It looks like the Democrats have taken our advice…
Last month, Senators Chuck Schumer and Bernie Sanders proposed legislation to restrict corporate share buybacks—unless companies pay their workers at least $15 per hour and offer paid time off and health benefits.
We said this was just a sound bite from the left to look tough… and suggested (tongue-in-cheek) that if Democrats really wanted to increase employee compensation, they should just raise the minimum wage.
But be careful what you wish for…
Last week, a House committee passed the Raise the Wage Act, which would increase the federal minimum wage from $7.25 to $15 an hour by 2024. The vote was along party lines—28 to 20—with all Democrats in favor.
Now, Democrats argue that raising the minimum wage will lift millions of workers out of poverty. But Republicans counter that, if passed, the bill would cause significant job losses for hourly workers. One Republican congresswoman even called it “blatantly socialist.”
At the Daily, we’re not fans of government intervention in the economy. We believe the market should set employee pay… and that companies can run themselves better than a bunch of politicians in D.C. can.
But here’s the thing… Companies have been raising their hourly salaries.
In 2018, Walmart raised its minimum hourly wage to $11. That put pressure on competitors Amazon, Costco, and Target. All three responded by raising their minimum hourly wages to $15.
And that’s how a free market should work.
Of course, increased wages are good for employees. But at the Daily, our beat is money-making opportunities. So we wanted to know what rising wages mean for investors.
The answer may surprise you…
Paying More Is Profitable
I wanted to find out whether companies paying higher wages are also good investments. So I reached out to our PBRG team of elite gurus and analysts.
It took some digging, but I eventually got the scoop from Grant Wasylik, former hedge fund manager Teeka Tiwari’s chief analyst on The Palm Beach Letter.
Grant is an expert on exchange-traded funds (ETFs). His Rolodex of insiders in the industry is bigger than anyone else I know. (Grant tells me he has over 700 contacts in the fund space.)
And recently, Grant returned from the Inside ETFs Conference in Hollywood, Florida. It’s the world largest conference of its kind, with over 2,300 attendees—including financial advisors, institutional investors, and hedge funds.
I think Grant lives just to go to this conference. He’s attended it for eight straight years.
When I told him about my research, he sent me his conference notes. They’re a must-read at PBRG headquarters. I’m always excited to look through them for ways to juice up my own portfolio.
That’s how I came across a new fund created by billionaire hedge fund manager Paul Tudor Jones that holds “socially responsible” companies.
Jones amassed his $5.1 billion fortune through his investing prowess. It’s even rumored that he tripled his money on October 19, 1987 when the market crashed. This is a man who knows opportunity when he sees it.
And he’s found that companies that act more like “social justice warriors” actually outperform the market…
The Left Is Right
In 2013, Jones cofounded JUST Capital. The non-profit research firm’s mission is to build a more “just” marketplace that reflects the true priorities of the American people.
JUST polled over 100,000 Americans to identify which business behaviors are most important to them. Here are the top three it identified:
Hiring the best employees and treating them well
Making a great, socially beneficial product at a reasonable price
Treating customers like they’re on a pedestal
And to track companies with these types of practices, JUST created the JUST U.S. Large Cap Diversified Index. Since its inception in 2016, it’s outperformed its benchmark, the large-cap Russell 1000 Index, by 3–4% annually.
The index is made up of companies that score well on JUST’s environmental, social, and governance metrics—including Microsoft, Apple, and Johnson & Johnson.
Ironically, the left is right (no pun intended) in this case: Socially responsible companies that “do the right thing” can also be profitable—making them good investments. What the left is missing, however, is that the market will reward companies that pay their workers more… We don’t need a bunch of D.C. politicians butting in.
So as a serious capitalist, Jones is putting his money where his mouth is. He teamed up with Goldman Sachs to create the JUST U.S. Large Cap Equity ETF (JUST).
And if you’re looking to invest in these socially responsible companies that are also making money, consider the JUST ETF. As always, do your homework before making any investments.
Analyst, The Palm Beach Daily
P.S. JUST isn’t the only firm that found companies that treat their employees better also perform better.
A joint study by Morgan Stanley and job search website Glassdoor found that over the past six years, companies with higher employee reviews outperformed those with lower reviews by five percentage points per year. And the risk-adjusted returns were higher as well—meaning these companies rose higher and with less volatility than the overall market.
We want to hear from you. Will raising the minimum wage help workers as the left says? Or will it do more harm than good for the economy like the right is warning? Tell us your views right here…
PBRG guru Teeka Tiwari is revealing a major upgrade to his trading strategy…
If he were still running his hedge fund, this would be the No. 1 strategy he’d use to help his clients grow their wealth right now. And if you act quickly, it could change your life…