Archive for the ‘Grow Page’ Category

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Congressional Staff Profit From Suspicious Trades

Monday, October 11th, 2010

If you invest because you know a government bill benefiting a certain industry is going to pass soon, does that make you an inside trader?

  • You may be surprised to learn that insider-trading laws don’t apply to Congress. Some lawmakers have tried to change that with the STOCK (Stop Trading on Congressional Knowledge) Act, but there hasn’t exactly been a lot of momentum to get that law passed.
  • The Wall Street Journal went through financial records of Congressional aides and found that many were trading in stocks whose prices were directly or indirectly impacted by the legislative activities of their bosses. The finance and energy sectors were especially popular among Congressional traders.
  • Because aides don’t technically make the decisions that determine whether laws are passed, some say there is no real conflict of interest. But both members of Congress and the highest-paid Congressional aides (about 11% of all aides) are required to make the details of their personal finances public.

Facts & Figures

  • In 2008 and 2009, 72 Congressional aides have traded stock in companies overseen by their bosses
  • Some of the higher-paid aides earn salaries of $170,000 per year

Best Quote

“Congressional staff are often privy to inside information, and an unscrupulous person could profit off that knowledge. The public should be outraged there is no law specifically banning this.” – Vincent Morris, Spokesman for Rep. Louise Slaughter (D., N.Y.)

An Annual Meeting is…

Friday, October 8th, 2010

An annual meeting in the investing world is a legally-mandated gathering of company leaders and its shareholders. The annual meeting (also known as the annual general meeting) is a place for shareholders to learn about and discuss past and future fiscal years. They also have the opportunity to elect directors for the company’s board. Basically, it’s an opportunity for any shareholders or partners of the company to review what happened in the past 12 months and plan for the year ahead.

U.S. Companies Buying Stock… In Their Own Companies

Thursday, October 7th, 2010

It’s an easy way to make your shares look better, but is it the kind of long-term investment companies need?

  • Companies these days have a lot of cash on hand. Because of the recession, they’ve been scared to spend too freely and risk losing more money. So they’re doing something kind of unusual: they’re buying back stock they’ve sold to investors.
  • Buying up lots of your own company’s shares makes your stock look better to investors because of a statistic called earnings per share. If you reduce the number of total shares available to the public (by buying them back), you make that number go up.
  • Spending cash on shares means not investing in company infrastructure or workforce. Some people say it’s a bad long-term strategy because it’s based on short-term gains, not long-term growth.

Facts & Figures

  • Firms plan to buy back $273 billion of their own shares this year.
  • According to the Federal Reserve, companies (excluding financial firms) held $1.8 trillion in cash and other short-term assets as of June 2010.
  • Some of the companies buying back large amounts of their own stock include Hewlett-Packard, Pepsico, and The Washington Post Co.

Best Quote

“It’s totally wasted money. It does not do anything long-term for companies.” – William Lazonick, Professor and Director of the Center for Industrial Competitiveness at University of MA at Lowell

Toxie The Toxic Asset Dies

Thursday, October 7th, 2010

Those crazy kids at NPR spent $1,000 on an adorable toxic asset named “Toxie” to teach us all a lesson about the subprime mortgage disaster. And then they made a 3-minute cartoon about it. It’s really good:

(via npr.org)

The Principles of Responsible Investment (PRI) are..

Wednesday, October 6th, 2010

The Principles of Responsible Investment (PRI) are the guidelines for investors who are conscious of environmental, social, and corporate governance (ESG) issues (like human rights or climate change, for example). Like the title says, they’re basically guidelines to help investors investing responsibly.

The six Principles say that “as investors,

1. We will incorporate ESG issues into investment analysis and decision-making processes.

2. We will be active owners and incorporate ESG issues into our ownership policies and practices.

3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.

4. We will promote acceptance and implementation of the principles within the investment industry.

5. We will work together to enhance our effectiveness in implementing the principles.

6. We will each report on our activities and progress towards implementing the principles.”

The Social Investment Forum is…

Wednesday, October 6th, 2010

The Social Investment Forum is an association for professionals, firms, and organizations that practice socially responsible investing. Members of the Forum work to come up with better strategies for managing socially responsible investments. Businesses and individuals are only allowed to join if their investments have a positive impact on society and the environment.

The Calvert Social Index is…

Wednesday, October 6th, 2010

The Calvert Social Index is a stock market index of companies that are considered socially responsible. It was created by Calvert Investments and uses Calvert’s social criteria to determine whether a company is socially responsible or not. This criteria relates to the environment, product safety, community relations, international operations, weapons contracting, human rights, and workplace issues. While the number changes frequently, as of August 2010, there were over  650 companies in the index.

A Triple Bottom Line is…

Wednesday, October 6th, 2010

A triple bottom line is when a company takes its environmental, social, AND financial performance into account to assess its overall performance. It takes the idea of a double bottom line (which considers the company’s social impact) one step further to include its environmental impact.

A Double Bottom Line is…

Wednesday, October 6th, 2010

A double bottom line is a way for a company to measure its performance in terms of positive social impact as well as financial success. While a traditional bottom line helps a company understand its financial profits and losses, a double bottom line factors in the greater social consequences to business decisions.

The Global Compact is…

Wednesday, October 6th, 2010

The Global Compact is a United Nations-sponsored voluntary initiative that guides businesses around the world in practicing corporate responsibility. Basically, it’s an effort to make corporations keep their business practices morally upright. The compact is made up of ten principles in the areas of human rights, anti-corruption, labor, and the environment. Through discussion and networking, businesses strive to achieve the goals set down in all ten principles.

The four main components of the Global Compact are:

  • Human Rights: Issues relating to human rights make up the first two principles of The United Nations Global Compact. They basically state that businesses should always protect and support people’s human rights.
  • Labor: These four principles state that businesses should uphold fair and non-discriminatory standards of labor for all of their employees.
  • Environment: Environmental stewardship is the topic of three of the principles in Compact. These principles state that a company should support and promote environmental responsibility in all of its corporate endeavors.
  • Anti-Corruption: The final principal of the Compact says that businesses should work against all forms of corruption, including extortion and bribery.

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