Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
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Elizabeth Warren Wants To Be Your New Mutual Fund Manager
"And for comparison, something along the lines of 40,000 people are killed in the USA in automobile accidents. Where is that outrage?"
Likely meant as a distraction, but it's instructive to compare auto safety and gun safety. History might teach us something.
Autos are dangerous machines. Still, the auto industry opposed safety measures because it felt that this wouldn't sell cars. Gradually, several states instituted their own safety regulations, and in 1968 various federal regs went into effect, including requiring seatbelts in passenger cars. http://www.autonews.com/article/19960626/ANA/606260818/1964-brought-seat-belts-for-every-buyer
How effective has this federally mandated safety measure been? Via the CDC: "Seat belts reduce serious crash-related injuries and deaths by about half. "Seat belts saved almost 14,000 lives in 2015." https://www.cdc.gov/motorvehiclesafety/seatbelts/facts.html
Hard to know what a comparable reduction in gun injuries would be with safer guns: "Since the [Dickey Amendment] passed in 1996, the United States has spent about $240 million a year on traffic safety research, but there has been almost no publicly funded research on firearm injuries."
"And for comparison, something along the lines of 40,000 people are killed in the USA in automobile accidents. Where is that outrage?"
Most people need a car today. However, they used to need a horse. By contrast, few if anyone needs a gun today. However, when our nation was founded, it was probably a good idea to own a gun in case King George forgot his lesson and tried to come back - and to kill your dinner.
Moreover, cars aren't mentioned anywhere in the Constitution/Bill of Rights -- a legal document which the gun lobby groups always use to backstop their messaging to further press their legitimacy and perceived importance in *modern* society. And of course, fear sells. Fear of invasion, crime, loss of 'liberty', encroaching federalism, of immigrants, of 'others' in the Oval Office, etc. It all sells, and traditionally sells BIG.
And back in the time of our nations founding folks probably needed a rifle to put food on the table. Historical portrayals show that those rifles fired one shot at a time with a somewhat lengthy pause and process to reload the next shot.
The notion that Warren is suggesting divestment with her letter is false. Engagement and divestment are two different things and both can be effective in their own way. This article goes into the differences and what money managers like BlackRock can do: https://medium.com/the-esg-advisor/mutual-funds-that-own-gun-stocks-need-to-divest-or-engage-2196647257d7 I don't see anything dramatically affecting returns by requesting that money managers engage with gun companies and companies that do business with gun companies. Moreover, the long-term impact to returns could actually be positive as there is now reputational and potential litigation damages from manufacturing certain types of guns and supporting a trade group--the NRA--with extreme and largely unpopular political views. I don't for instance think that Delta disassociating itself from the NRA is just a politicized response. It's good business sense. There are a lot more non-gun owners and sensible gun owners who want this nonsense with AR-15s to stop. If I'm the CEO of Delta, I have to think that to continue to associate with an extreme political group like the NRA is bad for business.
"And for comparison, something along the lines of 40,000 people are killed in the USA in automobile accidents. Where is that outrage?"
Please try to quote a little more carefully. The above reads as though I wrote the statement rather than quoted it (despite the quotation marks). Perhaps it would be clearer if I highlighted text.
I started by stating that the likely intent of the quoted statement was to distract. However, it was nevertheless informative about the value of product safety regulation, regulations that have significantly reduced deaths and injuries from autos.
Thus, if there is to be outrage over the lack of attention to safety, that outrage is better directed not at autos (where much work has been done, studies performed, deaths cut in half), but at arms where none of that has been done.
Most people need a car today. However, they used to need a horse.
Thanks for starting off with that. It explains why seatbelts were first introduced not in autos but with the horse and buggy. Attention to product safety, or lack thereof, goes back a very long way. At least with some products.
"The notion that Warren is suggesting divestment with her letter is false."
@LewisBraham: Exactly. A fact that seems to elude our friend Maurice, who first introduced her letter. You'd think that he might have read his own "evidence" a little more carefully.
@Maurice: Show me in her exact language where she "wants to be your new mutual fund manager". Talk about "reading between the lines"! I suggest that it's a false assumption that "integrity" is even identifiable in most of your postings.
@Maurice This is in Warren's letter to BlackRock's Fink:
In your January 12, 2018 Annual Letter to CEOs, you explained that companies have a duty to positively contribute to society. In that letter, you called for a "new model of shareholder engagement - one that strengthens and deepens communication between shareholders and the companies that they own." You wrote that, "[ to] prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society." Now it's time to put your money where your mouth is.
Note the word "engagement." Warren is asking Fink to be true to his own words and those words in recent months from Fink's own mouth and pen have been about engagement, not divestment. Many articles have been written about Fink's recent letter that Warren is citing in which he promises to engage with companies, including this one: https://nytimes.com/2018/01/15/business/dealbook/blackrock-laurence-fink-letter.html
I'm fairly certain you yourself have commented on Fink's stance, and it's well known that as an index fund provider that has to track a benchmark it is far easier for BlackRock to engage than divest. Engagement has been its longstanding claim and now Warren wants the company to live up to that claim. There is no reading between the lines here.
@Maurice The politics of a public state-run pension plan financed by taxpayer dollars and a private company like BlackRock's assets under management for private shareholders are two entirely different things. But I suspect you already know that. You're reading things between the lines that don't exist.
I think it is sad that 1) a discussion board about mutual funds somehow devolves into vitriol 2) that the majority of Americans not only don't vote (thus letting the 20 % fringe on both sides control the debate and the outcome), they are too uninterested, lazy or whatever to educate themselves about the simplest points of economics or investments, pay attention to their funds and the fees and express an opinion to their fund managers or elected representatives, regardless if they reply or not.
2) that the majority of Americans not only don't vote (thus letting the 20 % fringe on both sides control the debate and the outcome
I agree that it is a shame more Americans don't vote, but it is a false moral equivalency to say "the 20% fringe on both sides control the debate and the outcome." The person Democrats elected--Barack Obama--in the two previous presidential election was a very moderate Democrat. He didn't take people's guns. He didn't raise taxes hardly at all. He didn't impose Sharia law. All of those ideas are conservative fairy tales imposed on him. And the person who won the popular vote in 2016--Hillary Clinton--was also a very moderate Democrat, no matter what some posters on this board believe. Look at their actual and proposed government policies and ideas compared to historical Democrat politicians and to other left of center leaders in other nations and you will realize how moderate they were. So please stop talking about the "fringe on both sides." Regarding why the majority of Americans don't vote, there is one political party that has long actively tried to register more people to vote and one party that has long tried to suppress the vote by every means possible. There is ample evidence of that. So please stop making these false moral equivalencies. Does this sound like a "fringe" left-wing politician to you:
This thread, from its beginning, was already "pre-loaded" to be provocative. Lewis Braham is correct, here. I'm personally to the Left of BOTH of the parties which, between themselves, have locked-up politics in this country. The Repugnant Party has become controlled by extremists of the far-Right. They deliberately pander to their semi-educated, radicalized base. Moderate Republicans are by now just simply in the wrong place, the wrong Party. The "GOP" does not represent them anymore. Like Clint Eastwood, after the 2016 election. I caught an interview in which he said that traditionally, the GOP was socially liberal, but fiscally conservative... He just hasn't bothered to actually LEAVE, yet.
"This thread, from its beginning, was already "pre-loaded" to be provocative."
@Crash- You mean that Maurice was deliberately trying to stir up trouble? Oh, no, surely not him! Pure as the driven snow, is he. Always the victim of the far-left commie cabal echo-chamber here at MFO. Just ask him.
Yes, it's unfortunate that only 20% of Americans vote. I think that more actually want to vote, but encounter a head wind constructed of artificial barriers or disincentives to prevent them from doing so.
More Cambridge Analytics shenanigans:
"But a large part of the team’s strategy now mirrors the negative slant of the larger Trump campaign. In the words of an unnamed senior official quoted by Bloomberg, they’re running “three major voter suppression operations,” aimed at lowering turnout among liberals, young women, and black voters."
On a few different issues, I've kept tabs and been involved in official and unofficial groups wanting to exert influence on policy matters--- as a group. ("There's strength in numbers.") It seems to always be that these groups, being savvy and cautious politically, start with "dialogue" with the board of directors or gov't agencies, or government itself. Eventually, divestment must be employed because "government works for you and me" only during campaigns and elections. And the promises are empty. Because the status quo takes a LOT of TIME and EFFORT to change. And often, in order to change the status quo, what is sadly necessary is for some key people to get out of the way and simply die. That can take a long time. Why divest from guns and ammo? Seems to me it would be an appropriate response only if the issue is that gun makers are being brazenly reckless, not caring to whom the guns get sold. But as soon as you'd start caring about that, it will reduce your profits. And we all know that the Civil Religion in this country is Capitalism. Big, sweaty wads of money are what matter, of course. Bow down. It is your duty.
I thought I was done with this, but the accusations that I can't read between the lines, didn't and still doesn't sit well with me.
And what do other shareholder activists seeking divestment have to do with Elizabeth Warren wanting to be your fund manager? The original letter she wrote and the one you attacked her for mentioned nothing about divestment, which is what this thread you started was ostensibly about.
As far as other activism for divestment, guess what, shareholders and capitalists can be liberal too, and they have every right to use their own money to pressure companies to make changes to their policies just as conservative capitalists like the Koch brothers do all the time. They are owners too. I would hazard to say that most money managers lean Republican and conservative so don't worry. There will still be plenty of ETFs and mutual funds for libertarian investors to express all the nasty me-first capitalist values they want.
And again, public state pension plans funded by taxpayer dollars are not the same as privately owned ETFs and mutual funds--a point already made yet you keep harping on as if its all part of some conspiracy. Public pension plans are held to a different standard and should be as citizens who finance them again with their tax dollars have every right to weigh in on how that money is invested.
Also, the argument that divesting from gun makers will have any real impact on indexed ETF returns is largely garbage. From the ETF.com link you posted:
Either way, these 47 ETFs devote only a tiny portion of their portfolio assets to gun stocks. The ETF with the largest percentage holding is the VanEck Vectors Spin-Off ETF (SPUN), which holds just 1.33% of its $4.9 million portfolio in Vista Outdoor. That position is worth roughly $60,000.
@LewisBraham: Sir: Your introduction of actual facts to rebut Maurice's yammering is an uncalled-for escalation of argument, and decidedly unfair to the proponents of dubiously sourced garbage. In the future please follow the guidelines favored by Maurice and limit your comments to universally recognized sources such as Fox "News" and the Washington Examiner.
Comments
Likely meant as a distraction, but it's instructive to compare auto safety and gun safety. History might teach us something.
Autos are dangerous machines. Still, the auto industry opposed safety measures because it felt that this wouldn't sell cars. Gradually, several states instituted their own safety regulations, and in 1968 various federal regs went into effect, including requiring seatbelts in passenger cars.
http://www.autonews.com/article/19960626/ANA/606260818/1964-brought-seat-belts-for-every-buyer
How effective has this federally mandated safety measure been? Via the CDC:
"Seat belts reduce serious crash-related injuries and deaths by about half.
"Seat belts saved almost 14,000 lives in 2015."
https://www.cdc.gov/motorvehiclesafety/seatbelts/facts.html
Hard to know what a comparable reduction in gun injuries would be with safer guns:
"Since the [Dickey Amendment] passed in 1996, the United States has spent about $240 million a year on traffic safety research, but there has been almost no publicly funded research on firearm injuries."
https://www.dallasnews.com/news/news/2016/06/13/the-cdc-isnt-banned-from-studying-gun-violence-its-just-too-scared-to-do-its-job
Moreover, cars aren't mentioned anywhere in the Constitution/Bill of Rights -- a legal document which the gun lobby groups always use to backstop their messaging to further press their legitimacy and perceived importance in *modern* society. And of course, fear sells. Fear of invasion, crime, loss of 'liberty', encroaching federalism, of immigrants, of 'others' in the Oval Office, etc. It all sells, and traditionally sells BIG.
Speaking of guns and product safety, Bloomberg ran this yesterday: 'How Defective Guns Became the Only Product That Can’t Be Recalled' https://www.bloomberg.com/news/features/2018-02-28/how-defective-guns-became-the-only-product-that-can-t-be-recalled
https://medium.com/the-esg-advisor/mutual-funds-that-own-gun-stocks-need-to-divest-or-engage-2196647257d7
I don't see anything dramatically affecting returns by requesting that money managers engage with gun companies and companies that do business with gun companies. Moreover, the long-term impact to returns could actually be positive as there is now reputational and potential litigation damages from manufacturing certain types of guns and supporting a trade group--the NRA--with extreme and largely unpopular political views. I don't for instance think that Delta disassociating itself from the NRA is just a politicized response. It's good business sense. There are a lot more non-gun owners and sensible gun owners who want this nonsense with AR-15s to stop. If I'm the CEO of Delta, I have to think that to continue to associate with an extreme political group like the NRA is bad for business.
@LewisBraham: Exactly. A fact that seems to elude our friend Maurice, who first introduced her letter. You'd think that he might have read his own "evidence" a little more carefully.
https://nytimes.com/2018/01/15/business/dealbook/blackrock-laurence-fink-letter.html
BlackRock's policies about the importance of engagement are also clear:
https://blackrock.com/corporate/about-us/investment-stewardship
I'm fairly certain you yourself have commented on Fink's stance, and it's well known that as an index fund provider that has to track a benchmark it is far easier for BlackRock to engage than divest. Engagement has been its longstanding claim and now Warren wants the company to live up to that claim. There is no reading between the lines here.
2) that the majority of Americans not only don't vote (thus letting the 20 % fringe on both sides control the debate and the outcome), they are too uninterested, lazy or whatever to educate themselves about the simplest points of economics or investments, pay attention to their funds and the fees and express an opinion to their fund managers or elected representatives, regardless if they reply or not.
@sma3: Disagreement, yes; "vitriol", no. You want vitriol? Take a look at the reader comments on almost any WSJ article.
@Crash- You mean that Maurice was deliberately trying to stir up trouble? Oh, no, surely not him! Pure as the driven snow, is he. Always the victim of the far-left commie cabal echo-chamber here at MFO. Just ask him.
Regards,
Ted
More Cambridge Analytics shenanigans:
"But a large part of the team’s strategy now mirrors the negative slant of the larger Trump campaign. In the words of an unnamed senior official quoted by Bloomberg, they’re running “three major voter suppression operations,” aimed at lowering turnout among liberals, young women, and black voters."
http://fortune.com/2016/10/30/trump-voter-supression-operations/
Regards,
Ted
As far as other activism for divestment, guess what, shareholders and capitalists can be liberal too, and they have every right to use their own money to pressure companies to make changes to their policies just as conservative capitalists like the Koch brothers do all the time. They are owners too. I would hazard to say that most money managers lean Republican and conservative so don't worry. There will still be plenty of ETFs and mutual funds for libertarian investors to express all the nasty me-first capitalist values they want.
And again, public state pension plans funded by taxpayer dollars are not the same as privately owned ETFs and mutual funds--a point already made yet you keep harping on as if its all part of some conspiracy. Public pension plans are held to a different standard and should be as citizens who finance them again with their tax dollars have every right to weigh in on how that money is invested.
Also, the argument that divesting from gun makers will have any real impact on indexed ETF returns is largely garbage. From the ETF.com link you posted: