““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Buffett Briefs Berkshire Shareholders on NetJets
In his annual letter to Berkshire Hathaway shareholders, investment mogul Warren Buffett said the company's flight-services division-which includes fractional provider NetJets and aviation training company FlightSafety International-set a record last year with pre-tax earnings increasing 49 percent to $547 million. "Corporate aviation had an extraordinary year worldwide, and both of our companies-as runaway leaders in their fields-fully participated," he wrote. NetJets, which Buffett regards as the "unchallenged leader" in the fractional industry, currently operates 487 jets in the U.S. and 135 in Europe. Though NetJets Europe ran cumulative losses of $212 million in its first 10 years of operation, it now has "real momentum," he said, with earnings tripling there last year. The U.S. operation is also doing well financially, he wrote. At FlightSafety, revenues climbed 14 percent and pre-tax earnings soared 20 percent.