Teachers pension fund votes to sell holdings in firearms, ammo clips

[cal04]

Last edited Wed Jan 9, 2013, 10:08 PM - Edit history (1)

Acting on a request from the state treasurer, the board of the state teachers pension fund has begun the process of selling its holdings in some gun and ammunition-clip manufacturers.

Treasurer Bill Lockyer's motion was approved unanimously Wednesday by the Investment Committee of the $154-billion California State Teachers' Retirement System.

Lockyer brought the issue to the board in response to December's mass shooting of 20 students and six adults at Sandy Hook Elementary School in Newton, Conn.

"CalSTRS' action targets ammunition clips that turn ordinary guns into killing machines, assault weapons and other firearms that pose extreme dangers to public health and safety," Lockyer said. "Divestment from the makers of these products complies with the board's fiduciary duty and its investment policy, which specifically allows divestment from manufacturers of products that endanger public health."

http://www.latimes.com/business/money/la-fi-mo-pension-votes-firearms-divestment-20130109,0,4942689.story

NYTimes
(snip)
An official of the Los Angeles pension fund for police and fire fighters said one of its trustees had also sought an evaluation of how its investment in the Freedom Group comported with its investment policies. The Los Angeles Police Department is also a customer of the company.

Connecticut’s treasurer, Denise L. Nappier, who is the sole trustee of that state’s pension fund, said the fund’s only stake in a weapons manufacturer was in Alliant Techsystems, which sells ammunition. But she said she was also looking for potential problems among companies that sell and distribute weapons.

New York City’s five pension funds — which were valued at $127.8 billion in September — contain nearly $18 million in weapons and ammunition companies, the city comptroller’s office said. The comptroller, John C. Liu, said in a statement that the funds “are reviewing their holdings in gun manufacturers and are considering all options, including divestment, to ensure that public pension dollars do not support weapons that can destroy a community in the blink of an eye.”

http://www.nytimes.com/2013/01/10/business/california-teachers-fund-to-divest-of-gun-stock.html?_r=0

[nadinbrzezinski]

1. And that is one way

I need to talk to investment guy...investment in defense and weapons manufacturer is not to even be considered. Never mind they always do well.

[cantbeserious]

2. Excellent Plan - De-fund The Firearm and Ammunition Industry

eom

[ProgressiveProfessor]

4. Actually it won't impact them at all

The stock will be sold to someone at a mutually agreeable price, like all stock transactions. The company itself will be impacted by it in all likelihood.

[Hoyt]

6. Maybe they understand that attitudes toward guns are shifting, and restrictions are on horizon.

Will impact EPS, hence stock price. In any event, glad to see gun manufacturers being viewed like polluters, tobacco companies, etc.

[ProgressiveProfessor]

7. If that indeed happens

And if you are in the magazine business, you will continue to build magazine for a market that is buying up all you can make.

[Hoyt]

8. Yep, so-called responsible gun owners acting like irresponsible gun cultists.

That's why we need to end this celebration of guns and killing accessories.

[ProgressiveProfessor]

9. What is irresponsible?

Magazines wear out. Having spares on the shelf is fine. Its the shooter not the gun

[Hoyt]

10. Naw. Certain guns and accessories attract callous people who have trained to shoot people in our

neighborhoods. I also think they trigger people to do things clearly detrimental to our society, certainly enables gun cultists.

Guns - especially the way we tolerate them today - just aren't good for society or those who covet them.

[ProgressiveProfessor]

11. What would those be?

Optical sights? Laser sights? Maybe 100 round magazines?

[Hoyt]

12. You are actually catching on.

[ProgressiveProfessor]

15. With the exception of the POS 100 round mags all those items are fine

[ReRe]

3. Good on 'em!

[ProgressiveProfessor]

5. I assume they have done a fiduciary duty check on this

If not, it could get "amusing"

[libdem4life]

13. A "fiduciary duty check"? Do tell...with amusing anecdotes, if you please.

[ProgressiveProfessor]

14. IANAL, but have been an investor, a pension plan trustee, and have money in that pension plan...

The BOD of a pension is not unlike the BOD of a business. They have the legal obligation to maximize return of the shareholders/beneficiaries. This does not mean they have violated the law if they don't as long as the decisions were reasonable and prudent at the time. That is a pretty lose standard and subject to lots of interpretation. BofA in the 60s found out the hard way.

If the CALSTRS dumps an investment for non-financial reasons (like this) and if a loss is taken that could have been otherwise avoided the BOD is open for a lawsuit. This is not a new concept and its safe to say that CALSTRS will find a way to cover themselves. Even so, all it would take is one member to file suit with the backing of some repuke foundation to really make a mess of things if its not done perfectly.

[libdem4life]

16. Many investment funds bowed out of concerns that became sullied and/or tainted. Funds come and go

and I'm going to predict that this will become a self-fulfilling prophecy, as did investments in Rhodesian South Africa and tobacco and probably liquor (not sure about this one), that people/investors have a right to determine where their funds are invested,which provides de facto financial support. Educational concerns might be appropriate to give ATF businesses a pass.

Another take, if it can't be legally advertised on public airwaves, it's probably not an appropriate educational investment.

What I applaud is that California is yet again, providing leadership that will shift the public discourse and other educational investment funds will follow. It couldn't happen to a more "deserving" industry.

(I don't know what IANAL means...kind of a newbie as my post count shows...

[ProgressiveProfessor]

17. IANAL = I am not a lawyer

Pension plans are as concerned about beneficiary suits and corporations are concerned about share holder suits. They tend to become expensive nuisances and some times lead to piling on.

Alcohol has been a decent investment if you chose carefully, and until Newtown, firearms and accessories were too, but more of a short play.

Once the stock is sold, who buys it afterwards does not impact the company significantly. Firearms and accessory makes have had a great 2012. Newtown caused such panic buying that brick & mortar as well as online venues are empty. That includes firearms, accessories, ammunition, and even reloading supplies (a first).

CALSTRS and CALPERS have had a host of problems over the years, including being pillaged by the state to pay other bills. Some of that is under control now. Leadership? Not that others should follow overall, they track record is not all that bright

[libdem4life]

21. Thanks. Interesting and I see your point. Hopefully the negative social statement will prevail

for financial choices...at least in education.

[ProgressiveProfessor]

23. Again if BODs let social statements override prudence there can be issues

CALSTRS and CALPERS were hurt badly in the last decade. They have been predicting growth well head of anyone else so they can claim they are healthy. The reality is that they most likely will have to increase contributions with a shrinking base. They are not the only public employee pension fund facing such issues.

[Hoyt]

18. That's right, Professor, and it would be dereliction of fiduciary duty to be invested in industry

about to be decimated by public disdain, and/or regulation.

[ProgressiveProfessor]

19. However the first half of the year should have good profits...

[Hoyt]

20. Good, you can profiteer from your close relationship with your guns.

[ProgressiveProfessor]

22. Depending on how the companies FYs are structured, its could be an interesting technical play

As for my own profits, you know I don't charge for my classes. How else would I profit? I have only 4 in the safe in my house. Are you saying I should buy more?