Dr. Jonathan Tiemann
Barron’s, the Dow Jones business weekly, published its annual investor survey of America’s most respected large companies this week. I was one of 112 investors responding to the survey.
It’s important to note that the survey asked what companies we respect. I chose to interpret the question narrowly, recognizing that not every successful enterprise — and not even every enterprise that seems likely to deliver an attractive return on capital — is deserving of respect. Here’s how Vito Racanelli, the Barron’s journalist, under whose byline the results of the survey have appeared for the past several years, quoted me in his report on the survey: “Business is a human enterprise. What is most admirable in business is running a successful enterprise honestly, without cutting corners. As soon as you begin to be an apologist or say things that are untrue or only narrowly true, you run into trouble.”
Unfortunately, it’s impossible to build a well-structured, well-diversified portfolio entirely of stocks of companies deserving of respect in the sense I had in mind. There’s just too much routine mendacity in the business world. But that doesn’t mean that we have to give a pass to every executive that cuts a few too many corners.