Investing in black entrepreneurship

As National Black Business Month begins in August, our first suggested activity is to take a look at investing in black-managed publicly-traded companies or mutual funds.

It could not be a better time for some of the firms we track regularly at, not only domestically but also internationally.

While the headlines trumpet huge loan losses at money center banks, investors and black consumers are looking much more favorably at community banks such as Carver Bancshares (CNY), Broadway Federal Savings (BYFC) and Citizens Bancshares (CZBS).   Based in New York, Los Angeles and Atlanta, respectively, each bank eschewed predatory lending and stuck to the traditional mortgage and business loan practices which have built credibility for decades.  The overall pullback in credit makes them a much more attractive option for black borrowers.

They are also likely to benefit from a new administration in Washington.  Despite the problems of Ways and Means Chairman Charles Rangel in recent stories, his advocacy of Carver’s Harlem market is likely to continue.    The federal bank deposit program for minority banks and community development lending initiative are likely to be expanded by Congress and approved by a new president, whether Obama or McCain.

The most visible black public company in the U.S. is RadioOne (ROIA) which owns radio stations in most major markets, launched TVOne cable channel, bought Tom Joyner’s Reach Media and most recently, the BlackPlanet web portal and a magazine. It now has the diversified portfolio to present nationwide multi-platform markets.    The campaign focus on black talk radio plays to RadioOne’s strongest suit. In fact, the company started with a single talk radio station in Washington, D.C., WOL, popularized in the movie last year, Talk to Me.

Other public firms such as American Shared Hospital Services (ASHS) launched by neurologist Dr. Ernest Bates and Telecommunications Systems Inc., (TSYS) created by Dr. Maurice Tose, benefit from biomedical and technology trends and potentially from national policy shifts.  In both cases, the firms have evolved into new fields, including international markets.

If you’re looking for an “Obama play,” or a stock which benefits from the Democratic nominee’s selection, it would undoubtedly have to be Ariel Investments.  Its three mutual funds, CAAPX, ARGFX, AFFFX, have been exceptionally well managed during its 25-year history, making founder John W. Rogers a respected columnist for Forbes magazine and president Mellody Hobson a commentator on ABC’s Good Morning America.  Rogers has been prominently identified as a major fundraiser and network builder for the campaign of fellow Chicagoan Barack Obama.

In coming days, we’ll also discuss why their is a silver lining to high gas prices in the U.S. for some African stock markets.


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