Click here: The Weekly Beacon – August 19 2022
We will be giving some macroeconomic market updates on a weekly basis. No
recommendations will be given in this commentary and we encourage you to contact us
today if you have any questions regarding any observations.
Feel free to send in your pictures of lighthouses to be featured in our weekly commentary.
This weeks issue: ESG Investing, ESG Fraud, BlackRock, Anti ESG, Drill Oil, DRLL, Strive Asset Management, Bill Ackman, Peter Thiel, ETFs, Oil Stocks, XOM, OXY, Adam Neumann, WeWork Failure, WE Stock, Andreesen Horowitz, Venture Capital, New Funding, Flow Real Estate, Michael Burry, Scion Asset Management, Market Predictions, Sitting on Cash, Natural Gas prices, Energy Desperation, Shortages, UK Importing Aussie Gas, Global Energy Collapse, German Electricity Prices, Firewood as Energy, Canada Jobs Update, the Canadian Economy, Public Sector Jobs, Oil Market, Annual Oil Storage Comparison.
ESG Has a Competitor
Whether you are an active investor or watch from the sidelines, we are sure you have heard the acronym ESG. Whether it’s your financial planner, local bank advisor, Bloomberg TV, mainstream news networks, social media advertisements, or even through a trading platform, everyone talks about ESG. It is the new, hip thing to do when investing. ESG stands for Environmental, Social, and Governance. Essentially, companies are graded on a scale of 100 on their commitments to social and environmental issues and their governance. Who comes up with these rankings? Well, that is complicated, numerous companies’ grade ESG scores and there are major inconsistencies across the rankings. There are also glaring holes in many of the rankings. Tesla, an Electric Vehicle (EV) maker scores poorly while some global fossil fuel companies grade better, it’s almost like the companies who lobby for better regulations and laws are also lobbying for ESG scores…..
We hope you do not invest based on arbitrary ESG scores; we think companies who focus on that will suffer financially. They also do not maximize returns for shareholders, they focus on ESG scores. ESG has become a punchline and has been a fancy way people can make more money from consumers.
In the ESG space, there are thousands of ETFs, mutual funds, and closed unit funds that invest in ESG first and finances second (yea, that’s a big no-no for us). We think climate change, social issues, and strong governance are important, but they should not be the major reason to invest in a company.
We only bring this up this week because those thousands of funds finally have a challenger. An Anti-ESG ETF launched in North America last week with the ticker DRLL as in “drill”. The company believes in drilling more oil domestically.
The aim of the Strive US Energy ETF (ticker DRLL), which began trading last week, is to accumulate enough assets for the Ohio-based manager to have a say in the boardroom of energy companies. Strive Asset Management was co-founded by Vivek Ramaswamy and Anson Frericks in 2022 with backing from billionaire investors including Peter Thiel and Bill Ackman.