HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » General Discussion (Forum) » Investing, via a hedge fu...

Wed Jul 18, 2012, 06:06 PM

Investing, via a hedge fund does not make you a business man, whatever that means...

It means you are an investor and investors only want one thing out of their portfolio; the largest return on capital they can"create".

To me, a business man is a person who is interested in all aspect of the firm they are running.

There are many aspect, of course, but here are the ones I think are pretty universal.

First, producing good products to build up your firm in the publics eye, second, looking for the best way to sell your product, third, how to best keep the people in your employ by treating them fairly and equatable. And finally, turning a sustainable profit which means looking far beyond the next few quarters.

I'm an accountant and deal with a lot of small business people and what they wanted most was a sense of building something good and also looking for a comfortable living. Doing this can take a lot more than just a few quarters.

So to say Mitt Romney is a business man is just disingenuous. To me, Mitt Romney is a vulture capitalist who swoops down into a situation with only one goal on his mine, getting as much money he can get and moving on leaving others to pick up the pieces.

6 replies, 1250 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 6 replies Author Time Post
Reply Investing, via a hedge fund does not make you a business man, whatever that means... (Original post)
WCGreen Jul 2012 OP
CaliforniaPeggy Jul 2012 #1
WCGreen Jul 2012 #2
dkf Jul 2012 #3
WCGreen Jul 2012 #4
Igel Jul 2012 #5
Igel Jul 2012 #6

Response to WCGreen (Original post)

Wed Jul 18, 2012, 06:39 PM

1. I think you have accurately described the Mittster.

This is what he did with those companies he took over. It's all legal..........but moral? Nope.

Do we want an immoral man to be President?

Reply to this post

Back to top Alert abuse Link here Permalink


Response to CaliforniaPeggy (Reply #1)

Wed Jul 18, 2012, 06:42 PM

2. It's not just Mitt....

It's the whole idea beyond these investments into companies. Professional investors have literally destroyed a good chunk of the American economy.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to WCGreen (Original post)

Wed Jul 18, 2012, 06:51 PM

3. You need to read up on Bain.

 

If their philosophy were only to invest that is one thing. But the control they exert is scary.

The problem isn't that Bain's style is hands off, it's that it is suffocating.

http://features.blogs.fortune.cnn.com/2012/01/15/bain-fortune-1987/

Reply to this post

Back to top Alert abuse Link here Permalink


Response to dkf (Reply #3)

Wed Jul 18, 2012, 08:26 PM

4. That's how they get every bit of money they can squeeze out of the company

And then let it go...

I was aiming a little hire than one company....

Reply to this post

Back to top Alert abuse Link here Permalink


Response to dkf (Reply #3)

Wed Jul 18, 2012, 08:31 PM

5. Wrong Bain.

Right person, but wrong company.

Bain was a consulting company, but Romney's is Bain Investments, which takes money and buys companies.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to WCGreen (Original post)

Wed Jul 18, 2012, 08:47 PM

6. Two points.

The first is trivial, but usually overlooked.

Romney was there and helped get Bain started. Around 2000 it had 400+ employees. Building a company, any company, with 400 employees isn't something to sneeze at. In this case, he was interested in every part of it: He produced a product investors wanted, found a well to sell the product, kept people in his employ, and managed to make his company turn a profit that lasted for more than a few quarters.

His product was investment. Not steel, notepads, or anything else.

Everybody gets hung up on the 2nd point, but only hear the last few weeks of a nearly 10-year story.

When Bain bought all or part of a company, it got slots on the board of directors. And it appointed Bain-folk. Romney was one of them. Bain folk appointed managers and turnaround men in the companies. GST Steel is one company whose board Romney was on, but there were a flock of related companies or, rather, companies with related products that were merged into one corporation. Like the others, the steel products company wasn't broke, but it was heading that way. Bain buys companies cheap, and if GST Steel had been in good shape it wouldn't have bought it. The early '90s were hard on a lot of companies. The GST Steel union representative at the time blamed "politicians" for allowing cheap imports to ruin the business and nearly drive the company into bankruptcy, and it's not like that's the only union rep to do so. Recession, cheap overseas imports, and they blamed Bush I for it.

GST Steel was turned around. Bain invested a pile of cash in the company, investment that made the company competitive. It was more than profitable for a few years. Around 2000 it started to crash, as did a lot of steel companies (thank you, recession; thank you, China). My mother's old employer finally bit the dust then--a steel company that had gone belly up in '93 (bought out) and which finally was fully liquidated and the pension obligations turned over to the US government. Note that a few other companies in that corporation also went under. The rest survived with decent revenues and profits, but don't know about offshoring in them. The little steel company had an okay 8-year run with Bain before things went sour, which is probably 8 more years than it would have had, and then a bad year or two before it was liquidated.

Reply to this post

Back to top Alert abuse Link here Permalink

Reply to this thread