The Occupy Wall Street Index: 9 Companies the 99% Loves to Hate
Occupy Wall Street targets corporate evil, but does evil equal stock market gains?
I used to worry that I was living in the age of apathy, but the Occupy Wall Street phenomenon has changed all that.
People are taking to the streets all over the world, protesting a wide scope of issues that's grown far beyond the financial system.
During my own visits to demonstration sites in New York City, I've seen an endless range of topics come up for discussion. Need examples?
Well, there's Federal Reserve policy, the Troy Davis execution, abortion rights, organized labor, corporate-tax dodging, student loans, government largess, unlawful mortgage foreclosures, African-debt forgiveness, and so on, and so on, and so on.
Given the growth of the movement, we at Minyanville have decided to put together what we call The Occupy Wall Street Index to track the companies that the protestors -- the self-proclaimed 99% -- love to hate.
Some of these corporate titans, like Goldman Sachs (GS) and News Corp. (NWSA), have their names splattered on signs at every Occupy Wall Street rally. Others, like McDonald's (MCD), are obvious symbols of issues and trends that the 99% rails against.
So without further adieu, here are the nine names we selected for The Occupy Wall Street Index:
1. Goldman Sachs. Were you expecting anyone else in the top spot? For the 99%, Goldman -- having profited from the inflation of the credit bubble, only to get bailed out by the Federal government when reckless risk-taking put the firm's security in jeopardy -- is the definitive symbol of Wall-Street evil.
Goldman just might be feeling the heat, as management has reportedly instructed its employees to steer clear of Zuccotti Park, a.k.a. the unofficial Occupy Wall Street headquarters in lower Manhattan.
2. JPMorgan Chase (JPM). Behind Goldman, JPMorgan is the most-hated too-big-to-fail financial institution for the Occupy Wall Street crowd. Why? Well, quite a few folks are ticked off about JPM's foreclosure robo-signing activities, while others were convinced that CEO Jamie Dimon has Fed Chair Ben Bernanke on a leash.
Dimon is seen as a modern-day financial robber baron, and that will keep his firm in Occupy Wall Street's crosshairs.
3. News Corp. It's not possible to attend an Occupy Wall Street protest without spotting at least one sign mentioning Fox News, News Corp's flagship US media property.
Pretty simple thinking here: Fox commentators have been harsh on the movement, with Bill O'Reilly calling demonstrators "drug-trafficking crackheads" at one point. In fact, the liberal-leaning Media Matters For America places Fox News among "right-wing media" that "have engaged in a relentless smear campaign against the Occupy Wall Street movement."
4. General Electric (GE). The company is a frequent punching bag for the 99%, but what is GE's ultimate sin? Simple -- getting a huge bailout, and then paying no taxes. In fact, the Institute for Policy Studies called GE "King of the Tax Dodgers."
Heck, GE's tax department is probably the most effective on Earth. How else could you explain a negative 64% US Federal tax rate for 2010? That's like one of us regular folks earning $50,000 this year, and getting a $32,000 refund next April!
From a purely capitalist perspective, those folks deserve far bigger bonuses than Goldman's army of traders and bankers.
5. BP (BP). We've chosen BP to represent not only Occupy Wall Street's hatred of corporate polluters, but also its support for workers rights. We all remember BP's disastrous 2010 spill in the Gulf, but the company has an astonishingly poor safety record that goes beyond last year's spill. Just one example: an entirely preventable Texas City plant disaster in 2005, in which 15 workers lost their lives.
As of mid-2010, the Office of Safety and Health Administration had fined BP a whopping 760 times, exactly 759 more times than it did ExxonMobil (XOM). Would you feel safe working for BP?
6. McDonald's. Income inequality is a major issue for the 99%. In fact, 99% specifically refers to those folks who aren't in the top 1% that control much of the wealth in this country. According to the Bureau of Labor Statistics, the single worst-paying job in America is fast-food cook. So if you're looking for the bottom 1%, head to any restaurant with a 99-cent menu.
This revelation lands McDonald's, the largest publicly traded fast-food chain, in our index as a symbol of just how small a full-time paycheck can be.
7. Lockheed Martin (LMT). Occupy Wall Street protesters are vehemently anti-war, which has us targeting Lockheed Martin, the U.S. government's largest defense contractor. Aside from its sheer size, Lockheed deserves special mention for the controversial F-22 Raptor fighter aircraft program. That episode has seen the U.S. government drop a whopping $67 billion on planes that it probably didn't need.
That kind of dough could launch the war on poverty that many of the 99%, including Princeton's Cornel West, would like to see.
8. Wal-Mart (WMT). The Occupy Wall Street crowd is drawing favor from unions, including branches of the AFL-CIO, the International Brotherhood of Teamsters, and the American Federation of Teachers, among others. And Wal-Mart is more or less the best-known corporate opponent of organized labor in the world.
In a scathing 210-page report from 2007, Humans Right Watch scolded the company "for the sheer magnitude and aggressiveness of its anti-union apparatus," including a union hotline encouraging employees to tattle on each other.
9. SLM Corp. (SLM). If you read the incredibly popular We Are the 99% Tumblr blog, you'll see that a lot of folks are upset at having accumulated mountains of student-loan debt, only to face a crumbling job market.
SLM, which you may know as Sallie Mae, refers to itself as "the nation's No. 1 financial services company specializing in education." And that means it's profited from people gambling, albeit sometimes foolishly, on education as a way to a better life.
So How Does This Work?
We're keeping this experiment pretty simple. We backdated the Index to September 16, the last trading day before the protest hit New York, and equal-weighted the stocks. Over time, we're going to see how this basket of names performs against the S&P 500 Index.
Note that the performance of these stocks was not considered in our decidedly unscientific selection process. In other words, we didn't mess with the list to get a pre-planned surprise fit for a cheap headline.
So far, here's what we've seen:
Click to enlarge
No shocker here. Given that we're comparing large-cap stocks to a large-cap index, there isn't much disparity; the Occupy Wall Street Index is outperforming by about one percentage point thus far. So we'll call that a small, and perhaps temporary, victory for the 99%.
So can a company profit by misbehaving in the eyes of the 99%?
Can supposed corporate evil result in stock-market outperformance?
Stay tuned -- we're about to find out.
Unscientifically, of course.
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