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Trebizond Investments sparks campus controversy
Trebizond Investments has sparked controversy ever since it arrived on campus last semester with the slogan, “Become the 1%.” But as founder Caspian Tavallali (SFS ‘14) put it, “any press is good press, especially when you’re a small company.”
This has proven true for the upstart student investment group. Perhaps more alarming than the premise of the slogan itself is how rapidly the group has grown because of it.
When GU Occupy “occupied” one of the group’s meetings last semester, there were only an estimated 30 members. Now, the so-called “future one percent” has grown to include 150 members who currently manage $65,000. GU Occupy member Madeline Collins (COL ‘13) sees this as a troubling sign.
“I think it suggests that there really are a lot of people who just want to make money for themselves and profit at the expense of others, and who don’t really care about the social implications of what they do,” she said. “There are aspects of this university that encourage that, which is an entirely different conversation.”
Speaking on behalf of her fellow Occupiers, Collins expressed disdain for the slogan.
“We saw the slogan as shameful and disturbing, because it suggests students, even invites students to enjoy profit regardless of the effects of their actions on the majority of people,” she said. “Not to mention that the slogan is essentially and inherently elitist in its glorification of occupying some upper echelon of society.”
The Georgetown University Student Investment Fund (GUSIF) echoed Occupy’s antipathy towards the provocative catchphrase. In an email statement, the club wrote, “We think that the actions/promotions [of Trebizond] are immature and do not stand for the beliefs of the investment community.”
Tavallali shot back, saying, “Obviously our competitors are jealous … A lot of GUSIF members are joining Trebizond; whether or not the management of GUSIF likes our advertisement campaign, it works.”
As for Occupy, the Trebizond founder says their accusations are mere misunderstanding. “[Occupy] shouldn’t be fighting us. We’re certainly not fighting them in any way,” he said.
Even so, GU Occupy is more disturbed by the ethical standards of the investment group than the slogan itself. Unlike GUSIF, which only invests domestically, Trebizond invests globally to increase the risk and reward of investment.
“We do look at all the aspects of the investment,” said Tavallali, “including, I guess, the ‘ethical’ aspects of the business. We haven’t invested in that many controversial industries.”
With America’s economy remaining sluggish, Trebizond looks elsewhere in for profit.
“We have invested in China,” Tavallali admits, “because it’s just a booming place, and when it comes to it … always the market decides.”
He commented on Nike and the famous case a few years ago that caused its stock prices to plummet. “You do need to look at all sorts of risks,” Tavallali said. “Especially these days where you know people are especially sensitive about these subjects.”
While the awareness of the financial effects of ethical misconduct of investments is standard business procedure, it does not necessarily display a concern for social or ethical issues.
“After pulling out of a company that has fishy practices, that seems to me like just one example of caring about the social and ethical implications of your investments. I don’t see any sort of systematic statement about their socio-ethical framework,” Collins said.
Tavallali responded to Occupy’s criticism with defiance. “Since when did capitalism become evil? Capitalism built this country, we’re just continuing that American tradition. We don’t do anything illegal, we’re very to the book, we have very good operating agreements that we all agree on.” Within the group members vote on which companies to invest in, including not just Chinese, but Vietnamese companies as well.
Trebizond’s decision to invest in the Vietnam Exchange Traded Fund, which includes various Vietnamese public companies, is another controversial point. “That’s a very high-risk area,” Tavallali said. “The communist government recently threw some capitalists in jail and the market fell five percent in one day. So, it does fluctuate, but obviously there’s huge growth potential.”
Risky as their decisions may be, Trebizond educates its members and employs democratic processes to make decisions, a system Tavallali describes as “progressive.” Unlike GUSIF, where “the old management, basically picks their friends to become the new management,” Trebizond votes for all board members and investment decisions. However, that is where the politics ends.
“We’re just about making investments,” Tavallali said. “Our top priority is profit, that’s business. But second, secondary priority is education.” Trebizond does not require a minimum investment from its members, although most students invest a few hundred dollars on average.
As for the slogan, Tavallali wanted to make it clear it was not intended to be offensive, but rather, “tongue-in-cheek.” He said the meaning behind the slogan was, “Aim high and maybe our members will become wealthy and build business and be successful.”
But that justification did not sit well with Collins.
“To me, it doesn’t seem to matter whether the slogan is tongue-in-cheek or not,” she said. “Because it’s usually offensive either way, maybe even more so if it’s tongue-in-cheek because it suggests that it’s making light of economic inequality, which is pretty shameful.”
Correction: an earlier version of the article identified Caspian Tavallali as a member of the School of Foreign Service (SFS) class of 2013. He is a member of the SFS class of 2014.