stolinski Uncategorized

The enemy

Suddenly as I browse through all this nonsense I wondered what the enemy is doing. How do you invest in arms companies?

It’s simple, it’s called “defense”.

Boeing (BA) is known for its commercial jets, but its defense and space programs accounted for $6.59 billion in the second quarter.

Northrop Grumman’s (NOC) revenue was $8.9 billion in Q2 and $33.8 billion in 2019. Its market cap is $54 billion.

Lockheed Martin (LMT) is the biggest defense contractor and is now the largest U.S. aerospace company by valuation. Lockheed’s revenue was $16.22 billion in Q2 and $59.8 billion in 2019.

Raytheon and United Technologies completed their $100 billion all-stock merger in early April to become Raytheon Technologies (RTX).

General Dynamics’ (GD) revenue was $9.3 billion in Q2 and $39.3 billion in 2019. Its market cap is nearly $43 billion.

Thanks so much Investors.com!

stolinski Fund Review

Fund Review: Kames Ethical Cautious Managed (Class B) (Acc)

[Review from 2019] Disclaimer this is uh just like y’know my opinion maaaan

Kames Ethical Cautious Managed (Class B) (Acc)

This fund is the only “ethical” fund in the Hargreaves & Lansdown Wealth Top 50. I personally don’t really see where the ethical side of things lies.

Having Coca Cola as one of the top 10 holdings is a massive red flag. This is a fizzy sugary drink which uses 3 litres of drinking water to produce 1 litre of product. The company has been invovled in human rights abuses, including the murder of trade union officials in China, Colombia,Guatemala, India and Mexico. Check killercoke for all the information.

Almost 50% of the holdings are bonds, which I doubt are ethical. These are the sort of holdings that come up if you go to page 224 of the 2018 annual report (pdf):
Bank of Scotland, Santander, Rabobank, Sainsbury’s Bank, Transport for London, Esure, Legal & General, AA, Dignity.

Er… So what’s the screening criteria? Well after 20 minutes of googling I was none the wiser except for finding a few references to the ethical criteria being listed elsewhere. I finally found the right link. kames claim “All three ethical funds we manage are designed to meet the needs of clients who wish to make investment decisions based on strong ethical principles. These are often referred to as ‘dark green’ funds, with ethical screening criteria which are clear and unambiguous”
Further, “Our ‘dark green’ screen is ideally suited to investors looking for a more stringent ethical philosophy. It adopts a negative approach that screens companies out of our funds’ potential investment universe if they engage in certain unacceptable activities. Examples of our screening process are shown below.”
Then we have a fairly typical negative screening list. The categories are as follows:

  • Animal welfare
  • Military
  • Nuclear power
  • Environment
  • Political donations
  • Genetic engineering
  • Gambling
  • Alcohol
  • Tobacco
  • Pornography
  • Banks
  • Oppressive regimes

This is not a bad list necessarily, but obviously not very good if it lets through the companies listed above. I prefer positive screening as made by a bank like Triodos, which only invests in projects which it believes are benefitting culture, environment

Simply put though, this is far from a stringent screening. It’s not even dark green. These people are bullshitters.

VERDICT NOPE

2020 update – LOL not much to add, I guess I just ran out of stea,m, it’s quite depressing checking all these funds advertised as ethical and whatnot only to find out they are SHITE

stolinski Effective altruism, My investments, My story

Loanstock investment in peril

I said in a previous post about my ethical investments And I must say, so far so good for me! I haven’t lost any money yet.

Then of course the next day I got an answer to an email asking about loanstock repayment saying that the housing cooperative had fallen apart and had been fined by the FCA for not submitting taxes for two years. At this stage we are discussing repayment plans and since some friends are/were involved i think i will get my £2000 back, but it did make me think about the frailty of investments. And also about the wisdom of mixing friends and money.

On the flipside, this is the first blip I have had in twenty years of ethical investment.

2020 UPDATE – The story I was given didn’t stack up, but I got my money back so I didn’t press further.

Conclusion – be wary of mixing friends and money! Without keeping an eye on this investment, I would have lost it.

More philosophically, some investments don’t work out.

stolinski Effective altruism, My investments, My story

It’s not all about profit (part two)

The second attitude (part one here) I seem to come up against a lot regarding ethical investment is a nihilistic argument with two prongs.

One is represented mainly by my father (hi dad!) who takes the view that he wants to double his money as quickly as possible and if everything is legal then where on earth is the problem? Further, he firmly believes in survival of the fittest.

I actually find this view quite offensive, even though I would imagine the majority of people would share it. I feel that anyone who has enough money to invest is not necessarily amongst the fittest in evolution terms but definitely privileged in many ways. I don’t want to lose money but I would rather everyone got rich, not me at the expense of others. There is enough for us all! If the game of capitalism results in winners and losers then I want to change the game. I believe in abundance, not poverty.

The rules of the game have been drawn up wrong, I truly believe we can all win. Or if not all win, maybe that’s too much, but at least ensure that no-one is hungry and everyone is housed. For fuck’s sake it’s 2020 and we can’t even do that!?

The second prong says that buying/selling stocks in a company doesn’t really affect them that much anyway, you can’t cause direct change by buying their stuff instead. I understand this argument, but i still don’t really get this, it’s just as ridiculous to me as Marxists telling me they buy coffee at Starbucks rather than the local cafe because we are powerless in the face of multinational corporations and it simply doesn’t matter. Yup rather nihilist. I would much rather put my money where my mouth is and therefore this argument simply passes me by for the most part. Not thinking only about profit means that i can invest my money where i want it to be and not be ruled by the market. I am generally quite nihilistic in the sense of thinking we are all fucked, but as the ship goes down I’d still like to be spreading my money so that more people than ME ME ME benefit.

stolinski Fund Review, My investments

Fund review – Jupiter Responsible Income

Jupiter Responsible Income

I have some holdings in this fund through a SIPP which i set up about ten years ago and then basically forgot about since I struggled to find anything really great and settled on this one. It is/was hard and dispiriting trying to find truly ethical stuff. I remember at that time not being able to find anything particularly hard ethical (on my requirements) that i could put in a SIPP. Nowadays i think things are improving and so i’m already thinking before i check this out that i will want to transfer the SIPP.

Let’s have a look.

Objective (pdf): The Fund’s objective is to provide income and long-term capital growth through investment primarily in UK equities. The Fund’s investment policy is to attain its objective by investing primarily in the UK in a portfolio of companies considered by the Fund Manager to be responding positively and profiting from its challenges of environmental sustainability or are making a positive commitment of social well-being.

Top 10 Holdings

1 AVIVA
2 GLAXOSMITHKLINE – tests on animals
3 LLOYDS BANKING GROUP PLC – arms / tax evasion / PPI scams / Libor manipulations – pick your controversy
4 TESCO CORP – destroys local shops
5 HSBC HLDGS – the worst high street bank?
6 VODAFONE GROUP
7 BARCLAYS PLC – terrible bank, so many scandals
8 RELX NV
9 PRUDENTIAL PLC
10 MICRO FOCUS INTERNATIONAL

Yup. Let’s not go further. I don’t even need to do the research, I know the crimes of enough of these companies off the top of my head. If you want more info check the links. This fund shouldn’t even pass a negative screening.

Ah! Although i decided i should check the other companies, and funnily enough Aviva is getting some good feedback for taking some actually ethical steps. This in no way makes them hard ethical though.

VERDICT

Nope!! I’ll be moving my money away ASAP, i just need to finish the research on where to go. There’s nothing responsible about these companies, unless you agree with this Milton Friedman quote:

There is one, and only one, social responsibility of business: to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

Perhaps Aviva is a cut above the rest.