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> But I do already own some of the robots. I have Amazon stock in my 401k. That's what "the people owning the robots" looks like. Is it though? Correct me if I

by aylmao 9y ago

> But I do already own some of the robots. I have Amazon stock in my 401k. That's what "the people owning the robots" looks like. Is it though? Correct me if I'm wrong, but doesn't stock only generates value if it increases in price (or the company decides it wants to pay dividends), and not directly from the productivity of robots? To put it a bit more clearly, your stock only makes you money if Amazon keeps growing. Let say Amazon were to reach a theoretical maximum size: profits and value stop growing. It would still generate massive amounts of money but would it be obliged to give you a cut of it?

shamsalmon 9y ago
Due to population increase the revenues would grow. When a company stops growing and increasing revenue its not keeping up with population increase and may as well be dying. There are also stocks with high dividends, which are paid out based on profit and not by the stock increasing in value. This is obviously ignoring the fact many people either make horrible financial decision or are too poor to invest in stocks.
- aylmao 9y ago
  > Due to population increase the revenues would grow. When a company stops growing and increasing revenue its not keeping up with population increase and may as well be dying. I'd like to retort this because I think it's important to have a bit of perspective here: 1. Population growth doesn't imply market growth. If I sell polio treatment, my market are the number of people with polio, which thankfully hasn't been correlated with population growth. 2. Market growth doesn't imply revenue growth. Competition. 3. Revenue growth doesn't imply profit growth. Say, for example, I run a company building cheap computers for the children of low-income families. As I move into new countries and expand my revenue I might want to, instead of increasing profits, make my computers cheaper so more children have access to them. 2 and 3 are usually not true when companies are trying to maximize profits, but I don't think 1 should be at all rare. Anyway, this is besides where the discussion was meant to go, but thought I'd share.
eberkund 9y ago
If it stops growing and the "massive amounts of money" it generates result in a profit, then shareholders like the parent could vote that the company starts paying dividends to shareholders. So to answer your question: Yes.
lr4444lr 9y ago
To put it a bit more clearly, your stock only makes you money if Amazon keeps growing No, I think you have it incorrect. As long as revenue > costs and internal expenditures, you make money by dividends. That's the whole reason we buy stocks. Price growth is ultimately just a projection of the belief in higher future dividends.
- m_fayer 9y ago
  Many tech stocks pay very little in dividends or none at all, even if the company is quite profitable. In tech it's all about share price.
  - Sargos 9y ago
    That's because they are growing at a large rate. When that growth stops the only option they will have is to pay dividends. The investors make money either way.
    - teemwerk 9y ago
      There's also buybacks, which has mostly been tech companies' weapon of choice when it comes to capital return.
- teemwerk 9y ago
  I don't want to split hairs because you are correct, and this isn't really directed at you. I'd just like to point out that if you believe in roughly efficient markets, if your enterprise maintains its value, if you amass a pile of cash, that will be reflected in your share price. The dividends come directly out of that share price whenever issued. You can theoretically amass a pile of money that would make Smaug blush, and this will increase your share price to reflect. But that cash isn't being reinvested, it's only going to increase linearly with respect to that cash position. Which is why in many circumstances investors frown upon it.
deleted 9y ago
[deleted]
didibus 9y ago
Yes. The revenue is used somehow. The board decides how. And shareholders elect board members. Thus, if growth stalled, but there was excess revenue, the board would need to decide where it goes. It could be used to help growth revive, by using it to invest in future prospects, it could choose to use it towards employee compensations, maybe if it believes its required to retain talent, or it could choose to give it to shareholders as dividend. If the board does make decisions the shareholders don't like, they can eventually be booted out and replaced by a new one.
stale2002 9y ago
Yes it would. This isn't a new problem you are talking about. Stocks have worked like this since they have existed. Go take a look at any major company that "stopped growing" but is still making money, and see how it works.

by aylmao 9y ago

shamsalmon 9y ago

Due to population increase the revenues would grow. When a company stops growing and increasing revenue its not keeping up with population increase and may as well be dying. There are also stocks with high dividends, which are paid out based on profit and not by the stock increasing in value. This is obviously ignoring the fact many people either make horrible financial decision or are too poor to invest in stocks.

aylmao 9y ago
> Due to population increase the revenues would grow. When a company stops growing and increasing revenue its not keeping up with population increase and may as well be dying. I'd like to retort this because I think it's important to have a bit of perspective here: 1. Population growth doesn't imply market growth. If I sell polio treatment, my market are the number of people with polio, which thankfully hasn't been correlated with population growth. 2. Market growth doesn't imply revenue growth. Competition. 3. Revenue growth doesn't imply profit growth. Say, for example, I run a company building cheap computers for the children of low-income families. As I move into new countries and expand my revenue I might want to, instead of increasing profits, make my computers cheaper so more children have access to them. 2 and 3 are usually not true when companies are trying to maximize profits, but I don't think 1 should be at all rare. Anyway, this is besides where the discussion was meant to go, but thought I'd share.

eberkund 9y ago

If it stops growing and the "massive amounts of money" it generates result in a profit, then shareholders like the parent could vote that the company starts paying dividends to shareholders. So to answer your question: Yes.

lr4444lr 9y ago

To put it a bit more clearly, your stock only makes you money if Amazon keeps growing No, I think you have it incorrect. As long as revenue > costs and internal expenditures, you make money by dividends. That's the whole reason we buy stocks. Price growth is ultimately just a projection of the belief in higher future dividends.

m_fayer 9y ago
Many tech stocks pay very little in dividends or none at all, even if the company is quite profitable. In tech it's all about share price.
- Sargos 9y ago
  That's because they are growing at a large rate. When that growth stops the only option they will have is to pay dividends. The investors make money either way.
  - teemwerk 9y ago
    There's also buybacks, which has mostly been tech companies' weapon of choice when it comes to capital return.
teemwerk 9y ago
I don't want to split hairs because you are correct, and this isn't really directed at you. I'd just like to point out that if you believe in roughly efficient markets, if your enterprise maintains its value, if you amass a pile of cash, that will be reflected in your share price. The dividends come directly out of that share price whenever issued. You can theoretically amass a pile of money that would make Smaug blush, and this will increase your share price to reflect. But that cash isn't being reinvested, it's only going to increase linearly with respect to that cash position. Which is why in many circumstances investors frown upon it.

deleted 9y ago

[deleted]

didibus 9y ago

Yes. The revenue is used somehow. The board decides how. And shareholders elect board members. Thus, if growth stalled, but there was excess revenue, the board would need to decide where it goes. It could be used to help growth revive, by using it to invest in future prospects, it could choose to use it towards employee compensations, maybe if it believes its required to retain talent, or it could choose to give it to shareholders as dividend. If the board does make decisions the shareholders don't like, they can eventually be booted out and replaced by a new one.

stale2002 9y ago

Yes it would. This isn't a new problem you are talking about. Stocks have worked like this since they have existed. Go take a look at any major company that "stopped growing" but is still making money, and see how it works.