​Socially Responsible Trading

Of all the email I receive, I dread most the ones that are sent to me by traders and investors who want to be (and want me to be) socially responsible. "Socially responsible" is cousin to being "politically correct." However, I am not a good judge of what is socially correct. I can measure moral correctness only in terms of the Bible.

I have held Philip Morris, Altria, and Lorillard stocks at one time or another, and am looking to get back in. I own Kellogg's (the great adulterator of breakfast cereal), Kraft Foods (the purveyor of adulterated cheese), Coca Cola and Mac Donald's (the poisoners of our youth). Really, what can you invest in that is socially responsible? It seems that everything mankind touches is polluted or pollutes something else. Even the passing of gas by animals is said to contribute to global warming and pollution of the air!

However, in the spirit of fairness, I want to "clear" the air by giving Ms. Amy Domini a chance to reveal her socially responsible thoughts to us. If you want to engage in socially responsible investing, you should look into the $1.5 billion Domini Equity fund, one of the oldest mutual funds based on social responsibility.

It's all yours, Ms. Domini:

"What is a social responsible company? I believe that many corporations operate under the assumption that profits are the first and only priority; many corporate leaders believe they should make money at any cost, but adhering to this standard has social consequences. I would argue that the company's 'fiduciary responsibility' will consist of meeting that standard, and they will feel justified to do that by any means. They may feel it is moral to bribe somebody at the accounting standards board to create new accounting standards that may make the company look more profitable. Under that standard, it will be their moral obligation to cheat, bribe, and steal. They will feel it is moral to do whatever they can to make money, regardless of the social costs.'"

"What role can investors play? The way you invest builds the world your children and grandchildren will grow up in. You must ask, 'What kind of world do you want them to grow up in?' There are two issues to consider: universal human dignity and ecological sustainability. One should be comfortable as a human being; you would like to avoid needing an armed guard every time you left home or requiring your children to play behind a barbed wire fence. There's also a health aspect as far as the planet goes. It's pretty simple and straight-forward, but right now, the corporate culture works against these issues because the standard is to make a profit at all costs, and human dignity costs money. Environmental responsibility costs money."

"There are advantages to investing in socially responsible companies, in addition to the fact that they address issues of human dignity and ecological sustainability. It's harder to both turn a profit and remain socially responsible. Innovative executives usually run companies that address social and ecological issues. They are on the ball and proactive. And because socially responsible companies are more innovative, they tend to be more profitable over the long run.

"It's possible for companies to be both profitable and socially responsible. One wants to be mindful of the world you want your children to grow up in. One wants to be mindful when investing. The investor has ultimate power. The investor is over weighted in power. He or she has more power than other players at the table and needs to take responsibility for his or her actions."

Thank you for your thoughts Ms. Domini. You have convinced me. Turn on the wind generators, and let's kill more birds. Let's not eat any more beans because they cause flatulence. We already have enough flatulence from the hordes of cows, sheep, and pigs. Don't trade corn futures because they are used to make ethanol, which destroys your car engine. Let's make more solar panels…uh wait a minute, I read somewhere that the manufacture of solar panels creates more pollution than it saves.

Forgive me, please! I have 3 solar arrays on my roof.

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