No matter what industry you look at, the top shareholders, and therefore decision makers, are the same: Vanguard, Blackrock, State Street and/or Berkshire Hathaway. Vanguard and BlackRock are the top two owners of Time Warner, Comcast, Disney and News Corp, four of the six media companies that control more than 90% of the U.S. media landscape BlackRock and Vanguard form a secret monopoly that own just about everything else you can think of too. In the end, owning land is the only thing that's gonna matter, and these people know this. I leave that to you to figure out, since I have more numbers to spring on you. Thats why these empirical studies are so striking and important, as they suggest that its the case. that argues you can achieve diversification by investing across industries.4 But no matter what the strategy is for diversifying across industries, if youre only holding one company in each competitive industry, some investors would end up worse off. But every theft creates a hole in his spiritwhich is why the wealthy age faster and worse than normal people. Posner: There are a lot of answers to your question. Among his research interests is the question of the increasing concentration of ownership in corporate America, including the role of institutional investors. If our rule were put into place, we would predict that the market would segment, and you would see the big institutions like BlackRock divest from all the firms in a concentrated industry except for one and increase the stake in that remaining firm. The same can be said of anything. Two platforms were promoted from the beginning, to give the. You can have a controlling share at this level, if you own the most share blocks.. You DOn't have to own 51%, just own more blocks then everyone else. Morningstar: Eric, how did you become involved in this topic of concentrated ownership? While bigger may be better for the fund giants, passive funds may be blurring the inherent value of securities, implied in a companys earnings or cash flow. Our conversation has been edited for clarity and length. BlackRock and The Vanguard Group are two of the most powerful asset management companies in the world today. This is a very broad rule. Presumably the defense would bring out one set of papers and plaintiffs would offer another set. These companies are publicly traded and are run by boards, where the largest shareholders have power over the decision making. You do want index funds to remain easily accessible. It would be a new world that would have to be addressed. And I dont just mean you are ahead of him in the eyes of the gods, though I believe that, too. You certainly can, and a lot of people do. If they keep the shine, it is for a reason. 2017. Big Tech Its only a problem when the underlying markets are concentrated. What is of bigger concern is the assests that they have 100 percent control of (real estate). And then the question is, would this be a bad thing? BlackRock Inc. and Vanguard Group already the world's largest money managers are less than a decade from managing a total of US$20 trillion, according to Bloomberg News calculations. Global warming is a global disaster if left unchecked Bill Gates Demands The Right To Censor Insane People Press J to jump to the feed. Providing exclusive original content and interviews with some of the best known voices in the world of economics and precious metals. Create an account to follow your favorite communities and start taking part in conversations. Indeed, the global economy may be the greatest illusionary trick ever pulled over the eyes of people around the world. BlackRock and Vanguards dominance raises questions about competition and governance. In accordance with Title 17 U.S.C. One problem is that people would have to search out and find the small [asset managers]the 1% companiesif they want to be fully diversified. For example, Facebook owns Whatsapp and Instagram. Posner: Yes. While index investing does play a role, the price discovery process is still dominated by active stock selectors, executives led by Vice Chairman Barbara Novick wrote in a paper in October, citing the relatively low turnover and small size of passive accounts compared with active strategies. Blackrock is the top investor, and Vanguard and State Street are right behind. An Empirical Exploration of Idiosyncratic Risk, The Journal of Finance, Vol. The same investors are at the basis of every aspect of our journey. Given that there are papers from economists on both sides of this issue, how would that affect the legal process? I wont name any names, because I dont need to. What would happen in litigation is that the plaintiff would say, Here is this paper, and they would probably try to get the authors to testify as experts, but even if not, they would hire other economists who are experts. There is a general tendency of capital markets to become concentrated. I know secondhand that people in the Justice Department were interested in the topic. While there appear to be hundreds of competing brands on the market, like Russian nesting dolls, larger parent companies own multiple smaller brands. Between these 3, and the likes of other hedge funds and assest managers (and the likes of Bill gates and other 'elites') they own and control soooooo much land. If they cross the 10 per cent threshold, I think for many people that would make it clearer that the growth of large asset managers could create serious concerns for competition in many industries.. It is Vanguard's oldest mutual fund and the nation's oldest balanced mutual fund, and it has been subadvised by Wellington Management since its inception in 1929. But since Obama had been President before that, and since he was already Goldman Sachs lawnboy, what does that make Trump? That is known. Despite that, I would guess the answer to my title is. The institutional investors will arguemaybe they already have arguedthat they fall within this passive investor exception. According to Forbes, there were 2,075 billionaires in the world as of March 2020. Survival I think the legal merits boil down to an empirical question of whether these purchases really do have an anticompetitive effect. If you baked a cherry pie today or mended a sock, you are ahead of the guy who sat on his ass and created nothing while earning a million from investments. I cant seem to find this specific one anymore. Its very unlikely that someone is just going to sue all the institutional investors for all the anticompetitive effect they have had on the whole economy. But I did find some information that is not hidden which is very interesting. Whatever the case may be there, we have to ask who owns Goldman Sachs. Heres a sampling: You can continue going through the list of tech brands companies that build computers, smart phones, electronics and household appliances and youll repeatedly find Vanguard, Blackrock, Berkshire Hathaway and State Street Corporation among the top shareholders. 2001. The proliferation of exchange-traded funds is also supercharging these firms and will likely continue to do so. Blackstones current portfolio is much smaller, about 20 billion, down from 36 billion in 2015. Which is why I could be charmed by that one scene and ignore the rest. As for the new U.S. administrationto be fair, they are just still transitioning, but Id be skeptical that this would be a priority for them. Examples will come to mind. Alphabet owns Google and all Google-related businesses, including YouTube and Gmail. Without perhaps intending to, it actually confirms my sermon. BlackRock also developed the computer system that the central banks use. The letter starts out saying, My name is Spartacus, and Ive had enough: We are watching the medical establishment inject literal poison into millions of our fellow Americans without so much as a fight. I mean that even if the gods arent watching or keeping score, you are still ahead of him. Data show performance among active managers is improving. You will say that shouldnt protect her, but I think it does. These institutional investors own Bayer, the worlds largest seed producer; they own the largest textile manufacturers and many of the largest clothing companies. These are facts, not fiction. Maybe it was required that they actually gain the whole world before they could lose it. Riots/Protests This post disappeared from the sub and it doesn't show up when you search for it. So yes, I can see issues coming up. These four media conglomerates own and control more than 90 percent of the United States media landscape, which explains why their collective coverage of world events all centers around the same propaganda. Not everyone can see when eyes go dark, apparently. Eric Posner: I was brought in by Glen Weyl, who is an economist at Microsoft Research. But I am not talking about that kind of beauty anyway. Were permanent long-term holders and, given that, we have the strongest interest in the best outcomes. Their size could also help companies change for the good. They will tell me it is purposely seductive, what with Elizabeth Hurley playing the devil and coming across as likeable. As with Pepsi, the majority of the company shares are held by institutional investors, which number 3,155 (as of the making of the documentary). It is how the gods know exactly how shallow you are. They dont want to actually have to vote. DEL BIGTREE EXPLAINS WHY IT AINT JUST THE COVID VAX, Facebook More than 80% of Facebook shares are held by institutional investors, and the top institutional holders are the same as those found in the food industry: Vanguard and Blackrock being the top two, as of the end of March 2021. You cannot sell your soul. We should be concerned. Education News We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters. Their combined $22 trillion in managed assets is. Active managers will be watching these developments closely. To see how that works, notice that on the page for, What this means is that whoever owns Blackrock/Vanguard also owns the NYSE and everything else. Do you think that, in addition to the argument around concentrated ownership, the traditional tools of trustbusting could yield greater gains to consumers today? Policymakers Take Notice Since youve started writing on the topic, whats been the level of interest among policymakers? Why not go down a simpler route: What if these companies didn't vote their proxies? Wouldnt you create a long tail of bad outcomes for, say, the person who ended up holding Pan Am in the mid-1980s instead of United Airlines? Entertainment News In turn, they, themselves are owned by shareholders and the most surprising thing is that they own each other's stocks. Now, there are exceptions and defenses, which I will get to in a moment. The blame attaches to those who run the projects and who join them knowingly. How do we cut the head off the snake (Black Rock and Vanguard) In the process, they will own almost everything on planet Earth. The same ownership trend exists in all other industries. 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