Yesterday's New York Times had an article on the graduating Harvard MBA class. About 20% of the class have signed off on an ethics oath, which you can find here:http://mbaoath.org/If you follow the lead, you will find the list of what these students have promised to do:I will act with utmost integrity and pursue my work in an ethical manner.I will safeguard the interests of my shareholders, co-workers, customers, and the society in which we operate.I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and...
Stockholder democracy...
Today's New York Times carries an article on shareholder democracy that illustrates why there are shades of gray even with proposals that seem absolutely cut and dry at the outset. This one has to do with the proposal from the SEC, allowing institutional investors to propose board members who would then be listed in the proxies that companies send out to stockholders. (Only investors who are not interested in doing an acquisition and have held the stock for more than a year can propose new directors, and even then, only 25% of the directors can be challenged) The idea seems unexceptional. Until...
Keep it simple!!
While I took issue with a great deal of what Mr. Buffett said in the last post, there is one point on which I completely agree. Keep it simple! In my valuation classes, I begin my class by promoting the principle of parsimony. In the physical sciences, this principle (also known as Occam's razor) specifies that when trying to explain any phenomenon, you start with the simplest possible explanation before moving on to more complicated theories.In valuation, the principle of parsimony calls on us to use the simplest possible model to value any asset. However, there is a catch. The definiton of simplest...
Buffett and Munger... Shock value!
Berkshire Hathaway is having its annual meeting and the financial press is falling all over itself reporting what the sage from Omaha has to say about investing. Let me say at the outset that I have expressed my admiration for what Warren Buffet does well - the fact that he has a core philosophy that he does not deviate from and his instinct for going against the grain. Over time, he and Charlie Munger, who has operated at his right hand for decades, also say things for shock value to indicate how separated they are from both academics and other portfolio managers. Here is a listing of quotes...
