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I used to have similar thoughts until I got my MBA. We live in a capitalist economy. Investors consider where to invest by comparing an investment opportunity t

by cebert 5y ago

I used to have similar thoughts until I got my MBA. We live in a capitalist economy. Investors consider where to invest by comparing an investment opportunity to a safe rate of return. They need some upside (greater returns) to offset the risk of less certain investments. Maximizing profits or at least ensuring hefty returns is important for a firm to continue to grow and receive investment dollars.

yoyohello13 5y ago
Maybe the need for continual growth and always angling for more investment dollars is a problem for society.
- jen729w 5y ago
  Of course it is, but we’re all greedy so nothing will ever change. Where I live, house prices are climbing at about 10% a year. More, now that people can work from home. So you see articles in the paper where boomers say how terrible they feel that the young people won’t be able to afford a house because their house price has gone up $100,000 this year. To the boomer I say, well, you don’t have to take the money. Nobody is forcing you to sell your house for $100k more this year than last. You’re free to sell it for less. Put your money where your mouth is! Of course this is just a wry view, a letter to the newspaper. It’ll never actually happen. Because we’re all greedy.
tgv 5y ago
There's no need for investors to get an ROI that's just over the inflation rate. Why would they want that? Because they want to get rich quick. So let me rephrase it like this: do you like paying too much?
- Nevermark 5y ago
  What are you trying to say? Public companies are going to be priced on the open market based on their growth prospects relative to other companies. Their management chosen to maximize their growth prospects. I think it is a fair point to say that "good" companies may choose to maintain the wind of customer satisfaction, goodwill and trust at their back by not doing predatory "bad" things. But saying public corporations are not going to maximize returns is like saying mother bears are not going to protect their cubs. If that was possible within their nature, they wouldn't exist.

by cebert 5y ago

yoyohello13 5y ago

Maybe the need for continual growth and always angling for more investment dollars is a problem for society.

jen729w 5y ago
Of course it is, but we’re all greedy so nothing will ever change. Where I live, house prices are climbing at about 10% a year. More, now that people can work from home. So you see articles in the paper where boomers say how terrible they feel that the young people won’t be able to afford a house because their house price has gone up $100,000 this year. To the boomer I say, well, you don’t have to take the money. Nobody is forcing you to sell your house for $100k more this year than last. You’re free to sell it for less. Put your money where your mouth is! Of course this is just a wry view, a letter to the newspaper. It’ll never actually happen. Because we’re all greedy.

tgv 5y ago

There's no need for investors to get an ROI that's just over the inflation rate. Why would they want that? Because they want to get rich quick. So let me rephrase it like this: do you like paying too much?

Nevermark 5y ago
What are you trying to say? Public companies are going to be priced on the open market based on their growth prospects relative to other companies. Their management chosen to maximize their growth prospects. I think it is a fair point to say that "good" companies may choose to maintain the wind of customer satisfaction, goodwill and trust at their back by not doing predatory "bad" things. But saying public corporations are not going to maximize returns is like saying mother bears are not going to protect their cubs. If that was possible within their nature, they wouldn't exist.