Day: June 13, 2010

Investing in BP and other bad actors

Lisa Schweitzer

One of my colleagues triumphantly announced that his son bought BP stock yesterday, and I think expected us to be surprised or outraged or jealous, I guess. Unfortunately, he was talking to economists, who, if they paid attention, know full well that the odds are good in favor of BP if there is any precedent what happened in Exxon. Here’s cartoonist Scott Adams’ take, which as usual, captures the perversity of the issue with both wit and intelligence:

When I heard that BP was destroying a big portion of Earth, with no serious discussion of cutting their dividend, I had two thoughts: 1) I hate them, and 2) This would be an excellent time to buy their stock. And so I did. Although I should have waited a week. People ask me how it feels to take the side of moral bankruptcy. Answer: Pretty good! Thanks for asking. How’s it feel to be a disgruntled victim? I have a theory that you should invest in the companies that you hate the most. The usual reason for hating a company is that the company is so powerful it can make you balance your wallet on your nose while you beg for their product. Oil companies such as BP don’t actually make you beg for oil, but I think we all realize that they could. It’s implied in the price of gas.

Read the rest:

link: Dilbert’s Scott Adams on Betting on the Bad Guys in Investing – WSJ.com

John Keefe, writing for the Maritime Professional last month, also took up the question, though with less information and brio than Adams:

Maritime Professional – Too Big to Fail?

Keefe I do think has a point that Adams doesn’t quite see: that companies have gone paff! in recent years, leaving the public holding the bag for the consequences and shareholders with worthless stock. BP got driven out Nigeria, for example, and though the average Nigerian may not be in any way better off, Nigerian companies wanting to become oil barons certainly have.


Extreme environmental games and class privilege

Lisa Schweitzer4 Comments

Ok, I’m happy that French sailors managed to rescue Abby Sutherland, but the whole thing annoys me, and with reason, from an environmental justice perspective.

I quote Bill Cosby quoting his father when confronted with his son terrified from riding on the roller coaster his father told him not to get on: “Who put ya on the goddamn thing in the first place?”

So you go hiking by yourself and you wind up in trouble and you have cut off your hand? Woo. Get a book deal out of it and expect the rest of us to see you as a brave survivor (ok, fine) instead of some idiot who went hiking without a buddy. Who DOES that? Walk away from your family and stroll, completely unprepared into Alaska, starve to death and have Jon Krakauer write a book about you because you’re so interesting. We care about you if you starve, given how you have courted starvation. The homeless people hungry outside the door? Nah. Too prosaic.

Here’s Mr. Sutherland’s brilliant justification on why he let his daughter do something so ridiculously stupid for the thrill of it:

“I never questioned my decision in letting her go,” he told reporters Friday. “In this day and age we get overprotective with our children. If you want to look at statistics, look at how many teenagers die in cars every year. Should we let teenagers drive cars? I think it’d be silly if we didn’t.”

link: Young Sailor Is Rescued – WSJ.com

Overprotective? Overprotective is refusing to let your 16 year-old ride public transit. Over-protective is swooping into their schools to try to browbeat teachers into giving your kid an A when they’ve earned a B. Saying no to an unsupervised solitary sail around the world? No, not overprotective.

1) It’s stupid to sail by yourself, no matter what your skill level and no matter how good of shape you are in.

2) It’s really stupid to let your 16 year old kids sail around the world by themselves to try to break records so that you can spend your time basking in media attention.

3) Sixteen year-olds have parents to keep them from indulging in their “I’m invincible because I’m so special and the world has never seen anything or anybody like me before” routine.

4) Danger and risk are playthings among those whose class privilege protects them from the consequences of danger and risk on an everyday basis.

So by indulging in some sixteen year-old’s “need” to prove herself against nature, we nearly killed a French ship captain rescuing her. Of course. It’s just her due: she’s playing, he’s working, and there’s no romance or interest if the guy with the sweat on his collar dies on the water, but her risks, well, those are special special special!