Protestors confused on investments demands

David MoonBlog

If any of the protesters occupying the campus at New York’s Columbia University are students in the school’s renowned investing program, they should be expelled – if for no other reason, because they lack the most basic understanding of investing and business. (As homage to fellow protestor Arlo Guthrie and Alice’s Restaurant, they should also be required to pick up the garbage.)

In addition to the pro-Palestinian protestors more extreme demands, the campus protestors want Columbia’s endowment to divest of companies that do business in Israel. These offending companies include Microsoft, Google and other big tech firms that have contracts with the Israeli government. The protestors also take issue with companies like Airbnb, citing concerns that “a portion of the company’s revenue comes from illegal settlement on occupied Palestinian land.”

Aside: Columbia University is located on land once occupied by the Lenni-Lenape people, the indigenous residents of Manhattan’s upper west side.

The protestors at Columbia University have singled out investments as small as $30,000 from the school’s $14 billion endowment because they hold positions in supposed genocide-supporting companies such as Caterpillar and Hyundai. By this definition, likely every American with a retirement account is, in the words of the proposal to the Columbia Advisory Committee, lending “legitimacy to … the perpetuation of Israeli apartheid and war crimes.”

These demands concerning the school’s endowment either stem from a fundamental misunderstanding of everything about how investing works, or this is a protest just to protest. Or both.

These ridiculous demands almost certainly reflect a lack of understanding about how investing works. If you buy shares of Berkshire Hathaway stock, your money doesn’t go directly to Warren Buffett. It’s like buying a house. The guy who built the house 20 years ago doesn’t get your money. You give your money to someone who doesn’t want to own the house (or stock) any longer.

And if your objection to owning a particular stock is that you don’t want to profit from some objectionable or immoral activity the company’s products or services could be used to support, there is practically no investment you could own, including CDs in your local credit union.

The selective nature of the protestors’ ire is interesting.

One of the protestors arrested at Columbia was Isra Hirsi, the daughter of U.S. Representative Ilhan Omar (D-MN). In her most recent financial disclosure, Representative Omar reports owning a global equity mutual fund that includes Microsoft and Google among its largest holdings. Thus far, no pro-Palestinian protestors have occupied Ms. Omar’s U.S. taxpayer-funded office and demanded that she cease her financial support of Israeli war crimes.

David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.