article thumbnail

GM’s Stock Buyback Is Bad for America and the Company

Harvard Business Review

” But the only real wins are a victory for the hedge funds, and a Pyrrhic victory for GM in that it managed to keep Wilson off its board and reduced the size of the buyback from the $8 billion the investors had been demanding. During the bailout, financial firms, including hedge funds, were nowhere to be found. Instead, U.S.

Hedge 8
article thumbnail

Bill Ackman Is Just Doing God's Work

Harvard Business Review

Everybody has been piling on to hedge fund manager Bill Ackman lately. Ackman''s short-selling campaign against vitamin distributor Herbalife has blown up in his face, with the company''s stock up more than 75% since he unveiled his position last December and some of his most prominent hedge fund competitors profiting from his misery.

Hedge 8
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

The Answer to Short-Termism Isn’t Asking Investors to Be Patient

Harvard Business Review

stock exchanges in 2002 to identify causation rather than mere correlation. Turning from evidence on liquidity to evidence on short-term investors, activist hedge funds are seen as the epitome of the latter – allegedly stripping assets and piling on debt to make a quick buck. These studies use the decimalization of the major U.S.

article thumbnail

Yes, Short-Termism Really Is a Problem

Harvard Business Review

” On the other side, noted economist and hedge fund adviser Larry Summers cautions that reforming “quarterly capitalism” would risk driving us toward “Japan’s keiretsu system, which insulated corporate management from share price pressure by tying large companies together.” years in 2002 to 7.2

Hedge 8
article thumbnail

Is Economics Ready for a New Model?

Harvard Business Review

So were the currency and debt crises of 1997 and 1998, and the stock market collapse of 2000-2002. So they moved on (Brock's Santa Fe affiliation ended in 2002). The 1987 stock market crash was a scare. None of them brought economic devastation in the U.S. In recent years J.

article thumbnail

Who Should Actually Have Say on Pay?

Harvard Business Review

To a large extent, say-on-pay — which was introduced in the UK in 2002 and has spread to several other countries, most recently Switzerland — is a simple exercise in bandwagon-following. Since say-on-pay hit the U.S. That''s not all it is, though. The idea was to get away from paying CEOs "like bureaucrats," as Michael C.

Hedge 8
article thumbnail

The Brighter Side of Decades of Disappointing Investment Returns

Harvard Business Review

Sheelah Kolhatkar, in a cover story (and what a classy cover it is) in the new Bloomberg Businessweek , argues that the great alternative to plain-vanilla equity and debt investing — the hedge fund — is more or less over, too. Sometimes governments actually use the money they borrow wisely.

Bond 8