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I don't know how to say this, but I would trust a common sense understanding of human behavior over research. If there's one rule in life, it's that high financ

by kolbe 10y ago

I don't know how to say this, but I would trust a common sense understanding of human behavior over research. If there's one rule in life, it's that high finance will exploit legal and immoral loopholes to accumulate wealth, and there is plenty of opportunity for that here, despite the rigorous academic studies done by an institution that is highly connected to the people who can profit off of it.

cowsandmilk 10y ago
You claim that Vanguard doesn't care about corporate governance, but that doesn't match their voting record. For instance, at the 2016 Alphabet meeting, they voted for Alphabet shareholders having one vote per share and adoption of a majority vote for election of the board. Those are the very core corporate governance oddities that Alphabet is using to allow the founders and Eric Schmidt to have total control of the company and Vanguard voted their shares towards better governance. Obviously, since Eric Schmidt and the founders have the majority of the votes, these didn't pass, but they voted the way you would have liked and against management.
- kolbe 10y ago
  So you found one anecdote where they cast a meaningless vote in a direction that you agree with (not necessarily the correct direction, but whatever), and you think this constituted a rebuttal to my statements? I'm sure there are hundreds if not thousands of instances where Vanguard voted in a direction you agree with, but that doesn't change my argument.
slackstation 10y ago
This exact sentiment is exactly how research was born. In large complex systems, a few ideas pop up that take the system in non-intuitive directions; non-linearity of influence of small factors, hidden factors, etc. Also, I would counter that in a firm, the legal and immoral loopholes that would give one party greater wealth would do so 1) at the expense of other parties inside the firm and 2) run the risk of bad optics / PR to institutional investors who look out for things like this when evaluating a firm. Lastly, the aggregate of these factors is baked into the return on investment of a stock. In other words, I suspect that might be happening in firms that are making alot of money and providing healthy returns for shareholders. Alot less so at firms that are struggling and not providing much growth.

by kolbe 10y ago

cowsandmilk 10y ago

You claim that Vanguard doesn't care about corporate governance, but that doesn't match their voting record. For instance, at the 2016 Alphabet meeting, they voted for Alphabet shareholders having one vote per share and adoption of a majority vote for election of the board. Those are the very core corporate governance oddities that Alphabet is using to allow the founders and Eric Schmidt to have total control of the company and Vanguard voted their shares towards better governance. Obviously, since Eric Schmidt and the founders have the majority of the votes, these didn't pass, but they voted the way you would have liked and against management.

kolbe 10y ago
So you found one anecdote where they cast a meaningless vote in a direction that you agree with (not necessarily the correct direction, but whatever), and you think this constituted a rebuttal to my statements? I'm sure there are hundreds if not thousands of instances where Vanguard voted in a direction you agree with, but that doesn't change my argument.

slackstation 10y ago

This exact sentiment is exactly how research was born. In large complex systems, a few ideas pop up that take the system in non-intuitive directions; non-linearity of influence of small factors, hidden factors, etc. Also, I would counter that in a firm, the legal and immoral loopholes that would give one party greater wealth would do so 1) at the expense of other parties inside the firm and 2) run the risk of bad optics / PR to institutional investors who look out for things like this when evaluating a firm. Lastly, the aggregate of these factors is baked into the return on investment of a stock. In other words, I suspect that might be happening in firms that are making alot of money and providing healthy returns for shareholders. Alot less so at firms that are struggling and not providing much growth.