Cliff Asness: Shareholder Value Is Undervalued

Cliff Asness: Shareholder Value Is Undervalued by AQR Capital Management

The idea that corporate management should focus on maximizing shareholder value is under attack, often in hyperbolic terms, with this idea blamed for great and varied harm (e.g., underinvestment, inefficiency, inequality and the failure of people to appreciate the film Ishtar). Recently, James Montier of the esteemed, including by me, money manager Grantham, Mayo, Van Otterloo & Co., voicing the views of many, wrote a piece calling it “The World’s Dumbest Idea.”[1] In addition, attacks have appeared in The New York Times and in The Wall Street Journal.  A simple web search shows this to be a concept with many prominent learned detractors and...