FWOMX

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jacksonM
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FWOMX

Post by jacksonM » Sat Jun 01, 2019 10:50 am

Not sure I can articulate why but something tells me this is a very dumb idea.....

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ochotona
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Re: FWOMX

Post by ochotona » Sat Jun 01, 2019 1:29 pm

I went to business school *not recently* and in the 1980s we were reading case histories that argued that companies that did not engage all of their employees fully performed worse. Why is that hard to believe? And why does it bother you?

If I have a V8 engine, I need all eight to fire when needed.

Arguing the inverse, would ETFs tracking the "whites dudes only" index demonstrate alpha? If so, why?
jacksonM
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Re: FWOMX

Post by jacksonM » Sat Jun 01, 2019 1:43 pm

ochotona wrote:
Sat Jun 01, 2019 1:29 pm
I went to business school *not recently* and in the 1980s we were reading case histories that argued that companies that did not engage all of their employees fully performed worse. Why is that hard to believe? And why does it bother you?

If I have a V8 engine, I need all eight to fire when needed.

Arguing the inverse, would ETFs tracking the "whites dudes only" index demonstrate alpha? If so, why?
I guess it's just my belief that companies that tend to perform better tend to perform better and that's all I care about.
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ochotona
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Re: FWOMX

Post by ochotona » Sat Jun 01, 2019 5:22 pm

jacksonM wrote:
Sat Jun 01, 2019 1:43 pm
ochotona wrote:
Sat Jun 01, 2019 1:29 pm
I went to business school *not recently* and in the 1980s we were reading case histories that argued that companies that did not engage all of their employees fully performed worse. Why is that hard to believe? And why does it bother you?

If I have a V8 engine, I need all eight to fire when needed.

Arguing the inverse, would ETFs tracking the "whites dudes only" index demonstrate alpha? If so, why?
I guess it's just my belief that companies that tend to perform better tend to perform better and that's all I care about.
Sure, and that's all the shareholder needs to care about, I agree with that. But real, inclusive teamwork is about as all-American as anything. That's what the young people in the volunteer military are all about... they respect and rely on the contributions of members of the team, so that the team and it's members survive and win.

Women are half of the American "team".

I see nothing creepy or disturbing about a fund which is trying to find alpha by finding companies that squeeze more juice out of the lemon by fully enaging every team member. Actually it makes me sad to think of how much value has been discarded because "We never done it that way afore".

I'm from the oil patch, and I have witnessed decades upon decades and generations of talented women engineers and scientists enter this industry and they say, "I'm sick of this prejudiced, bigoted environment", they vote with their feet, and go where they are valued more. I'm a 58 year old guy but I'm totally done with that, I'm personally sick of it, and I call it out when I see it. Like at Anadarko Denver. Makes me shudder because I have been in that office as a visitor, makes me wonder what the hell was going on just out of sight.

https://www.bloomberg.com/news/articles ... ver-office
sweetbthescrivener
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Re: FWOMX

Post by sweetbthescrivener » Sat Jun 01, 2019 5:27 pm

ochotona wrote:
Sat Jun 01, 2019 1:29 pm
I went to business school *not recently* and in the 1980s we were reading case histories that argued that companies that did not engage all of their employees fully performed worse. Why is that hard to believe? And why does it bother you?

If I have a V8 engine, I need all eight to fire when needed.

Arguing the inverse, would ETFs tracking the "whites dudes only" index demonstrate alpha? If so, why?
Jordan Peterson has said that the question isn't why aren't there more women in these high competition, high stakes companies and positions, but why do some men seek them out in the first place?

It is the overachievers and the hyper competitive who are perfectly happy to work 80 hours and week and focus obsessively on work who end up the successes in business, and these are usually not only men, but only a small percentage of men.

Most people, men and women, want a healthier work/life balance, and even among less driven people, it is the men who are more likely to be willing to work more hours, to relocate, to take on the dangerous and the boring work and thus get compensated more.

What is being pushed in our culture is the idea that it is bias against women that keeps companies and leadership from being 50/50 men and women. So there are all sorts of programs and initiatives designed to even things out under the assumption that the only reason there aren't 50% women at every company is sexism and not things like preferences, gender differences, different core competencies, tolerance for risk, etc..

Like look at this challenge to Chief Technology Officer of the Oculus Rift.

https://www.youtube.com/watch?v=vzmbW4ueGdg

The question is assuming bias for the lack of women. His response to the question is that very few people can even do the work they do, and they are having trouble finding capable programmers at all, the ones that they do end up being men, but that is because that is all they can find.

If you want to invest in a fund like this because politically you think it is as simple as hire-more-people-of-a-particular-sex, then have at it.

I just don't see how basing your investing on the balance of the genders has any relation to getting a higher return on your investment.

This is a deceptive advertisement that appeals to your heart strings and your feelings and not your sense.

I might buy into a fund that only works with companies that minimize their impact on the environment because it makes me feel more responsible, but if that fund advertised that it also would increase my return I would be suspicious because generally following your conscience costs you, you don't profit from it.

I think Jackson's intuition in the original post, one of suspicion, was spot on, and there is no reason to assume it comes from sexism. It might just as easily have come from the pandering nature of the advertisement.
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Xan
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Re: FWOMX

Post by Xan » Sat Jun 01, 2019 10:26 pm

This particular ad only says "could offer the opportunity for higher returns" (emphasis mine), which I do believe to be deceptive, because it applies to any investment, and is only being said there to make it sound like such a thing is expected (when it probably is not).
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Tyler
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Re: FWOMX

Post by Tyler » Sat Jun 01, 2019 10:58 pm

Xan wrote:
Sat Jun 01, 2019 10:26 pm
This particular ad only says "could offer the opportunity for higher returns" (emphasis mine), which I do believe to be deceptive, because it applies to any investment, and is only being said there to make it sound like such a thing is expected (when it probably is not).
Reading the fine print on that claim, I find it interesting that they had to invent a new benchmark to match the sector weightings of the companies that meet the diversity criteria of the fund. That makes me think 1) it must not look so hot compared to the normal market benchmark, and 2) we'll see an interesting sector bias in the companies it holds. Basically, the final makeup of the fund may tell us more about the industries that attract women than about the companies that do.

Personally I have no problem with people investing according to their conscience but I do have a problem with marketers pandering to subsets of customers in order to take advantage of their emotions and good will for profit. At a 1% ER for simply applying a few employment filters, I fear this is the latter.

In any case, now I'm anxiously awaiting academics to update their factors so that I can calculate the returns for large cap testosterone vs. small cap estrogen. ^-^
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boglerdude
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Re: FWOMX

Post by boglerdude » Sun Jun 02, 2019 12:10 am

So the market expects this fund to grow at 5% a year (or w/e)

You make money only if it beats that expectation?
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sophie
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Re: FWOMX

Post by sophie » Sun Jun 02, 2019 8:40 am

ochotona wrote:
Sat Jun 01, 2019 5:22 pm
I see nothing creepy or disturbing about a fund which is trying to find alpha by finding companies that squeeze more juice out of the lemon by fully engaging every team member.
Herein lies the problem: how exactly do you determine this, and who makes the decision?

I can imagine this fund preferring companies who spend a lot of money trumpeting diversity, which doesn't necessarily translate to a sane working environment.

If the socially responsible fund experience is anything to go by, I would guess that this fund will substantially underperform a straight total market index, simply because anytime you depart from the criteria of "most profitable" you inevitably get "less profitable". When I first started working and funding a 401K, I went for socially responsible options because that's what you do when you're in your 20s and have no clue about investing. Didn't last long, because I decided that my investments are the one place where I needed to be as selfish as possible. That doesn't mean everyone should think that way, but on the other hand I don't want to have to be paying for the retirement of someone who didn't manage to save enough because they went the socially responsible route.
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