Steve Milloy’s latest scam

Steve Milloy has made a special appeal to his supporters:

I helped launch the Free Enterprise Action Fund (www.FreeEnterpriseActionFund.com), a pioneering mutual fund designed to accomplish two goals for investors:

Earn a market-based financial return from investing in the common stocks of Fortune 500 companies; and

Provide a pro-free enterprise, anti-junk science ideological benefit through advocacy that promotes shareholder value and defends the American system of free enterprise from the onslaught of activist-sponsored attacks.

Counter-pressuring corporate managements on global warming/energy availability is a key effort of the Free Enterprise Action Fund. We are sponsoring, for example, global warming-related shareholder resolutions at General Electric, Goldman Sachs and JP Morgan Chase.

I am asking you to consider investing in the Free Enterprise Action Fund and to join our effort to counter corporate managements that are siding with global warming and other social activists.

So how well is Milloy’s fund meeting those two goals?

Financial returns:

According to a January 26, 2006 report in the Chicago Tribune, “The fund’s advocacy stance boils down to opposing many of the things supported by traditional ‘social investment funds,’ because issues like global warming or corporate governance distract business from its real role of operating in the best interests of shareholders.” However, its performance as an investment has been less than stellar. The Tribune called it the “Stupid Investment of the Week … Strip away the rhetoric, and you’re getting a very expensive, underperforming index fund, while Milloy and partner Thomas Borelli get a platform for raising their pet issues. … An expense ratio capped at 2 percent–ridiculously high for a portfolio of corporate giants–makes stock market returns unrealistic. From inception on March 1 of last year through Dec. 31, Free Enterprise Action returned 2.32 percent; the S&P 500 returned 4.72 percent. That’s ugly.”

Shareholder resolutions:

According to the Financial Times of April 1, 2006: “Goldman Sachs investors yesterday overwhelmingly voted down a unique shareholder proposal that claimed the Wall Street bank was misusing shareholder resources by pursuing an potentially expensive pro-environmental agenda. The proposal, submitted for consideration at Goldman’s annual meeting by a small mutual fund firm called the Free Enterprise Action Fund, claimed that Hank Paulson had a conflict of interest in serving both as chief executive of Goldman and chairman of the Nature Conservancy, an environmental group”. For background on this now-soundly defeated proposal…it melted down faster than a Greenland Glacier in 2050, with less than 0.01% shareholder support…

If you really don’t believe in that global warming is happening, I reckon betting against it should be better value than entrusting your money to Milloy

(Hat tip: z)

Comments

#1 z
April 5, 2006

at the risk of repeating my last post

“The Kyoto Protocol isn’t merely a political document — it’s the equivalent of market research. Viewing the protocol from this perspective, we see that most of the world’s nations believe climate change is real and urgent and are attempting to do something about it. That allows the commercially inclined among us to move on to the wonderfully crass questions about what products we might sell them. We start to ask: Whose appliances will the world buy? Whose fuel cells and photovoltaic panels? Whose light bulbs? Whose cars?
“This basic market intelligence may be the single most important key to thriving in a new economy. There is money to be made here — lots of it. There are jobs here — lots of them. This is Silicon Valley 2.0. We thrived with the information revolution, developing computers and software to change how the world works and plays. We can thrive again with a clean energy revolution, changing the way the world finds power for electricity and transport. But we can only thrive if we lead, if we take action now.”
http://www.salon.com/opinion/feature/2006/04/04/hope/index1.html

Milloy is the moral equivalent of an IBM shareholder back in 1980 trying to pressure them to stay out of the PC business as it would just lead to anarchy.
#2 Bob
April 5, 2006

Meanwhile, this tree-hugger’s social responsible investments have provided an average rate of return exceeding 9% over the last 3 years.
#3 Meyrick Kirby
April 5, 2006

From inception on March 1 of last year through Dec. 31, Free Enterprise Action returned 2.32 percent; the S&P 500 returned 4.72 percent. That’s ugly.

All we need now is for Dr Lott to produce some model that demonstrates the FEAF to have ultra low risk, thereby justifying the low return!
#4 llewelly
April 5, 2006

Tim: Clearly you have forgetten the terrible weapons the Sovient Union developed to manipulate the US stock market. (Did you really think the crashes of 1929 and 1987 happened by chance? Really?) The Enviro-whackos have obtained these weapons, and mounted them on their black helicopters. YES! Steve Milloy’s fund is doing badly because Evilvromentalists have used their Stolen Soviet Military Technology to make it do badly. His Puny Fund is no match for their World-Wrecking Conspiracy! He has NO HOPE! Mwuhahahaha!

Oh yeah, said stock-market manipulating tech was invented by Nikolai Tesla, using secret alloys obtained from the 1908 Tungaska event.
#5 Danny Yee
April 5, 2006

A plurality of my savings is with Australian Ethical Investment. Their Ethical Equities Trust has returned 21.4% per annum over the last three years, while their (less actively ethical) Ethical Large Companies Share Trust 23.9% per annum (again for three years).

That’s largely because the Australian sharemarket has done so well, but it’s at least followed that.
#6 Scott
April 6, 2006

It just goes to show you that these GOP think-tankers live in an alternate universe (so do Democratic academics I might add). People like to vote green with their dollars, that’s why people shell out thousands more for hybrid cars than the fuel savings and HOV perks are worth, buy recycled paper, organic produce etc. As for the attack on the Nature Conservancy, well, remember that when they claim it’s all about property rights.
#7 Japhet
April 6, 2006

Yeah Milloy is quite a crack. Head.

We’ve recently been targeted by the fellow as “a bunch of ideological child abusers” for working with kids on rainforest ecology and engaging in “questionable” letter writing campaigns to CEOs of major corporations like Citigroup and Ford Motors.

Way to go Steve. This latest bit of news just reflects his sad state of affairs.
#8 BC
April 11, 2006

This fund is falling into the typical short sighted assumption that anything that is socially responsible is somehow automatically counter to private enterprise; that anything that helps save the environment, health or helps people has an economic cost. This person fails to realize that there is a great deal of money to be made in helping people, protecting the environment, human health and other human interest. We don’t have to choose one or the other, economy or human rights. We can have both and in fact we should insist on it. Private enterprise is not simple minded pillaging. Private enterprise is innovation, technology and response to market demand.