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The HIP Investor Hardcover – April 7, 2010
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A new breed of investing that combines making more money and making a difference
First there were the "Profiteers," investors who sought to make money regardless of the cost to society. Then came the "Do-Gooders," investors who avoided "bad" companies and supported "good" ones, based on philosophy over financials. Now this book introduces a brand new breed of investor: The HIP Investor.
Written for those who want to profit handsomely while also building a better world, it will help you discover companies that are boosting the bottom line by solving key human needs through innovative products and services-benefiting customers, engaging employees, and delivering sustainable, profitable growth for their investors. That's the Human Impact + Profit, or HIP, approach.
In The HIP Investor, R. Paul Herman-creator of the HIP methodology-introduces a revolutionary system that allows investors to profit and make a positive impact. It values measurable results over policies and philosophies, and shows how higher-performing companies can deliver both human impact and profit for shareholders. This book
- Provides a compelling, easy to use "investor tool-kit" so you can quickly "HIP" your portfolio
- Reveals the three questions you should ask when looking for a company to invest in
- Illustrates how world problems can be solved for profit by companies and investors making informed decisions
You can make money while making a difference, and The HIP Investor is here to show you how.
- Print length352 pages
- LanguageEnglish
- PublisherWiley
- Publication dateApril 7, 2010
- Dimensions6 x 0.99 x 9 inches
- ISBN-100470575123
- ISBN-13978-0470575123
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From the Inside Flap
Is it possible to make bigger profits while building a better world? Yes, if you are a HIP investor. Most investors have focused on a capitalist approachchasing short-term financial gains, but risking societal, environmental, and economic stability. An increasing minority follows a socially responsible philosophyexcluding "bad" companies from their portfoliothat often leads to lower long-term returns. A third way, transformational for the investing world, is revealed in this book: a "HIP" approach that can realize the bigger profits that capitalists seek while building a better world that the socially conscious desire. HIP stands for Human Impact + Profit. With this book, you'll discover exactly how to incorporate it into your investment portfolio.
In The HIP Investor, R. Paul Hermancreator of the HIP methodology and a leading investment managerintroduces a systematic approach for investors that is designed for more attractive profits and positive human, social, and environmental impact. Based on comprehensive research of the S&P 500, HIP assesses and values measurable results over well-intentioned policies and philosophies, and shows how higher-performing companies can deliver both human impact and profit for shareholders. This HIP approach is shown to outperform the financial returns of the S&P benchmark in both up and down markets.
Written for investors of all types and their financial advisors, this detailed guide will help you construct a portfolio of firms that are boosting their bottom line by meeting five core human needs. Leading firms benefit customers, engage employees,??and deliver sustainable, profitable growth for their investors through innovative products, measures, and decision making. Each chapter reveals a fundamentally strong analytical approach enriched with real-world case studies that show you how your portfolio can capture substantial financial returns and generate positive impact while also mitigating risks.
As a reliable resource for investors, The HIP Investor:
- Provides a new set of questions and tools to build a solid HIP portfolio across all asset types, including stocks, bonds, and real estate
- Outlines "the new fundamentals" of investing and how to perform a full quantitative assessment of a company's Human Impact + Profit potential
- Highlights which companies in the S&P 500 are the most and least HIP, based on their products, metrics, and decision making
- Shows you "how to be more HIP" in how you invest, where you work, and what you buy
- And much more
If you're looking for a fundamentally strong, long-term systematic approach to your investments that can generate attractive profits for your portfolio while building a better world, this book has the tools you need to succeed. After reading The HIP Investor, you'll discover how to position your portfolio, your company, and your life for more Human Impact + Profit.
From the Back Cover
Is it possible to make bigger profits while building a better world? Yes, if you are a HIP investor. Most investors have focused on a capitalist approachchasing short-term financial gains, but risking societal, environmental, and economic stability. An increasing minority follows a socially responsible philosophyexcluding "bad" companies from their portfoliothat often leads to lower long-term returns. A third way, transformational for the investing world, is revealed in this book: a "HIP" approach that can realize the bigger profits that capitalists seek while building a better world that the socially conscious desire. HIP stands for Human Impact + Profit. With this book, you'll discover exactly how to incorporate it into your investment portfolio.
In The HIP Investor, R. Paul Hermancreator of the HIP methodology and a leading investment managerintroduces a systematic approach for investors that is designed for more attractive profits and positive human, social, and environmental impact. Based on comprehensive research of the S&P 500, HIP assesses and values measurable results over well-intentioned policies and philosophies, and shows how higher-performing companies can deliver both human impact and profit for shareholders. This HIP approach is shown to outperform the financial returns of the S&P benchmark in both up and down markets.
Written for investors of all types and their financial advisors, this detailed guide will help you construct a portfolio of firms that are boosting their bottom line by meeting five core human needs. Leading firms benefit customers, engage employees,??and deliver sustainable, profitable growth for their investors through innovative products, measures, and decision making. Each chapter reveals a fundamentally strong analytical approach enriched with real-world case studies that show you how your portfolio can capture substantial financial returns and generate positive impact while also mitigating risks.
As a reliable resource for investors, The HIP Investor:
- Provides a new set of questions and tools to build a solid HIP portfolio across all asset types, including stocks,bonds, and real estate
- Outlines "the new fundamentals" of investing and how to perform a full quantitative assessment of a company's Human Impact + Profit potential
- Highlights which companies in the S&P 500 are the most and least HIP, based on their products, metrics, and decision making
- Shows you "how to be more HIP" in how you invest, where you work, and what you buy
- And much more
If you're looking for a fundamentally strong, long-term systematic approach to your investments that can generate attractive profits for your portfolio while building a better world, this book has the tools you need to succeed. After reading The HIP Investor, you'll discover how to position your portfolio, your company, and your life for more Human Impact + Profit.
About the Author
R. PAUL HERMAN created the HIPSM methodology for investors worldwide to realize Human Impact + ProfitSM. Herman advises investors and manages portfolios (including the HIP 100 Index) using "The HIP ScorecardSM" featured in Fast Company magazine and at www.HIPinvestor.com. Herman's financial acumen was honed at the Wharton School and McKinsey & Co., and he accelerated social entrepreneurs at Ashoka.org and Omidyar Network. Herman advises leading corporations (including Walmart and NIKE) and foundations on how to be more HIP. His insights have been quoted in the Wall Street Journal, Fortune, Forbes, BusinessWeek, and on CNN and CNBC.
Product details
- Publisher : Wiley; 1st edition (April 7, 2010)
- Language : English
- Hardcover : 352 pages
- ISBN-10 : 0470575123
- ISBN-13 : 978-0470575123
- Item Weight : 1.26 pounds
- Dimensions : 6 x 0.99 x 9 inches
- Best Sellers Rank: #3,185,133 in Books (See Top 100 in Books)
- #3,220 in Business Ethics (Books)
- #5,984 in Environmental Economics (Books)
- #6,275 in Introduction to Investing
- Customer Reviews:
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About the author

R. Paul Herman* is a globally recognized leader in investing that pursues positive impact and profit. Herman founded and leads HIP (Human Impact + Profit) Investor, which licenses more than 125,000 impact investment ratings of stocks, bonds, REITs, and funds to investors, investment advisors, wealth advisors, fund managers, hedge funds, fiduciaries, and retirement plans, including 401(k)s. HIP’s Impact and ESG Ratings have helped drive the Peter Drucker Index and Newsweek's Green Ratings. HIP Investor's Portfolios and Strategies focus on “great places to work,” sustainable real estate, global dividends, and sustainability leaders.
Herman’s 2010 text-book, e-book, and audio-book "The HIP Investor: Make Bigger Profits by Building a Better World" is published by John Wiley & Sons), and is included in 28 university, MBA and MPA curricula worldwide on finance, capital markets and impact investing. Nobel Peace Prize winner Muhammad Yunus highlighted HIP Investor's impact scorecard as a "new yardstick for business" in his book, "Creating a World without Poverty: Social Business and the Future of Capitalism" (Public Affairs, 2008).
Herman and the HIP team have advised leading companies, including Walmart, Nike, Cisco and Charles Schwab, on measuring sustainability and how it drives business value; and advised cities across the USA and Canada on how to fund and finance climate action plans.
Herman is a graduate of the Wharton School of Finance at the University of Pennsylvania, advised Boards and executives while with McKinsey and Company, found and funded social entrepreneurs at Ashoka.org, and shaped and measured impact investments at eBay founder Pierre Omidyar’s Network. Herman is an advisor to the Sustainability Accounting Standards Board (SASB), Net Impact and Sustainable Brands.
Born in Chicago, Herman has traveled to 40 countries and has lived in Philadelphia, Washington D.C., New York City, Mexico City and Sydney, Australia. He now resides in his adopted city of San Francisco, with his wife Gayle Keck, an award-winning travel and food writer and branding expert.
* R. Paul Herman is CEO, a licensed Series 65, and a registered representative of HIP Investor Inc., an investment adviser registered in California, Washington, and Illinois.
Photo Credit: (C) Laura Read, 2010
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Herman identifies five elements for scoring on the human impact side. It starts with the basis of healthy people. Customer satisfaction, employees' satisfaction and retention as well as safety, wellness, safety and health for all stakeholders including community. Herman suggests these as good indicators of the ability to maintain a brand as well as a market. He takes Henry Ford's axiom of, "paying a good wage to workers so they can buy his cars," to the next level. You need a healthy community and workers to be your market. The business is valued and viable when its customers, workers and community can count on it.
The second element is wealth of the system. These are mostly familiar indicators but adding them into be measured as part of a scorecard to good investing is brilliant. Wealth is described as: Employee's future savings and retirement; pay relative to peers in the industry; CEO compensation relative to average staff pay and investment made by the company in the community. The idea here is, that companies need to build wealth for employees and the community as well as themselves and seems to be highly correlated with profitability of the company.
The Earth is a more familiar ground for responsibility efforts. Herman gives us four main driers he believes are good indicators for Earth impacts--the reuse of waste, water efficiency, energy efficiency and greenhouse gas emissions.
Equality is an interesting fouth arena for assessing the HIP company. Herman found correlations between diversity in customer base, Board makeup, employees and supplier mix, with that of financial performance. There has been a lot written on employee diversity and creativity, (also customer because it means you are less trapped in one niche) but having Board diversity is added into this mix is new. It makes sense. It is amazing to see that having a mix of women and ethic groups in the Boardroom makes a difference to profitability as well as ethical decision making. It confirms a lot of intuition.
The fifth arena is Trust. It was added after examining the oil industry more deeply and finding it wanting. Trust metrics include openness to being interviewed, and third party certifications for transparency. The other two indicators of trust are legal actions in which a company becomes embroiled and the degree and nature of their lobbying efforts. High levels of either of the last two categories, relative to revenue, are flags to call for more investigation.
That is the human impact framework on the system. The rest of the book is demonstrating how to build a portfolio that takes all this into account in making investment decisions. HIP Investor making it clear how connected the positive human impact is to higher valuation of the company. Herman gives you sources for how to get the information you need to build a thoughtful portfolio based on his five elements. And to make sure it is understood as very doable, Herman sets up a handful of side by side comparisons of companies: Pepsi and Coke, Proctor and Gamble and Colgate; J. P Chase and Bank of America; Verizon and Sprint; McDonalds and Starbucks; Chevron and ExxonMobil; Microsoft and Apple; Wal-Mart and Target Raytheon and Lockheed Martin; and finally Dow and DuPont. They are compared directly on the five human impact measured as well as the financial measures. You have to read the book to get the answers.
I highly recommend it not only for investors, but also for managers and executives to use in assessing themselves. That is before their investors do it for them. I have a followup Q & A with the author on my blog [...]
Yes, impact investment is an important and useful knowledge area to explore; there are just better sources for it. ( Example: anything by David Chen). The book puts down all other forms of impact investment, relies on anecdotes too heavily to prove its point, gets some basic economic definitions wrong ( that's NOT how you define an externality), and is all about selling their approach and their investment consulting services to you.
