Although the current sensibility of the time is that America has too many MBA financial engineers running companies and not enough skilled operators with the good horse sense to grow revenues, much of America’s corporate history was filled with the opposite concern. People used to worry about founders and controlling families having no idea how to allocate surplus capital–especially when it came to stock buybacks.
There were three reasons that could explain why a founding family would have trouble figuring out the buyback price.
The first reason is sentimentality–you know those studies that show how we overweight the commercial value of our possessions because of the sentimental value we place them? Well, if … Read the rest of this article!