If You Can’t Beat ‘Em … Jared’s Portfolio Of Evil

Would you invest in a company that peddled death, took advantage of the sick, polluted the environment or abrogated workers’ rights? Or are you one of those goody-two-shoe “ethical” investors who wouldn’t touch a company like Altria (MO) with a ten-foot pole?

Yeah, right. Cry me a river. I’m in it for the money, and if some people’s toes are going to get stepped on because my company knows the quickest way to make money and doesn’t hesitate to do so for the sake of some mamby-pamby “business-ethics”, so be it. I’ll be the one collecting dividends and profiting, and maybe just maybe, I’ll throw some of my ill-gotten gains to the Sierra Club and the American Lung Association along the way … in order to salve my conscience.

Seriously though, the purpose of a corporation is profit its shareholders. Corporations do not exist to employ people; they don’t exist to contribute to society; and they do not exist to innovate. These are all just possible means to the single corporate end: make money. Whether the means are ethical or not, does not matter. It doesn’t even matter whether the means are legal. So long as the defense lawyers and the consequences of illegal activities don’t impact the bottomline too badly, legality is a non-issue. Corporations exist to make money.

Up until now, I have avoided investing money in companies against which I have been conducting my small inconsequential boycotts. WalMart locks workers in the stores overnight? Hello Costco. Exxon drags its feet cleaning up the mess left behind by the Exxon Valdez? I think I’ll ride my bike to work today. Cigarettes will kill you? I’ve never smoked in my life.

But you have to admit, these companies make money despite my efforts. And I’m thinking if you can’t beat ‘em, join ‘em — let’s create a portfolio of evil and ride this highway to Hell, profiting all the way. And maybe my proxy votes will have an effect on how these companies conduct their business.

So far, I have identified 6 corporations whose businesses I would never frequent — I might even picket them — but that I wouldn’t mind owning stock in them:

Goldman Sachs (GS) (02/20/2010 – $156.18) – They advised Greece right into needing a bailout, got the lion’s share of the AIG bailout money, and still gave their people big bonuses. That’s pretty evil.

McDonald’s Corporation (MCD) (02/20/2010 – $64.74) – Bad food that makes you fat. In addition, they sued an Italian food critic for telling the truth about their food and put some protesters in the UK through more than a decade of legal hell (McLibel Case). Not to mention their anti-union activities in Quebec (hiring fifteen lawyers to fight workers at just one restaurant … I gotta say, that’s evil). Well done guys, I want you working for me.

Altria Group Inc. (MO) (02/20/2010 – $20.16) – These guys sell “Cancer Sticks”. Need I say more? Definitely evil … and a great opportunity to profit from the misery of others.

Microsoft Corporation (MSFT) (02/20/2010 – $28.77) – Ever see that episode of The Simpsons where Bill Gates “buys out” Homer? Evil. Seriously though, these are the people who got away with creating Vista, lifted the Mac’s look-and-feel to create Windows, and added their own little twist in the form of “The Blue Screen of Death” … not necessarily in that order. Evil? I think so.

Wellpoint (WLP) (02/20/2010 -$58.47) – Dropping people for pre-existing acne conditions and raising Californians’ health insurance rates by some ungodly amount? Hey, it’ll all go to the bottom-line. Too bad they don’t pay their shareholders any dividends out of all their ill-gotten gains. Evil.

Wal-mart Stores (WMT) (02/20/2010 -$56.49) – Hey, I’d like to lock my employees in my store to force them to take inventory too. These guys actually do it. There are even several sites dedicated to showing and documenting WalMart’s mis-deeds like WakeUpWalMart.com. I wouldn’t shop there, but I’ll buy some shares. Evil.

I established a tracking portfolio of these stocks on StockPickr.com, Jared’s Portfolio Of Evil, to see exactly how my premise works out.

To tell the truth, I have invested some money in Altria and am quite happy with the returns over the past year, and that underlines the fundamental problem with corporations — their only conscience lies in the shareholders. If the shareholders are only looking at their own gains there is nothing stopping a corporation from locking people in the store,  or suing the pants off individuals who can’t defend themselves. In fact, the corporation is obligated by its duty to its shareholders to maximize profits. So if they can make a few million dollars by breaking the law and getting fined $100,000, they and their shareholders still come out ahead.

Anyhow, since it does bother me that  my gains and dividends in Altria are ill-gotten, I do salve my conscience in the knowledge that, when proxy time comes, I vote against what the directors suggest. And in the knowledge that some of my profits go to raising a couple of liberal free-thinkers and supporting the Green Party.

I still refuse to buy cigarettes at Wal-Mart, though.