The top 1% is not a stable group.....

Parent Cafe
41

<p>

If you are talking about individual shareholders, they are irrelevant, because most companies are mostly owned by institutions.</p>

<p>Example: </p>

<p>Google - 80%
Apple - 71%
BOA - 60%
Goldman Sachs - 69%
JP Morgan - 74%
Wells Fargo - 77%</p>

<p>You occasionally get individual shareholders who are so wealthy they can accumulate enough of a company to become a threat to the entrenched management, but this is pretty rare I think. </p>

<p>Why aren’t the institutions exercising their power?</p>

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<p>I think there
is some truth to what BCEagle91 says…but people can sell and stlll be mad. </p>

<p>I kind of like what you are saying notrichenough…</p>

<p>The people that run the institutions benefit by higher pay in the business world…and especially the financial world…so why would the people who run these institutions complain about the pay?</p>

<p>I also think there are some psychological aspects at play. I had a friend who was a stockbroker and the stock that he pushed the most blew up. I asked him if he received phone calls from irate clients. And he told me, “No. Not at all. I did get many phone calls asking for my next favorite idea.”. :)</p>

<p>The sentiment indicators have been skewing negative. I don’t know what shareholders have been doing lately…I think they are selling. There was heavy shareholder selling in 2008 and 2009. </p>

<p>This bugs me. I really think the economy is awful…but…with all this negativity…stocks may be a great investment now. Stocks have been pretty poor performers for a long time…( I know there are exceptions…Aapl for one). Overall though, as an investment class, US stocks haven’t performed well for over a decade. That is a long time for stocks not to perform well…could go longer…there are so many crosscurrents now…</p>

<p>How did I get so off track? :)</p>

<p>Anyway, I do think institutional ownership plays a part. I don’t think people understand the stock market too well.;)</p>

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<p>In the case of Microsoft, institutions have no power because the CEO owns millions of shares of stock. Ballmer is the worst CEO in America but no one can get rid of him because he owns so many shares.</p>

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I had a stockbroker friend do that with me except after that I never used him again. I don’t want to reinforce poor judgment (in this case on his part for making the choice and on my part for paying attention to him).</p>

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<p>“I had a stockbroker friend do that with me except after that I never used him again”</p>

<p>That’s good.</p>

<p>I had another friend who was a stockbroker…and he said you hadn’t made it as a stock broker until you blew up three books. ( a book is a list of your clients).</p>

46

<p>I reread a few posts…
I really like this…</p>

<p>“They all sit on each other’s boards. Dodd Frank is so weak and so irrelevent and didn’t even regulate or make derivatives transparent. Still, the CEO’s know this, and yet they rail against it…it’s wagging the dog. “Please, please don’t throw me in the briarpatch” they act as if they have been meaningfully regulated when they managed to avoid anything that would really change anything. It’s a nice trick.”</p>

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<p>Equity ownership will remain in institutional hands given the significant percentage of stored wealth in pension plans (public & private; domestic & foreign), 401Ks (generally held in mutual funds), endowments, sovereign wealth funds and mutual funds. Most individuals have exposure to the equity markets through mutual funds, which remains an efficient way to invest, given the diversification they offer and most individuals do not have the time, resources or investment knowledge to do this on their own. I do not see this situation changing, in fact, institutional ownership of equities will continue to rise (in my professional opinion). </p>

<p>With regards to executive bonuses, most are in stock options, not cash, which is a point the media typically overlooks. The value noted it the intrinsic nature of the option - the stock needs to go up for the executive to realize the value and be able to exercise them. In the current market, many of these options are not exercisable and fairly worthless. (An entirely different discussion is how some boards have lowered the strike price of these options, but that would be too political).</p>

48

<p>If you want to clean up the insider trading in the market, call bank loans and CDS (credit default swaps) securities, so that they are subject to governance by the SEC. This is where the hedge funds make quite a bit of their money and have access to investments that individuals do not. It is shameful how they get the inside info provided to bank loan investors and then turn around and trade the public bond’s CDS. This is legal.</p>

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<p>post #17…</p>

<p>Also…companies give out stock options…then companies buy back stock…</p>

<p>hmmmm…</p>

<p><a href=“http://blog.chron.com/lorensteffy/2011/06/are-stock-buybacks-really-worth-it/[/url]”>http://blog.chron.com/lorensteffy/2011/06/are-stock-buybacks-really-worth-it/&lt;/a&gt;&lt;/p&gt;

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<p>a mini AIG…</p>

<p><a href=“Dexia’s Collapse in Europe Points to Global Risks - The New York Times”>Dexia’s Collapse in Europe Points to Global Risks - The New York Times;

<p>So trading firms are going to be bailed out again…</p>

<p>"While American financial institutions have sought to limit any damage by reducing their loans and thus lowering their direct exposure to Europe’s problems, the recent rescue of the Belgian-French bank Dexia shows that there are indirect exposures that are less known and understood — and potentially worrisome.</p>

<p>Dexia’s problems are not entirely caused by Europe’s debt crisis, but some issues in its case are a matter of broader debate. Among them are how much of a bailout banks should get, and the size of the losses they should take on loans that governments cannot repay.</p>

<p>Among Dexia’s biggest trading partners are several large United States institutions, including Morgan Stanley and Goldman Sachs, according to two people with direct knowledge of the matter. To limit damage from Dexia’s collapse, the bailout fashioned by the French and Belgian governments may make these banks and other creditors whole — that is, paid in full for potentially tens of billions of euros they are owed. This would enable Dexia’s creditors and trading partners to avoid losses they might otherwise suffer without the taxpayer rescue.</p>

<p>Whether this sets a precedent if Europe needs to bail out other banks will be closely watched. The debate centers on how much of a burden taxpayers should bear to support banks that made ill-advised loans or trades.</p>

<p>Many on Wall Street and in government argue that rescues are essential, to avoid the risk of destabilizing the financial system — with one bank’s failure to pay its obligations leading to problems at other banks. But others counter that the rescue of Dexia is reminiscent of the United States’ decision to fully protect big banks that were the trading partners of the American International Group when it collapsed, a decision that was sharply questioned and examined by Congress. "</p>

51

<p>I notice the discussion went from cultural racism to corporate indulgence, but I’d like to swing back to the racism aspect for a moment.</p>

<p>When I first started teaching, I taught for a year in a public high school of 3000 students in east San Jose, CA. It was about 1/3rd black, 1/3rd Hispanic, 1/6th poor white, and 1/6th southeast Asian (mostly Vietnamese). </p>

<p>I taught a course called General Science, which was required for graduation (“one year of lab science”) and which students only took if they had flunked Intro to Science the year before OR if their guidance counselor in eighth grade recommended it OR if their parents mistakenly signed them up for it.</p>

<p>I had 96 students (3 sections of 32) and I had three white students–two of them 9th graders coming from private schools (clueless counselors), and the third a 12th grade alcoholic (I routinely confiscated his vodka-laden orange juice).</p>

<p>It became obvious to me, a nice white woman from the suburbs, age 37, highly educated in private schools and colleges, that the students I had were mostly clueless about the consequences of being channeled into General Science (as opposed to the college-prep track). They had no clue how to behave in class and in fact had never been asked to focus and learn. Many of them could not read and were obtaining no assistance in changing the situation. If I tested the students orally on the material–by doing interviews–most of them understood it quite well. If I wrote down the same questions, most could not read well enough to answer the questions. If I asked them to respond in writing, it got even harder.</p>

<p>I sent a lot of students for testing that year. A lot of them got special ed services for the first time in their lives.</p>

<p>Bizarrely, the school had an excellent special ed staff. But when I visited the reading program, most of the students there were white. So white kids got referred for special ed, but black kids, Hispanic kids, recent immigrants did not. </p>

<p>By the end of my year there–and I did not stay there–I was convinced that the visible migration of minority students into the non-college-track classes (the college track was mostly white, even though white students were the minority in that school) was not the result of individual acts of racism, but more the result of systemic cultural racism.</p>

<p>The students hadn’t really been discriminated against in first grade, when the teacher noticed they were struggling with reading just a little bit. Nor in second grade. But as time went on, it became easier to ignore the problem than to confront it and just pass the kids along to the next teacher. And at that point… it becomes cultural racism not to try to maximize each person’s educational potential.</p>

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<p>dmd77…I like your post…</p>

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<p>Made me think about some posts here:</p>

<p><a href=“http://www.nytimes.com/2011/10/23/opinion/sunday/social-inequality-and-the-new-elite.html?pagewanted=1&_r=1[/url]”>http://www.nytimes.com/2011/10/23/opinion/sunday/social-inequality-and-the-new-elite.html?pagewanted=1&_r=1&lt;/a&gt;&lt;/p&gt;

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<p>…</p>

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54

<p>I found this article to be of interest in light of the many concerns expressed on this thread and several others. </p>

<p>[Why</a> Companies Can’t Find the Employees They Need - WSJ.com](<a href=“Why Companies Can't Find the Employees They Need - WSJ”>Why Companies Can't Find the Employees They Need - WSJ)</p>

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<p>Beawinner…great link…thanks.</p>

<p>Interesting to read about companies and their lack of training programs.</p>

56

<p>No one else has commented on this, but dstark - I found your post #15 very enlightening. I didn’t know all that about Canada, but it sounds like a system that makes more sense than our American system.</p>

<p>Also loved beawinner’s link in #54.</p>

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<p>Lafalum84… Starbright wrote that. I liked that post too.</p>

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<p>I think it’s also interesting to contrast how companies don’t allocate resources to training while executive compensation soars above and beyond. It has also been stated elsewhere (although forgive me, I can’t remember now where) that many companies hire foreigners not as employees but as contract consultants to save money.</p>

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<p>oops - thanks dstark. Credit to Starbright.</p>

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<p>i cannot believe this thread is not locked yet</p>