Companies are supposed to tell shareholders about risks to their investments...

Discussion in 'Off-Topic' started by GopherT, Nov 5, 2015.

  1. GopherT

    Thread Starter AAC Fanatic!

    Nov 23, 2012
    5,986
    3,726
  2. nsaspook

    AAC Fanatic!

    Aug 27, 2009
    2,907
    2,163
    It's called 'risks' not certainty but the last time I checked Exxon Mobil has made a tidy profit for all those years and only a fool thinks they won't in the future if the predicted cold happens starting in 2030. There is zero science in this bogus government action. Over production and lower prices is a much larger short-term risk to the company than 'climate change' cutbacks that would likely increase prices and possible profits in fossil fuel futures.
     
  3. Papabravo

    Expert

    Feb 24, 2006
    10,135
    1,786
    I guess if you own XOM and they haven't been lying, the you've got nothing to worry about. If you don't own any XOM, then you don't care what they've been doing. I don't own any and I'll wait and see if they've been lying or not.
     
  4. JoeJester

    AAC Fanatic!

    Apr 26, 2005
    3,373
    1,157
    I have not read any of the annual reports for exxon mobil found here yet. Let's see how they identified the "risks".

    Here is the 2014 annual report summary on the subject of climate change ...

    All I see is the typical short term, mid-term, and long term propaganda. The NYS AG must be up for re-election and needs some "free" advertising of him doing something.

    Of course the NY Times article said they were doing a project that was EXPECTED to last 30 to 40 years. The engineers would be negligent to the stockholders if they didn't plan for a scenario that didn't include the melting of the ice cap. See http://graphics.latimes.com/exxon-arctic/ for more details.

    Here is another group of articles from a biased source ... http://insideclimatenews.org/content/Exxon-The-Road-Not-Taken

    Who is the NYS AG going to investigate next? Nostradamus predicted climate change ... and yet no one cared.
     
    Last edited: Nov 5, 2015
    nsaspook likes this.
  5. tcmtech

    Well-Known Member

    Nov 4, 2013
    2,033
    1,625
    Well so far none of the companies I have ever invested in have bothered to send me any heads up warnings about their stock before they crashed and burned or worse. :mad:
     
  6. nsaspook

    AAC Fanatic!

    Aug 27, 2009
    2,907
    2,163
    No more money in big Tobacco so now it's big Oil for a fast buck.
    [​IMG]
     
  7. Papabravo

    Expert

    Feb 24, 2006
    10,135
    1,786
    Ditto for the brokerage houses and the mutual fund managers. Cramer is about the only source of heads up news to avoid the House of Pain! Even he is wrong some of the time.
     
  8. GopherT

    Thread Starter AAC Fanatic!

    Nov 23, 2012
    5,986
    3,726
    I think the whole topic of corporate responsibility is interesting - conflicting and completely biased for survival. Acceptable and endearing if done by some industries (or companies) and viewed as being part of the Evil Empire if done by others. Cell phone companies may be melting nuts when carried in our pocket - but we are all so addicted to our phones that most people could not believe it is true so the studies about low sperm count, skin disorders, ... are taken with a grain of salt and a wink and ignored. At the same time, cell phone manufacturers are publishing their own studies, lobbying congress and trying to limit any future liability if current phones do cause us to explode and making sure the current test methods do not become any more stringent.

    The firearms industry is making sure that electronic "smart guns" never come to fruition and that product liability immunity remains.

    Pesticides, dairy industry, beef industry, automotive industry, pharmaceutical industry, food additives, genetically modified foods, baby cribs, kids' car seats, laminate wood flooring, carpet, - those are some industries that sell to consumers that are all lobbying test methods and spinning the benefits of their products. Then the upstream industries like trucking, steel, coal, power plants do the same thing but the fact we have less attachment to them, the more likely our opinions will be negative.

    I just think it is interesting how attached people can be to some industries (products) and negative about others - all doing the same thing to promote the product and extend the lifetime of the company.
     
  9. Papabravo

    Expert

    Feb 24, 2006
    10,135
    1,786
    The interests of the shareholders and the interests of the company are often in conflict. To access the capital markets the alignment and management of that conflict is required. If the burden of managing the conflict becomes too great the company can always be take private with a suitable outlay of capital and debt in an LBO.
     
  10. GopherT

    Thread Starter AAC Fanatic!

    Nov 23, 2012
    5,986
    3,726
    I realize that but it is amazing to me how the NYS AG is not investigating Apple or Motorola for funding and publishing research on the safety of cell phones that use non-standard test methods to confuse results and muck up opinions on cell phone health effects but they do after the oil industry for doing the same thing.
     
  11. nsaspook

    AAC Fanatic!

    Aug 27, 2009
    2,907
    2,163
    When XOM starts selling yogurt and calling it oil that's when the shareholders and the public have a problem.
     
  12. nsaspook

    AAC Fanatic!

    Aug 27, 2009
    2,907
    2,163
    Maybe because even the NYS AG knows it's bunk.

    Cell phones are dangerous.
    [​IMG]
     
    Last edited: Nov 6, 2015
    JoeJester likes this.
  13. Papabravo

    Expert

    Feb 24, 2006
    10,135
    1,786
    Amen to that brother Spook!
     
  14. JoeJester

    AAC Fanatic!

    Apr 26, 2005
    3,373
    1,157
    I wouldn't be so dam cynical if NYS AG wasn't an elected official. On the bright side, it's probably the first time since the last election that New Yorkers has heard about their AG.

    I find it amusing that the Carter Administration and Reagan Administration praised Exxon for doing climate research. Even the Exxon researcher warned against using uncertain science in making decisions however, they also noted expenses could be 30% to 50% less if there was global warming. Yesteryear's praise is today's vilification.
     
  15. wayneh

    Expert

    Sep 9, 2010
    12,090
    3,027
    This is nothing but grandstanding by the AG. Publicly held companies are required to identify and report to the owners (shareholders) any specific risks to the business. They do not have to consider every scenario of force majeure possibilities such as asteroid strikes, massive earthquakes, mass hysteria and so on. They need to identify the risks that are somewhat unique to their business environment, that an ordinary investor might not think of on their own. Having the government declare your business illegal is a risk for everyone.
     
  16. JoeJester

    AAC Fanatic!

    Apr 26, 2005
    3,373
    1,157
    Does anyone know if Vegas has a line on future events like disappearing ice caps, artic or Antarctic?

    I'm sure the gamblers would have as good a prediction as anyone else.

    In 2007, there was a bet ... you can read about that here.
     
    Last edited: Nov 6, 2015
  17. Papabravo

    Expert

    Feb 24, 2006
    10,135
    1,786
    The fellows at Goldman Sachs will sell you any kind of option OTC, that you care to name, for the right price. I might buy a DEC 2020 put on the disappearance of the Arctic Ice Cap.
     
  18. JoeJester

    AAC Fanatic!

    Apr 26, 2005
    3,373
    1,157
    There are areas of the Baffin Sea that are above the Artic Circle which by definition is part of the Artic Ice Cap that could freeze over by Dec 2020. Yesterday, it was -11 c in Cape Christian Nunavut Canada ...
     
  19. GopherT

    Thread Starter AAC Fanatic!

    Nov 23, 2012
    5,986
    3,726
    I think the point is, if they are spending money to do research and lobbying without formally explaining to their shareholders why it is important, then it can be troublesome. If it is an issue worth the expense of lobbying and 3rd party research, then they need to inform their shareholders why it is worth the expense (what risks they are abating).

    If the company believes global warming is a non-issue, then they need to explain why money was spent on research and lobbying - unaccounted expenses are very troublesome and can have the appearance (or the actual root cause) of illegally funneling shareholder value to friends and family as 3rd parties expenses.
     
  20. JoeJester

    AAC Fanatic!

    Apr 26, 2005
    3,373
    1,157
    They looked at all scenarios and the expenses involved with each. They warned of making decisions on uncertain science. They did not state there would be global warming. So, if they planned for the two extremes, yes, global warming would be more profitable, as the expenses are lower. Business 101, not a grand conspiracy.

    It's a wonder the Alaskan Pipeline was ever built.
     
Loading...