An Open Letter
Don't let your principles get
in the way of making money, sez Jim.
(2012 Jun blog post)
Blog menu >
This 'The Investing Ethics of Jim Cramer' page
! Note !
A few more 'points' . . . and links
. . . and images may be added,
if/when I re-visit this page.
Back in 2009 April 22, Jim Cramer took his 'Mad Money' program on the road to Ohio State University. In a question and answer session with members of the audience, I remember a student asking him a question on whether Cramer considered it OK to invest in a stock even though the company was engaging in practices that this potential investor did not approve of.
Cramer's immediate answer was that you should not let considerations like that get in the way of making money.
I thought this was a really morally bankrupt reply to this student's question.
The Sugar Example
I personally choose not to invest in stocks of companies that manufacture added-sugar products --- such as cokes and candies --- especially when those companies try their hardest to get people to maximize their annual consumption of the sugar-products.
In other web pages on this site, like this one on being an inadvertent sugar experiment, I have laid out my experiences with excess sugar consumption. I found out the hard way that, as Gloria Swanson used to say, 'That stuff is poison'.
Added-sugar was responsible for a disintegration of cartilage in my knees and other joints, and it led to a cataract that was causing me to have double-vision. I had a high-level of triglycerides in my blood that indicated I was on the path to type 2 diabetes.
I think it is reprehensible that executives of companies like Coca Cola and Pepsi Cola know that their products are a main reason for the explosion in Type 2 diabetes and obesity in this country --- yet they continue to try to maximize their sale of their high-sugar products.
No warnings. No suggestions that consumers should curb their consumption at a certain number of grams of sugar per day --- and no suggestion to choose one of their less damaging products instead.
It used to be that Type 2 diabetes was called 'adult onset diabetes'. That was back in the 1970's or before --- before children were coming down with the affliction.
The executives of these companies are well aware that their products are instrumental in the epidemic of type 2 diabetes. But they continue on a path that was used so effectively for many, many years by the tobacco companies.
The sugar-company-executives insist that there is no clear association between their products and the adverse health effects --- even though almost any knowledgable health professional with a conscience will testify that there is indeed a strong association.
And, no doubt, within the next 20 years, the association between high added-sugar products and type2 diabetes will be common knowledge --- and people will look back at these days and marvel at how primitive our medical knowledge was back then --- and wonder how those sugar-company executives could sleep at night knowing that they were poisoning their fellow citizens, all the while insisting that all was peachy.
Even though these sugar-companies are wrecking the health of children in this country, they continue their goal of maximizing profits no matter the health damage that they are wreaking on their fellow citizens --- and the children of those fellow citizens.
And it's not enough that they are destroying the health of citizens in their own country. For decades now, they have been carrying out their socially irresponsible marketing plans in countries around the world. They will not be satisfied until they have spread Type 2 diabetes throughout the world. Watch out, China. You're next.
In Spain, the basketball backboards on children's playgrounds are red with the white Coca Cola logo in big letters just above the basket.
I suppose that Coca Cola has not done that in the U.S. because they might get a quite public earful from some mothers who are concerned about the health of their children. No doubt, Type 2 diabetes in children is on the rise in Spain.
Sure, Cramer. You go ahead and sing the praises of Coca Cola. I beg to differ.
Drawing the Line (more examples)
Surely Cramer must draw the line somewhere. If he were in Nazi Germany as an investor, back in the 1930's, and there was a company making components for the ovens in which the Nazis were burning people, would he say it is OK to invest in that company because there was a chance of making a good profit? Would he just ignore the purpose of the ovens?
Taking a more up-to-date example: If it is revealed that a U.S. gun manufacturer is clearly selling guns (say directly) to Mexican drug lords, would he say it is OK to invest in that company because there is a chance of making a good profit?
One more example: If it were revealed that a certain California utility company were knowingly allowing hexavalent chromium to leak into aquifers, and nearby residents and their children were coming down with cancer because of it, would he tell an investor he was stupid to refrain from investing in P & G (Pacific Gas and Electric) when it paid a good dividend?
I say Cramer should tell people to follow their conscience when investing, if the non-financial issue is more important to them than the financial issue of making money on a particular stock.
Summary and Conclusion :
Cramer, I think it is commendable that you try to make investing understandable to your fellow citizens who are trying to protect their savings from the ravages of inflation and scoundrels in the investment world.
BUT your ethics boil down to 'even if a company has practices that stink to high heaven, hold your nose and try to make some money.'
That's really sad. There are thousands of alternative stocks to choose from.
No doubt, one can find a reason to not invest in any of them. But there ARE 'lesser evils'.
Some External Links :
For further info on Jim Cramer at Ohio State in 2009, here are some links to WEB SEARCHES on related keywords.
If I ever find a web page or video with the exact wording of the question (mentioned above) asked by the student, along with the exact wording of Cramer's response, I will post the wording on this page. Unfortunately, the one video (9min 56sec) that I can find of the program cuts off near the beginning of the question-and-answer session --- and I have not been able to find a transcript of the program.
For some info on Jim Cramer, here are some Wikipedia links.
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Page was posted 2012 Jun 14.