Tag Archive for Shenanigans

As If Nothing Matters

     The world gave the appearance of doing nothing and going nowhere over the past month – apart from the sensational liaison of Kim Kardashian and Kanye West, which, some believe, augurs a dazzling speed-up of the much prayed-for economic recovery, return to full employment, $2.50 gasoline by summer, and the selection of Jesus Christ as VP running mate by Mitt Romney – but, in fact, so much trouble is roiling under the surface…

One of the Telltale Signs Behind Risky Stocks

Short-term corporate thinking has been blamed for many of America’s economic ills.

With little foresight beyond next year, management sometimes closes down plants and fudges accounting to make this year’s earnings look better and boost the stock price.

Often, it is simply because management is excessively rewarded by short-term incentives such as stock options.

While investors might benefit from these shenanigans in the short-run, a new study points out the long-term effects are frequently negative.

A new Harvard Business School study entitled “Short-termism, Investor Clientele and Firm Risk” has shown that short-termism is bad for investors increasing their risks without any corresponding increase in returns.

In other words, risk and the short-term thinking usually go hand in hand.

Breaking Down the Conference Call

The study used a very interesting method to find out which companies are short-term oriented or more risky.

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