In a blog post, Luis Pazos deals with sin stocks. In his opinion, stocks and morals have nothing to do with each other. There is much better leverage.
How do you feel about ethical investments?
Luis Pazos: Personally, I consider the ethical investment to be a marketing gag, which, however, can be used to compensate for lost income in other areas. It is of course also a good lever, the moral conscience. But especially in the equity sector, one should simply ask whether I can even act in the category of moral action. Why? Let’s leave out new issues. Then I am not investing in a company, but there is a stock size.
For example, a thousand shares in a company that is traded back and forth on a stock exchange between different parties. That means that I usually don’t buy a share from society but from someone else. My actions on the stock market – especially as a private investor who now does not buy any quantities that influence the price – have zero impact on the company’s business. If I find what a company produces morally reprehensible, the lever through the corresponding consumption is a much better lever. Or even get a stakeholder group together, buy the stock, and then vote at the annual meeting to counter it. The mere buying of stocks that are already in circulation actually escapes the moral category. Because I don’t buy such a share of sin from society, but from you, for example. Then I would have to ask myself, in order to be able to evaluate the action morally at all: I get shares from you and give you money – What do you do with the money?
What if you sell me a very clean stock, but you do something bad with the money and I remember it too? Is it a moral act or not? But then it is simply completely detached from the security that is circulating anyway. I think it’s a bit easy to do there. With many things I have to say that I only understand to a limited extent, including the business model, where there should be a moral problem. For example tobacco stocks like BRT: Nobody is forced to buy and consume tobacco products. This is the free choice of adult people.
Millions of ex-smokers also prove that you can quit if you want to. It’s a bit too easy to call a morally objectionable company that makes morally objectionable products. Then one could also say that those who try to prevent or combat such a thing, enact prohibitive laws, must ask themselves what morality they are pursuing. If you look at, for example, that such prohibitions in history have always resulted in a Mafia promotion program with much more misery than ultimately the consumption of these goods. If you look at the death tolls from the drug crisis on the Mexican border, you have to wonder if it’s worth it. What would be, if, for example, I only made as much from cocaine or marijuana as I did from a glass of beer and the whole thing was legally run over a pharmacy counter? It is a very broad field.