International Investments – When Bird’s Fly High International Investments in Wal Mart View

by | Oct 5, 2006 | Archives

A recent message outlined a number of reason why international investments expert Jyske Bank has downgraded its view of Wal Mart shares.

See International Investments – Bird’s Eye View Investing in the Big Picture

I believe there is another reason to run from international investments in Wal Mart if we take a bird’s eye view. Wal Mart’s mission is to get the price down for consumers. This is admirable but does not account for the big picture. When lower prices trample the environment, create ill will from workers at home and in many other nations, then we only save in appearance. Long term the short term savings will cost us even more. Wal Mart is convenient and inconvenience is the one thing that man has not yet learned to overcome.

The fastest growing demographic group in the US (and probably the West) are “Birds Eye Consumers” and they seem to be sensing these long term costs created by Wal Mart.

Research has shown that “Birds Eye Consumers” will inconvenience themselves for important long term issues.

They find big picture issues important enough to alter their purchasing and lifestyle habits.

Some of the issues that concern “Birds Eye Consumers” consumers include:

Nature and its destruction.

Problems with the whole planet such as global warming, destruction of the rain forests, overpopulation, lack of ecological sustainability.

Exploitation of the poor.

Developing and maintaining relationships.

Helping others and bringing out other’s unique gifts.

See spirituality or religion as important but concerned about Religious right.

Equality of women.

Violence and abuse of women and children.

Creating new and better ways of life.

Concerned about big business’s focus on profit over environment, downsizing and human exploitation.

“Birds Eye Consumers” have shown that they will pay more for products that uphold these concerns. They have also shown that they will shy away from products and businesses that exacerbate their long term interests.

Birdseyers have also shown they will pay more if the extra money is used to clean the environment, ehlpp the poor and to solve the whole problems they see. They are willing to boycott and demonstrate to express their points of view and they are big at volunteering for good causes.

Starbucks discoeverd this when they ignored Birdseyers in the UK. The bird’s eye boycott caused the coffee company to do a big turn around, shift to fair-trade coffee and donate money to the poor.

The birdseyers are concerned about psychological and spiritual development and believe that more should be spent on education, neighborhoods and sustainable future. This means they are likely to spend more on services and experiences instead of stuff…not good for Wal Mart.

They are not foolish spenders, have their finances under control, so they have financial clout. They dislike overspending, conspicuous consumption and “making it”.

They are especially highly educated, well informed and wired. They love authenticity, transparency and want to see the whole picture. They hate businesses that gloss over product realities and that mislead with spin and hidden agendas. Companies (such as Ford that calls itself the green auto manufacturer and then pushes gas guzzling SUVS) that try to fool these consumers by replacing truth with glitzy sound bites and vivid but less than clear pictures are likely to lose or even alienate this group.

An article in today’s USA Today entitled “More university students call for organic, ‘sustainable’ food” by Bruce Horovitz, suggests that this demographic wave is growing and that the cream of our upcoming society will be Birdeyers.

The article says: The agonizing decision to pick Yale over Harvard didn’t come down only to academics for Philip Gant. It also came down to his tummy. And his eco-savvy. When he chose Yale last year, Gant wasn’t swayed by its running tab of presidential alumni: President Bush, George H.W. Bush, Bill Clinton, Gerald Ford and William Howard Taft. He was more impressed by Yale’s leading-edge dedication to serving “sustainable” food. Sustainable might sound like New Age jargon, but college students such as Gant are embracing the idea: food grown locally with ecologically sound and seasonally sensitive methods. The concept also includes humane treatment for workers and animals and fair wages. In addition to wanting sustainable food, students such as Gant want it to be organic: grown without pesticides, herbicides, antibiotics or hormones. As a health-conscious member of Yale’s wrestling team, Gant says, “Part of why I was so excited about coming to Yale is the way it eats.” Nutritionally wired students — many raised on Whole Foods diets at home — are pushing campus dining standards to be measured more by the food’s origin, not its volume. This is part of a larger student movement on many campuses calling not just for sustainable food practices, but also for sustainable energy use. Some colleges are even naming directors of sustainability.

The article goes on to point out that students consider the way they eat every day is a moral act and that organic food can be part of a greater educational experience.

The sustainable and organic foods have increased Yale’s annual food costs but the students demand it. You can read the entire article at USA Today

This suggests that Wal Mart’s long term policy of thinking short term may backfire. Their corporate culture may be so hard to turn around that they will lose both the existing birdeyers and never gain younger markets. As Wal Mart goes “organic” and “green” itself chances are they will try to water down the meaning of these words and stonewall birdeyers with image instead of deeds. If Wal Mart does not walk its talk a scandal could taint the name Wal Mart Birdeyers forever.

Mankind continually achieves the impossible, but that pesky inconvenience creates stumbling blocks for us again and again. It is inconvenient to search for business ideas or companies to invest in that have a long term view. It is inconvenient for Wall Street to search for such deals. Yet the Bird’s eye view is a growing trend. We the human creature should pat ourselves on the back for this…but we don’t want to stop now. Look for investments that make money now without leaving an aggravating footprint on earth. That’s smart bird’s eye investing.

A bird’s eye view makes good investing sense even in the short term. For example the WilderHill Clean Energy Index is up 41.2% since launch August 16, 2004.


P.S. One of the reasons Merri and I like Jyske Bank is that over the 20 years we have dealt with them, we have seen that they have real long term views and a genuine concern for their three stake holders, the customers, the employees and the shareholders. Join Merri, Jyske Bank and me at our upcoming course in Ecuador. For details see International Business Made EZ – Ecuador

They’ll look for a retailer that may be more authentic and transparent instead.