“Warren Buffett’s longtime business partner Charles Munger said activist investing is bad for the U.S. Two of the biggest practitioners, Bill Ackman and Carl Icahn, said not when they’re doing it,” Margaret Collins and Noah Buhayar report for Bloomberg. “Buffett and Munger, renowned for their success with long-term value investing at Berkshire Hathaway Inc. (BRK/A), both predicted at the firm’s annual meeting that activist funds will draw more money. Munger questioned whether the strategy actually improves targeted companies. The tactic is causing a bigger stir ‘than anything has in years,’ Munger said. ‘I don’t think it’s good for America.'”
“‘I 100 percent agree with them,’ said Ackman, 47, who runs hedge fund Pershing Square Capital Management LP, of Buffett and Munger. Seeking short-term gains without creating better businesses is ‘bad for markets, and it’s bad for shareholders.’ Pershing Square typically holds stakes ‘four, five, six years or more,’ Ackman said. He pointed to investments in Canadian Pacific Railway Ltd. (CP) and General Growth Properties Inc. (GGP) as examples where value rose for shareholders. Almost every company he bought into had a higher market value after he exited, he said,” Collins and Buhayar report. “‘I understand and somewhat agree with their criticisms that some activists are going for a short-term pop,’ Icahn, 78 and chairman of Icahn Enterprises LP, said of Buffett and Munger’s remarks. ‘That doesn’t mean you throw the baby out with the bath water. One of the most important things we need in this country is to keep companies accountable.'”f
“Icahn also pushed for changes at Apple Inc. (AAPL)… He has called on the technology company to return more of its cash to shareholders in payouts. Cupertino, California-based Apple said April 23 it will increase its share repurchase authorization by $30 billion and boost its dividend. The stock jumped 8.2 percent the next day, the most since April 2012. ‘We own a lot of stocks long-term,’ Icahn said. ‘I haven’t sold a share of Apple,'” Collins and Buhayar report. “Icahn, who didn’t attend the Berkshire meeting, published an article that day in Barron’s in which he called on Buffett to take a more of an activist role as an investor in situations like a dispute over Coca-Cola Co.’s pay package. Icahn wrote that if Buffett, a billionaire who drew thousands of people to Omaha to hear his thoughts on investing and the economy, doesn’t speak out for changes who will? ‘Activism is extremely important for the future of our country because some of these companies are run badly,’ Icahn said. ‘Some of these boards are a travesty.'”
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