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The Market Doesn’t Give Bonus Points to Martyrs

Apple, Philip Morris, and Amazon might well be sells, but a lack of morality shouldn't be Ronnie Moas' reason

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The good news is, someone on Wall Street finally managed to prove that not everyone working in, around and for the capital markets industry is a heartless, greedy son-of-a-@#$%.

The bad news is, this person who almost became a beacon of humanity and humility within the world of wealth creation might have undermined his message with a delivery that came across as … shall we conservatively say “over the top”?

Most of you will already know the Wall Streeter in question is Ronnie Moas, the founder and director of research Standpoint Research who raised eyebrows earlier this week with his soapbox moment during a CNBC interview. The topic? A deeper and more passionate explanation of why he downgraded Apple (AAPL), Amazon (AMZN) and Philip Morris (PM) because these organizations and/or the people who run them are morally bankrupt.

Seriously.

Moas stated, “For Apple Computers to pay their (overseas) workers $2 an hour while they have $150 billion in the bank is nothing short of obscene. I heard all of the arguments in their defense and they make no sense to me,” and added that Philip Morris “has the black lungs and blood of 500,000,000 people on their hands.”

You get the idea, but if you have to see it for yourself, here’s a portion of the rant.

To be fair, Moas is right — corporate greed and feelings of entitlement have gotten out of control, to the point where crimes aren’t actually seen as criminal by those committing them. Moas’ stance, however, overlooks a key reality that even the most moral of investors can’t sidestep.

Slim Pickings

Kudos to those who prefer to invest in conscientious corporations that treat their employees fairly. Indeed, it’s a rare investor that actually puts people before profits. And contrary to popular belief, limiting a portfolio’s holdings to faith-centric and socially responsible businesses doesn’t inherently mean sub-par performance.

On the other hand … if you think you’re changing the world by refusing to own stocks that treat people or the environment with little to no respect, you’re not.

See, the odds of finding a single investment that doesn’t have some sort of ugly side are effectively nonexistent.

Take the Parnassus Workplace Fund (PARWX) as an example. The fund’s mission is to only invest in companies that are known as a “good” place to work. Admirable, right?

Problem is, one of the fund’s biggest holdings is Capital One Financial (COF), which caters to — and some would say abusively so  — consumers with weaker credit scores, charging them astronomical interest rates (even by credit card standards). And, let’s not forget that Capital One was forced by the Consumer Financial Protection Bureau in 2012 to refund $150 million to some cardholders because the company was deemed to have used deceptive marketing practices. A great employee environment clearly didn’t mean a lot of respect for customers.

What about a faith-based mutual fund like those offered by GuideStone Funds? The GuideStone Funds family is a group of “Christian-based, socially screened mutual funds for individual and institutional faith-based investors.” Surely this family of funds would be safe for even the most morally conscious investor to wade into, right?


Article printed from InvestorPlace Media, http://investorplace.com/2014/01/ronnie-moas-sell-ratings-on-morality/.

©2014 InvestorPlace Media, LLC

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