Socially responsible investing

A group that opposes the atrocities in Darfur is pressuring investing companies like Berkshire Hathaway into divesting shares in companies that are involved with the country. The problem with this is, of course, that if a profitable stock is shunned by investors, its price drops. Presumably, its profit per share will be constant (that is, the company won't change its actions to comply with its former shareholders), meaning that a profitable stock will now be even more attractive to investors without similar qualms. The more investors who refuse to own the stock for moral reasons, the more immoral investors can profit. This is simple economics.
Does this mean that so-called "socially responsible investing" is a bust? Probably not. We can assume that those who are making these choices are making them on some sort of Kantian basis: they ask themselves whether a world in which everyone invested merely according to profit would be one in which they wished to live, and answer in the negative. But there are other options. One tactic is to use shareholder votes to affect the choices that companies make. Unions, for instance, have been purchasing shares in certain companies in order to force them to improve their business practices. Unfortunately, I suspect this tactic would not work in the present situation because the Chinese company that is engaging in the questionable behavior probably does not afford many decision rights to its shareholders; i.e. because the Chinese economy is insufficiently capitalistic, shareholders do not have the right to tell companies what to do.
Finally, some companies' actions are morally controversial, meaning that there are actual debates as to whether they are right or wrong. Take Caterpillar, for instance: the Episcopal Church and others have taken money out of this fairly successful stock because it sells the bulldozing equipment that Israel uses to destroy Palestinian houses. Supporters of Israel and its actions will presumably have no objection to buying the stock and profiting more from it than they would otherwise. Similarly, those who have no moral issues with vice stocks (alcohol, guns, defense and tobacco) can invest in the extremely successful Vice Fund.
Investors need every tool they can get to beat the market. This is because we can presume that stock prices reflect the decisions of people who have a very strong interest in knowing how their investments perform and who pay a lot of attention to news and upcoming events. Insider trading is so profitable because those who do it have information that others don't; they can beat the market by knowing important events sooner. If socially-responsible investing is prevalent, investors without morals also stand to make a significant amount of cash.
How do we apply this? Find out what companies are being shunned for what reasons. Some of those reasons you probably feel are justified--for instance, the activity in Darfur is unconscionable. What you do with those stocks is a hard question and I think I've outlined reasons for not investing them and the consequences of not investing. But the easiest thing to do is find a stock that is being shunned for reasons with which you disagree . I support the right to produce and consume alcohol and tobacco. If others don't, they can shun the stocks while I invest in them. They will only be helping me, someone with whom they disagree, make a large profit. Thanks, Christians!

UPDATE:
Here's an excellent article on the issue by Daniel Gross of Slate. Via that article, here's a chart that puts "The Ave Maria Catholic Values Fund" against The Vice Fund. The upshot: moral investing may be profitable, but vice investing is as well.