Thursday, January 31, 2013

Conversation with a vegan

Me: So you're a vegan, eh?

V: Yep! I don't like the idea that animals should be treated as property. I've even rid my household of all leather and wool products. I don't want to own anything non-vegan.

Me: Do you have a 401k?

V: Uh.. sure, why?

Me: Do you own broad-based stock mutual funds?

V: Uh, er.. I'm not sure, I haven't looked at it in a while.

Me: You might want to check it out, because if you do, you're the proud (partial) owner of such companies as Tyson Chicken and McDonald's.

V: !

We compassionate vegan types can have a tendency to forget that our money is an extension of our own actions. Because what most of us do every day earns money, how we choose to spend and invest our money is a direct representation of where our daily effort is going.

Wednesday, January 30, 2013

The DNV top 13, Index Funds

I've gone through the S&P500 and haphazardly selected 13 public companies that are Decidedly Not Vegan (or DNV). To be clear, this process is somewhat error prone. Regardless, it's a starting point:

CMG Chipotle Mexican Grill (beef, pork, dairy, chicken)
CAG ConAgra Foods: (slim jims, beef and chicken products, egg products)
COH Coach, Inc. (leather)
DRI Darded Restaurants (Longhorn Steakhouse, others)
DF Dean Foods (Big Dairy)
EL Estee Lauder (animal testing)
HRL Hormel (SPAM)
KRFT Kraft (cheese)
TSN Tyson (chicken, pork)
PG Procter & Gamble (animal testing)
MDLZ Mondelez (a.k.a. Kraft, dairy foods)
MCD McDonalds (need I say more?)
YUM Yum! Brands (Kentucky Fried Chicken, etc.)

Since these are in the S&P 500, they're in most domestic stock index funds. That means they're probably in your 401k. For example, if you're invested in any of the following mutual funds, you're invested in all of these companies:
  • Vanguard S&P 500 Index fund
  • Vanguard Total Stock Market Index fund
  • all Vanguard Target Retirement funds
  • Fidelity Spartan 500 Index fund
So if you care beyond just the return on your investments, but also about the sort of work your money is doing, you may refer to Vegan Investing lesson 1: Broad-based stock market index funds aren't.

This doesn't mean all index funds are DNV, just the broad-based stock ones. Is a treasury bond index fund DNV? No. You're probably also avoiding DNV companies in many sector-specific funds: health care, technology, financials, or precious metals, for example.

Thursday, January 24, 2013

Ethical vegans - to invest vegan or not?

To the ethical vegan, the question of whether to invest vegan may seem obvious on the surface. To a person who is vegan because they think it's not fair to cage and/or kill innocent animals unnecessarily, certainly being responsible for the caging and killing indirectly as a shareholder is a violation of principle.

To somebody with an understanding of financial markets, however, it might not be so simple. That's because if a group of people chooses not to invest in a class of companies, share prices in those companies will, all other things equal, tend to go down. As the share prices go down, the returns become more attractive until somebody else picks up the investments. This is an effect similar to that seen in vice industry investing, which has been rather lucrative financially over the years.

So there's an argument for keeping animal companies in your portfolio and ending the cycle on the demand side -- namely, reap the profits from animal suffering but refuse to create any further demand for it yourself.

On the other hand, in addition to wanting to have "clean hands," you may find that vegan investing is a nice way to align your interests with the future that you desire, and also a nice way to make a statement of your values.

In my opinion, both sides of this argument have good points and neither is wrong per se.

In his excellent book The World Peace Diet, Will Tuttle puts forth a great case for how, once we have begun to see the truth of animal exploitation, we have a responsibility to step up and make it stop happening. When faced with an investment decision, you are responsible for what your money is enabling. The question then becomes, which choice can you live most comfortably with?

Monday, January 21, 2013

Why invest vegan?

So you're a vegan. You may be wondering, why should I bother to think about whether my investments are vegan?

Some people are vegan for ethical reasons, others for nutritional and health reasons, other for environmental reasons or any combination thereof. Let's go through these one by one.

Those who are vegan solely for nutritional/health reasons may want to consider investing in vegan lifestyle companies because they are well positioned to make more money as plant-based lifestyles become more popular. Indeed, I believe solid plant-based food companies have a great outlook for future growth right now. This factoid is a little dated but I think still relevant: "Sales of vegetarian foods in the U.S. were estimated at $2.8 billion in 2006, which represented a constant-price growth rate of 72% since 1998." (Source: Forks over Knives's smashing success is a testament to the plant-based diet moving into the mainstream.

Serious environmentalists know about the devastating impact animal agriculture has on the environment. From being the #1 carbon emitting industry to using disproportionately large amounts of precious clean water, animal farming has a lot to answer for. Why go to all the trouble of recycling, composting, or conserving energy if a company of which you are a partial owner is wreaking havoc on the environment? Furthermore, as the world gets more crowded and more people realize that animal agriculture is not sustainable at large scales, animal-based companies will be exposed to increasing levels of restrictive environmental regulation and gradually begin to lose out in the marketplace, paving the way for more future-friendly vegan companies to be more profitable.

Investment considerations for ethical vegans coming in the next post..

Wednesday, January 16, 2013

Beyond Meat -- strong vegan company takes off

Keep your eye on this one -- the company has a strong team and a vision to change the world.

Our vision is to become the market leader in the development and introduction of new plant protein products. We are focused on perfectly replacing animal protein with plant protein where doing so creates nutritional value at lower cost.

From the looks of all the positions they're hiring for, they are pretty well funded at the moment. Already featured in Whole Foods Market, this could easily become a very valuable company in a few years.

Making money -- kindly

I've been vegan for a few years now, and it's become pretty integral to who I am. Some time ago I was going through my investments and realized that many of them are in companies whose values are decidedly not vegan.

So what if I'm personally vegan if I'm profiting from companies that are slaying the innocent?

I scoured the net, did some research, and eventually shifted my investments to ones I was more comfortable with. In future posts to this blog, I'll share my findings.

In the mean time, thanks for visiting and feel free to post a hello!