Economics, Videos

JUST Capital’s Paul Tudor Jones: Fixing Social Tumult?

Does investing have to be fundamentally amoral? Visionary billionaire Paul Tudor Jones doesn’t think so. Find out how his work is bringing “justness” to the corporate world in his interview with Jim Cramer.

Paul Tudor Jones social tumult

JUST Capital’s Paul Tudor Jones: Fixing Social Tumult? | Mad Money | CNBC

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 hedge fund letters, conference, scoops etc

Transcript

So five years ago it was apparent even then I think that capitalism need to be modernized. You could just see the wealth disparity even at that point in time was getting something that was causing social fissures and ruptures in our society. Fast forward to where we are today. Obviously I don't think I've seen this kind of social tumult since I was a kid in the 60s and 70s so it's. And so we need to change things. How are you going to get social change. OK. So the biggest way is there's a 19 Treon dollar private economy is four times the size of that public sector it's 40 times the size of the philanthropic sector. If we're going to have true social change it's going to come through the private sector. And I think that's where just capital comes in and boy now's the time we need it. I just saw this. I just saw this poll 51 percent of millennials from 18 to 29 either don't believe or are opposed to capitalism.

Yeah your show's going to have a viewership of about 15 and about 10 or 15 years. Now we've got to change that capitalism is a force of good businesses no good.

No. But what we're off the tracks right. You got so we got half the country left behind so here's what we did. So the way that you change things is that you've got to first go to the American people and that's what we did. We said what can what is it that you want to see that defines corporate just. And we went five years ago we began polling since then we polled over a thousand Americans and we found out from them what are the key drivers and social and corporate justice that define a just company.

They got workers customers products environment jobs communities leadership and shareholders in that order.

Yeah. So the most interesting thing. The reason why this is really interesting to your audience is that if you take the top three things that the public cares about and the first is worker pain treatment. Do you pay a living wage you pay him a good wage and you treat him well. Secondly the products are socially beneficial products with a reasonable price and reasonable cost and the just like. And then how do you treat your customer along with sales change. Are they always right which they should be. Those three things comprise 60 percent of the metrics in our index. So then we took those metrics that we every year we polled the public and reconfirm that thing is we found the same thing. It's the same metrics over and over again and then making difference whether women are men rich or poor old or young they all say the same thing.

And number one most important worker pay interest does it does it does it make sense that therefore they get the best people which therefore produce the best products and therefore produce the best stuff. All right.

So get this. If you take those just those three metrics the other is important. You take those three metrics just like you said it's a great business model. So then we take we took the run of the 1000 largest companies Russell 1000. We break them up into the individual sectors and then we take the top half of each sector. Every year we rank take the top half and that composes just index which this ETF tracks and so our people are watching if they feel like you do they buy shares and just now hold on. OK here's the punchline. On average those companies earn 7 percent more return on equity than the ones in the bottom half. And of course you know returns on equity translates to be.

Higher prices. We know what this says to me. This is an index with a heart.

Well here's a chance to do it to do good feel good and hopefully.