I once wrote a column headlined “Buffett deserves his D-grade”. It prompted a one-line e-mail from Jim Cramer, the CNBC investment pundit: “You have cojones.”
Not that my assessment was particularly ballsy: the D was Warren Buffett’s own self-critical grade in March 2000 for his capital allocation decisions the previous year. And, of course, I was wrong. Publication of that annual letter to shareholders called the trough in the share price of his Berkshire Hathaway and the peak of the internet bubble. As Mr Buffett pointed out in the same letter, he and vice-chairman Charlie Munger had avoided technology sector investments because they had “no insights into which participants in the tech field possess a truly durable competitive advantage”. It turned out they weren’t alone.
The financial sector should be a laboratory for sensible new ideas about incentives – rather than a morgue for dead bonus programmes. So it’s distressing to read that investment banks are lagging behind insurers and retail banks in their efforts to design effective new rewards for their chief risk officers.
CROs are supposed to be the linchpin of tighter self-regulation of post-crisis institutions, at least according to the blueprint prepared by Sir David Walker, the City of London panjandrum. He drew up a report in 2009 on how governance at financial institutions should be improved. But research by Hedley May, a City headhunter, points to a lack of consistency among investment banks in the UK about how to tackle risk officers’ remuneration – and to a worrying lack of individuals who can fulfil all the Walker report’s requirements. Read more
The Oscars were last night, and my first prediction for 2011 was utterly wrong. Not only did The King’s Speech, a classic independent drama of the kind the Academy loves, win best picture but Tom Hooper, its director, achieved an upset by being named best director.
Here was the first of my predictions in an end-of-year column: Read more
This blog is about to evolve as I welcome a co-author – Andrew Hill, the FT’s new management editor and columnist. From next week, he will be adding his own posts on business and management from London to mine from New York.
Andrew and I are old colleagues and friends and we also look a bit alike – tall with (in my case greying) blond hair and glasses. I hope that our blog contributions will be a little more distinctive than our appearances. Read more
Does Arianna Huffington have staying power?
I have agreed to act as a judge on this question as part of a bet between Felix Salmon, the Reuters financial blogger, and Robert Cottrell, my former FT colleague who now owns a Latvian bookshop and is co-founder of The Browser website. Read more
Maersk Line, operator of the world’s biggest container fleet, this week announced plans for a very big ship indeed. The Danish company has ordered, from a South Korean yard, 10 vessels bigger than aircraft carriers that will carry vast quantities of Chinese-made goods from Asia to Europe.
My column last week on stock exchange mergers included some disturbing figures on the fall in the number of initial public offerings in the US since the 1990s.
I mentioned one possible reason: Read more
It is time to declare a winner of my competition to find a name for the proposed merger of Deutsche Börse and NYSE Euronext.
You will recall that Chuck Schumer, the New York senator, declared that “New York” should come first in the new name because otherwise it would be a signal that “the Germans” were taking over. Read more