Some of us content ourselves with market returns on our investments by buying index funds. Most investors are very pleased if they beat the market by a few percentage points. In the last year, the Standard and Poor’s 500 is up something like 7% since the index was at something slightly above 1100 a year ago and closed today at about 1185.
Things are different for shareholders of Halliburton.
Raw Story reports:
The company has been criticized by auditors for its handling of a no-bid contact in Iraq. Auditors found the firm marked up meal prices for troops and inflated gas prices in a deal with a Kuwaiti supplier. The company built the American prison at Guantanamo Bay.Despite those problems, shareholders of Halliburton have done quite well.
Halliburton was trading in the mid thirties a year ago. Today, it closed at nearly 62, which results in a one year profit of a cool 77% or so. Why has HAL done so well?
“Halliburton has already raked in more than $10 billion from the Bush-Cheney Administration for work in Iraq, and they were awarded some of the first Katrina contracts," Lautenberg said in a statement…
Given the history of the Halliburton/ Dresser merger consummated by Vice President Cheney (in which Cheney failed to realize that Halliburton was acquiring not only Dresser Industries but also massive potential asbestos liability) and the subsequent accounting scandals, perhaps Halliburton stockholders are just regaining the ground it lost while under bad management.
It is amazing how competent management can change the fortunes of a business. Perhaps it is time we try to run the government more like a business, a least in that respect.
Endnote: Please note that despite the fact that Vice President Cheney owns a couple hundred thousand Halliburton stock options, he does not personally profit from the rise in the value of those options because he has agreed to donate the net profit to charity and has agreed not to take a tax deduction for that gift.
(NB: Dwight, not I, MB, was the author of this post. One of the problems with sharing a machine, as mine is, once again, on it's way for repair at HP. Sigh.)