The spending bill, which Senate Democrats hope to pass by Christmas, would give tax credits of up to $12,500 for electric vehicles that are union-made in the U.S. Notably, Tesla factories are not unionized, and Tesla has been absent from much of the Biden administration’s EV agenda.

“It might be better if the bill doesn’t pass,” Musk told the Wall Street Journal’s Joanna Stern on Monday. “I’m literally saying get rid of all subsidies … the government should, I think, just try to get out of the way and not impede progress.”

Musk also criticized the size of the bill, saying it would increase the federal deficit to an unsustainable level.

When asked about the infrastructure bill, Musk said Tesla doesn’t really take any of it into consideration. When pressed by Stern on what critical infrastructure needs the U.S. has, Musk cited the need for improved airports and highways, and suggested urban tunnels to reduce congestion. Musk, of course, is also founder of The Boring Co., a tunnel-digging company whose services he has pitched to multiple U.S. metro areas, including Las Vegas, Los Angeles, Chicago and Fort Lauderdale, Fla., as a solution to traffic gridlock.

In the wide-ranging interview, Musk also said the upcoming Cybertruck may be Tesla’s best vehicle ever (“It will be awesome”), hinted at his future by saying no one should be CEO forever (“It would be nice to have a bit more free time on my hands as opposed to just working day and night from when I wake up to go to sleep seven days a week”), and said he splits his time about evenly between Tesla and SpaceX.

He also said his neuroscience startup, Neuralink, hopes to start human trials next year.  “I think we have a chance with Neuralink of being able to restore full body functionality to someone who has a spinal-cord injury,” he said.

The Tianjin, China-based company said late Monday that its board had approved plans to buy back up to 10% of H-shares and A-shares in circulation.

It separately said that its chairman and executive director, Xu Lirong, had resigned, to be replaced in both positions by Wan Min, who currently serves as the board chairman of China Cosco Shipping Corp.

Wan Min on Monday was also appointed chairman and executive director of Orient Overseas (International) Ltd., a subsidiary of Cosco Shipping.

Shares of shipping companies may also be getting a boost from another increase in container freight rates. Bocom International said in a research note Tuesday that global container freight rates hit new 2021 highs in the latest week, with Shanghai, European, Transpacific and U.S. West Coast rates all rising on week.

The research group said that the total number of vessels waiting in the open ocean along U.S.-based ports “has not fallen meaningfully, which points to still-elevated demand from Asia to the U.S., in our view.”

Han “is expected to strengthen the synergies among the different businesses” and “drive new businesses and technologies,” Samsung Electronics said in a statement on Tuesday.

The company also named Kyung Kye-hyun, who heads affiliate Samsung Electro-Mechanics, as the new chief executive in charge of Samsung Electronics’ semiconductor division.

Kyung, a semiconductor-design expert, “is expected to help maintain the Company’s semiconductor leadership,” it said.

“It is always difficult to restructure but this allows us to focus on TTP399 and our future growth,” the company said Monday. VTv said, “we are very excited to see TTP399’s novel mechanism of action allowing for reduction of hypoglycemic episodes with a well-tolerated safety profile,” and adding, “we continue to engage with the FDA to map out a clear and positive path forward on our Phase 3 pivotal studies.”

Shares rose 8% to $1.22 after hours.

Nunes also emailed his constituents Thursday, saying: “Recently, I was presented with a new opportunity to fight for the most important issues I believe in. I’m writing to let you know I’ve decided to pursue this opportunity, and therefore I will be leaving the House of Representatives at the end of 2021.”

Nunes was a vocal supporter of Trump when he was president, and served as chairman of the House Intelligence Committee. He was in line to chair the powerful House Ways & Means Committee if Republicans win control of the House in next year’s midterm elections. The 10-term congressman faced a potentially tougher path to reelection in 2022, as a preliminary redistricting map would have given Democrats an edge in his Central California district.

In a statement Thursday, Trump called Nunes “a fighter and a leader. He will make an excellent CEO of TMTG. Devin understands that we must stop the liberal media and Big Tech from destroying the freedoms that make America great.”

Earlier Monday, Digital World Acquisition 
DWAC
 — the special-purpose acquisition company looking to take Trump Media & Technology Group public — said it faces regulatory investigations by the Securities and Exchange Commission and the Financial Industry Regulatory Authority about its proposed merger.

Read more: The SEC has some questions for the Trump SPAC

After sinking during the regular trading day, DWAC shares shot more than 9% higher in after-hours trading, following Nunes’ announcement.

My suggestion to Wall Street: Read academic research about the importance of the CEO for an organization’s long-term success. My reading of these studies suggests that Wall Street actually should be celebrating that Twitter’s board chose an insider. CEOs who come in from the outside often do a poorer job than lesser-known managers who have worked their way up through the ranks of the corporations they eventually lead — like Agrawal.

This is because a corporation’s internal culture plays a much bigger role in a company’s success or failure than the CEO. Internal candidates like Agrawal are steeped in Twitter’s corporate culture and know how to navigate it. In contrast, CEOs brought in from the outside have no such familiarity, which is why they often are less-effective leaders.

To be sure, a board of directors might want to bring in an outsider in order to change a firm’s internal culture. Unfortunately, in a contest between an outsider CEO and an internal culture, the latter usually wins. Gautam Mukunda, a professor of organizational behavior at Harvard Business School, has found from his research that “most of the CEOs who try to radically transform a company will fail.”

The implication is that Wall Street exaggerates the importance of the CEO. Rakesh Khurana, a colleague of Mukunda’s at Harvard Business School who is a professor of leadership development, told me on the occasion of past CEO shakeups that “large-scale statistical studies have failed to find any direct causal link between CEOs and firm performance.” A corporation’s internal culture “exerts a far greater longer-term influence on the company’s success” than a CEO. 

The importance of culture

What is this corporate culture that plays such a predominant role? It’s not easily defined, which is one reason why Wall Street doesn’t pay it as much attention as it deserves. A partial list of what corporate culture includes was provided by a recent study by three finance professors: Gary Gorton and Alexander Zentefis (both at Yale) and Jill Grennan (at Duke):

• Unwritten codes, implicit rules, and regularities in interactions

• Identities, self-image, and guiding purpose

• Espoused values and evolving norms of behavior

• Conventions, customs, and traditions

• Symbols, signs, rituals, and group celebrations

• Knowledge, discourse, emergent understanding, doctrine, ideology

• Memes, jokes, style, and shared meaning

• Shared mental models, expectations, and linguistic paradigms

You can readily see why culture isn’t easily defined. But just because it’s hard to define doesn’t mean that it has little or no impact.

An example of how big an impact culture has arises when two companies merge, either through an outright merger or an acquisition. Many studies over the years have documented that the average merger destroys value, when taking into account the market valuation of both companies and comparing them to otherwise similar companies that don’t merge. The likely culprit, according to Eric Van den Steen, a professor of business administration at Harvard Business School, is a “culture clash — the… destructive effects of combining two organizations with different cultures.”

No guarantees

To state the obvious, picking an internal candidate to be CEO is not a guarantee of success. So there is no assurance that Twitter will perform well under its new CEO.

Just think back to the disappointing performance of General Electric
GE,
+3.49%
stock when Jeff Immelt was CEO. Immelt had been working for GE for 19 years when he was appointed CEO. During his tenure, GE stock lagged the S&P 500 by more than six percentage points annualized.

Still, my reading of the research suggests that GE is more the exception than the rule. Twitter has a better chance of success by naming an insider as CEO than it would have had it catered to short-sighted Wall Street investors and appointed a higher-profile outsider.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com

More: Why GE’s tax-free split could power the stock higher and reward patient investors

Also read: The Nasdaq and the Dow are now trading in a way that was evident just before the internet bubble burst

The $7 trillion asset manager began providing institutional clients – pension funds, endowments and the like – access to private-equity investments in 2020 through HarbourVest Partners, an $85 billion, independent global private markets investment firm. It expanded into wealthier individuals earlier this year.

Vanguard wouldn’t disclose how many clients have invested in its first offering for individuals, the Vanguard HarbourVest 2021 Private Equity Fund, or the dollar amounts, but Fran Kinniry, global head of private investments for Vanguard, said the fund giant has exceed its goals “by quite a far margin.”  

Private equity is a very different than the stock market — notoriously expensive and opaque, with little regulatory oversight and often requiring individuals to lock up money for a decade or more. It is open to individuals who are qualified purchasers—those with $5 million or more in investments — or accredited investors — a net worth of at least $1 million, or more than $200,000 in annual income.

Vanguard’s foray into this market comes as the Labor Department allowed plan sponsors to add private-equity investments to defined-contribution plans as part of professionally managed asset- allocation funds, generally known as target-date funds. None have done so yet, but private-equity proponents are pushing for this to become reality. Vanguard is a top choice in 401(k)s and runs one of the biggest target-date fund businesses.

Vanguard’s first offering to individuals set a $500,000 minimum investment, made over three years, and the term, or lockup period, is 14 years. Many of Vanguard’s mutual funds have a minimum investment of just $3,000, and few have any minimum penalty-free holding periods.

Jack ‘will roll over in his grave’….

Some advisers think Vanguard’s entry into private equity underscores that the firm is no longer the firm founded by Jack Bogle in 1975.

 “I suspect [Bogle] will roll over in his grave” if he was asked about the private-equity foray, said Allan Roth, certified financial planner and founder of Wealth Logic, an investment advisory and financial planning firm in Colorado Springs, Colo.

Roth said he understands Vanguard is pursuing private equity for competitive reasons; money managers like Goldman Sachs and BlackRock are already in the space. “But I don’t necessarily agree with it.”

Rick Ferri, an investment advisor at Ferri Investment Solutions in Georgetown, Texas, also hosts the Bogleheads on Investing podcast, where he spoke at length with a guest about his worries. He’s particularly concerned about private equity’s high fees and whether these investments can be opened up to the masses the same way index investing was while still commanding high returns. 

“That’s not how Jack thought of things. But then again, you know, when Jack was there, they had $150 billion under management. So it’s a different company for sure,” Ferri said.

Kinniry said Vanguard’s move into private equity follows in Bogle’s footsteps and giving individual investors access to markets traditionally open only to institutions.  “What Jack stood for was taking a stand for all investors, especially retail investors. We find that this entry into private equity follows that exact template that he launched indexing with,” he said.

Vanguard led the charge to lower fees for its mutual funds and exchange-traded funds, causing a ripple effect across the industry. That led to the term “the Vanguard effect,” meaning costs often fell in whatever sector of the market the fund giant entered. In August, Morningstar said in its annual U.S. Fund Fee study that the average expense ratio paid by fund investors is half that of 20 years ago.

Both Ferri and Roth said they don’t know what Vanguard is charging investors for this private-equity fund, and Vanguard’s Kinniry wouldn’t disclose it, only saying that the fees are higher than the costs for Vanguard’s actively managed mutual funds, which are around 0.40% to 0.50%.

Private-equity fees typically are not disclosed, but they are often hefty, typically 2% of assets under management and 20% of the profits, dubbed “2 and 20”.

Vanguard chose HarbourVest because of the company’s long-term performance record and its philosophy of putting client outcomes first, which Kinniry said was most unique among the managers interviewed.

Will strong returns continue?

Citing the usual caveat that past performance doesn’t equal future results, Kinniry pointed out that HarbourVest outperformed the MSCI ACWI index, which tracks about 3,000 stocks in 49 developed and emerging market countries, by 700 to 800 basis points net of all fees in the firm’s 35-year-plus history. Vanguard has a more conservative estimate of expected outperformance, and returns may fall of if private equity becomes more democratized, as the firm expects, he said.

“We’re somewhere thinking that net returns over public markets will be 300 to 400 basis points,” Kinniry said, while stressing the lockup period of this type of investment repeatedly to investors. “If the future is anywhere, even half of its past with HarbourVest, we believe investors will have higher net outcomes even though they have higher costs,” he later added.

Another concern Roth and Ferri have is whether the high returns will remain if more investors are fighting over the opportunity to invest in good private companies. Consultants at Deloitte forecast increased interest could boost private-equity assets under management to $5.8 trillion in 2025 from $4.5 trillion in 2019.

That also could shrink the illiquidity premium—the reward private-equity investors traditionally have received for locking up their money for years. Kinniry said the illiquidity premium should fall to about one-third or one-half of the 3 percentage points it’s been historically as more investors enter the market, but it won’t disappear.

Investors should focus on private equity’s demand side, not supply, he said. There are many more small, private companies than public firms, and these are small companies without private backing. “As private-equity supply grows, we’re seeing more and more of the demand side. And so I think the two will very easily equate to each other,” he said.

Kinniry also suggested that investors who may be saving for children or grandchildren may not need to put all of their money in easy-to-sell assets like stocks and bonds.

“If I have a 30-year horizon, and I can get 100 to 200 basis points in illiquidity premium, why wouldn’t I want 20 or 25 or 30% of my portfolio (in illiquid assets)? You don’t want to go too far. You don’t want to be 80% illiquid. But I would argue that investors are probably too liquid given their time horizon,” he said.

Debbie Carlson is a MarketWatch columnist. Follow her on Twitter @DebbieCarlson1.