Warren Buffett (investment) versus Larry Fink (balance buy-backs)
Are short-sighted managers under-investing in the US economy because they want to line the pockets of investors through share buy-backs?
Are short-sighted managers under-investing in the American economy because they want to line the pockets of investors through share buy-backs? Yes, says the world’s biggest fund manager: American capitalism needs to be fixed. No, says the world’s most successful investor: good projects aren’t dying for lack of financing. Larry Fink, BlackRock’s chairman and CEO, and Warren Buffett, chairman of Berkshire Hathaway, personify a debate vital to investors and voters. If managers are ignoring profitable opportunities because of short-term shareholders or badly designed incentives, a better approach could boost both share prices and economic growth. Bringing back corporate cash trapped overseas, part of the aim of US President Donald Trump’s tax plans, could then support further investment. If everything’s dandy with corporate management, the blame for slow growth lies elsewhere. Companies bringing cash home to the US won’t have new projects to invest in, so it’s likely to be spent on yet ...
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