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May 6th, 2011, 20:14
Originally Posted by Alrik Fassbauer View Post
This is because everyone is so much shareholder-oriented.

I read not too long ago that this is a relatively new movement.

Decades ago, companies (and their bosses) just weren't so much shareholder-oriented.

The thought-model / the philosophy to be FORCED to give the shareholders their revenues AS FAST AS POSSIBLE is relatively new.

Decades ago, I read, the philosophy was rather to build up a healthy company, and not to look at shareholders like a rabbit looks at a serpent.
So to say.

You only have to go back to the late 80's, early 90's to see a change, IMO. Its a product of instantaneous 24/7 news coverage every single person with $100 to invest thinking they are Warren Buffet. The volatility in the markets has gone up exponentially since the advent of CNBC and internet trading.

There's actually an interesting strategy I read about a few years back ( I want to say it was '05 or '06, it was in Barrons). There are some companies that refuse to give any type of earnings guidance at all. They release when they are going to release, and that is it. Additionally, there are some companies that also only report earnings annually, rather than quarterly. As a whole, the group outperformed the DJIA and the S&P500 something like 12 out of the previous 15 years.

The author of the article came to the conclusion that they outperformed because those strategies allowed the management to be more concerned with running the company and less with the fickleness of the market.

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