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Does the Stock Market Have Any Socially Beneficial Aspects?

Does the Stock Market Have Any Socially Beneficial Aspects?. What Is the Stock Market?. What is the Stock Market?. The group of public stocks that can be bought and sold by anybody When a person buys a stock, he is buying a partial ownership of the company

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Does the Stock Market Have Any Socially Beneficial Aspects?

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  1. Does the Stock Market Have Any Socially Beneficial Aspects? What Is the Stock Market?

  2. What is the Stock Market? • The group of public stocks that can be bought and sold by anybody • When a person buys a stock, he is buying a partial ownership of the company • The two largest American exchanges on which stocks are bought and sold are the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (NASDAQ) • NYSE = The largest stock exchange in the world in dollar value • Conduct exchanges face-to face on a trading floor • Companies must pass a financial strength test and pay to be listed • NASDAQ = The largest electronic stock exchange in America • Primarily tech stocks and start up companies

  3. Who Influences the Market? EVERYONE

  4. Washington (IWR Satire) - The stock market today dropped more than 250 points this morning when President Bush turned up missing for over an hour. Moments before Vice President Dick Cheney was to assume the reins of power, George W. Bush emerged somewhat shaken from the White House hedges. • "I was on my way to the Marine One helicopter, but I guess I took a wrong turn in the hedges," said President Bush (“Bush Gets Lost”).

  5. Is the market a socially destructive institution? • Or are there some socially beneficial and constructive outcomes?

  6. Is The Market Socially Destructive?

  7. But Can it be Socially Constructive? • Charity • Universal Opportunity • Social Investing

  8. Social Investing • The theory of aligning one’s investments with one’s values • The Council on Economic Priorities (CEP) • Examines companies based on various criteria • I am focusing more on the larger picture than a personal level • Environmental Issues • Safer World • Charitable Giving • Education in America

  9. EnvironmentValdez Principles (Alperson 23) • Protection of the Biosphere • Sustainable Use of Natural Resources • Reduction and Disposal of Wastes • Wise Use of Energy • Risk Reduction • Marketing of Safe Products and Services • Damage Compensation • Disclosure • Environmental Directors and Managers • Assessment and Annual Audit

  10. Safer World • Weapons Contractors • Nuclear Weapons and Power Plants • Many ethical investors immediately exclude defense contractors from consideration (Alperson 31) • There are also many non-defense companies that serve as research facilities for the military • Ford Motor Co. and AT&T

  11. Philanthropy • In general, average corporate giving is around 1% of pretax income • Social investors want to reward companies for their philanthropy by buying into the companies • Do corporations donate money out of good will, or is charity used to put out an image? • Would it matter?

  12. An Educated America • Educational reimbursement • In-house literacy • Adopt-a-school • Scholarship programs for children • Marketing Ploys?

  13. Your Turn

  14. Company A • Is growing 18% annually with a 2.5% dividend • Was recently under heat for trying to cover up illegal dumping of waste in the Pacific Ocean • Charity is .3% of their earnings, however, most of it goes toward their local community • Offers little health care to their workers; has the standard 8 week maternity leave • A large percentage of the company’s profits comes from defense contracting, and the company contributes to nuclear development.

  15. Company B • Is growing at 12% annually with a 1.7% dividend • Is supportive of minority promotion, and the executive board is integrated • None of the top executives are environmentalists, and the company refuses to disclose any more information on its actions than is required by law • Sponsors the largest adopt-a-school foundation in the nation, mostly in lower-class neighborhoods • Some of its profits come from defense contracting

  16. Company C • Is growing at 5% annually with a 1.1% dividend • Actively participates in the community through mentor services and large donations • The executive board is integrated, and two of the board members are famous environmentalists • Although it does not actively oppose nuclear development, the company chooses to refrain from participation • Health benefits to workers are adequate, although not exemplary

  17. My Take • Socially responsible investing is the most beneficial aspect of the stock market • It will never become a significant part of the American culture • There should be a majority of people investing in Company C

  18. Works Cited Alperson, Myra, et al. The Better World Investment Guide. New York: Simon and Schuster, Inc., 1991. Burns, Shannon. “I left out the stock market section for your own good.” Cartoon. 2001. Shannon Burns. https://www.shannonburns.com. 2006. 26 Nov. 2006 <http://www.shannonburns.com/Toon637+.gif> "Bush Gets Lost in the White House Hedges." Internet Weekly Report. 26 Nov. 2006 <http://www.internetweekly.org/photo_cartoons/ cartoon_bush_hedges.html>.

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