Tuesday, January 09, 2007

Why I Post on Things

In a brief look back at what I've posted on, I have noted a couple of things which someone who does not know me might think are just hobby horses. They aren't. They go to the heart of smaller investors having a fair chance to achieve their own financial goals through access to the good returns which the financial markets can provide for those who invest wisely and patiently. You see, getting those returns is my business.

I have written frequently about hedge funds. There is room in the world for them I guess. But they have huge clout and very little restraint, and serious potential for actions damaging to their own and other investors. Yes, the market will deal with a hedge fund which invests poorly, but I would really rather not have the world's financial markets go through convulsions with them in their death throes, if you don't mind. We get enough of those anyway.

I have written also frequently on the subject of shareholders' rightful interest in not having the corporate enterprise's earnings slashed by utterly fantastic manager pay, excessive managerial stock options, not to mention unscrupulous or illegal abuse of same. Corporate directors are before anything else the trusted stewards of the shareholders' property (the corporation, if you please) and should not forget that. Whether the stockholders are investing to fund their retirements, college for their children, or just to gainfully deploy the financial resources they have accumulated, they have skin in the game. A managerial "hireling" with big pockets and a short-term employment horizon should be seen as having a radically lesser stake in the corporation's earnings. Mutual funds have largely supplanted individual shareholders, for many valid reasons, but they should never feel that they have no responsibility to vote their shares wisely, and in ways jealously protective of their portfolio holdings' long-term investor returns.

The common theme: we all, as investors, need and require orderly financial markets, and good directorial stewardship in the Board Room.

I know one person who is rather cynical sometimes about things. He's pretty smart. I can almost hear him saying, "...you know, that really is the way it's always been, and it's the only way it ever will be, and you're too old to be sooooo naive." Well I would just say that there are two world views through which you can see how things are. I will take a "half-full glass" view, acknowledge the imperfections of people and organizations and try to do what I can. There is power in reason, and in communication. Improving things, even if just incrementally, is possible. That other view is no fun at all.

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