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This isn't a lack of understanding. It's the principal-agent problem. Non-founder executives are usually rewarded for short term results. They'll deliver on th
by bhickey 2y ago
This isn't a lack of understanding. It's the principal-agent problem.
Non-founder executives are usually rewarded for short term results. They'll deliver on this even if it means laying off the entire Python language team in the midst of an AI boom. The market is bad at distinguishing these growth hacks for sustainable business, so they'll see 4% quarterly growth and pile on under the assumption that the hockey stick is going up.
By the time reality catches up management has already cashed in their chips.
- physhster 2y agoI see what you did there.
- kermatt 2y agoThe market is bad at looking beyond the next fiscal quarter.
- Ekaros 2y agoMost of the market is designed to look for next fiscal quarter. Index fund dump more money in stock going up. Most managed funds make money when stock goes up. So they aim for stocks that go up. In the end there is only limited number of entities seeking value. Or long term sustainable profitability. For everyone else it is line going up. Or blindly following others.
- alt227 2y agoThe same reason that nothing good ever gets done in governments. They only lead for short terms and so never make any long lasting policies that would actually create change over time.