Small shareholders have difficulty collecting their votes to counter perceived managerial missteps. However, this article reminds me of one more tool available to shareholders: lawsuits. However, I suspect the lawsuit is brought on by larger shareholders that can afford attorneys. To recap, we are up to three options for shareholders to voice their opinion and hopefully improve firm management:

1. Vote at shareholder meetings
2. File lawsuits
3. Vote with their feet -> sell their shares

Let me add one more that just came mind sine this message is going out via social media:

4. Social media campaign, e.g., #ShareholdersAgainstTSLASCTYMerger

http://www.reuters.com/article/us-solarcity-m-a-tesla-idUSKCN11P1BL

We discussed the role of large investors in resolving the shareholder-manager conflict in class today. This article describes two large shareholders, Ackman’s hedge fund and the Vanguard group, taking action to re-align management with shareholder interest. Ackman’s angle is to push for CEO removal, actually the two co-CEOs which I never heard of before. Vanguard voted against the pay package for the co-CEOs.

Stay tuned as the Chipotle story unfolds…

http://mobile.reuters.com/article/idUSKCN11D1LP

Expect lower returns going forward, don’t reach for yield (I.e., take on more risk), and just save more. Another subtle but important point in the article regarding fees:

“Inattentive investors can expect to lose as much as 70% of their profits to “hidden” fund management costs in addition to the “expense ratios” touted in mutual-fund prospectuses. (These hidden costs include things like sales load, transaction costs, idle cash and inefficient taxes.)”

So yes, stocks are relatively high now. The P/E ratio is currently 25.22 well above the historical average of 15.61 (multpl.com, based on trailing 12 month earnings). Does this mean sell stocks and go to cash? No. Personally, I address high market multiples with a lower (but greater than zero) percentage of my allocation to stocks. I continue with my monthly contributions and have increased them once already this year. After reading this article, it may be time to consider another increase.

Good luck everyone!

-Dt. Moore

https://news.google.com/news/ampviewer?caurl=http%3A%2F%2Fwww.wsj.com%2Famp%2Farticles%2Fjack-bogle-the-undisputed-champion-of-the-long-run-1472855372#pt0-562693

Totally wild idea not in this article: what if there were a flat corporate tax around the world? Would that eliminate all tax havens and then force corporations to setup shop only in countries that have infrastructure, an appropriate labor force, and perhaps convenient proximity to consumers?

Just s thought…

https://news.google.com/news/ampviewer?caurl=http%3A%2F%2Famp.timeinc.net%2Ffortune%2F2016%2F09%2F02%2Fapple-tax-game-ireland%2F%3Fsource%3Ddam#pt0-183355