The Beat Goes On …

The beat goes on … the drums keep pounding rhythms to the brain …
Sonny & Cher, 1967

Yes, the M&A beat goes on.  Worldwide M&A activity totaled $4 trillion in 2018, up 19% versus 2017.  And, with more than three-quarters of corporate and private equity executives anticipating the pace of M&A to accelerate in 2019[i], the M&A drums keep pounding rhythms to the brain.

M&A is exciting.  Almost instantly it seems the company becomes bigger with access to new customers, products, brands, services and markets.  Increased industry dominance can produce opportunities to gain scale, leverage efficiencies and create synergies.  No wonder many bankers, reporters and investors seem to egg-on the process.

However, too often M&A deals don’t reach their full potential.  Sometimes merger objectives aren’t well-thought out, are too narrow in focus or don’t anticipate industry/market changes.  Sometimes integration efforts fall short or cultures don’t mesh.  Sometimes underlying business issues aren’t identified until after close.  So not surprisingly, not everyone is thrilled with M&A.

When M&A is successful, its typically because the acquiring/surviving company recognizes the beat goes on.  In other words, both the buyer and target companies know themselves and bring business competencies that complement and expand upon each other’s capabilities and opportunities. Further, throughout the diligence process (not just during the deal stage), the strategic vision for the union is continuously validated.  Importantly, there’s an ongoing effort to develop, refine and execute an integration plan that balances driving organic growth with achieving cost-cutting synergies.

Given the robust interest in M&A, investors will inevitably ask about M&A strategy. Investor Relations should be prepared to respond while keeping the sound of the beating drums to a dull roar.  Often this means repeatably articulating the company’s broader growth strategy and how M&A may (or may not) fit into that.

To that end, companies should have a M&A framework to provide organizational focus and discipline.  Such a framework should be grounded in strategy and consider questions like:  What are the risks and opportunities of growth via acquisition versus organic growth? What are our strengths and weaknesses and how does an acquisition/divesture address such? What options are most viable in view of our current situation and desired strategic direction?

When the hypothetical becomes real and a deal is announced, Investor Relations should be cognizant of disclosure limitations and work to ensure internal and external messages are aligned.  At best, everything is preliminary until close so when it comes to setting expectations “less is more” should be your mantra.  This is particularly important because not everything gets revealed during the due diligence process and confidentiality agreements may limit what is discoverable until after close.

During this time, think about what your investors will most want to know, what metrics and milestones will be most important for measuring integration progress and merger success, how you will breakout the reporting of same and how your guidance practices will or should change.  Inasmuch as deal structure or size may impact the company’s financial flexibility and go-forward growth strategy, consider how your investor base may change.  For the next 1 – 2 years, your answers to these questions will serve as a roadmap for managing this change because, of course, the beat goes on.

Lisa Ciota
Lead-IR Advisors, Inc.

[i] Deloitte, The state of the deal – M&A trends 2019

Reading the Tea Leaves

A while back a friend lamented the decline in his company’s stock despite reporting solid quarterly earnings.  My friend’s company had been the target of an activism campaign during which the activist gained board seats.  This led to a transformation at the company, with a new CEO being named and the departure of several of the old senior management team.  Of course, the company also divested assets and cut staff.

These strategic moves appeared to be generating positive momentum for the company but not apparently for the stock.  My friend – a survivor of the turmoil – was puzzled why the stock was languishing.  So, I took a look at the company’s trading.  Their stock price was down, but what piqued my interest was the elevated trading volumes.

Now, trading volume has a story to tell, you just have to read the tea leaves.  The company’s 30‑day trading volume was roughly 35% higher than both its 90- and 180‑day average trading volume. Neither the S&P 500 rebalancing nor an industry disrupter buying a prominent distributor could explain the sustained higher volumes.  I suspected a major holder was taking their position down. Trading bots, sensing the increased liquidity, were trading the same shares over and over, keeping volumes elevated.  Meanwhile it appeared fundamental investors were on the side lines as the stock drifted downward over the next several weeks and trading volumes returned to historic norms.

My suspicions were confirmed later in the fall after the 13F/G/D filings came out.  The filings showed that the activist investor had reduced its position by roughly 60%.  The company’s stock price firmed a few weeks later when the CEO presented at a high-visibility investor conference.  Essentially, fundamental investors appeared to have woke up and began setting price again.

Hindsight is 20/20, but I think this example illustrates how an understanding of investor and market behavior could inform investor relations strategy.  It’s hard to say as so many internal and external factors play a role, but I wonder if a more active fundamental investor outreach program during this time would have mitigated the decline or shortened the time the stock was drifting.


Trust in Value

A cynic is a man who knows the price of everything and the value of nothing.
Oscar Wilde (Lady Windermere’s Fan, 1892)

Are you a cynic?  How important is price?  How do you define and measure value?

The latter was a key question raised in University College London economist Mariana Mazzucato’s book The Value of Everything: Making and Taking in the Global Economy.  Mazzucato outlined the evolution of how theories of value have evolved since the late 1600s.

Defining what creates value and measuring it is not as easy as it sounds.  For example, in the late 1600s and early 1700s, there were different schools of thought as to how much value creation should be attributed to the land (or land owner) versus the farm laborer and whether import/export merchants were value creators, or simply people who moved goods around.  The political culture of the times largely influenced the definition and measurement of value.

Fast forward to today, and virtually anything that can have a price associated with it is deemed to create value regardless of the energy or resources expended, the real risk involved or benefits delivered.  In parallel with the rise of this theory of value, so has the theory of shareholder primacy gained ascendance and with it came the nearly myopic focus on metrics like earnings, cash flow, margins, market share and stock price.

It seems we’ve forgotten the dichotomy inherent in the definition of value.  The Oxford dictionary defines value as:

  1. The regard that something is held to deserve; the importance, worth, or usefulness of something.
  2. The principles or standards of behavior; one’s judgement of what is important in life.

People are rejecting the idea that you can divorce value from notions of principles and standards.  That’s why there’s increasing investor focus on corporate purpose and culture.  Don’t believe me?  Read BlackRock’s or State Street’s annual letter to directors and review the Edelman Trust Barometer survey of institutional investors.

Today, business is being viewed in a larger social context and trust is an essential part of that.  Business has higher trust scores than government and media and is increasingly expected to take a lead in addressing societal issues from cybersecurity to income inequality to workplace diversity and more, according to the Edelman report.

Investors have expanded their focus, seeking more information on how companies conduct themselves, advance their corporate culture and evaluate and manage environmental and social factors. So, when communicating about your business, create context by talking about your company’s purpose, culture and operating environment. You’ll build trust and gain value.

Lisa Ciota
Lead-IR Advisors, Inc.

Oops, I Did It Again

Old Britney Spears songs are not normally a source of inspiration for me, but this one feels especially apropos right now.  You see, after being chastised by the SEC for certain tweets last year, Tesla’s CEO Elon Musk is  – oops, doing it again:

Musk Tweet 2.19.2019 - 1

This tweet was about material information for Tesla – annual vehicle production, a figure for which it provides guidance.  The tweet implied guidance different from that provided just a few weeks earlier in fourth quarter 2018 earnings, when Tesla said it was “targeting annualized Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 of 2020.”  Well, somebody must have said something to Musk, because a few hours later he corrected himself, tweeting:

Musk Tweets 2.19.2019 - 2

This situation is problematic from at least two perspectives:

First, while Twitter can be a useful communication tool, as discussed in a previous post (Loose Lips Sink Ships, August 15, 2018), one tweet on a material topic can rarely, if ever, contain enough information or context for a reasonable investor to make an informed investment decision.  That’s why it’s considered a best practice to issue a press release and/or file an 8-K and refer to or link to that more fulsome source when tweeting on a material topic.

Second, and more specific to Tesla, it points to the need to have a process to vet communications about a company to determine a statement’s accuracy and/or completeness, its materiality and any relevant SEC disclosure requirements.  Setting up such a process is exactly what Tesla agreed to as part of the company’s settlement of securities fraud charges with the SEC last fall, and Tesla’s Board was tasked with overseeing its implementation.

This incident makes me wonder “how’s that working out?”  I guess the news that Tesla’s general counsel – the person who helped negotiate this SEC settlement – is leaving the company after just two months, partly answers that question.

It seems when it comes to Musk and Twitter, Britney’s line from this song: “… to lose all my senses that is just so typically me” appears all too true.

Lisa Ciota
Lead-IR Advisors, Inc.

A Terrible, Horrible, No Good, Very Bad Day

That’s what a short attack feels like.  I know.  I’ve been there. (To read about my terrible, horrible, no good, very bad day, see my case study here.)

By way of background, a short attack is when short seller(s) actively seek to profit by driving a stock price down.  Just about any company can become a target of a short attack, but those with complicated corporate structures, in regulated industries or with low liquidity or low float are most vulnerable.

Short attacks can be launched by well-known activists or anonymous bloggers operating out of their basement.  Such an attack can come swiftly in the mainstream business media and/or private investor forums like Value Investor Club.  One thing for sure is the market reacts before ascertaining the facts, so during a short attack a company is immediately forced into a defensive position regardless of the merits or accuracy of the short’s thesis.

What is particularly frustrating is the SEC historically has been skeptical of allegations against short sellers. When complaining about shorts, companies are often viewed as whiners and are rarely successful litigating claims against them.  Still there’s a glimmer of hope this may be changing. For the first time in recent memory, the SEC prosecuted a hedge fund last fall for its part in making demonstrably false and misleading statements during a short attack according to a Vinson & Elkins insight post.  This action will hopefully serve as a deterrent to the more egregious attacks.

Still, short attackers are not likely to go away anytime soon, so its best to be prepared.  Begin by assessing your company’s vulnerabilities.  A good resource to help you develop a short attack defense strategy is a primer put out by Ropes & Gray in late 2017.  In addition to this primer, here are some thoughts based on my experience:

  • Keep your ears to the ground. Be alert when seemingly tangential or even inconsequential questions begin to crop-up. Engage with investors, especially hedge funds, as they may catch wind of something before you do.
  • Assess your company’s risks and vulnerabilities and be familiar with common short seller tactics. This will help you be better prepared because once an attack begins, you may not have time to analyze the attacker’s playbook.
  • Aggressively monitor changes in short interest via your stock surveillance firm or retain a market structure analytics provider for timely updates. Know what’s normal for your company.
  • Don’t assume a short seller’s blog reaches a limited audience. If your stock is reacting and investors are calling, the game is afoot.  Focus on the best way to respond based on the merits of the short seller’s thesis and company vulnerabilities.  Regain control of the narrative and don’t engage in a public tit-for-tat.

My top recommendation is don’t get angry or distracted – focus your energies on defending and protecting the company.

Lisa Ciota
Lead-IR Advisors, Inc.

The Effects of Auto-Pilot

Let’s face it.  It’s hard to beat the market.  Those who can do so consistently are few and far between and get paid serious money.  Whereas investing in a fund that tracks the market– a so-called “passive” fund because there’s no active choosing of individual investments – is like being on auto-pilot; it’s easy and low cost.

So, it’s no surprise investors big and small often put a portion of their money in passive funds like indexed mutual funds and exchange traded funds (ETFs).  A large chunk of these funds track the S&P 500 or Russell 3000, but passive funds can follow a myriad of other indices.

Over the last decade, passive investing has grown prolifically, from approximately $2 trillion to $10 trillion today, representing nearly 40% of assets under management.  Rapid change can make people uncomfortable.  As a result, some are raising questions about the broader effects of auto-pilot investment funds.  For example:

  • Can passive investing fuel a bubble or increase financial instability?
  • Does it crowd-out small, high-growth companies from the public markets?
  • Does it, or can it, distort the capital allocation process?
  • Does it stifle competition? Or create an anti-competitive environment?
  • What is, or should be, the role of these passive institutions in exercising oversight over their investments?

Serious questions, but can we really pin all this on passive funds?  Let’s take a closer look.

By definition, passive funds are designed to follow an index (however defined). Accordingly, they own a market-capitalization weighted interest in the companies comprising that index and rebalance their portfolio on auto-pilot.  Consequently, passive funds are followers, not leaders, of market trends, so it’s hard to imagine them causing a speculative bubble or bust.  Yet, some research indicates that the increased size of passive funds, their use of leverage and derivatives to manage risk plus market correlations among and between stocks, may result in passive funds increasing market vulnerabilities to idiosyncratic events. For example, when multiple funds on auto-pilot simultaneously buy and/or sell the same stock or if they suffer a liquidity event in the face of a rash of fund redemptions.  The good news is research shows passive fund holders tend to be less reactive, so the latter is not too likely.

Next, it logically follows that as money flows into index funds and ETFs, there is a proportionate increased investment in the companies comprising the indices.  Since generally larger companies belong to an index (depending on the specific index), passive funds basically facilitate the big getting bigger. Indeed, since 1997, we’ve seen the average market capitalization of public companies increase, while the number of public small-cap companies has dropped dramatically.  However, other factors such as industry consolidation, M&A and robust venture capital and private equity markets are also drivers of this trend.

In a similar vein, passive funds are, in essence, allocating capital to the underlying components of an index without regard to a specific business’s opportunity or fundamentals.  Sanford Bernstein analysts argue this is sub-optimal with potential long-term economic consequences as compared with active management, or even Marxism.  This is because under active management and Marxism, investing agents seek to optimize capital flows in an economy based on desired objectives or principles.  This is an interesting concept and one that bears watching, but in my opinion not critical at this time since passive investing represents less than half of all assets under management and access to capital remains robust through the debt, private equity and venture capital markets.

While not unique to passive investing, it’s very common for indexed mutual funds and ETFs to hold competing companies in the same industry.  Some academics theorize this could lead to anticompetitive behavior.  The thinking goes that given these funds’ portfolio optimization goals, some fund managers may try to influence the competitive strategies of portfolio companies so as to limit the negative impact portfolio companies in the same industry have on each other.  Amplifying this concern is the high level of common ownership at institutions and the collective influence they can bring to bear on companies.  This theory is a stretch in my view given my understanding the nature and behavior of institutional investors; the fiduciary responsibilities boards have to all – not just some – investors; and the significant compensation incentives managements have to optimize business performance.  Nevertheless, this theory has enough traction that the Federal Trade Commission held an open hearing on the subject in December 2018.

Finally, the major passive institutions can have a powerful voice in the corporate world given their ownership stake and corresponding proxy voting power.  Largely they have used this voice to focus on governance and board accountability matters, such as board operating principles and composition – including diversity. They are also focused on how well boards exercise their oversight of executive leadership, compensation, company strategy, corporate culture and risk management.  This includes asking boards to ensure companies assess relevant social and environmental risks.  As part owners of a company, passive investors have every right to expect boards to execute such responsibilities effectively.  Still, there’s a delicate balance between asking thoughtful questions and offering perspectives and being accused of overreach.

Deep breath here. Passive funds are not the source of all the business world’s problems – or even half of them. While passive investing has grown to a significant level rapidly, passive fund managers act and work independently, compete against each other for client dollars and have differing priorities.  In the end, passive funds have been a boon to a broad swath of the investing public and if there are any unintended consequences of their growth or size, it should be handled with a scalpel, not an axe.

Lisa Ciota
Lead-IR Advisors, Inc.

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That’s what BlackRock Chairman and CEO, Larry Fink’s annual letter to CEOs is: purposeful.  Purposeful in its language. Purposeful in its thinking. Purposeful in its intent to advance a dialogue about corporate purpose.

Yes, purpose.  It’s a concept that befuddled many last year who seemed to think that serving a corporate purpose was antithetical to profits.  Yet, as Fink laid out in 2018, companies without a sense of purpose cannot reach their full potential and will ultimately deliver subpar returns.  This year, Fink further expands upon this concept, noting that:

“Purpose is not the sole pursuit of profits but the animating force for achieving them.
… when a company truly understands and expresses its purpose, it functions with the focus and strategic discipline that drive long-term profitability.”

In Fink’s view, corporate purpose informs strategy, guides culture and provides a decision-making framework.  With clarity of purpose, organizations can become more resilient, aware and aligned, making them better prepared to adapt and evolve.

Fink’s perspective appears to be resonating more deeply this year.  Perhaps this is due to today’s more volatile and uncertain environment and the erosion of trust in government and media.  It may also reflect the current debate about shareholder primacy and the role of business in society.  What we do know is the general public and institutional investors increasingly look to business to be a bulwark of trust in an increasingly dystopian world according to the 2017 Edelman Trust Barometer.

So, what’s a company to do?  First, I dare say most companies do have a purpose, but it hasn’t been front and center in their thinking.  This is probably the hardest part.  It requires companies to thoughtfully answer and act on questions like:

  • What do we aim to do as a company? Why do we or what we do matter?
  • Where are we most vulnerable?
  • How does (or should) our purpose shape our culture and strategy?
  • How does our purpose create value (for customers, employees, communities and shareholders)?
  • Do our strategies, tactics and actions support this purpose and create value?

The answers to these questions need to be communicated internally via employee townhalls, new employee on-boarding, training programs, etc. and externally via the company’s website, the CEO’s annual shareholder letter, investor days as well as 10-K and 10-Q filings.  As part of its engagement efforts, BlackRock will be looking for this type of information in a company’s external communications.

For those who still pooh-pooh the concept of corporate purpose, I ask:  Isn’t, for example, a consumer product company that offers new products to make consumers’ lives easier or more enjoyable … or an industrial manufacturer making equipment that enables factories to operate more effectively … each serving a social purpose?  Don’t we expect companies to consider the upstream and downstream implications of their activities and be good corporate citizens? For an example of a company that adheres to its purpose while delivering results, read Judith Samuelson of The Aspen Institute recent Quartz at Work posting which highlights Southwest Airlines.

In the end, there’s a purpose for it.  Be purposeful about it.

Lisa Ciota
Lead-IR Advisors, Inc.

Dubious Distinction

“As the world’s largest and deepest equity market, the U.S. tends to be the relatively steady hand among volatile peers.  Not anymore.” (Lee, Bloomberg, January 7, 2019)

This was the opening comment in a recent Bloomberg article about increased volatility in U.S. markets. Morning Brew (Freyman, January 6, 2019) provided additional perspective, noting that the VIX Index (aka Wall Street’s fear index) had the dubious distinction of outpacing the corresponding measures in Europe, Hong Kong and emerging markets in December. vix historyYes, volatility in the U.S. was higher in 2018 than in the recent past, but for perspective, its still largely below the levels experienced during the financial crisis and roughly on-par with the levels during the dot-com bubble at the turn of the century.

Still, volatility being up sounds worrisome.  But what does this really mean?  Let’s breakdown the components used to arrive at the VIX Index:

  • The S&P 500 Index is a market-capitalization weighted average of the 500 largest public companies in the U.S. As such, the S&P 500 Index is a calculated value, existing only on paper, although you can buy mutual funds and ETFs designed to replicate the index. The S&P 500 Index is considered a benchmark for the overall economy and equity portfolio performance.
  • This is where S&P 500 Index (SPX) future options come in. Investment managers use SPX futures as a form of insurance – to hedge portfolio performance in changing market conditions.  Others simply want to predict (speculate on) the future level of the S&P 500 Index.  There are a series of weekly and monthly expiration dates on SPX futures which can extend well into the future. Just like buying insurance, the SPX trades and settles using cash – something to think about given the extent to which index futures are traded on margin.
  • The VIX Index uses SPX future options as a means to predict the volatility in the S&P 500 Index over the next 30 days. The VIX is calculated using the midpoint of the bid/ask quote on a constantly changing portfolio of SPX future options that have expiration dates more than 23 days but less than 37 days away.  Like the S&P 500 Index, the VIX is a calculated value, existing only on paper

So, let’s follow the logic chain:  We start with a weighted-average based on the real market value of the 500 largest companies in the U.S.  Because there’s a desire to hedge, predict or speculate on this benchmark’s outlook, futures options are available to do that.  But, every minute of every day there are different views of where the benchmark is headed and to measure this variation a weighted-average based on said futures options is used.  This sounds logical when you read it forward, but can you read it backwards: Can changes in the VIX drive or influence changes in SPX trading and in turn effect the value of companies in the S&P 500?  Can the tail wag the dog?

Today, more than a third of all assets under management is passively managed (i.e., in index funds or ETFs), a big chunk of which use algorithms tied to the S&P 500 Index to inform its trading strategies.  So, while the financial markets are considered efficient and rational, it’s hard not to worry about getting caught in a feedback loop.

For example, there are future options on ETFs like the SPDR S&P500 Trust ETF (SPY). Could an anomaly with a well-known ETF like this spread to the VIX or other similar instruments?  Many believe it’s unlikely and note that estimated total assets invested in individual index futures like this is tiny (in the billions of dollars) compared the total S&P 500 market capitalization of $21 trillion, so any impact should be contained. That’s good news, but a dubious comfort.

Lisa Ciota
Lead-IR Advisors, Inc.

Something in the Air

It all started with a short reply to a National Investor Relations Institute (NIRI) eGroup chatroom just before the holidays.  In the week after this posting, I received a dozen or so calls and emails asking about my experience running an integrated investor relations and corporate communications function a few years ago.  There must of have been something in the air given the variety of companies and industries saying they were thinking about this.

I was little surprised by this interest as investor relations is often siloed within the finance department with limited involvement with other audiences.  This largely reflects the specific information needs of investor audiences.  Yet, the idea of an integrated communications makes perfect sense when you consider the importance of companies speaking with one voice.  Of course, the complexities of the disclosure environment, multitude of information sources and relentlessness of the news cycle are also factors.  Bottomline, everything communicates.

It’s naïve to think what a company says to one audience isn’t heard by another and perceptions aren’t shaped by it.  So integrated and aligned communications are a must.  But this can take many forms, with varying degrees of centralization or coordination based on the company’s industry and product lines, its critical audiences as well as the nature and intensity of the messaging needs and communications channels.

In my case, when due to a company restructuring I assumed leadership for corporate communications, my first step was to define the integrated function’s strategic purpose and functional scope.  This was informed by the company’s broader strategic focus and a prioritization of critical audiences and stakeholders.  We defined our critical audiences as investors, financial and industry/trade media, industry councils/associations, governance/regulatory affairs and our local communities.  A SWOT (strengths, weakness, opportunities, threats) analysis helped define our priorities and pillars for success. As a small industrial materials processing company with little visibility outside our industry and the communities where our facilities were located, combining external-facing communications under one umbrella made sense.

It may be more difficult for consumer-facing, high visibility companies to integrate the functions just given the volume and types of communications and channels involved.  In such cases, I’ve seen a strategic message council approach be effective.  This is where leadership from investor relations, corporate communications, government affairs, marketing and human resources, regularly meet to align strategies, priorities and messages and use that alignment to lead their respective teams accordingly.

Something may be in the air when it comes to combining investor relations and corporate communication, but whether it’s a soft breeze or the strong wind of change only time will tell.

Lisa Ciota
Lead-IR Advisors, Inc.

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Taking Stock

It always happens at the end of the year – people take stock of the past 12 months and measure what was most important, popular, read or viewed.  Not to miss out, below is Lead-IR’s top 5 blog posts of 2018.

Lead-IR Advisors
Top 5 Most Viewed Blog Posts of 2018

  1. Ahead of the Curve, April 18, 2018
  2. Replay: New Kid in Town, September 26, 2018 (Original post: February 21, 2018)
  3. Face North, October 31, 2018
  4. Long Days, Short Stint, October 10, 2018
  5. Its Personal, Redux, August 1, 2018 (Original post: January 5, 2018)

In reviewing this year’s top posts, three key themes emerged:

Beyond Business Issues
Should CEO’s and companies address public policy, political or social issues? If so, when and how?  In the past, such topics were considered beyond the normal scope of business and companies and CEOs could stay out of the fray.  However, the general public and investors increasingly believe it appropriate for companies take a stand on issues relevant to fostering a healthy business environment. Both the Ahead of the Curve and Face North posts offered perspectives and best practice pointers on doing just that.  The former outlined how Jamie Dimon, Chairman & CEO of JPMorgan Chase discussed public policy issues in his annual letter to shareholders.  The latter highlighted the importance of having a deep understanding of company purpose, values and culture to guide decisions on where when and how to take a stand.  While not in this year’s top 5, the Stay or Go post from early May 2018 also addressed this topic.

C-Suite Transitions
From the sudden passing of Fiat Chrysler’s CEO Sergio Macchione, to Pepsico’s CEO Indra Nooyi’s retirement and the surprise ousting of GE’s former CEO John Flannery, CEO transitions were a hot topic in 2018. So, it’s no wonder readers found It’s Personal, Redux’s discussion of key disclosure considerations related to CEO health matters and Replay: New Kid in Town’s pointers on introducing a new CEO to investors, particularly relevant.  If you’re working with a new CEO, I suggest reading October 2018’s Just Being post and reflecting on what “becoming” a CEO means in the full sense of the word.

Focusing on Tomorrow
Or rather, there’s not enough of it – focusing on the long term, that is.  Everyone and their brother complain about the short-termism prevalent in the markets today.  Yet, as discussed in the Long Days, Short Stint blog post, it seems every solution to counter this is focused on what companies should or shouldn’t do.  Certainly companies can do some things to counter this as suggested in the Give No Quarter post.  But, as outlined in the Easter Bunny blog post, the current market structure is designed to support investors who drive a big chunk of trading today and have short-term investing horizons.

Lisa Ciota
Lead-IR Advisors, Inc.

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