Charles Mizrahi: God, Capitalism, and ESG

Charles Mizrahi is a savvy value investor with a record of picking undervalued stocks. In a recent article he wrote about the connection between Biblical principles and capitalism, forces often considered to be at odds. He looks at values in both senses of the word.

Mizrahi wrote:

In this time of economic uncertainty around the world, we should not look for a global reset, attempt to undo the tenets of capitalism, or wait to see what the next round of government bailouts gives us.

We should instead be taking hold of the opportunities that American capitalism, based on thousands of years of Judeo-Christian principles, provides to each and every one of us: to work hard, invest, and thrive — and follow God’s commands to help our neighbors prosper.

In an interview, Mizrahi talked about the difference between the abilities of government and private enterprise, the increasing investor support for ESG priorities (environmental, social, and governance priorities) in their portfolio companies. Mizrahi offers a free 30-day subscription to his Alpha Investor newsletter, including his model portfolio and text alerts.

What can capitalism and free enterprise do that government cannot? What can government do that capitalism cannot?

We could talk extensively about all the ways that capitalism and free enterprise can accomplish things that the government can’t, but in such a conversation it’s important to remember that business and government have different roles. It is the confusion around where one should stop and the other should start that is often the source of the problem.

Government is designed to maintain the status quo. It only looks at systems that are already in existence and seeks to manage those. The government’s real role is to maintain the safety and basic infrastructure needed for citizens and their businesses to thrive and grow. Think of FEMA as an example, that’s where the government steps in effectively.

Capitalism is different because it’s designed to create growth. It is innovative and, by nature, looks to create new opportunities and systems for free markets to expand and grow. That’s why, in our current crisis, the free market is best equipped to help us innovate and…