In Stocks, Vice Beats Virtue
Here on Mad Money, we know investors can never ring the register for big profits if a virtuous, socially responsible portfolio is the ultimate goal. You want to save the world? Hold your nose, buy a tobacco company or an oil company, and then give your profits to Greenpeace.
To prove the point, Cramer compared a portfolio of 10 corporate citizen stocks from Stockpickr.com – which is half owned by TheStreet.com where Cramer is a co-founder and the biggest shareholder – as ranked by Corporate Responsibility Officer magazine with Charles Norton’s Vice Fund. (Norton is a colleague of Cramer’s at TheStreet.com.)
Here are the teams:
Over the course of one year – from Feb. 26, 2006, through Feb. 26, 2007 – when we equal-weight the returns, the “good guys” stayed flat while the “bad guys” returned 35.7%. In fact, Constellation Brands was the only stock from the Vice Fund that wasn’t up more than 15%.
Bottom Line: When it comes to stocks, vice beats virtue. You can take your profits from evil companies and invest them in a cause, but you can’t do anything with your non-profits from companies with good behavior.
Cramer’s charitable trust owns DEO and MO.
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