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I think it's worth it to allow this but I fail to see it's true relevance. If companies don't innovate sufficiently for the long term they will die to other com
by reasonablemann 7y ago
I think it's worth it to allow this but I fail to see it's true relevance. If companies don't innovate sufficiently for the long term they will die to other companies that do. Hence the market takes care of itself.
- maxander 7y agoShareholders aren’t incentivized to act in the company’s long-term interest; only to maximize apparent growth for as long as they hold the company’s shares. This leads to companies making shortsighted moves that aren’t in their long-term interest, due to shareholder influence.
- eries 7y agoIt’s astonishing to me how clear this is in the research literature: https://corpgov.law.harvard.edu/2019/04/30/short-term-investors-long-term-investments-and-firm-value-evidence-from-russell-2000-index-inclusions/ https://corpgov.law.harvard.edu/2019/04/30/short-term-invest...