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Right, this is about power. Specifically, it makes clear that Larry and Sergei are now in the capital allocation business. When you buy a share of Alphabet, y

Right, this is about power. Specifically, it makes clear that Larry and Sergei are now in the capital allocation business. When you buy a share of Alphabet, you are buying shares in Larry and Sergei's opinion about what should be done with money. If you think they're much better at spending money than you are, this is a great opportunity. If you don't, it isn't.

chetanahuja 11y ago
Well you're still mostly investing in the growth potential of Google's existing businesses. Don't forget that Alphabet still completely owns all the money-making businesses of Google.
- fredkbloggs 11y ago
  Wrong. You cannot have your profits and let someone reallocate them for you too. You would be right if you owned a controlling interest, but you don't. Because you don't, all the profits of the money-making businesses go where Larry and Sergey want them to go. That's not (necessarily) going to be your pockets. If you owned a controlling interest, you could throw them out if you're unhappy with their performance as capital allocators, but you don't and you can't. So those profits are worth little or nothing to you, both now and in the future, because you aren't entitled to receive them.
  - hluska 11y ago
    This is only true if: a) Neither executive nor any member of the board has any concept of fiduciary duty. b) They can keep any mismanagement out of audited financial statements.
    - fredkbloggs 11y ago
      Malice is not required. All they have to do is be wrong.
  - mattlutze 11y ago
    > So those profits are worth little or nothing to you, both now and in the future, because you aren't entitled to receive them. You invest in a company assuming it will increase its value over the time you hold your fraction of ownership. Parent isn't saying you're entitled to dividends, but was observing that the decision to buy Alphabet stock will likely mostly be made on the expectation of the money-making businesses continuing to grow, and only minor-ly on the hope that one or more of the ventures takes off and significantly increase company value. Perhaps I'm reading it wrong but I didn't see an expectation of dividends in the parent's comment.
Ankaios 11y ago
That was already clear.
minthd 11y ago
>> If you think they're much better at spending money than you are, this is a great opportunity. If you don't, it isn't. It's not that one-dimensional . Their company does have resources that enable them to do things you and others cannot do.

chetanahuja 11y ago

Well you're still mostly investing in the growth potential of Google's existing businesses. Don't forget that Alphabet still completely owns all the money-making businesses of Google.

fredkbloggs 11y ago
Wrong. You cannot have your profits and let someone reallocate them for you too. You would be right if you owned a controlling interest, but you don't. Because you don't, all the profits of the money-making businesses go where Larry and Sergey want them to go. That's not (necessarily) going to be your pockets. If you owned a controlling interest, you could throw them out if you're unhappy with their performance as capital allocators, but you don't and you can't. So those profits are worth little or nothing to you, both now and in the future, because you aren't entitled to receive them.
- hluska 11y ago
  This is only true if: a) Neither executive nor any member of the board has any concept of fiduciary duty. b) They can keep any mismanagement out of audited financial statements.
  - fredkbloggs 11y ago
    Malice is not required. All they have to do is be wrong.
- mattlutze 11y ago
  > So those profits are worth little or nothing to you, both now and in the future, because you aren't entitled to receive them. You invest in a company assuming it will increase its value over the time you hold your fraction of ownership. Parent isn't saying you're entitled to dividends, but was observing that the decision to buy Alphabet stock will likely mostly be made on the expectation of the money-making businesses continuing to grow, and only minor-ly on the hope that one or more of the ventures takes off and significantly increase company value. Perhaps I'm reading it wrong but I didn't see an expectation of dividends in the parent's comment.

Ankaios 11y ago

That was already clear.

minthd 11y ago

>> If you think they're much better at spending money than you are, this is a great opportunity. If you don't, it isn't. It's not that one-dimensional . Their company does have resources that enable them to do things you and others cannot do.