pies/

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