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>> companies are going to continue to try to hold on to as much of that increase as possible for themselves Shareholders are going to continue to try to hold o

>> companies are going to continue to try to hold on to as much of that increase as possible for themselves Shareholders are going to continue to try to hold on to as much of that increase as possible for themselves. It is too easy to place blame on heartless corporations. Place the blame squarely on the flesh-and-blood people running and benefiting from corporations. Those profits aren't sitting in a big vault at Amazon. They are sitting in the bank accounts of every Amazon shareholder.

throwawayboise 5y ago
So you mean you, me, your grandmother, and everyone else with a 401k or pension?
- Frost1x 5y ago
  A 401k with a vesting schedule geared at minimizing the already empheral retirement contribution businesses don't want to provide hoping on turnover with vesting to reduce payout and for those remaining with enough disposable income to contribute hefty amounts to their 401k? Sure. Even 401ks are evaporating in significance so that is becoming a less valid point. Given the typical audience here, you and me sure, but the vast majority aren't reaping rewards or able to tie money up in unrealized gains they cant magically realize like many with piles of investments (often tax free).
  - nly 5y ago
    Why are 401k's evaporating in significance? Curious Brit here.
    - mrep 5y ago
      Not sure what OP is referring to because 401(k) balances are at all time highs [0]. [0]: https://www.cnbc.com/2021/08/19/401k-balances-hit-a-new-all-time-high-fidelity-says-.html https://www.cnbc.com/2021/08/19/401k-balances-hit-a-new-all-...
- dredmorbius 5y ago
  Stock ownership, along with other forms of wealth, is very unevenly distributed. Far more so than even income. "Wealthiest 10% in U.S. Own 89% of Stocks and Mutual Funds" The wealthiest 10% in the U.S. hold 45% of real estate, 54% of pension entitlements, 85% of private businesses and 34% of consumer durable goods. https://www.thestreet.com/investing/wealthiest-10-pct-in-us-own-89-pct-of-stocks-mutual-funds https://www.thestreet.com/investing/wealthiest-10-pct-in-us-... You might also care to revisit HN's guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Particularly: Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive. Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith. Eschew flamebait. Avoid unrelated controversies and generic tangents. Throwaway accounts are ok for sensitive information, but please don't create accounts routinely. HN is a community—users should have an identity that others can relate to.
nly 5y ago
This is wrong. If Amazon earns $1bn extra profit the market cap of the companies shares could/should increase at least $1bn (depending on how it was made, and any future prospects for repeating the win). However, no money is transferred to shareholders unless Amazon do a buy back or issue a dividend, it's just a revaluation. If those shareholders starting selling, only market forces (belief in Amazon) keep the price up. Shareholders can't demand their share of that $1bn in most cases, short of suing the company. Stocks can and do trade below book value. Companies with net $1bn in the bank can have a market cap below $1bn in inefficient markets.
- diordiderot 5y ago
  With a high enough net worth you don't need liquid assets, large banks provide <1% interest rate loans that get paid off by your estate. Saves on taxes as well
- Godel_unicode 5y ago
  It's not market inefficiency causing that, but rather expected value. If a company has $1bn in the bank and you expect them to squander it, then you'd be foolish to value them based off of it. This same logic explains the value of Amazon; they plow profits back into the business, making the future business bigger and more valuable. Their shareholders clearly agree with that type of longer-term thinking and have rewarded Amazon's growth with giant valuations repeatedly over the years.
bryanrasmussen 5y ago
>Shareholders are going to continue to try to hold on to as much of that increase as possible for themselves. I mean the small shareholders generally don't make much comment about anything, and certainly not about wage control at a company they invest in. >Those profits aren't sitting in a big vault at Amazon. They are sitting in the bank accounts of every Amazon shareholder. sure, if the company pays dividends quarterly or if the board doesn't make some other decision on what to do with the money, and of course until the dividends are paid it does sit in Amazon's accounts. on edit: I see nly made the same point with more technical observations https://news.ycombinator.com/item?id=28927742 https://news.ycombinator.com/item?id=28927742
hellbannedguy 5y ago
"It is too easy to place blame on heartless corporations." If we had a government that enforced antitrust laws, like they are suspose to; I guess we could stop blaming the corporation business identity a bit. Let's not forget how easy it is for corporations to influence legislation, and laws with copious amounts of money, and favors. Do I blame the naieve pensioner--no, or the union that invests in stocks--no. Should we heavily tax the wealthy boys (Over 400,000/yr in stock profits)--yes. Tax them to so they dream they were in China licking Xi slippers. Providing a return for pensioners--fine. Accumulation obsence amount of wealth for a few--bad. So the corporate has a few heads, and one head is greedy. Tax the head that makes the most. We have the power to tax.

throwawayboise 5y ago

So you mean you, me, your grandmother, and everyone else with a 401k or pension?

Frost1x 5y ago
A 401k with a vesting schedule geared at minimizing the already empheral retirement contribution businesses don't want to provide hoping on turnover with vesting to reduce payout and for those remaining with enough disposable income to contribute hefty amounts to their 401k? Sure. Even 401ks are evaporating in significance so that is becoming a less valid point. Given the typical audience here, you and me sure, but the vast majority aren't reaping rewards or able to tie money up in unrealized gains they cant magically realize like many with piles of investments (often tax free).
- nly 5y ago
  Why are 401k's evaporating in significance? Curious Brit here.
  - mrep 5y ago
    Not sure what OP is referring to because 401(k) balances are at all time highs [0]. [0]: https://www.cnbc.com/2021/08/19/401k-balances-hit-a-new-all-time-high-fidelity-says-.html https://www.cnbc.com/2021/08/19/401k-balances-hit-a-new-all-...
dredmorbius 5y ago
Stock ownership, along with other forms of wealth, is very unevenly distributed. Far more so than even income. "Wealthiest 10% in U.S. Own 89% of Stocks and Mutual Funds" The wealthiest 10% in the U.S. hold 45% of real estate, 54% of pension entitlements, 85% of private businesses and 34% of consumer durable goods. https://www.thestreet.com/investing/wealthiest-10-pct-in-us-own-89-pct-of-stocks-mutual-funds https://www.thestreet.com/investing/wealthiest-10-pct-in-us-... You might also care to revisit HN's guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Particularly: Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive. Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith. Eschew flamebait. Avoid unrelated controversies and generic tangents. Throwaway accounts are ok for sensitive information, but please don't create accounts routinely. HN is a community—users should have an identity that others can relate to.

nly 5y ago

This is wrong. If Amazon earns $1bn extra profit the market cap of the companies shares could/should increase at least $1bn (depending on how it was made, and any future prospects for repeating the win). However, no money is transferred to shareholders unless Amazon do a buy back or issue a dividend, it's just a revaluation. If those shareholders starting selling, only market forces (belief in Amazon) keep the price up. Shareholders can't demand their share of that $1bn in most cases, short of suing the company. Stocks can and do trade below book value. Companies with net $1bn in the bank can have a market cap below $1bn in inefficient markets.

diordiderot 5y ago
With a high enough net worth you don't need liquid assets, large banks provide <1% interest rate loans that get paid off by your estate. Saves on taxes as well
Godel_unicode 5y ago
It's not market inefficiency causing that, but rather expected value. If a company has $1bn in the bank and you expect them to squander it, then you'd be foolish to value them based off of it. This same logic explains the value of Amazon; they plow profits back into the business, making the future business bigger and more valuable. Their shareholders clearly agree with that type of longer-term thinking and have rewarded Amazon's growth with giant valuations repeatedly over the years.

bryanrasmussen 5y ago

>Shareholders are going to continue to try to hold on to as much of that increase as possible for themselves. I mean the small shareholders generally don't make much comment about anything, and certainly not about wage control at a company they invest in. >Those profits aren't sitting in a big vault at Amazon. They are sitting in the bank accounts of every Amazon shareholder. sure, if the company pays dividends quarterly or if the board doesn't make some other decision on what to do with the money, and of course until the dividends are paid it does sit in Amazon's accounts. on edit: I see nly made the same point with more technical observations https://news.ycombinator.com/item?id=28927742 https://news.ycombinator.com/item?id=28927742

hellbannedguy 5y ago

"It is too easy to place blame on heartless corporations." If we had a government that enforced antitrust laws, like they are suspose to; I guess we could stop blaming the corporation business identity a bit. Let's not forget how easy it is for corporations to influence legislation, and laws with copious amounts of money, and favors. Do I blame the naieve pensioner--no, or the union that invests in stocks--no. Should we heavily tax the wealthy boys (Over 400,000/yr in stock profits)--yes. Tax them to so they dream they were in China licking Xi slippers. Providing a return for pensioners--fine. Accumulation obsence amount of wealth for a few--bad. So the corporate has a few heads, and one head is greedy. Tax the head that makes the most. We have the power to tax.