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705. Re: Morning Metaverse Oct 30, 2013, 12:58 Beamer
 
Sepharo wrote on Oct 30, 2013, 11:48:
RollinThundr wrote on Oct 30, 2013, 11:42:
Beamer wrote on Oct 30, 2013, 11:33:
RollinThundr wrote on Oct 30, 2013, 11:27:
Wowbagger_TIP wrote on Oct 30, 2013, 11:23:
RollinThundr wrote on Oct 30, 2013, 11:17:
Beamer wrote on Oct 30, 2013, 11:15:
RollinThundr wrote on Oct 30, 2013, 11:14:
You're moving the goalpost, now it's only CEO's don't get fired, a minute ago it was no one in business ever gets fired.

No, no I am not. I am using CEOs as examples because they are high profile and it's easy to look at them - Johnny QA being fired never makes headlines.

But, to your point, in my first paragraph I say "President and VP," neither of whom are CEOs, and in my second paragraph I say "People," who certainly aren't CEOs.

Only my second to last sentence says "CEO." It isn't my fault you can't read and project that to all the lines you read before.

The reason they don't say fired is because they step down to save face, it's the same thing, if the share holders want a change, a change they get. Share holders being people, like you and me.

Lol. Most shareholders have little power over consequences for a CEO. They may step down after a major fuckup, but they're still gonna get paid tens of millions on the way out.

Because their contracts say that I'd imagine. Shareholders have more power than you think however.

When, in the last 40 years, has a change been brought about by shareholders other than someone with 5% or more of the company?
It does not happen.

Your belief in shareholder power is antiquated and na´ve. Only a very small amount of shareholders have any power, and these days it's almost exclusively fund managers. Most companies are somewhere between 15% and 33% fund held. Those funds hold power. The hundreds of thousands of other shareholders have no power at all relative to them (interestingly, do you know how tiny a portion of Americans hold any stock at all?)

Much like my believe in the Constitution right? Naive and antiquated?

"Oh shit I don't know what I'm talking about... NON SEQUITUR GO!"
"You can lead a horse to water but you can't make him drink because you're a liberal."

I love that he calls you cupcake, and that's ok, but when I did something similarly dismissive-but-not-aggressive he said "ADHOM" and didn't address the substance of the post.

In any case, this all makes sense, doesn't it?
47% of Americans own stock, give or take, but 10% holds 81% of shares. Per economist Edward N. Wolff at New York University, the top 1% owns 36% of shares, and the top 0.1% holds somewhere around 20% of all shares.

The remainder, that 19% spread around the 90% of America, is meaningless. Most of them hold through funds and aren't even sure what they hold. Even the ones that do tend to be holding on long-term, in many cases "married" to their stocks, and not really following them day to day and certainly not paying attention to internal politics of the company.
You'd need to get 25% of them, for about 5% of the stock, to really make any waves. Good luck getting 25% of 90% of America to rally behind getting rid of a CEO. Getting any kind of mobilization of enough people holding a few shares to get any kind of notice is pretty much impossible. You'd need tens of thousands, if not millions, of shareholders to add up to the 5% needed for someone to pay attention. Good luck there. Seriously, good luck with it. Outside of flukes where the company is doing something so bad that it is unquestionable and not at all defensible good luck with it.

Actually, I'm not sure if fund-held stocks count in that 19%. Thinking about it, it likely doesn't, so that 19% actually chose to buy that stock.

Contrast that with everyone else holding. MSFT, for example, is 68% fund held. Vanguard alone holds 5% - only about 10% less than Bill Gates holds. If Vanguard wants something changed, the fund manager, the one guy that controls that 5%, will get listened to. And, if not, he calls State Street, Blackrock, Capital Research and Capital World. Now those 5 combined hold over 15% of the stock. 5 people represent 15%. They get listened to.

And, of course, here's where the fun really begins. Vanguard's conservative growth fund holds over 1% of MSFT. Let's say they begin short selling MSFT with their aggressive fund. It's aggressive, it moves fast, whereas the conservative one is in for the long haul, so this can make sense. But now Vanguard complains about something, and threatens to sell that 1.X%. Ultimately they do, flooding the market with more supply than there is demand, dropping the stock immediately. The guy in charge of the aggressive fund buys low, covering his short. Vanguard, now seeing the depressed price, buys low, because Microsoft is now undervalued. In a single day, doing something like that, they can create massive wealth for themselves by literally taking it from every other shareholder.
 
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