Carl Icahn is a well known advocate for share holder value. He's an outspoken critic of Board of Director and CEO misbehavior. He's famous for his involvement with Michael Milken's Junk Bonds and for stripping TWA to the bone and recently for pushing the sale of Yahoo to Microsoft. And now he has a blog.
You can find Carl Icahn's blog here. Currently, most of the articles are rants (well deserved in my opinion) against the managers and boards of large corporations in America.
In Corporate Democracy is a Myth, Carl dispels the notion that the boards are representing the shareholder. Instead they get cushy benefits like theater tickets and use of the company jet. Board members have nothing to lose if the corporation does not perform. As Carl says, "[w]orst of all, the board itself is not made accountable because corporate board elections are generally a joke."
Carl calls poison pills "absurd" in Absurdity of The Poison Pill. A poison pill is a "strategy used by corporations to discourage a hostile takeover by another company." Karl's angry about this tactic because of Yahoo's use of it to fight off Microsoft. Mr Icahn was pushing the sale to Microsoft.
Carl Icahn's labeled an "activist investor" in many articles. Icahn got involved with the Yahoo deal because he felt share holders were getting shafted. Icahn's so called activism is good for investors. Especially for small investors whose individual voices aren't heard by large corporations. Icahn has the power to coerce the board and corporate managers (CEO, presidents, etc) to act in a way that's beneficial to the shareholder.
Icahn's valuable now more than ever. As CEO pay leaves the stratosphere and enters outer space, company profits decline. Shareholders aren't getting their money's worth.
As Benjamin Graham said in The Intelligent Investor, corporate managers want to hold onto company profits instead of paying dividends. These managers think they can put that money to better use. However, that money is usually best given to the shareholder as money left with the company produces a lower return.
I don't invest directly in stocks right now. If you want to know why, read Carl's blog. The small investor has no power and little hope of a fair deal right now. There's a reason most wealthy people didn't get that way through the stock market.
In The Millionaire Next Door, the authors reveal that many wealthy people don't rely on stocks for their wealth. The reason? Wealthy people know that they little or no ability to profit in the stock market on a consistent basis. The S&P 500 has stagnated for 10 years. You can't count on the stock market to build wealth, especially when CEOs and corporate boards are doing their best to rip you off.
If you'd like a good introduction to what's wrong with corporate America right now, Carl Icahn's blog is a great place to start.
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