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Some Thoughts on Investing from My Recent Interview

Curious Cat

The government provided very good 401(k) incentives and gave companies cover to move away from false pension promises (promising much more than could be provided based on what was happened – which just meant companies went bankrupt much more often and pension benefits were slashed).

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In financial engineering, PE investors provide strong equity incentives to the management teams of their portfolio companies. Rather, they rely on internal rates of return and multiples of invested capital. (We classify private equity as buyout or growth equity investments in mature companies.

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The Case for Stock Buybacks

Harvard Business Review

They particularly overpay when the interest rate – the rate of return required by the bank – is high, just as firms particularly repurchase when the stock price is low and thus the rate of return required by shareholders is high. Higher CEO ownership stakes typically improve long-term stock returns.

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Venture Capitalists Get Paid Well to Lose Money

Harvard Business Review

There are, of course, individual firms that succeed in generating venture rates of return. But they are too small in size and too few in number to make up for the vast majority of funds that fail to generate attractive returns (or any returns) for investors. The larger the fund, the larger the fee stream.

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An Experiment in India Shows How Much Companies Have to Gain by Investing in Their Employees

Harvard Business Review

It may seem that the employers of such low-wage workers — who focus mainly on keeping costs down in order to survive in a relentlessly competitive industry — would have no incentive to provide such training or resources for personal development.

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Don’t Take Money from VCs Until You’ve Asked 4 Questions

Harvard Business Review

Investors in VC funds see returns data from a wide range of firms, and those performance figures make it clear that many well-known “brand” VC funds consistently fail to generate minimum venture rates of return. Insight Center. Entrepreneurship for the Long Term. Sponsored by Northern Trust.

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Research Explores The Path Our Careers Take

The Horizons Tracker

By calculating the expenses of training and comparing them to the benefits of enhancing workers’ career opportunities and lowering unemployment rates, the overall societal rate of return was found to be approximately 10%.

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