Sudan and Misguided Activism

Misguided Activism Abounds About Darfur
By Cody Willard
RealMoney.com Contributor
5/18/2007
URL: http://www.thestreet.com/p/rmoney/codywillardblog/10357768.html

David Weidner of MarketWatch.com posits that the world will be better off when Warren Buffett is gone.

Oh, do I have a "flip it" for him. The world will be better off when David Weidner is gone.

Weidner says he wants Warren Buffett to show he cares about the genocide in Darfur by selling Berkshire's (BRKA) investments in PetroChina (PTR) , which is controlled by the government of China, which in turn does business with the government in Sudan, where Darfur is located. Weidner says that Buffett "shot down a series of do-gooder proposals that would have required the company to spare some profits in the name of social responsibility, and maybe saving a few lives."

How the heck does forced liquidation of the few cash-generating businesses in Sudan "do good" for anyone? People care about their investments, so shouldn't we want more investments in Sudan rather than fewer? If you had some real money on the line in Sudan, you'd probably follow the news and be much more active in pursuing sustainable economic foundations for the country. Those economic foundations can only be self-sustaining if they're profitable -- by definition.

Ignore those shortsighted activists who claim they're doing good for the world by forcing private investors in the developed world to leave war-torn areas. As Buffett himself asked these Darfur disinvestment activists: "Proponents of the Chinese government's divesting should then ask the most important question in economics, 'And then what?'"

If we leave -- if Warren Buffett leaves -- these areas, Sudan will only become more isolated. The corrupt factions will have more power and access more capital.

I'm considering starting a fund called "Blood in the Streets, LP" to invest in these types of war-torn areas. There is, heartbreakingly, literal blood on the streets in Sudan. And on top of it, people like Weidner are pressuring good, self-sustaining capitalists and investors to sell their assets in these countries, driving prices below even the ridiculously low fair value at which they'd otherwise be valued. Smart investors want to be on the buying side of pressured liquidations.

Anyone who would put money into such a fund will certainly be all over the U.S. government and the rest of the world to make sure they, along with the individuals suffering in Darfur, have opportunities to get a return on what they put into the country. That's virtuous for everyone except the bad guys killing hundreds of thousands of people in Sudan.

Let's discuss this in the Answers section on Stockpickr.com. If nothing else, more awareness and more discussion of the Darfur tragedy are certainly positives.

At the time of publication, the firm in which Willard is a partner had no positions in the stocks mentioned, although positions can change at any time and without notice.