Posted by
The Free Enterpriser on Wednesday, October 11, 2006 11:32:52 AM
Taking a page from the playbook of the liberals, the Free Enterprise Action Fund has tailored corporate activism for those of us that believe in free markets and small governments.
A recent blog entry sums up the benefits of this fund:
"
1) Instead of giving $500,000 every year, donate $10 million to an anti-environmentalism organization. The entire amount will be returned to you after a certain number of years, or whenever you decide to stop your activism.
2) The organization invests the money in an extremely diversified portfolio of S&P500 companies. The idea here is
not to use any special financial expertise. The idea is
not to try to do better than your S&P500 index fund. The idea is simply to replicate the results of an S&P500 fund, mechanically. So, for instance, $10 million across 500 companies would be $20,000 in each. That's enough to buy about 400 shares in most S&P500 companies.
3) Assuming that the S&P500 (including dividends) goes up 5% a year, the organization can withdraw about $500,000 out of the corpus each year.
Now comes the part that's different from other endowments:
4) The couple of guys employed by this anti-environmentalist organization are not really fund managers. They are activist/campaigners against the environmentalism-friendly policies of S&P500 companies. They can do this more effectively now,
because they are shareholders!!"
For the complete Blog entry see:
http://softwarenerd.blogspot.com/2006/10/activist-fund.html.