Ruling Class Looting ...

The list of techniques the ruling classes have used for 15 years to raid and loot companies puts any blackout rioter to shame.

Let me count the ways:

1. Golden parachutes. Today's WSJ story about Wachovia executives collecting after running the bank into the ground is a simple proof.
2. Stock options. Every single stock option issued for "performance" and "incentive" is proved to be a lie, as they merely reward poor behavior such as stock buybacks.
3. Insane pay for CEOs, etc. ... approved by their buddies on the compensation committee.
4. Private equity ... is merely as way to loot in private, sucking good assets out of companies and paying themselves big dividends and high fees. See the WSJ story about Mervyn's today.
5. Financial firm pay .. ignores the use of the firms capital and its risk. Traders get huge pay for risking the firms money to make "profits", which are not properly charged a fair cost of capital. Of course, it's a "heads they win, tails the stockholders lose game"
6. Hedge funds. Ditto. That scam is now laid bare.
7. CFOs ... many are obviously incompetent and overpaid. They financed their companies using commercial paper and now must pay huge rates to refund it into long term bonds. Financing long term assets with long term debt is Finance 101, as I learned it 25 years ago. I guess they flunked or cheated in that course.
8. Class action lawsuits ... enrich lawyers turned pirates and do nothing for consumers or stockholders.
9. Stock buybacks ... nearly single share of stock bought back for the past 10-15 years is proven to have been a very poor use of corporate funds. The management prefers stock buybacks as those prop up the value of their stock options.
10. Thinking ... Does anyone have a tenth ?

Markets

That glorious, efficient, rational and liquid market show itself well yesterday [ that's sarcasm ! ], putting in another wild move.

The bears might re-attack soon. Some recent Thanksgiving holidays have given them easy targets in low volume on the Friday after Thanksgiving.

Actions

Today I can do a bit of re-allocation in Krypto Fund, but stil must wait until late next week for most of it. I am tied up by the interplay of tax rules for wash sales and mutual fund exchange rules. I wonder if I should open a brokerage account in my main retirement accounts to enable me to use ETFs to sidestep those rules ? Thinking ...

I am thinking of investing some Alpha Fund money into a package of small, beaten up stocks the might go up 5 or 10x in a new bull market. That will require some selection. Just thinking for now.

Word of the Day

"Copyhold" - noun [$100]
Copyhold means 1. (formerly) a type of ownership of land in England, evidenced by a copy of the manor roll establishing title; 2. an estate held under such ownership.
Sentence: Stockholders need to stop being mere copyholders and start act as real owners exercising their powers to approve stocks options plans, director and other corporate actions. And they should lobby for new laws for secret voting in proxies, rights to elect the compensation committee directly, and to nominate directors themselves.