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Technology Stocks : Walt Disney -- Ignore unavailable to you. Want to Upgrade?

To: Fredric D. Bellamy who wrote (433)	2/25/1998 1:57:00 AM
From: Fredric D. Bellamy	Read Replies (1) \| Respond to of 2222

TIAA-CREF, a major pension fund outfit for educators, led the charge at Disney's annual meeting for "reforming" the DIS board. TIAA-CREF generated a great deal of publicity with its vote, which was around 35% in favor of the proposed reforms. I find it interesting, however, that TIAA-CREF's own performance would not earn the outfit any bragging rights. As reported in thestreet.com today: "The largest of their pension accounts, CREF's $104 billion Stock Account, which aims to track the market, has posted a 10-year cumulative return of 341.3% through the end of last year. That's compared with 416.4% for the Vanguard Index: 500 Portfolio. Meanwhile, its $4.6 billion CREF Growth Account, which aims to return more than the market, has returned 117.9% over three years. That's compared with 124.9% for the Vanguard 500." The foregoing investment results hardly amount to a stellar performance. Maybe TIAA-CREF needs to spend more time looking at its own management skills before campaigning against a company that greatly outperformed the majority of the funds' remaining investments. When I want a large institutional investor to shake up a board, I will look to a Michael Price, or a James Cramer, because they will focus on creating shareholder value. For that reason I don't invest in companies in which the voting power is concentrated in a closely held class of stock (the New York Times, for example). I'm not sure what TIAA-CREF is doing, however, other than perhaps trying to justify its own management's existence given its gross under-performance of the Vanguard index funds. Given TIAA-CREF's track record, the outfit's clients would be better served if TIAA-CREF fired its management and turned over all the money to Vanguard. The only bragging rights TIAA-CREF has been earning is the right to tell the outfit's underserved investors that TIAA-CREF was in the forefront of complaining about hypothetical management problems. Hip, hip, hooray!