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Letter to Company CEOs from a Value Investor
Management | 4 Comments | Mon 03 Jan 2011
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Company chief executives have a difficult job and there is probably no end to the advice they are being offered. The average investor holds the stock for less time than it takes to implement a marketing campaign, and investment bankers and stock brokers of course are incentivised to line their own pockets. So who should a CEO listen to? This letter offers advice from the type of investor who examines fundamentals and sees himself as a long term owner of a business



Comments

1.
On 15/03/2011 10:28:10, VII wrote:
An interesting statement from Lubrizol management(recently acquired by Berkshire Hathaway) is quite instructive as to how many company management feel about the short term market focus: management state that the deal with Berkshire would allow them 'to focus on long term plans without the constraints of short term public market requirements.'

2.
On 27/01/2012 11:51:32, Anonymous wrote:
An interesting link on the subject:
Shareholders should scrap fancy pay packages for top bosses
http://www.ft.com/intl/cms/s/0/634181be-4769-11e1-b847-00144feabdc0.html#axzz1keZ6vZ43


3.
On 14/05/2012 23:47:01, Paul McNulty wrote:
This article from The Boston Consulting Group - 'The CEO as an Investor' has some useful insights. For example - along the same lines as the KPMG and McKinsey studies mentioned in the article:
'More than one-third of the $8 trillion of invested capital in the S&P 1500 does not earn the cost of capital. Over a five-year period, half the companies experience a significant write-off, divest a major business, or see a decline of 50 percent or more in company value'.

See the link to BCG article below:

https://www.bcgperspectives.com/content/articles/value_creation_strategy_corporate_strategy_portfolio_management_ceo_as_investor/

4.
On 18/10/2012 16:32:21, Paul wrote:
John Kay, who has experience of M&A transactions from many angles, writes a great piece in the ft on the often flawed rationale for acquisitions. See the ft link below and look out for Neil Woodford!

http://www.ft.com/intl/cms/s/0/5a37d888-16e0-11e2-8989-00144feabdc0.html#axzz29f890r9g

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