Motley Fool analyst Jason Moser chats with Rick Engdahl in a side-of-desk interview about developing a personal investment philosophy, and shares his own four-point system for deciding whether a particular stock is right for his portfolio.
Shareholders obviously have some skin in the game, but what about others affected by corporate actions? Is the company obeying the law? How does it treat employees? What is its impact on society in general?
A full transcript follows the video.
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Rick Engdahl: We talked about shareholders and management serving shareholders. Here at The Fool we like to talk a lot about stakeholders, too.
Jason Moser: Yeah.
Rick: I think people outside of our walls might conflate those words a little bit and not really think too hard about stakeholders. Can you dig into that a little bit?
Jason: Yeah, absolutely. Stakeholders are not just shareholders. Think about stakeholders as being the entire world, OK? This company is making an impact on society in some capacity. If you're Amazon and you're trying to do all of this stuff to make things more accessible to consumers within a faster time and a cheaper price, are you in fact doing that, and are you doing it responsibly?
Are you neglecting the environment? Are you breaking the law? Are you skirting the law and figuring out a way to grease some palms to get your foot in the door?
I read a great example here just recently where Wal-Mart (NYSE: WMT ) was trying to get into D.C. -- open up three stores, I think, here in D.C. -- and there was an issue there in regard to the minimum wage. D.C. was asking them to increase their minimum wage by 50% in order to be able to open those stores there.
In hindsight, Wal-Mart said, "No, thanks, we'll step back," and then it was revealed that Wal-Mart had greased a bunch of palms to even get their foot in the door to begin with. That's not necessarily... you have to be aware of that.
It's one thing, I guess, if maybe you're looking at a company looking at expanding their international presence. Those kinds of things, yeah. They're a little bit more difficult to pinpoint, but when you see it going on right in your own back door, I think you have to at least acknowledge that and think about, maybe, is that a way that they are normally doing business? I don't know that I'm feeling all that good about their future, if that's the case.
But going beyond just the general public, look at the employees. Think about the employees who work with the company. Think about it just from our perspective here, working at The Fool, and how important we are -- and how important we feel -- I think, on a day-to-day basis. I think that our management here does a great job of making us very happy and wanting us to stay here.
You can look at employee attrition. Are companies like a revolving door? Are employees coming in and then leaving six months later? The Internet has given us a lot of great ways to find more information; Glassdoor I think is one of those. Our CEO here, Tom Gardner, is a big fan of it and I think there's a lot to it.
You can find out a lot about a company and how they operate, and how their employees feel about them, by looking at some simple reviews.
I think that when you see something like Glassdoor's reporting on The Motley Fool, you see a lot of positive reviews there. If you go to Glassdoor and you see a lot of negative reviews, you have to address that. You have to wonder, "Why is this company creating this environment where people don't like to be?"
I think that John Mackey at Whole Foods (NASDAQ: WFM ) is a great example of someone who has really brought conscious capitalism and looking out for all stakeholders to the forefront for investors, and consequently Whole Foods has done a pretty good job, I think, of creating an environment where employees tend to want to stay.