Due to a potential project I’m working on, there is the possibility that I may need to become a Registered Investment Adviser in the state of Missouri, even though I won’t be taking on individual clients, or at least have no plans on doing so. We won’t know for certain until the securities laws are finalized following the implementation of the Dodd-Frank bill that goes into effect in a few months.
As I researched RIA’s, I came across an organization call the Bri Institute that tries to get investors to focus on “Biblical” investing. How it works is, the Bri Institute has a screen that tests companies for what they consider (I disagree) to be the “Christian” position on various issues. Registered Investment Advisors, or other investors, who want to buy shares of companies based on their moral beliefs can reference the Bri Institute scale to determine the companies that fall into the acceptable range of good vs. evil.
Some of the items on the list make sense. For example, I understand the opposition to abortion support totally and completely. The Bri Institute scale includes 24 “evil” points, as I call them, for abortion related items, including wholesale or retail distributors of the morning-after pill and insurance companies that cover elective surgical abortions.
The Priorities Are a Bit … Interesting
Where they lose me is the absolutely absurd items that follow. For example, the Bri Institute literally assigns 1.73x the evil points to businesses somehow connected to gambling than they do to weapons manufacturers that sell items to terrorist-sponsoring restricted countries! Grandma at the bingo hall might as well be wielding an AK47 and shooting innocent villagers in the name of some deity.
Likewise, they assign 2x the evil points to companies that offer benefits to gay and lesbian employees as they do those same weapons manufacturers that do business in countries where women are slaughtered for wearing makeup. The prurient obsession doesn’t say much for the group’s priorities. It isn’t hard to imagine that if this were 1855, the list would include items taking away points for “Initiatives to Support Negro Freedom from Slavery”. I mean, that is how bigoted the things reads. Giving health insurance to spouses is bad? These people are unhinged.
But before we get into the good part, I just want to make a point: Following the Bri Institute’s scale would make it virtually impossible to build a diversified investment portfolio or even to eat, live or work unless you were on a self-sufficient farm. Virtually all of the S&P 500 violates its rules. If you can’t even buy a broad-based diversified index fund, you have problems. Their ranking scale is completely unworkable.
There are 26 possible evil points for gaming related sins out of 115 possible, or 22.6%. These include:
- Owning or operating a betting shop,
- bingo hall,
- Internet or mobile phone gambling system,
- licensing your company name to a gambling service (e.g., Monopoly slot machines from Parker Brothers at the Bellagio in Las Vegas),
- owning or operating a lottery,
- manufacturing gaming equipment or software,
- payment processing, consulting, or other services to the gaming industry,
- owning or operating a race track, etc.
Apparently, my brother playing poker, despite living far below his means, owning a house, and having a full investment portfolio, is bad. So is my maternal grandmother’s delight at the penny slots and my paternal grandmother’s affinity for bingo at the Church hall. I, myself, very rarely gamble because I think about all the beautiful compounding I’ll lose when playing a game where the odds are stacked in the house’s favor. I’m just delighted that my personality quirk makes me a saint on this one.
Aaron will take this one hard because, as you know from all the trips with grandma in the “My Day in Pictures” posts, he wants to own a casino. I promised that someday, the company will buy one when we are in our 40’s or 50’s and have enough money to throw around that a purchase like that won’t matter.
“Non-Married Lifestyle” and Related
Next on our list of verboten investments is companies that try and help those tricky gays and lesbians, who are responsible for up to 30 points out of 115 possible, or 26% of the total “evil” points that can be awarded.
That is literally 2x the points possible for weapons manufacturers that sell to terrorists and slaughter their people. (I’m not making this up – go look under “Human Rights”). To put it more bluntly: The group assigns 200% more evil points to giving benefits and support, such as medical insurance, to gay couples as it does giving grenade launchers to terrorist cells in restricted countries that murder women for being alone with a man outside of the presence of a male relative.
What horrible crimes have the companies committed that deserve these points?
- Provides medical coverage benefits to employees’ domestic partners (1 point)
- Has a gay/lesbian employee group (so even a softball team at Google would count?) (1 point)
- Underwrites medical insurance for domestic partners (1 point)
- Uses advertisements catered to gays or lesbians and / or uses mainstream ads in specialty publications (3 points combined between the two categories)
- Politically supports any gay rights initiatives (2 points)
- Sponsors gay/lesbian events (so companies buying a table at the Trevor Project events with the cast of Glee to help stop teen suicide would be in violation) (2 points)
- Gets a perfect score on the Human Rights Campaign Corporate Equality Index (2 points)
- This includes companies such as Land o’Lakes, Kellogg, Hershey, Chevron, General Motors, Ford, Hewelett-Packard, AT&T, Bank of America, JP Morgan Chase, IBM, Proctor & Gamble, Abercrombie and Fitch, Apple, Bristol-Meyer Squibb, Coca-Cola, Charles Schwab, Costco, Dell, Electronic Arts (EA Games), Game Stop, Gap (Old Navy, Banana Republic, Gap), General Mills, Google, Hyatt, Intuit, J.C. Penney, Johnson & Johnson, Levi Strauss, Mattell, MetLife, Microsoft, Merck, Newell Rubbermaid, Pepsi, Pfizer … the list is way too big to include here.
- Was the first to embrace civil rights initiatives for gays (you know, like equal housing rights so an old lesbian couple can’t get kicked out from a rental house as long as they pay their rent on time, just like you can’t kick out a single mother anymore or offering a make-up bonus, like Facebook does, to compensate employees who are married but who don’t get the tax breaks for health benefits to their spouse and so have to pay more to the government). (3 points).
There are plenty more. You would just need to read them for yourself.
Tobacco and Alcohol
Got me there … I own a small amount of Philip Morris International. It is tiny – only about $3,000 I think – and I had forgotten about it until reading the Bri Institute list but it is, legally, mine. I own a whole lot more Berkshire Hathaway, which has investments in Anheuser Busch. Oh, and my parents’ retirement accounts own shares of Heineken, even though neither of them drink it.
To be honest, I had been thinking about buying a rather hefty position in Philip Morris International when I make my “big” retirement contribution coming up in the next few months. It will just come down to opportunity cost and how much more attractive other securities are relative to it. But glad to know that we are contributing to the downfall of humanity.
Although … come to think of it … the very first miracle Jesus Christ ever performed was turning water to wine at a party so the guests could enjoy themselves.
I’m Guessing the Kennon / Green Family of Companies Wouldn’t Score Very Well
It seems to be a fair bet that the Kennon / Green family of companies would score terribly on the Bri Institute scale. But that doesn’t bother me because it represents less the Bible and more Southern culture in the United States. That is, I personally think smoking is idiotic, but there isn’t a single word about it in scripture. It is a cultural thing. Likewise, scripture said nothing about drinking – most of the people in the Bible drink quite often – it warns against getting drunk and becoming a drunkard. There are countless churches that wouldn’t be able to offer communion were it not for the alcohol companies!
Aaron wants a casino, we have no problem investing in shares of tobacco or alcohol companies even though we don’t smoke and very, very, very rarely drink, we don’t believe in discrimination – or to put it more bluntly, we believe there is absolutely no moral problem with gays at all because it is a variation that crops up in humanity across all times and cultures just like blond hair or blue eyes – and I would have no problem owning banks that offered tax refund anticipation loans or rent-to-own furniture, which is another list of evils the test provides.
The whole thing reminds me of a coffee company I examined years ago. The firm was controlled by a Muslim investor who demanded it follow Sharia law. They weren’t permitted to buy futures to hedge their coffee bean exposure, making the profits wildly exposed to fluctuations in the commodities market. That is one of the reasons that Starbucks trounced this particular company so thoroughly. It remains an also-ran in the industry.
You can’t go through life willingly handicapping yourself with irrational prejudices. If you do, don’t be surprised when you find it impossible to rise to the top of an industry. Joseph was the second most powerful man in the world and he managed to avoid this kind of stupidity while still remaining faithful.