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Feb 17, 2022Liked by Jeffrey Carter

Terrific article. What I would really like to know is how do we find fund managers & companies that are neither 'woke' nor beholden to the climate changers, greeners, or any of the diverse crowd that wishes to restrict Capitalism? I would like to think Fidelity, Charles Schwab and Vanguard are Pro-Capitalist but with all this goose-stepping to show one's allegiance to the anti-capitalist backlash I don't know how best to root out the good guys from the bad. If you have any ideas please share them. I cannot believe it is just me wanting this information. Does anyone know where Fidelity, Schwab and Vanguard stand. Are there any concerns available to the common man who still approach markets from a Capitalist point-of-view? Obviously, BlackRock. has made their bed and I hope it sinks along with their woke theories; Thank you, Jay Foster

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Feb 17, 2022Liked by Jeffrey Carter

"This could be fixed. Why doesn’t the SEC allow people who invest to vote the shares they own on a percentage basis?" Hi Jeff! In the corporate governance/shareholder settlement world - Technically, the investors don't own the shares. The broker owns the shares and the investors are the 'beneficial shareholders'. If you look at a public company's shareholder register - the largest shareholder is either "Cede & Co" or "Depository Trust Company" (or DTC)

DTC was created in the early 70's to help centralize the processing of securities. I used to hear stories from the retirees in my rookie year ( 1981) about the "Paper Crunch" in the 60's - which forced the exchange to lengthen the settlement time from T+3 to T + 5 - in order that every security which settled was forced to include a weekend within that settlement period - so the street and transfer agents could catch up with the backlog. DTC is owned by the variety of broker firms and banks which own it. The only comparable entity I can compare it to would be MasterCard (before it went public)

So if you have shares in your fund - and say it's a fund that trades through/custodies their shares at (for example) State Street - State Street is the "owner" of the shares and does the voting.

For retail - the brokers can - upon request - send you proxy materials and let you vote - you have to change your voting status from "Objecting Beneficial Holder" to "Non-Objecting Beneficial holder" Certain matters like auditors - the brokers vote for that automatically, and the auditor matter is placed on the ballot to help a company achieve quorum for the meeting. Certain brokers - particularly those who handle retail accounts (like TD and Schwab) may employ "proportional voting" where they vote the shares of unvoted shares in the same proportion as those who voted. It is a BYZANTINE system and I have been in the securities business for many years and even I don't understand it all! So my point is that the investors recognized in the case of shares owned via a brokerage firm is that THEY are the investors. One way to combat this is to have your broker switch your shares to the transfer agent so your shares are present on the share register with you as the named owner.

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Great comment!

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