An Open Letter to Google’s Larry Page and Sergey Brin: Let’s Bring “Don’t Be Evil” to the Investment Industry
You won’t hear traditional investment managers say this: the Earth is warming, some natural resources are becoming scarce, populations are increasing, and the global economy is beginning to change to reflect these realities. We’ve been brainstorming on how to offer the world a true, honest alternative to Wall Street, and we think that our next economy investment approach combined with Google’s anti-evil, iconoclast reputation would be a fantastic way to do that.
At Green Alpha ® Advisors, we seek, identify and purchase shares in companies who put their businesses in the path of these changes; companies whose business models both disrupt business-as-usual and represent the next, green economy. We focus on companies with proven, profitable businesses models. We still believe in buy and hold, and reject the notion that the true value of good companies changes ten percent or more each day. Green Alpha practices investment management with a transparent process, making our reasons for our portfolio positions clear, and we don't play games with synthetic assets such as credit default swaps or with computer tricks like high-frequency trading.
That is, we're doing the job that investment managers are supposed to be doing: making long-term investments in necessary businesses and watching them grow. If that makes us mavericks, maybe that says more about the world today than it does about us.
We want to help Google offer an anti-Wall Street investing house option. We’ve written previously about Google going way beyond search and building a next economy conglomerate. We can’t imagine why you wouldn’t want to add the key economic production function of equity markets to that mix.
One of Google’s many “green” logo variations (Image source: freshdialogues.com)
If we can speak to the millions of people who have seen the banks wreck the economy and cause foreclosures and joblessness – we have a chance to build a massive grassroots movement. All we have to do is light a match in the right place, and overwhelming public support for real investment banking will follow.
Furthermore, we’ll do it all investing in the emerging next, green economy – which almost by definition has to grow faster in coming years than the legacy, old, fossil fuels economy, and therefore we’ll earn our clients superior investment returns over time AND we’ll be providing a conduit of capital to the green economy which will help it succeed in supplanting the old economy.
We’ll become the new “S&P 500” for the 21st century, and leave the old-timey indices in the dust.
Why do we think partnering with Google will advance this cause? Google is perceived by so many people around the world as doing things its own way, that the opportunity to pop the Wall Street bubble and give folks and institutions a real alternative is ridiculously huge. And, the business is ridiculously profitable at scale – yes, even when practiced honestly and while charging very fair fees. Because once you have developed portfolio models (which we’ve already done, and have three-plus years of track record to show for it) you can allocate any quantity of clients and assets into them. This business scales like software, not like manufacturing, so it’ll be very accretive to Google’s bottom line to say the least. Green Alpha is the right team to deliver all this for Google and the world.
Yes, there are a lot of people who manage money, who are very well qualified, who know how to do the math. But in a world of data and quantification, or really any world, where there are cultural constraints that prohibit innovation from occurring, you can make a lot of progress in a short period of time, simply by being a maverick. On that front, with respect to next economy investing, the bar is low. There is tons of opportunity to innovate, and we’re happy to be making our own contributions, notably by redefining an index for the next century and by developing an industry classification system to reflect it (our proprietary GANEX and NESC). Where we stand out is that we’re pioneer types who refused to accept the financial services status quo for what it is, and in turn started innovating. We refused to get in line with financial institutions and their largely fossil fuels-oriented, short term culture of rigging systems for maximum profit regardless of ultimate negative outcomes. And make no mistake, the culture of “show me the money” is deeply entrenched, to the point where we really could be a candle in the darkness given the right platform. We’ll no doubt take criticism for our beliefs, but as Red Sox owner John Henry famously said to Billy Beane, “the first guy through the wall is always bloody.”
The summation is: we really do have a business approach that wins on several fronts: it’ll be very accretive to Google’s shareholders, it helps advance the sustainable, green, economy, and it starts putting a dent in the greedy, corrupt traditional Wall Street banks by beginning to capture their market share – meaning it also helps chip away at super-pac style political corruption as well.
The world will always need investment management and capital allocation. We’re approaching that business by identifying civilization’s primary problems, determining what technologies and approaches best address those problems, and then investing in the best companies that provide those technologies. Let’s show the world it can be done right.
Don’t be evil.
Garvin Jabusch is cofounder and chief investment officer of Green Alpha ® Advisors, and is co-manager of the Green Alpha ® Next Economy Index, or GANEX and the Sierra Club Green Alpha Portfolio. He also authors the blog "Green Alpha's Next Economy."