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The funny thing is it isn't efficient capitalism -- the shareholders are losing value. These are dumb shareholders who reward short termism. SWA will lose value
by angry_octet 4y ago
The funny thing is it isn't efficient capitalism -- the shareholders are losing value. These are dumb shareholders who reward short termism. SWA will lose value as passengers opt for other carriers, buoying their share price over SWA. The interesting effect is the lag -- the share market should have devalued SWA a decade ago, or certainly when the market lost stability due to COVID.
- kerkeslager 4y agoShareholders don't have visibility into the internal workings of SWA that would have been necessary to predict this. Sure, there's a lot of information you have the right to, but if you're investing in a diversified portfolio, you eventually are limited simply by time: you can (and should!) do some research on a company before you invest, but ultimately if you're investing in, say, 100 companies, you only have time to dig so deep into each one. And this is efficient capitalism for the people who have the visibility and decision-making power. C-level execs are measured by their ability to produce growth, so they do that, even if it's not sustainable, because while they're producing growth they're receiving massive amounts of income. When it all falls apart, the income they've received over years of short-term decisions is safe and they can, at worst, retire.