“Everything has its price”
January 12, 2009
Mr Olijslager answers the question “does the recession offer any advantages?”, by stating that he hopes that people will better understand that there are no free tickets to richness. Some people that are investing, should not do that because they don’t understand it and therefore get emotional when things go wrong. He also disputes the objective of the VEB in fiercely promoting shareholder value and he opposes the guaranteed returns in some advertisements of asset managers. His conclusion is that there are no guarantees and that “everything has its price.” So far, so good.
But then he says: <Quote>: ”This reminds me of a pension fund in which I was involved. The members said that they did not want to invest anymore in companies that were producing tobacco, liquor and weapons. Then I said: Fine, but then you will have to settle for a lower return. And obviously nobody wanted that”. End of quote.
What a lousy end of this interview. Of course everything has its price. But sometimes it requires more than “obviously” before concluding what price you want to pay for what. An increasing number of investors is more balanced in their actions than this example from the past (especially after the Zembla programme on clusterbombs). Moreover, the claim that excluding these investments from a portfolio leads to lower financial returns is also disputed. For example Hans Ludo van Mierlo in his recent book “Gepast en ongepast geld” says that there is plenty of research which concludes that “sustainable investments” generate a better return than “regular investments. Then again there is also plenty of counter evidence. (page 131). Unfortunately his book lacks references, so I don’t have a clue to what research he refers. This book was picked up widely in the media. His plea to have all bankers take an oath, as a means of raising ethical standards, was well timed. This does not mean that the book is very robust. He has chosen for a “nice to read”, personal and anecdotic approach. This is also a way of paying a price. But then: what isn’t?
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