The Digest #162
Volcker on inflation, Parametric insurance, The futility of guidance, Corporate governance reform, Keeping a notebook, Singleton and Teledyne, The pros and cons of cancer screening ...
The Case for Splitting Berkshire’s Class A Shares
A stock split would have no effect on a Berkshire's intrinsic value, but could keep super-voting Class A shares in the hands of longtime shareholders ...
The Digest #143
Gell-Mann Amnesia, GEICO, Todd Combs, Onboarding Directors, Damodaran on Meta, Paul Graham's Essays, Home Depot, Nick Sleep ...
Berkshire’s Directors Have Skin in the Game
Most corporate directors have minimal skin in the game. Berkshire Hathaway is a notable exception. This article looks at the ownership interest of each Berkshire director ...
Snap Pitches Hopes and Dreams, Shuns Accountability
Snap Inc., the parent company of the popular Snapchat app, has officially filed the paperwork required to go public in an offering expected to raise up to $3 billion. Characterizing itself as a "camera company" that has reinvented the way ...
Munger’s Prescription for Corporate Governance
David Larcker and Brian Tayan of the Stanford Graduate School of Business recently published a paper entitled Corporate Governance According to Charles T. Munger which concisely outlines the governance philosophy that Mr. Munger has presented on a number of occasions ...
HP Board Dilutes Principled Stand with Generous Severance Agreement
Considering the scale of recent examples of corporate malfeasance, at first glance Mark Hurd's indiscretions pale in comparison. Mr. Hurd was forced to resign from Hewlett Packard last Friday after a sexual harassment allegation failed to reveal a violation of ...
Share Buybacks Gain Popularity as Stock Prices Rebound
It has become relatively common to read annual reports of companies that previously engaged in regular share buybacks yet mysteriously decided to halt the practice during 2009 even as share prices hit multi-year lows. As The Economist has noted, share ...
A Modest Proposal for Audit Reform
Attempting to understand the sequence of events that led to the downfall of Lehman Brothers is normally a mind numbing process, but occasionally an obvious outrage is discovered such as Lehman's use of "Repo 105" transactions. While we have not ...
Was Lehman’s CEO Criminally Negligent or Merely Incompetent?
In a pattern that would be amusing if it was not so disturbing, we are again witnessing the spectacle of lawyers for a disgraced CEO who claim that their client was "unaware" of key risks that led to the downfall ...
Motives Behind Value Destroying Mergers
In recent weeks, Kraft's proposed acquisition of Cadbury has generated a great deal of interest. When an investor with Warren Buffett's reputation characterizes the transaction as making him "feel poorer", observers might wonder what could possibly motivate a CEO such ...