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Sunday, 27 November 2011

Minority shareholders – what about your duties and obligations?

I can’t help be amazed at the way some retail “investors” sometimes mistake owning a few shares of a listed company as if they really “own” the business.

All this talk about aligning the management’s compensation with shareholders interests… How the laws and regulations can be better improved to “protect” minority shareholders, etc…

I guess calling myself a speculator makes life a lot easier for me. And my trading cousins must be smiling at me and giving me a high five! What matters to us is how much skin we bring to the game, and when we leave the table, whether our pockets are flushed with more cash than we entered the game!?

Come on! Let’s admit it. We are all greedy “freeloaders” when we “invest” in a listed company.

We part with our money, and in exchange for doing absolutely nothing, we either:



a)   Hope to make a capital gain by selling our shares to a greater fool out there. (If you think the price will go higher why are you selling?)

b)   Or like a leech, we just want the get the regular “ang pows” (dividends) every year from your “investment”. We see our penny invested as bigger than a bullock cart’s wheel!

I won’t talk about your minority shareholders’ rights. You know them better than me. I just would like to gently point out:


  1. Where were you when Management has decided to “downsize” 5% of the workforce in order to meet your incessant demands to show earnings growth?
  1. What about the employees’ benefits and rights when you applaud management’s wise decision to “outsource” non-critical business activities?  
  1. Have you ever once considered the environment impact and whether child labour was employed by the units outside the shores of Singapore? Far from our prying eyes?
  1. Did you notice that most top management teams have only a token number of female executives? How about the Board members? You only question about their “independence”; but never wonder why so few female Board of Directors?
  1. How about the quality of the products and services of the listed companies you own? Did you ever ask during the AGM how the customer experience can be improved? Or were you only interested on the buffet spread? 

I can go and go – like the energizer bunny. But you get the picture. It’s all about me, me, me!

Me? I am an equities man-whore. I’m in it for the money. (I never said I was a saint!)

I employ a “don’t ask; don’t tell” policy.


Hey lady! No kissing on the lips 



11 comments:

  1. Some mniority shareholders discharge their duties and obligations by consuming their precious annual leaves for suhc events.

    Some of them even have young kids hor so obligation to their stocks bigger than their kids???

    Serious business don't play play.

    ReplyDelete
  2. Hi SMOL,
    i am guilty. Believe it or not i have attended a few investment seminars but not even one AGM or EGM.
    i must have muddle throughout my investment journey. In Chinese: 胡搞,乱七 八 糟,胡 理 胡 图,Ha!Ha!
    But with HIS GRACE & BLESSINGS, i am alright. i am O. K. His GRACE has HIS WAYS. For you maybe you call it "LUCK"
    Amen.

    ReplyDelete
  3. this is one of the most irresponsible post i have read in a long time and utterly distorts what the Kreit debacle was about.

    The specific issue here is that a business trust operates in a different way then goods producing business but your reasoning states so many reasons that is not related to REITs and trusts.

    I am not sure if you are deliberating trying to stir things up here.

    ReplyDelete
  4. Hello CW8888 and Temperament,

    Phew! I guess with maturity of time and experience, you can read between the lines and see beyond the written words.

    We are aware WHY we are investing in stocks; and what really counts.

    LOL!

    ReplyDelete
  5. Hello Drizzt,

    I must first apologise that I've inadvertently upset you so much on a Monday...

    I am a bit puzzled. I can see your emotion; but I don't know specifically which points I've wrote that have riled you up. Or is it the whole post?

    When you have calmed down, I would really appreciate if you can write to me in private (or if you prefer openly here) how and where I've been irresponsilbe.

    ReplyDelete
  6. Me puzzle too??? May be Drizzt commented on wrong post. LOL

    ReplyDelete
  7. No i believe i wrote on the right post. what i totally disagree with is why the attack on minority share holders and specifically what were they in the wrong about? the reason being that the examples you cited seem to target events that are not related to REITS.

    ReplyDelete
  8. yes SMOL, if you are a speculator, why bother? and don't be afraid to speak out even if someone does not agree and even upset with you, whats the big deal haha. i don't agree with you most of the time.

    lust for winning and capital gains right?, as you gain experience, you will realise the lust in you will gradually reduce as you improve.

    ReplyDelete
  9. Hello Drizzt,

    Thanks for making it clear. Now I understand...

    1) My post is a satire on ALL small retail minority investors - not just REITs investors :)

    2) It's meant to be provide an ironic alternative side of the equation.

    Different people will read it differently. Some will do soul searching, some will laugh with me, and some will get riled up.

    3) Please hold on to your feeling of being "attacked". Now you understand how the management would feel - when you are singing the chorus of popular opinion under "fair comment".

    I quote from a foreign talent MP that made a first class opening speech in parliament:

    It's the "intolerence" of differences; that's the problem....

    ReplyDelete
  10. Coconut,

    Thanks for the cheerleading!

    It's OK. Drizzt is a friend who helped me a lot when I started out in blogging, and I respect his knowledge on technology; I visit his blog regularly to get inspiration on investng in tech stocks. I'm a laggard when it comes to technology!

    Friendship is based on honest communication. And I value Drizzt's feedback. It's OK to agree to disagree :)

    I don't know about you; but I hope my lust for women will not diminish with experience... Huh? You not talking about women? Everything I do I do for the opposite sex leh!

    ReplyDelete
  11. i think i have to make a stand to take a side for this. if u are stating it as a general management perspective then yes i do agree at times the problem we have is due to shareholders. and why do we invest in them when they are producing harmful stuff. it makes us just as bad.

    but i find it wrong to take away the main objective of the problem.

    this problem have exist for some time and it is plain to see and for the first time we can possible get the authorities attention we get investors stating that it is minority shareholders asking too much.

    ReplyDelete

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