Socially Responsible Investing and McDonald's
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Once, a long time ago, lured by the big dividend, I bought a hundred shares of stock in Philip Morris (NYSE: PM). But it was only a few weeks before I began to feel uncomfortable owning the stock -- I didn't really want to make money off other people's deaths, did I? I sold it.
I have never looked back, even though I know that holding the stock and reinvesting that fat dividend every year would have been a very, very, very good investment. I literally don't care that I could have gotten rich off this stock -- if I did have a beach house somewhere that I had bought with profits in Philip Morris, every time I drove the Porsche down to the store for another six-pack, I'd feel like I was driving over the graves of all the people who had died to make me rich. It is a blessing not to have that feeling.
Tobacco, of course, is the Satan of the invetment world. It is easy to make moral judgments about it. What about other problematic products, like alcohol? One time I was researching stocks and came upon Central European Distribution (NASDAQOTH: CEDCQ), the world's largest vodka producer. But I had just recently read an article about the alcoholism problem in Russia, and had a quesy feeling about making money off that. I pictured some lost soul passed out on a park bench in Kiev at 10 in the morning. I moved on.
But a few years later, I did buy the stock of Brazilian brewer Companhia de Bebidas das Americanas (NYSE: ABV). I had a picture in my mind of a burly construction worker in Rio as my customer; a hard day's work putting up a new high rise, and then a few much-needed cold ones.
But I knew as an objective matter that there are plenty of miserable alcoholics in Brazil, too. I didn't care. The picture in my mind was of a happy guy, not a sad guy. My different feelings about the two companies were largely due simply to projecting my internal images and the prejudices and the subjective feelings that attach to those internal images onto the two companies.
How about war? I briefly owned the stock of AeroVironment (NASDAQ: AVAV) a maker of drones for the Department of Defense. But I didn't want to make money off war, so I soon sold it. But I am not a soldier, and it is not my life on the line in war. Certainly an objective case can be made that drones actually save lives -- after all, if future wars are conducted entirely by robots, then it will be possible to have wars in which no humans die. Maybe. But I cannot escape my own point of view, and I just don't feel comfortable owning a weapons or defense contractor stock.
All investors have to make this assessment, of which stocks they don't feel comfortable with, and why. One stock that many people proclaim they don't like is that of McDonald's (NYSE: MCD), most often because they believe that McDonald's sells unhealthy, obesity-causing food. I don't see McDonald's that way at all. I see them as a do-gooder, in fact, a doer of much good. I submit that the perception that McDonald's sells "bad" food is simply a projection of upper-class and middle-class preoccupation with body image and fears of weight gain.
But for the poorest among us, the homeless, the alcoholics, weight gain is the least of their worries. A calorie is simply a unit of energy, the amount needed to raise the temperature of one gram of water one degree celsius. The human body is full of grams of water, all of which have to be constantly heated to a temperature of 37 degrees celsius. If you don't get enough calories, and you live in a cold environment, such as outdoors, you will die of hypothermia, or exposure. So while we who read articles about investing project our middle-class fears of "calorie-laden foods" onto McDonald's menu, for the very very poor, calorie-laden foods are what keeps them alive.
For millions, McDonald's is the only provider or one of very few providers of hot, cheap food, the only light on in the middle of the dark, cold night. McDonald's sells their food so cheap that even the most forlorn and lost alcoholic on skid row can scrape up enough change for a burger. Where I live, the McDonald's almost always has a few homeless people, both indoors and out, eating, and lingering. They are not shooed away after they finish eating, or, if they are, it is not done quickly. They are treated like customers. Of course, that is only the one I go to, but that is the one that forms my mental image, and it is of a company with a heart.
Thinking about the very precarious health of the homeless, I can't help but see anyone who feeds the homeless as a force for good. Does it matter that McDonald's makes a profit feeding the poor? Is that a bad thing, somehow profiting off human suffering? I submit that how one answers this question will be largely dependant on one's own mental images and prejudices, and how those mental images and prejudices reflexively shape one's feelings. I see McDonald's profit as an affirmation of their goodness -- people, even the homeless, vote with their dollars, and they vote for what they like. Those of us who are materially comfortable enough to worry about becoming plump have an entirely different point of view than those of us who worry about staying warm one more night. I don't own stock in McDonald's, but if I did, I would be proud of that.
boriskabinov has no positions in the stocks mentioned above. The Motley Fool owns shares of McDonald's. Motley Fool newsletter services recommend AeroVironment, McDonald's, and Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.