Comments on: Shareholder confidence vs. value investing http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/ Wed, 16 Nov 2016 01:37:11 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Allison http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5938 Wed, 19 Aug 2009 13:36:05 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5938 I know proper care by Investment Advisors involves speaking frankyl about the risks that buying certain companies entails. Shareholder confidence should be a value on par with price earnings and/or credit rating etc.
Allison

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By: Ajay http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5571 Fri, 31 Jul 2009 13:49:21 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5571 Brendan Wood International identifies TopGun performance in the capital markets. Identifying TopGun investment bankers, CEOs, CFOs and Boards of Directors reflects the “voice of the client” in investment banking deals, and the “voice of the shareholder” in terms of confidence expressed by 2500 institutional shareholders in more than 40 countries. There is a lot of due diligence that goes into these nominations. Not only does Brendan Wood International monitor the performance of TopGuns in the capital markets, but it identifies the financial strength and measures the quality of disclosure management puts forward. These are all critical aspects of analyzing investor confidence in general. The Brendan Wood International Shareholder Confidence product is a perfect tool for any investor seeking a new direct approach to doing due diligence on any company.

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By: Josh http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5569 Thu, 30 Jul 2009 17:55:40 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5569 Clearly the shareholder confidence study perpetuates the real instrinsic “value” of a company. Investors take note, shareholder confidence needs to be at the forefront of decision making.

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By: Weishi http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5565 Wed, 29 Jul 2009 18:41:29 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5565 The relationship between the shareholders’ confidence and the value of companies is a direct ratio relation. The more confidence that the shareholders have the value of the company will be higher. The versus is the same. I won’t touch anything that I am not confident with or not understand well. Companies should be ready to be transparent to the investors if they are going to go public.

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By: Black Chihuahua http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5560 Wed, 29 Jul 2009 14:55:35 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5560 Shareholder Confidence? …perhaps we should really be digging at the truth of what that means. Confidence is a relative term. I am a finance instructor and when students get good grades, they love me, have confidence in my abilities as a teacher, tell me that I am the best professor in the world and are lining up to take other courses with me. The students, who perform poorly, make it very clear to myself, my superiors and who ever will listen that I am a poor instructor, have no understanding about the subject matter being taught and that they wasted their time by coming to class and would have performed better had they stayed home and taught themselves. Now translate that into the world of stocks…an investor is going to look at a company’s fundamentals, the track record of the company getting good returns and have confidence that if they stay invested, the company will continue to deliver on those returns. When that company hits a rough patch, investors’ confidence will dwindle as the company falls short on delivering the EPS and returns forecasted. And it is off to the races with a sell off. Investors only love and have confidence in the immediate short run – what they made today. In my opinion, the total return in any investment is comprised of two parts – the expected return (based on fundamentals and what the company forecasts) and the unexpected return or surprise element (being a company having to deal with unexpected issues such as interest rate changes, political uncertainty, etc.). Currently, it appears that investors over the years have conveniently forgotten that the markets throws us curves balls every now and then and have placed their confidence in the expected return. Investors ignore risk and a company’s ability to deal with risk. If it appears that they will not make the same return today as they did yesterday, they sell.

If a stock delivers the promised EPS, we, the investors, love it. We praise the CFO and put the CEO on a pedestal. My next comment is not to insinuate that the role of a CEO is easy, but if a company does not have any obstacles, be it self imposed or market/economy imposed, if it does not have to deal with unexpected surprises then it is easy to deliver on the results the company has forecasted. The realty is that when surprise knocks at the door of many of the companies that we as investors claim to have confidence in, the CEOs will and do fall off their high thrones. Investors had confidence in AIG, Fannie Mae, Chrysler, Bear Sterns, Lehman Brothers…and looked what happened when market forces came knocking. Perhaps we are placing our confidence in the wrong place? Perhaps we have placed the wrong CEOs on the pedestal. In my opinion, our confidence should lie in the companies that are able to deal with market turmoil, unexpected surprises, and still get the job done and still deliver at the end of the day, even if the delivery is $1 dollar short Those are the real and true masterful CEOs.

And if you were any at all concerned about the CEO getting hurt when he fell off his throne…not to worry. A golden parachute caught him on the way down. And did I mention that he had short positions on the very same company that he asked us investors to have confidence in? So, he is doing okay. His wife is still able to get her manicures, have her spa days and still shop at Saks and Bergdorf Goodman.

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By: Investor http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5559 Wed, 29 Jul 2009 14:49:39 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5559 Is it a fair conclusion that companies which have high shareholder confidence measures, have in-effect, cheaper access to capital?

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By: Tom http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5544 Tue, 28 Jul 2009 22:13:06 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5544 When one has to sell the question becomes “what should an investor resist selling at all cost?”. It would appear that companies which retain their value are those that also receive the highest shareholder confidence. Clearly the investor’s behaviour is aligned with their vote of confidence in management and the company’s ability to grow profitably. Interesting to constrast “shareholder confidence” vs “value investing” -should the phenomenon described in the article actually be characterised as “shareholder value”.

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By: Amanda http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5543 Tue, 28 Jul 2009 22:12:56 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5543 The share price of a company is in the hands of the investor and confidence is a driving force in that price. Companies can look good on paper, make promises, forecasts, etc., however it is the investor’s confidence in the fact that the company will follow through on those promises or meet those forecasts that drives investors to purchase stock in those companies. A company can make all promises in the world, but if investors are not confident that they can keep those promises then they aren’t going to buy that stock.

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By: Lisa Miranda http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5542 Tue, 28 Jul 2009 19:48:52 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5542 I find it surprising that not all professional managers pay attention to Boards these days. Is this because they are seen as irrelevant or all professional investors have lost faith in them? What is the point of corporate governance then? When every company, big or small, in the world place such a high emphasis on corporate governance?

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By: Jack Kraft http://blogs.reuters.com/great-debate-uk/2009/06/30/shareholder-confidence-vs-value-investing/comment-page-1/#comment-5541 Tue, 28 Jul 2009 19:20:14 +0000 http://blogs.reuters.com/great-debate-uk/?p=2160#comment-5541 Shareholder confidence evidently goes up and down. There isn’t a company out there that held steadfast and didn’t see a drop in share price over the last 18 months. I think what Brendan Wood is trying to get at is that there are certain companies, those with the greatest amount of confidence, that go up higher than most during good times and drop less than most during bad times. I would think that confidence in a CEO and/or Board is only part of the equation, but an important component nevertheless. A perfect example of this is CN Railway vs CP Railway. Similar companies, same industry but one is run by the renowned Hunter Harrison and his understudy, Claude Mongeau. While there are other factors are play, surely, the difference in confidence and thus stock price is undeniable.

I would think that confidence in the CEO/Board is only part of the shareholder confidence equation and that confidence in the balance sheet and/or growth potential plays a part as well.

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