Let me first thank the reader who posted a comment with a link to a story indicating that, at the suggestion of Lehigh County Controller Mark Pinsley, its pension board has voted 4-2 to stop purchasing Tesla stock. It is also considering divesting what investments it has already made. Should NorCo's retirement board do the same?
I understand that Lehigh is sending a message - it's a big FU to Donald Trump and Elon Musk. But a retirement board has a fiduciary duty to the retirees and employees who contribute a portion of their salaries to their pensions. Any decision on the purchase of new stock should, in my view, be left to the discretion of the pension fund manager. In his view, this might actually be a good time to purchase Tesla stock.
As for divestment, that would almost certainly result in a loss and would be a breach of the fiduciary duty owed to retirees and employees.
That's my take. Feel free to comment if you disagree.
38 comments:
I surely agree that selling Tesla stock now is a foolish and probably losing proposition. More people need to understand, the longer term result in stock investing has been very good over time. Stocks move up and down . . . but mostly up over time. Remember, if you use a stock broker, he/she might be paid from making TRANSACTIONS. Any transactions.
As for Musk, his volunteer efforts have been greatly helpful in determining a design for an American future that will be spent digging out from outlandish, self-serving, wasteful, and sometimes illegal use of YOUR Federal tax dollars. Musk acted only as an Advisor. Musk organized and streamlined data. Musk made suggestions. Take those, or not.
Our elected officials in Congress have gotten out of control with spending. To make our dilemma worse, they have shown no real interest in straightening out our financial house. It can be done, but I believe we ALL need to get different people sitting in Congress.
Political grand standing stunts, like this one in Lehigh County, are not helpful to any of us.
If they wanna be good Democrats they should drop Tesla and invest in the next Solyndra or wait for a chance to invest in the next Enron. Another good bet would be Chinese Shipping container companies.
There shouldn’t be politics involved in municipal investment of pension funds. Period. Who the hell is some politician to decide what to invest in according to his political beliefs? Pure arrogance!
Can't blame them. Although, like him or not, betting against Musk has proven a terrible strategy. It's time to take a look at the entire portfolio and jettison any objectionable stocks. Are we invested in child grooming Disney? Are we invested in Big Pharma who pushed fake vaccines and drugs that damage children in the name of so-called gender affirming care? How about tech stocks that target kids with addictive apps? How about energy exploration and production companies that wreck our environment? How about any company that does business with China, which persecutes its Uyghur population? How about any company that does business with the Arab world, where LBGTQQIA++ are tossed from rooftops? Or, we can ignore these things and just try to make money, regardless of anyone's morals.
You are 100% correct Bernie. Northampton County has been rated as one of the best performing pension funds in the Commonwealth year after year. That's because the Retirement Board has always kept politics out of the system and has almost always followed the recommendations of the "investment advisor". When the fund performs well the taxpayers as well as the retirees benefit immensely.
Yes and divest itself of any tRump related businesses that he hasn't already bankrupted! So much losing, get in and let's go losing some more...
I love these liberals- they all loved Musk & were for saving the environment, until he supported Trump- now they burn Teslas! Damn the environment- what hypocrites!
Trump and Musk are two of the most despicable human beings on earth but I would leave the investment strategy to the advisor.
Yes. Republican or Democrat Tesla is a bad bet. It may go up a few points but it will take years to recover its market value. Also what Tesla is selling is a decade old design. It did not keep up to an evolving market worldwide, not just in the US. The Cybertruck was an ego project for both the manufacturer and the buyer, window dressing with little substance but lots of shock value. Sell it now, replace it with something safer, buy it back later if it recovers. As a corporation Tesla never fit into the Trump’s administration’s energy policies which favor high energy use and oil production. Twitter is a good example of how Musk can ruin value in a product by turning it into X. Common sense, ditch Tesla’s stock.
Tesla’s financials are collapsing. A factory in China with zero sales. European markets down drastically. The current Trump-Musk collaboration is alienating one of the wealthiest markets in the world - the EU - and that is not good for business. It is TERRIBLE for pension funds with fiduciary responsibility for the retirees it supports. Musk can lose half of his net worth and still be a multi-hundred-billionaire. Lehigh County retirees are as risk-averse. Regardless of the Pinsley comments, it is an appropriate decision.
At worst, DOGE is an 80/20 issue and Tesla is 60% made in the USA. Disappointing "leadership" of municipal funds.
For NorCo's sake, if the pension board does consider this I hope they notify the retirees and public of the possible vote, so they can speak to it, unlike in Lehigh.
FYI Politics was not a factor in this decision.
Unfortunately, one ambitious individual tried to frame it that way through an attention-seeking press release clearly aimed at trying to score a national headline.
According to multiple people who were actually in the room, the conversation was intentionally careful not to be driven by politics. Any press release circulated was NOT issued on behalf of—or representative of—the full retirement board.
Also worth noting: Like any good portfolio, the account includes both a managed component and an index component. It’s normal for the managed portion to be routinely reviewed and adjusted. Within the index portion, Lehigh County STILL holds a small amount of Tesla stock simply because it’s part of the S&P 500.
So no, this wasn’t political virtue signaling. Personally, I don’t care whether a stock is tied to liberal or conservative personalities—our fiduciary duty is to generate stable returns for 2,007 Lehigh County retirees who count on the fund. Period. Historically Lehigh Co. has done that under the guidance of money managers NOT politicians. Even through turbulent times.
These decisions should be totally objective, not political. And in Lehigh Co. despite what the controller implies that's the case.
Ron I have to tell you, given the current climate, and statements made by Plinsky and Josh Siegel, no one believes there was no political component to this decision.
I agree with you, decisions should be objective and apolitical. I trust you and County Executive Armstrong, I do not trust Plinsky or Siegel.
They should, not because of politics but because teslas stock is wildly overvalued and has terrible market indicators. The only reason it’s performed well in the past decade is first movers advantage and hype. Look at EBITDA or P/E ratio and its most recent earnings as well as year over year sales that are declining. The company doesn’t have sound financials and a has a stale product. It might hold its value for a year or two but with its bad intangibles AND politics playing into it now more than ever it starts to seem like a very poor investment choice especially for something that should be stable like a pension fund. Also most of Tesla like all of Elons companies are dependent on govt. contracts/subsidies so perhaps on Jan 20th 2029 the yo yo swings to D and all of those contracts and subsidies go poof since that’s the political games that get played now.
Agree 100%- shows the Dems as the hypocrites they are- they loved Musk before he bought Twitter, and exposed the liberal bias.
So are you!
Pinsley is a disgrace!
Great explanation.
Sell. Tesla was a good company that has been brought down by Musk. Most corporations have a clause in their board of director's, and top admin position contracts that state that the director will not engage in any behavior that would reflect negatively on the public image of the corporation and its products. An example of this would be the recent removal of the CEO of Olympus. So when some large personality has the power to affect the public's perception of the product it becomes a tough act to balance. Most people who buy Fords couldn't tell you who the current president of Ford is-- and that's ok. A little different but Opra Winfrey didn't save Weight Watchers.
Democrats get sillier and sillier. Can be entertaining.
Even though only a 4% interest rate for the last 10+ years for current employees?
And MAGAs keep creating distraction and feeding the narcissist……
Musk and his holdings were not political until he bought his way into federal funding and stolen contracts from under contract companies. It’s not even political, it’s maniacal that the man who talks to himself and the other man with all the wealth put their “let’s rule the world “ hats on, throw out any who oppose them, while plotting to destroy an established 250 year old way of life, called normal. Musk can fly his rockets straight to hell and the other guy should follow him like the lapdog he is.
I love the Republican hypocrites that laughed off Musk and really disliked his “silly” electric vehicles because they put dents in the pockets of their rich oil wealthy friends! Now he is a GOD to the Republicans for firing many good and hard working federal employees!
Never as entertaining as the circus currently taking up residence at 1600 Pennsylvania Avenue! LOL grab your popcorn whenever the Clown speaks! Always a good show! Sadly this terrible reality show should have been cancelled for good in 2021…
As great as your articles are at times it’s write ups such as this that may very cause the Retirement Board to face ridicule and pressure by many people that have no idea what they are even talking about. I envision hoards of uneducated financial “experts” packing the meeting crying and complaining about things that they have no knowledge of. This is the current issue with many boards, councils and such. People don’t care until they think they should.
As someone said earlier Northampton County’s pension fund is doing extremely well, I can care less what stocks they or their fund manager buy or sell, as long as the board continues to maintain a well funded account for current retirees and future retirees.
As many others have said, politics shall not ever play a role in these funds! I mean politics can wreak havoc on our 401k’s, IRA’s and personal investment accounts (thanks Trump), but should not and probably don’t play a role in these Boards decisions.
Dems wonder why they can't beat Trump-on the wrong side of every issue
Probably going to blame Trump and Musk for the selection of the new POPE
Tesla will rebound. The cars are electric, made in America, and the coolest thing you can drive. O to 60 in a blink. You can use a smartphone app to summon your car from the other side of the parking lot, and pick you up in inclement weather. They're the automotive equivalent of reusing rockets by landing them backwards where they were launched. There's a reason he was a darling of the left before embracing Trump. The reason is his visionary approach and the incredibly cool shit he build. Pinsley is a silly and bitter little man who wants to sell low, that which was likely bought high. That's some seriously moronic investment advice. Let's just stuff cash in a mattress. Haha. Remember, when you're selling low, I'm buying your mistake and making what might have been your money.
the cars are garbage and are being left behind by other manufacturers, just look at all the recalls that tesla has had they are junk
Pinsley is disgraceful
you'll keep losing elections- even w/ the legacy media on your side by being on the wrong side of the 80/20 issues
Ron @ 10:02: I can’t tell if you’re delusional or think people are idiots. There is no reason for the retirement board to make a decision on ANY individual stock. The county employs professionals to manage the funds and decisions on ANY individual stock holdings should be left solely to them. Those professionals should then be evaluated according to their net return relative to the market overall.
The stock market often changes rapidly, sometimes in a matter of minutes. There is no reality where any retirement board - which meets occasionally throughout the year - would be better equipped to make a decision on individual stocks more than a competent investment advisor. That’s what the taxpayers are paying those advisors to do.
I suspect that you are trying to give cover and attempt to minimize what was a blatantly political move on the part of some members of the pension board. That’s disappointing coming from someone who I think is one of the best commissioners currently on the board.
Musk is a strange, quirky, eccentric, and
Pinky and the Brain type virus that wants to rule the world by buying and bribing his way into the hearts of the weak. Texas gave him a city because they think he can fly them to another planet ! No, Tesla and Musk will soon be done ruining our lives and will be trying to propagate a new world order in Texas.
You sell. I'm buying. Look at TSLA's stock performance in the last week! Wow. I bought in last month at $239. It's about $300 now. Pinsley doesn't play politics as well as Musk runs businesses. Sell, sell, sell!
It’s an AMERICAN Pope, the Vatican avoided all tariffs lol.
Ditto - Trump and Musk are two of the most despicable human beings on earth. Musk isn’t even an American and goes around with chainsaw firing people, what a disgusting individual - who likes firing people? Oh yeah that’s supposedly Trump in his fake TV sitcom. Notice that he doesn’t fire his incompetent political pick. That’s virtually all of them. Wake Up America, these guys are clowns 🤡.
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