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> Markets are supposed to measure and allocate risk, yet shares in companies that pollute, peddle addictive pain killers, and build unsafe airplanes are doing
by pavon 7y ago
> Markets are supposed to measure and allocate risk, yet shares in companies that pollute, peddle addictive pain killers, and build unsafe airplanes are doing just fine.
This has nothing to with limited liability shielding investors, and everything to do with the companies themselves not being adequately punished for their wrong-doing. The market is accurately measuring the risk of these activities and determining they are low risk, because their consequences are lower than their gains. If you fix that, I guarantee you that the stock prices will follow.
Now investors will still end up making some profit of off harmful behavior of companies before that behavior comes to light, and thus the market reacts to it, but I don't know that investors should be punished in that situation. It is at most negligence, but it is hard to blame them for lack of due-diligence when regulators and law enforcement, whose job it is find wrongdoing, hadn't yet discovered it either. Leave the liability on those who performed, agreed to, or at least had knowledge of the wrongdoing.
- unishark 7y agoI think it has more to do with one's definition of "doing fine". Boeing lost money. They can continue as a going concern since their 150k employees have a ton of other things going on that investors expect to make money, aside from one particular flawed product. It seems wrong to me to require punishment to scale with the size of the company, as opposed to the size of the "wrong doing". If Boeing has ten other subsidiaries doing defense contracts, satellites and whatever else, that should require them to be fined ten times more?