Break The Wall Street Rule: Outperform The Stock Market By Investing As An Owner - Hardcover

Jacobs, Michael

9780201632811: Break The Wall Street Rule: Outperform The Stock Market By Investing As An Owner

Hardcover

ISBN 10: 0201632810 ISBN 13: 9780201632811

Publisher: Basic Books, 1993

Break the Wall Street Rule explains how you can maximize your stock-market returns by acting as a true owner of the companies whose stock you purchase. In his thorough analysis of today's investment landscape, former Treasury Department official Michael T. Jacobs shows that this "effective owner" approach takes the guesswork out of investing and reinvents the relationship between corporations and shareholders. In contrast, the current Wall Street Rule - to sell stock whenever its performance displeases you - actually undermines your returns.
Most investors speculate on stock prices, either buying and selling or paying mutual funds to buy and sell. Such shuffling produces dismal results compared to the overall market; each year three out of four money managers return less than the market average. The real beneficiaries of the Wall Street Rule are the investment industry and company executives who don't want to answer to owners. Jacobs shows that simply by investing for long-term growth, you can beat 95 percent of mutual funds. Even better, in the last decade companies with large effective-owner shareholders earned triple the market average.
With Break the Wall Street Rule investors of any size can become effective owners. In clear language Jacobs explains how small shareholders can utilize the power of institutional investors. There are guidelines for choosing companies structured for the benefit of their shareholders, not to insulate their executives from shareholders. Other chapters describe how to assemble a portfolio and how to calculate whether a stock has paid you back enough.
Many books explain when to buy stocks or which stocks to buy. Break the Wall Street Rule shows how real gains come from what you do once you own a stock. You can use the power of new SEC proxy rules to maximize your returns. You can ensure that management works for shareholders by supporting directors and resolutions that protect your interests, such as connecting pay to performance. Owning only $1000 of stock lets you propose your own shareholder resolutions; Jacobs illuminates the rules and realities of this process. As shown at Sears and GM, shareholders and boards can affect how major corporations are run. In sum, the effective owner philosophy of Break the Wall Street Rule will revolutionize the way you look at stock-market investing.

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From Library Journal:

Instead of selling the shares of a company whose performance is unsatisfactory (the "Wall Street rule"), Jacobs advocates shareholder involvement. By acting as an owner rather than a speculator, the shareholder can compel management to be held accountable for poor results, as recently happened to the CEOs of IBM and Amex. Part 1 presents the theoretical case for involved ownership and Part 2 offers practical guidance to becoming a more effective and influential owner. While this theory is important and topical, personal investors cannot expect to have much clout even when their proxies vote carefully, as Jacobs advocates. Realistically, his advice applies to the institutions (e.g., pension funds, insurance companies) that own and trade a high proportion of stock outstanding. Most of the salient points were originally laid out in his earlier book, Short-Term America ( LJ 10/15/91), but this is a useful companion work for most libraries.
- Alex Wenner, Indiana Univ. Libs., Bloomington
Copyright 1993 Reed Business Information, Inc.

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