Live from Music Row Tuesday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed Andy Puzder, former CEO of CKE Restaurants and now investment advisor at 2ndVote Advisors, to the newsmaker line to discuss the creation of anti-environmental, social, and governance (ESG) exchange-traded funds that focus more on pushing political agendas than on profiting their shareholders.
Leahy: We welcome to our newsmaker line Andy Puzder, the former CEO of CKE Restaurants. He helped turn around Hardee’s and Carl’s Jr. when he was the CEO there, and now is the author of a book, The Capitalist Comeback, and is an adventure advisor to 2ndVote Advisors. Welcome Andy, thanks for joining us.
Puzder: Great to be here Michael, thanks for having me.
Leahy: So a couple of things to talk about. These anti-ESG economic exchange-traded funds are starting to take off. Vivek Ramaswamy put together Strive Asset Management, and 2ndVote Advisors has a similar fund going on. Tell us a little bit about what 2ndVote Advisors is doing.
Puzder: What Vivek is doing at Strive is really very different than what we’re doing at 2ndVote. Strive is basically taking the products that BlackRock, State Street, and Vanguard offer. These are the large financial investment firms that are really pushing the ESG agenda.
He’s taking the same products that they have, mimicking them, and then he will vote the shares differently than BlackRock, State Street, or Vanguard would vote them on issues relating to ESG such as net zero on climate or appointing people to your board of directors based on their race or their sex rather than their qualifications, their merits, or their character.
So he would vote the shares differently. Same returns that you would get with BlackRock and the same stocks that you would get with BlackRock. 2ndVote has taken a little different approach.
We’ve got a couple of products that allow conservative investors to invest without offending their values, such as we have an ETF called LYFE that excludes from its investment universe companies that support abortion.
So you have companies that are neutral on the issue, which make up about 90 percent of the companies in the ETF, and then about 10 percent lean towards supporting the pro-life position. Same, the other one is called EGIS. It’s really a society-defended, what we like to call a society-defended EGF and it’s E-G-I-S is the call letters.
And EGIS basically will not invest in companies that support defunding the police or support open borders or oppose Second Amendment rights. So we’ve got those two ETFs. We’ve also got another ETF coming out which I think is very interesting for people that think corporations should be focused on making money and not trying to implement a liberal political agenda, and it’s called Shareholders First.
That product is, we’ve already got a first index on which you could base a separately managed account on if you have an investment advisor. But soon we’ll have an ETF that you could purchase in the public market.
And Shareholders First basically invests only in companies that are rated neutral on political issues. So no social activism, no political activism: companies that are focused on generating returns for shareholders on the theory that companies focused on profit will be more profitable than companies that aren’t.
And as you know, many of these woke corporations are not focused on investor returns. If you look at a company like Disney, for example, I think that’s the most prominent one, or Coke, they’re not focused on enhancing shareholder returns. They’re focused on social and political activism. And we don’t think those companies are going to be as profitable.
We think they’ll be more profitable than the companies in these BlackRock, State Street, and Vanguard products that Strive is mimicking. So really, it’s hard enough to make a profit when you focus on it, I can tell you as a former CEO, let alone when you’re trying to change the world based on some leftist political agenda.
So we’ve taken a different approach than Strive. I think what Strive is doing is great. Vivek is a good buddy and I wish him the best, but we’ve taken a different approach.
Leahy: Andy, you just said something very interesting. Were you able to find any publicly traded companies that actually focus now on maximizing shareholder profit and only maximizing shareholder profit?
Puzder: Yes, we license a rating system. There’s a company out there that does a very intense social and political audit on every company in the SMP 1500. So that’s the SMP 500, large-cap companies, big companies, mid-cap companies, SMP 400, and then small-cap. And it turns out that they rate them on a scale of one to five.
One is liberal, two is lean liberal, three is neutral, four is leans right, and five is right. And it turns out that about a quarter of the companies in the SMP 500 are neutral. There are none that are four or five. There are none that lean right, but about 25 percent are neutral.
And if you go to mid-cap companies and this is – we try and limit our investments to large and mid-cap companies with the least $2 billion in market cap.
So very liquid companies, what you would think of as large companies. And there are more companies that are neutral in the mid-cap area, and there are some that actually lean right. So you can find some companies.
There aren’t as many as there were 10, 15 years ago and certainly not as many as there were back in the ’70s and the ’80s and even the ’90s. With this ESG drive like a large financial firm, BlackRock, State Street, and Vanguard, who own tremendous amounts of stock, they put real pressure on these larger companies to adopt these liberal agenda items.
Rather than focusing on returns to investors, they focus on accomplishing this liberal agenda. We want to get away from those companies. We don’t want to invest in those companies. We want to invest in companies that focus on returns for investors.
Leahy: What would be an example of a company that actually is sort of neutral and focused on shareholder profit? Sort of the old traditional way of how publicly traded companies should be run?
Puzder: Well, none of the big ones, none of the companies are going to sound familiar to you. They’d be large companies that kind of operate under the radar, because right now you need to operate under the radar if you’re going to avoid being pressured to adopt these liberal policies.
In fact, the CEO of Whole Foods came out, I think it was two weeks ago, and said, look, we’ve got a problem here, which is that we’re being severely pressured by these financial companies, BlackRock, State Street, and Vanguard, to adopt these liberal policies.
Elon Musk came out about a month ago and said, ESG investing is a double incarnate. I’ve been quoting Bill Maher, Larry Summers, and Elon Musk a whole lot more this past year than I ever thought I would.
Leahy: The world has turned upside down.
Puzder: It really has. There are voices coming out in favor of rational policies. I mean, even Bill Maher sounds rational, which just blows me away compared to what you’re hearing out of the White House and out of Washington, D.C.
Listen to the interview:
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Tune in weekdays from 5:00 – 8:00 a.m. to The Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.
