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WCGreen

(45,558 posts)
Wed Jul 18, 2012, 07:06 PM Jul 2012

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.

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Investing, via a hedge fund does not make you a business man, whatever that means... (Original Post) WCGreen Jul 2012 OP
I think you have accurately described the Mittster. CaliforniaPeggy Jul 2012 #1
It's not just Mitt.... WCGreen Jul 2012 #2
You need to read up on Bain. dkf Jul 2012 #3
That's how they get every bit of money they can squeeze out of the company WCGreen Jul 2012 #4
Wrong Bain. Igel Jul 2012 #5
Two points. Igel Jul 2012 #6

CaliforniaPeggy

(150,704 posts)
1. I think you have accurately described the Mittster.
Wed Jul 18, 2012, 07:39 PM
Jul 2012

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?

WCGreen

(45,558 posts)
2. It's not just Mitt....
Wed Jul 18, 2012, 07:42 PM
Jul 2012

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

 

dkf

(37,305 posts)
3. You need to read up on Bain.
Wed Jul 18, 2012, 07:51 PM
Jul 2012

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/

WCGreen

(45,558 posts)
4. That's how they get every bit of money they can squeeze out of the company
Wed Jul 18, 2012, 09:26 PM
Jul 2012

And then let it go...

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

Igel

(35,763 posts)
5. Wrong Bain.
Wed Jul 18, 2012, 09:31 PM
Jul 2012

Right person, but wrong company.

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

Igel

(35,763 posts)
6. Two points.
Wed Jul 18, 2012, 09:47 PM
Jul 2012

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.

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