The children apparently have fallen in love with the whole divestment thing. BDS is an especially prominent and insidious case. But there are a ton of other divestment movements floating around in the higher education circus. Fossil fuels. To which you can now add Turkey:
According to the Daily Bruin, "the undergraduate student government voted 12-0-0 Tuesday to pass a resolution that calls for the University of California to divest from investments made in the Republic of Turkey." See http://dailybruin.com/2015/01/21/usac-passes-resolution-for-uc-to-divest-from-the-republic-of-turkey/. 12-0-0!
...Gun control activists in the national Campaign to Unload group and student governments — horrified by the May rampage that left seven dead at Isla Vista near UC Santa Barbara — are now seeking a more formal ban on weapons industry investment and better public disclosure...
The Regents actually did divest from guns after the Sandy Hook (Connecticut) shooting so apparently this campaign wants something more. It's not clear what that is.
All this despite the fact that divestment doesn't work and has very high costs:
A London Business School Institute of Finance and Accounting working paper called "The Effect Of Socially Activist Investment Policies On The Financial Markets: Evidence From The South African Boycott concluded:
"We find that the announcement of legislative/shareholder pressure of voluntary divestment from South Africa had little discernible effect either on the valuation of banks and corporations with South African operations or on the South African financial markets. There is weak evidence that institutional shareholdings increased when corporations divested. In sum, despite the public significance of the boycott and the multitude of divesting companies, financial markets seem to have perceived the boycott to be merely a 'sideshow.'"
Another paper, "The Stock Market Impact of Social Pressure: The South African Divestment Case," from the Quarterly Review of Economics and Finance in fact found:
"Using the South African divestment case, this study tests the hypothesis that social pressure affects stock returns. Both short-run (3-, 11-, and 77-day periods) and long-run (13-month periods) tests of stock returns surrounding U.S. corporate announcements of decisions to stay or leave South Africa were performed. Tests of the impact of institutional portfolio managers to divest stocks of U.S. firms staying in South Africa were also performed. Results indicate there was a negative wealth impact of social pressure: stock prices of firms announcing plans to stay in South Africa fared better relative to stock prices of firms announcing plans to leave."
In sum, divestment may make activists feel all warm and fuzzy, but the evidence is that (1) it has no significant effect on the target of the divestment campaign but (2) likely does harm the activists' portfolios.
As the Manhattan Institute's James Copeland explained in reference to an anti-semitic effort by the Presbyterian Chiurch (USA) to embrace the BDS movement, these results are entirely consistent with financial theory:
"Unlike a boycott in a traditional goods market, the sale of a stock or bond in a financial market in sufficient volume to affect its price makes it more attractive to a buyer who doesn't care about the divester's social cause. These buyers will bid the price back up to its equilibrium level, the risk-adjusted net present value of expected free cash flows from the instrument. So whereas a goods boycott can be effective under certain conditions, a stock divestiture never can unless there is insufficient liquidity on the other side, a highly dubious condition in our financial market. The Presbyterian Church may have $7 billion in financial assets, but that's hardly a sufficient sum to control financial market pricing."
As the UCLA Faculty Association blog observed of this ongoing stupidity:
So apparently there was not a doubt that it is a Good Thing to use the pension fund for political statements at a time when a) the pension is underfunded, b) there is a UC Regents dispute with the state over the state's responsibility to fund the pension, c) employer and employee contributions are being raised at UC to cover the pension liability, and d) students are wondering if in some way their tuition will go up to help pay for that liability. Interesting!