OFF THE WALL: The conscience investor: What type are you?
By Rene Pastor
Last week, AIG CEO Robert Benmosche compared the loud complaints over astronomical executive bonuses to “lynchings” in the Deep South 80 years ago.
What a dumbass.
He would apologize, though, calling his statement a “poor choice of words.” Was he sincere? Public backlash may have forced him to issue that statement, who knows?
Problem is, I own AIG stocks. That little voice in my house (read: the wife) offered a commonsense solution to my dilemma.
Wife: Dump your stocks.
Me: But I’m up almost 10 percent.
Wife: You’re putting more money in this guy’s pocket.
Me: But I’m up almost 10 percent.
Wife: How can you live with your decision?
Me: But, but I’m up…
How many of you have had this kind of conversation in your head — if not with your wife?
At one time, I bought shares in Philip Morris. Their quarterly dividend was robust and kept going up. The tobacco conglomerate is expanding in places like China and India, the two most populous countries in the world. The stock is headed toward $100, according to S&P, and I had bought it in the $70s. As a straight investment, Philip Morris is a no-brainer. The numbers, even today, are all good. The P/E ratio is under 17, with most investors preferring the number to be between 15 and 20. The earnings per share is over $5 and rising. The annual dividend is above 4 percent. With growth prospects looking promising in economically booming Asia, what’s not to like?
Cigarette smoking shortened my mother’s life so I couldn’t really justify to myself hanging on to the stock. My daughter has also acquired the habit and I am worried sick what it would do to her. In less than three weeks, I sold all my stocks in Philip Morris.
There were times over the last few months when I would look in on the stock to see how it is performing. I shrugged it off and opted to just put my money somewhere else.
How many of us wrestle with the push-and-pull of investing for money per se and investing for money and the common good? One of the hot trends in the market these days is investing in green companies that try to protect the environment or use sustainable technology to reduce their environmental footprint.
One example is the Calvert Global Alternative Energy Fund Class. It invests about 80 percent of its net assets in companies in and out of the United States whose main business is alternative energy.
“The Fund normally invests at least 80 percent of its net assets in equity securities of U.S. and non-U.S. companies whose main business is alternative energy or that are significantly involved in the alternative energy sector,” it said in its website.
In cars, one of the companies whose stocks are doing well is Tesla, makers of sleek electric vehicles. Japanese automakers Nissan and Toyota, along with General Motors of the U.S., are producing hybrid cars as well. Their stocks enjoy steady growth.
As for AIG, I haven’t decided what to do with my stocks in the company. As the market ended trading last week, AIG was still hovering near $50 and could be poised for a run-up past $60 or even $70.
That little voice kept chirping in my ear. Benmosche’s comments were insensitive and offensive, especially coming from a company that would have gone belly up if not for the bailout by American taxpayers of all colors.
I decided to kick the can down the road before deciding either way. I told myself: “Sleep on it and make up your mind in the morning.”
‘Off the Wall’ is a weekly column on the stock market. The comments expressed here are the author’s personal views and are not meant to recommend the buying or selling of stocks.
