This and that

A mix of unrelated stories that don't take a post-space by themselves.

• Democracy on trial again: In a post earlier I had detailed Morgan Stanley's version of shareholder-friendly democracy. The same is set to happen at Citigroup tomorrow. If you are an optimist, good luck!
  
• A story on monopolies being created via mergers, in the health insurance / benefit managers sector. While a link to increased costs is not obvious from this study, I can't help but conclude that cutting the excessive payouts in deals, like this one, may save a few thousand lives! Unfortunately, most federal and state regulatory agencies seem to be in a stupor. And fund managers - hmmm - haven't I covered that one before ? They sound more like apologists.
  
• I had noted a few months ago on how bank mergers don't usually lead to a better customer experience. Here is the official version of it! As a customer, you get smaller loans at higher rates. And oh, you also get fatter swines up in the ivory towers.
  
• Tax day turned out to be a memorable one for Symantec what with the IRS sending it a billion dollar bill! The underpayment is related to the Symantec/Veritas transaction, something that I disliked for many less interesting but practical reasons. Symantec shares look extremely attractive now.
  
• In other tax news: H&R Block, with a 2.2% dividend, is an attractive long term play. The stock got hit when Spitzer filed a suit over H&R's retirement accounts (hint : these accounts didn't necessarily help you retire unless your financial needs decreased over time from your initial investment). As with many such suits, this one will get settled with no one being punished. Ofcourse, the stock will recover.
  
• A few weeks ago I had posted about chasing stocks and understanding risk, taking Barron's picks as examples. An update - Greenhill has continued climbing, and ITG hasn't gone anywhere. Not exactly the forecast that followed from Barron's features. While Barron's could still end up being right, this is just not meant for small-time investors, who cannot afford to spend all their time in researching or stressing over their investments. Most investing publications are just not courageous enough to pick beaten-down or otherwise cheap stocks. Standing out from the crowd doesn't come naturally to us. Take another pick from Barron's this week - HP (HPQ). The piece predicts a 20% or more upside, but the truth is that most of the upside came over the last year or two. You should have bought HP at $15 (I did) when no one wanted it - there was also a nice dividend to be had. Now that HP is close to $35, I see a number of recommendations. If you have large sums to play with and can get in and out easily from huge positions, there is still money to be made, but if you have just a few hundred or a few grand at the most, you should be looking elsewhere.
  
• Idol (idle) worship: By now, I have probably bored you to death with stories of executive overcompensation. But please bear with me - I am still trying to understand. One explanation for tolerance, so far, towards such gross robbery, is the promotion of idol worship by various media outlets and other mouthpieces (like fund managers). There is hesitation to name names when things go wrong - even in those rare circumstances when someone gets axed, they go out in style, with an exit package to die for! When things go well, like in a typical turnaround story, everyone goes gaga over some executive, when in fact the turnaround may already have been in progress earlier, but wasn't visible. This is especially true in large companies employing thousands - a single executive cannot bring about such a change, that too in a few months. There is excessive fawning - something that gives an executive an excuse to make hay while the sun shines and milk as much as possible from the coffers, with board members and money managers as accomplices. This has to stop if we are to ever see a change. While in the rest of the developed world, the ratio of average compensation of a regular worker to an executive is in the 1:10 to 1:20 range, it is an astounding 1:140 in the US. What skills are being rewarded here ? The ability to lie on one's resume ? The knack to sell stocks while publicly maintaining that all is well with the company ? I must be missing something - please tell me what it is.