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10-06-2005, 11:07 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Oct 2003
Posts: 1,324
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Pension Fund Activism
Teachers’ Pension to Seek Corporate Governance Improvements
Sacramento, CA – The California State Teachers’ Retirement System has placed five companies on its Workplan of poor corporate performers. The publicly held companies within the pension system’s $133 billion fund have consistently produced disappointing returns and have fallen short of accepted corporate governance practices. CalSTRS will work closely and cooperatively with these companies with the expectation that they show improvement.
“As a long-term investor, we cannot trade away our disappointment in poor performers. We have an obligation to California’s educators to engage these companies and work toward rehabilitating the health of portfolio assets,” said Jack Ehnes, Chief Executive Officer of CalSTRS. “We believe this long-term approach as coach and partner with our Workplan companies over time adds value not only to the companies but also to our portfolio.”
The current Workplan companies are:
Compuware Corp. – Detroit, MI
Level 3 Communications, Inc. – Broomfield, CO
Sirius Satellite Radio, Inc. – New York, NY
Solectron Corp. – Milpitas, CA
UnumProvident Corp. – Chattanooga, TN
What do you think about this?* Is it the fund's duty to reform corporate America or maximize returns for its client?* (or I guess something in between).* I'm tempted to say take the dogs out behind the barn and shoot them.* Isn't it enough of a wake-up call when a fund the size of CalSTRS dumps you?
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Re: Pension Fund Activism
10-06-2005, 11:12 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Re: Pension Fund Activism
I am intimately familiar with one of the nags in the list they put out. If it is representative of the rest of them, I would either sell outright, or start putting forth your own slate of directors. Ain't no way the sleazebags running the place are about to clean up their act.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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Re: Pension Fund Activism
10-06-2005, 11:15 AM
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#3
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Northern, Florida
Posts: 925
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Re: Pension Fund Activism
Aren't they saying that they can't sell those companies, so they are trying to help them improve their performance? Maybe their holdings are too large to sell without taking huge losses? If so, that reflects poorly on the fund managers, and they should fire themselves!
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Retired in 2006 at age 49.
"Who among us is smart enough to learn from the mistakes of others?" - Voltaire
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Re: Pension Fund Activism
10-06-2005, 01:01 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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Re: Pension Fund Activism
That'll be the day...
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Have Funds, Will Retire
...not doing anything of true substance...
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Re: Pension Fund Activism
10-06-2005, 02:57 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 3,346
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Re: Pension Fund Activism
Bogle recently referred to our market as primarily owned by instutional interests, In this case IMHO CSTRS is doing a good thing in asserting ownership interests. Like really big mutual funds its hard for a fund this big to take small positions in companies. Ultimately they may come to "own" them and should offor board members and other oversight for the interests of the investors.
__________________
T.S. Eliot:
Old men ought to be explorers
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Re: Pension Fund Activism
10-06-2005, 03:09 PM
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#6
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Re: Pension Fund Activism
Quote:
Originally Posted by Patrick
Aren't they saying that they can't sell those companies, so they are trying to help them improve their performance?* Maybe their holdings are too large to sell without taking huge losses?* If so, that reflects poorly on the fund managers, and they should fire themselves!
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Maybe they're feeling guilty or just chasing deep-value stocks.
They can fix the boards and the companies like Warren Buffett does, or they can sell them for the tax losses like Jim Cramer or William O'Neill. They probably don't want to have to discuss the losses, so they'll try to emulate Buffett!
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*
Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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