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I spoke to a family owned business tycoon from South America and he was convinced that publicly owned companies are doomed in the long run. His rough quote (my
by spoonjim 6y ago
I spoke to a family owned business tycoon from South America and he was convinced that publicly owned companies are doomed in the long run. His rough quote (my Spanish was not fantastic) was something like, “I’m managing this company for the next 10 generations and your country’s companies are managed for the next quarter. Which of us will be here in 100 years?”
- throwaway6734 6y agoWhat's the market cap of his company?
- spoonjim 6y ago$1-10b
- periheli0n 6y agoAnother way to put this is: where would you rather make a long-term investment?
- spoonjim 6y agoHow long term? For 10 years I’d invest in Google but for 100 I’d invest in his company.
- throwaway6734 6y agoHow do they handle picking new executives? How will they replace this person when they are no longer able to perform the job at a high level?
- spoonjim 6y agoThe CEO I spoke to was at least the fifth or sixth. His son was the CEO in waiting and that guys son was a teenager doing dirty jobs on the factory floor so that when he is CEO he will have the workers’ respect and know how the business is done.
- throwaway6734 6y agoThis sounds like an interesting model for choosing future leaders but also it seems very risky as it is entirely dependent on a very small selection of people (those in the hereditary line) being able to lead and grow a company. Based on the fate of monarchies around the world, I wouldn't bet my money on it
- spoonjim 6y agoThere are two advantages that the family business has: they get to pick the son (In South America, it's usually the son, but in China it's frequently the daughter), it's not always the oldest, and sometimes when there are no suitable sons they go outside the family. In contrast, succession to monarchies is usually fixed, but crafty monarchies often pick the successor as well, such as Mohammed bin Salman in Saudi Arabia and Kim Jong Un in North Korea.
- phkahler 6y agoWhy would that matter to a privately held company?
- throwaway6734 6y agoTo give an idea of the scale of the company this person is managing
- AnthonyMouse 6y agoHow's the market cap of GE? Sears? Kodak?
- throwaway6734 6y agoGEs market cap is over 100 billion dollars. Sears and Kodak went out of business.
- AnthonyMouse 6y agoGE's market cap was over 500 billion dollars in 2000.
- throwaway6734 6y agoYes their value has decreased.