Discussion
DonkeyApple said:
crankedup said:
Moonhawk said:
crankedup said:
I will accept your 1.2.3. comments at face value, however it is not an easy task running such a behemoth Industry, you only need look at Tesco for evidence of that!
The current fiasco over profits aside - Tesco must be quite high up there in terms of efficiency.If you concentrate on share price this has been a failing of fund managers who treated it as a core holding and kept ploughing client funds in, pushing the price up when basic analysis showed it was not investable in contrast to its peers.
Aggressive, dominant expansion in the UK kept it growing market share from competitors while being able to hammer suppliers kept margins up. But they reached saturation in the UK many years ago, hence resorting to a policy of putting corner shops out of business. At the same time all their attempts to replace slowing UK growth with overseas expansion systematically failed because in those markets they couldn't dominate share and not could they hammer suppliers.
Then came the recession and everyone realised by 2009 that instead of shoppers cutting outgoings by switching to Tesco they in fact jumped further and switched to the newer and cheaper Aldi/Lidl businesses.
Tescos has been weakening since the early 2000 but managers kept pouring client funds in.
The real reason for the massive sell off after the accounting error is not because of the error specifically but the fact that it has allowed the fund managers to blame their investment error on Tescos not themselves and finally switch client money out that they should never have put in. It's been a real pump and dump through negligence in that regard.
To regain UK share they need a Lidlesque sub brand to capture the bottom end of the market. To get real growth again they need to find a model that allows for overseas expansion and the logical step as they failed to grow new brands organically is to raise capital to buyout existing chains that already have solid market share.
crankedup said:
How many Directors have been suspended now? Resting on laurels/sleeping on the job or just plain incompetence.
I'd say desperation. Saturated domestic market, unable to expand overseas and no longer being the goto cheap supermarket has led to the desperate tactic of pissing about with accountants to try and meet shareholder expectations and demands. It has been seen so many times before when a firm is bid up to carry a sector premium. Add in share incentives to accelerate the issue.
Check out Quindell if you want a real laugh/cry re directors/accounting and shareholders.
DonkeyApple said:
crankedup said:
How many Directors have been suspended now? Resting on laurels/sleeping on the job or just plain incompetence.
I'd say desperation. Saturated domestic market, unable to expand overseas and no longer being the goto cheap supermarket has led to the desperate tactic of pissing about with accountants to try and meet shareholder expectations and demands. It has been seen so many times before when a firm is bid up to carry a sector premium. Add in share incentives to accelerate the issue.
Check out Quindell if you want a real laugh/cry re directors/accounting and shareholders.
For years I have suggested that Boardrooms have been too powerful and their self appraisals leading to hyper inflated remuneration packages. Far to easy to satisfy shareholders with easily gotten profits during the 1980's - 2000, now we will see the quality, or lack of, in the Boardrooms.
crankedup said:
It has to be the responsibility of the Boardroom, it is they that countenance what we now know to be unrealistic expectations for shareholders consumption. It will not surprise me at all for other major Companies to come under greater scrutiny.
For years I have suggested that Boardrooms have been too powerful and their self appraisals leading to hyper inflated remuneration packages. Far to easy to satisfy shareholders with easily gotten profits during the 1980's - 2000, now we will see the quality, or lack of, in the Boardrooms.
Indeed, made up profits, real bonuses, shareholders lose out as usual. For years I have suggested that Boardrooms have been too powerful and their self appraisals leading to hyper inflated remuneration packages. Far to easy to satisfy shareholders with easily gotten profits during the 1980's - 2000, now we will see the quality, or lack of, in the Boardrooms.
How much do companies have to pay to get the best management? We keep hearing how huge salaries are justified because you have to pay to get the best, but the best seem crap to me.
crankedup said:
DonkeyApple said:
crankedup said:
How many Directors have been suspended now? Resting on laurels/sleeping on the job or just plain incompetence.
I'd say desperation. Saturated domestic market, unable to expand overseas and no longer being the goto cheap supermarket has led to the desperate tactic of pissing about with accountants to try and meet shareholder expectations and demands. It has been seen so many times before when a firm is bid up to carry a sector premium. Add in share incentives to accelerate the issue.
Check out Quindell if you want a real laugh/cry re directors/accounting and shareholders.
For years I have suggested that Boardrooms have been too powerful and their self appraisals leading to hyper inflated remuneration packages. Far to easy to satisfy shareholders with easily gotten profits during the 1980's - 2000, now we will see the quality, or lack of, in the Boardrooms.
The simple fact is that the shareholders put the board in place and set the rules and then if the board fails they are replaced.
What most people don't understand is who the shareholders are or what their objectives are.
The Tesco's board will carry the can and be replaced as much as required.
DonkeyApple said:
crankedup said:
DonkeyApple said:
crankedup said:
How many Directors have been suspended now? Resting on laurels/sleeping on the job or just plain incompetence.
I'd say desperation. Saturated domestic market, unable to expand overseas and no longer being the goto cheap supermarket has led to the desperate tactic of pissing about with accountants to try and meet shareholder expectations and demands. It has been seen so many times before when a firm is bid up to carry a sector premium. Add in share incentives to accelerate the issue.
Check out Quindell if you want a real laugh/cry re directors/accounting and shareholders.
For years I have suggested that Boardrooms have been too powerful and their self appraisals leading to hyper inflated remuneration packages. Far to easy to satisfy shareholders with easily gotten profits during the 1980's - 2000, now we will see the quality, or lack of, in the Boardrooms.
The simple fact is that the shareholders put the board in place and set the rules and then if the board fails they are replaced.
What most people don't understand is who the shareholders are or what their objectives are.
The Tesco's board will carry the can and be replaced as much as required.
The next stage of reformation which is under review is that of the major shareholders or block holders, pension funds for example. These people have sat back and watched extraordinary recommendations nodded through, this has to change, but it will not happen overnight, obviously. It is an inherent city business culture that has festered for decades, only the 2008 financial crash has opened the eyes outside of the City of just how rotten systems are.
yes the Tesco Board will carry the can, if it is found that fraud has indeed taken place then personal ramifications should follow.
You rightly mention that it is the shareholders that appoint the Board Members, these Members are always recommended for approval by existing Board Members. Its true to say that the average shareholder will go along with the recommendations within the annual reports. Many will say as long as the shareholder gets some profit from the Company that is all they care about. Well certainly I would not want to invest with any Company incapable of making profit, unless a long term business plan was asked for approval that was optimistic of turning around said Company. But that's all part of an investment and why Board Members are paid for results, too many Companies are now turning in losses or lowering profits, time to bail I guess. If a Board fails perhaps those earlier bonus payments should be recovered, although as we know many bonuses are now set with the provision of success rates of ambition and achievement being agreed and then brought to fruition.
Well that's ideal World even if it transpires the journey concludes at a halfway house it will have been a vast improvement on what has gone before.
crankedup said:
DonkeyApple said:
crankedup said:
DonkeyApple said:
crankedup said:
How many Directors have been suspended now? Resting on laurels/sleeping on the job or just plain incompetence.
I'd say desperation. Saturated domestic market, unable to expand overseas and no longer being the goto cheap supermarket has led to the desperate tactic of pissing about with accountants to try and meet shareholder expectations and demands. It has been seen so many times before when a firm is bid up to carry a sector premium. Add in share incentives to accelerate the issue.
Check out Quindell if you want a real laugh/cry re directors/accounting and shareholders.
For years I have suggested that Boardrooms have been too powerful and their self appraisals leading to hyper inflated remuneration packages. Far to easy to satisfy shareholders with easily gotten profits during the 1980's - 2000, now we will see the quality, or lack of, in the Boardrooms.
The simple fact is that the shareholders put the board in place and set the rules and then if the board fails they are replaced.
What most people don't understand is who the shareholders are or what their objectives are.
The Tesco's board will carry the can and be replaced as much as required.
The next stage of reformation which is under review is that of the major shareholders or block holders, pension funds for example. These people have sat back and watched extraordinary recommendations nodded through, this has to change, but it will not happen overnight, obviously. It is an inherent city business culture that has festered for decades, only the 2008 financial crash has opened the eyes outside of the City of just how rotten systems are.
yes the Tesco Board will carry the can, if it is found that fraud has indeed taken place then personal ramifications should follow.
You rightly mention that it is the shareholders that appoint the Board Members, these Members are always recommended for approval by existing Board Members. Its true to say that the average shareholder will go along with the recommendations within the annual reports. Many will say as long as the shareholder gets some profit from the Company that is all they care about. Well certainly I would not want to invest with any Company incapable of making profit, unless a long term business plan was asked for approval that was optimistic of turning around said Company. But that's all part of an investment and why Board Members are paid for results, too many Companies are now turning in losses or lowering profits, time to bail I guess. If a Board fails perhaps those earlier bonus payments should be recovered, although as we know many bonuses are now set with the provision of success rates of ambition and achievement being agreed and then brought to fruition.
Well that's ideal World even if it transpires the journey concludes at a halfway house it will have been a vast improvement on what has gone before.
The fact of the matter is that you can give whatever rights you like to shareholders but the percentage of free held stock in any listed company is irrelevant.
All you do with this legislation is hand more power and control to the groups who are nominated by the shareholders to act on their behalf. Ie the pension and investment managers. The one group of people who if you actually want to clean up the equity markets you must be removing authority from.
But no one has worked that out yet because the Little Englander mentality makes people think they would be getting control when in fact the whole problem is that they actually pay massive excess amounts to voluntarily throw all control away.
The board is irrelevant. It is put in place by the fund managers (ie shareholder collective). If there are failures then it gets blamed and replaced. At the other end the actual individual shareholders carry all the risk. Sitting in the middle are the real controllers. They have no risk, can replace whoever they like and dictate to the shareholders what will be done. At the same time they force the board to outperform while stripping the outperformance as fees and hidden costs before it gets to the shareholder.
It is a wonderous merrygoround of milking of idiots. And those idiots not only think that demanding more shareholder rights will help them when obviously it will enslave them even further but they can be steered into frothing about bad board members and forget all about the fact that they are systematically being rinsed while also carrying all the risk.
hornetrider said:
I apologise in advance if this has already been posted. Just flicking through youtube after watching Chukka Umanna and Eamonn Holmes.
Anyhoo, this is Andrew Neil rather expertly destroying political heavyweight Jo Swinson over airports and the mansion tax in particular. Well worth a full watch, it's f
king priceless! 
https://www.youtube.com/watch?v=ZynLTV9W5z0
Thankfully they won't get into power. But it is worrying that this is an example of a politician and how some of them think.... If you live in a house that will be subject to the family home tax, it's maddening to watch these idiots try and explain the cretinous policy that's going to hit you directly.Anyhoo, this is Andrew Neil rather expertly destroying political heavyweight Jo Swinson over airports and the mansion tax in particular. Well worth a full watch, it's f
king priceless! https://www.youtube.com/watch?v=ZynLTV9W5z0
crankedup said:
DonkeyApple said:
crankedup said:
Moonhawk said:
crankedup said:
I will accept your 1.2.3. comments at face value, however it is not an easy task running such a behemoth Industry, you only need look at Tesco for evidence of that!
The current fiasco over profits aside - Tesco must be quite high up there in terms of efficiency.If you concentrate on share price this has been a failing of fund managers who treated it as a core holding and kept ploughing client funds in, pushing the price up when basic analysis showed it was not investable in contrast to its peers.
Aggressive, dominant expansion in the UK kept it growing market share from competitors while being able to hammer suppliers kept margins up. But they reached saturation in the UK many years ago, hence resorting to a policy of putting corner shops out of business. At the same time all their attempts to replace slowing UK growth with overseas expansion systematically failed because in those markets they couldn't dominate share and not could they hammer suppliers.
Then came the recession and everyone realised by 2009 that instead of shoppers cutting outgoings by switching to Tesco they in fact jumped further and switched to the newer and cheaper Aldi/Lidl businesses.
Tescos has been weakening since the early 2000 but managers kept pouring client funds in.
The real reason for the massive sell off after the accounting error is not because of the error specifically but the fact that it has allowed the fund managers to blame their investment error on Tescos not themselves and finally switch client money out that they should never have put in. It's been a real pump and dump through negligence in that regard.
To regain UK share they need a Lidlesque sub brand to capture the bottom end of the market. To get real growth again they need to find a model that allows for overseas expansion and the logical step as they failed to grow new brands organically is to raise capital to buyout existing chains that already have solid market share.
What fund managers do you mean?, most pension mangers and asset managers have minus-zero affiliation with Tesco as a company and would have no compunction with dropping their shares, if there was any risk it would badly affect the man on the street who's pensions and investments they manage?
This will be the same for BP shares, or any Bank share (for example) held on behalf of the BT Staff Pension scheme etc.
Or, do you mean that Tesco's own staff pension fund is doing a 'Maxwell/MGN'?
http://www.ipe.com/tesco-launches-in-house-asset-m...
I think you need to be clear on whom, you mean?
NDA said:
hornetrider said:
I apologise in advance if this has already been posted. Just flicking through youtube after watching Chukka Umanna and Eamonn Holmes.
Anyhoo, this is Andrew Neil rather expertly destroying political heavyweight Jo Swinson over airports and the mansion tax in particular. Well worth a full watch, it's fking priceless!
https://www.youtube.com/watch?v=ZynLTV9W5z0
Thankfully they won't get into power. But it is worrying that this is an example of a politician and how some of them think.... If you live in a house that will be subject to the family home tax, it's maddening to watch these idiots try and explain the cretinous policy that's going to hit you directly.Anyhoo, this is Andrew Neil rather expertly destroying political heavyweight Jo Swinson over airports and the mansion tax in particular. Well worth a full watch, it's f
king priceless! https://www.youtube.com/watch?v=ZynLTV9W5z0
AstonZagato said:
NDA said:
hornetrider said:
I apologise in advance if this has already been posted. Just flicking through youtube after watching Chukka Umanna and Eamonn Holmes.
Anyhoo, this is Andrew Neil rather expertly destroying political heavyweight Jo Swinson over airports and the mansion tax in particular. Well worth a full watch, it's fking priceless!
https://www.youtube.com/watch?v=ZynLTV9W5z0
Thankfully they won't get into power. But it is worrying that this is an example of a politician and how some of them think.... If you live in a house that will be subject to the family home tax, it's maddening to watch these idiots try and explain the cretinous policy that's going to hit you directly.Anyhoo, this is Andrew Neil rather expertly destroying political heavyweight Jo Swinson over airports and the mansion tax in particular. Well worth a full watch, it's f
king priceless! https://www.youtube.com/watch?v=ZynLTV9W5z0
Hol said:
I missed this the first time around.
What fund managers do you mean?, most pension mangers and asset managers have minus-zero affiliation with Tesco as a company and would have no compunction with dropping their shares, if there was any risk it would badly affect the man on the street who's pensions and investments they manage?
This will be the same for BP shares, or any Bank share (for example) held on behalf of the BT Staff Pension scheme etc.
Or, do you mean that Tesco's own staff pension fund is doing a 'Maxwell/MGN'?
http://www.ipe.com/tesco-launches-in-house-asset-m...
I think you need to be clear on whom, you mean?
It's very clear. What fund managers do you mean?, most pension mangers and asset managers have minus-zero affiliation with Tesco as a company and would have no compunction with dropping their shares, if there was any risk it would badly affect the man on the street who's pensions and investments they manage?
This will be the same for BP shares, or any Bank share (for example) held on behalf of the BT Staff Pension scheme etc.
Or, do you mean that Tesco's own staff pension fund is doing a 'Maxwell/MGN'?
http://www.ipe.com/tesco-launches-in-house-asset-m...
I think you need to be clear on whom, you mean?
Underlying shareholders absolve all rights to managers and pay to do this.
How many collective shareholder meetings will the board of a FTSE 350 firm hold per annum versus public shareholder meetings? That shows you instantly who has the power.
If you believe that the fund management industry works directly for those whose money they manage then this merely highlights the gross misunderstanding that lies at the root.
Pull up the list of major shareholders of any 350 and see who they are. Then look at what risk they carry. As with everything in life, follow the money and you find who is in control.
For example, what was behind the massive sale/leaseback trend of the previous decade? One of the largest actions to destabilise firms by converting assets into debt.
Which group makes the most money for the least risk and which group has ultimate control of both the risk holders (beneficial shareholders) and the management?
Is giving these 'nominees' more power going to lead to more stable companies and better returns to shareholders or less? The answer is extremely obviously, less.
As always, the general public misunderstands how an industry works and as such will buy into misleading proposals from central sources.
As for firms wanting their staff's pensions to hold stock in the firm? Well that's a fun one. Who gains from getting direct control of a significant voting block in their own company and more importantly why do they desire it?
Yeah, I do believe that fund managers do everything they can to maximise the profits and stability of of their customers (whether they be Investment cistomers, or pension holders). Propping up a losing stock of a Supermarket is not going to work out well for them.
As somebody who works in that industry, you are aware of the Stewardship Code introduced in 2010, that now requires fund and pension managers to vote in the interests of their beneficiaries (the shareholders).
walm said:
DA while you are right that the investment managers set the board and extract as big a fee as possible for doing so - they would still rather Tesco share price went up than down. Although admittedly they don't really care that much.
Indeed. But it is this desire to push it up that is the risk. The fund management industry as a collective isn't genius. In fact it is a very large collective of intensely mediocre humans. It is the last bastion of extreme mediocrity in the City. It has huge power as a machine and immense control but it isn't intelligent. Reliant on a small number of 'stars' to disguise the general low level of ability. It is an industry that makes enormous profits that are not needing to be linked to client performance. It has tremendous staff synergies to government agencies: the best people earn more outside of the collective, bonuses are paid almost irrespective of individual performance, riddled with worst type of nepotism, all staff programmed to think and act the same, money all comes from a centralised collection system.
The fact that most funds are simple trackers but with huge execution costs and admin fees that suck out performance as overt and hidden fees and that uses a rigged peer to peer benchmarking system that rewards even third quartile performance highlights the problem.
Some has complained about this being a deviation from the Mansion Tax but they need to comprehend that due to the ever growing commoditisation of the domestic housing market this very industry is going to soon dominate home ownership in the UK. What do people then think is going to happen to house price stability, costs and any associated taxes?
It is an extremely relevant 'deviation'.
Hol said:
Yeah, I do believe that fund managers do everything they can to maximise the profits and stability of of their customers (whether they be Investment cistomers, or pension holders). Propping up a losing stock of a Supermarket is not going to work out well for them.
As somebody who works in that industry, you are aware of the Stewardship Code introduced in 2010, that now requires fund and pension managers to vote in the interests of their beneficiaries (the shareholders).
I am very aware that it is totally meaningless. As somebody who works in that industry, you are aware of the Stewardship Code introduced in 2010, that now requires fund and pension managers to vote in the interests of their beneficiaries (the shareholders).
Why was the code even required?
And who has been maintaining the premium to peers of Tescos for 7 years and whose money has been at risk?
Why are overt revenues front loaded and based on management fees and execution charges not performance?
Why aren't true benchmarks used?
Why are direct rewards based on peer v peer and not absolute?
20 years in and around that market and the sooner the stake holders wise up and learn how it is run the sooner it can be cleaned up and made more efficient and to work in the best interests of them.
burwoodman said:
I had to go back to page one to see a reference to a mansion tax. Typically way off topic. Lots of NHS talk and bickering
Quite right.http://en.wikipedia.org/wiki/Shareholders_in_the_U...
DA you should start your own thread.
Can you be a bit clearer on your questions though?
Edited by Hol on Tuesday 11th November 11:29
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