Investing During Times of Unrest

I first became aware of the riots, looting and cities on fire in the Sixties as a teenager in suburban New Jersey. It was very scary then, just as it is scary now. The cause of the unrest then was racial and financial, with an additional anti-war flavor due to Vietnam. I could not make any sense of the destruction. Clearly, going into any big city was a bad idea. Fifty plus years later the same events are visible – plywood and broken glass in downtown Boston. You can witness it personally if you live in Boston like I do or see it immediately on social media. What investment impact should we be aware of during this fraught time?

Tone Deaf

It’s easy to be tone deaf to the real suffering of people without much hope, most of them black and pressed into urban living. The accusation of tone deafness is not new, either. There is attractive urban living in Boston, like the Seaport, and there are poor and homeless people everywhere. Boston has a long history as a racially divided town. There is also luxury in the middle of poverty, as anyone who has come into Boston knows. No area is completely safe. Demonstrations happen regularly here. Sometimes they veer into violence. Oddly, the last major violent crowd episode in Boston was in 2004 when we won the World Series. It was not a protest but an outpouring of celebration that degenerated into violence, looting and death. Anyone who talks about investing now risks being cavalier and dismissive about the real suffering going on in this country. But as Jim Cramer says, “the market has no conscience” and investors only want to make money.

A Realistic Approach

Sadly, markets do not seem to care about social injustice, inequality and oppression in general. As long as we have civil rights for many, the markets are OK. Clearly, civil rights do not exist for a large number of people in this country. Sadly, too, the reopening of our economy is delayed once again because of the physical damage to stores, mostly small ones. It’s much easier for a large company like CVS to get riot insurance to pay for the damage then the small privately owned restaurant.

Investing Now is Necessary and Morally Defensible

No matter how awful the state of the nation is when it comes to riots and looting, one of the best things a person can do is invest broadly in any productive asset. Public companies provide jobs, pay income and offer opportunity to anyone willing to work hard. By now we are so socially conscious even the biggest companies must constantly demonstrate they do not discriminate in any way, that they are sensitive to those without money, and that they are increasing their investments in all those areas. Some entrepreneurs attract more negative attention in this area, such as Mark Zuckerberg and Facebook. No matter how much Facebook and Zuckerberg “do” right now, it clearly will not be enough. Some entrepreneurs seem to get a free pass, like Elon Musk, Jeff Bezos, Michael Dell and Bill Gates. Others seem to be labeled as ‘part of the problem’ no matter what they do. Even though it seems tone deaf and morally wrong to invest now, businesses have to grow every day and that takes daily confirmation that their company/business is a good place to keep and grow money.


At Osbon Capital we have access to and use ESG filters when we need them. ESG filters, as imperfect as they are, can be very helpful in finding companies both old and new that are more progressive. I am not aware of any filter that recommends for profit companies that promote social justice solely and above everything else. Obviously, any investments during times like these when we are in the international spotlight have to be done carefully. At the same time, countries outside the US are in the international spotlight sometimes too, because of their civil rights problems, so the investment issue goes both ways.

In a Perfect World

In a perfect world we would not have to take any of these moral and civil issues into account when investing. In a perfect world many people would vote in local elections where decisions about police officers and prosecutors are made. National elections are more about policy. Local elections are more about people, and are much more personal.

We have never lived in a perfect world and neither has any country, including those small countries that claim to be morally pure in their investments. When comparing places to invest I would put the United States at the top because our imperfect record is there for all to see, and we are the country everyone else wants to emulate. True, not all of our actions or institutions are attractive but eventually we do get it right. The right President, the right Congress, the right laws, the right companies and so on.

Staying on Track

It’s easier to pause during times of social unrest and just stop investing. Unfortunately, the definition of social unrest is quite broad, and the unrest and injustice can ebb and flow for years. The question of reparations comes up regularly, and there seem to be several major groups who feel entitled to many trillions. Reparations, although a noble thought, are not realistic because too much time has passed and the dollars discussed are unrealistic. We have a long history of successful disruption to advance human rights. We will eventually progress. Despite the rifts powered by the media and social media, America is an ideas meritocracy. We will come out of this more connected, with better inclusion and a healthier society.

Putting a stop to your investments or even selling them in protest to current social unrest can have the opposite effect. We encourage all investors to look closely at their approach to investing whenever another innocent person is killed for who or what they are, rather than for what they have done. We encourage comments from anyone reading this letter, and we promise to respond to them.

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