4 ms·

The shareholders don't care about any of that if they think the board did a decent job of propping up the stock price. Firing a board is generally risky, and t

The shareholders don't care about any of that if they think the board did a decent job of propping up the stock price. Firing a board is generally risky, and the shareholders probably haven't fired them because even though the board has, almost objectively, not been good - firing them is likely even worse for the stock short term, and there aren't a lot of long-term, active investors left in the world.

chasil 2y ago
The board's goal was to lock-in maintenance with computer security, which failed catastrophically. All previous generations of Deere tractors have on-board electronics that can be jailbroken. https://www.theregister.com/2022/08/16/john_deere_doom/ https://www.theregister.com/2022/08/16/john_deere_doom/ Just for that failure, they should all likely be gone.
- adventured 2y ago
  Their business is booming. That significantly overwhelms the concern you're raising. They have gone from $4.3b in operating income to $14.5b in three years, while their sales nearly doubled. That's an old industrial company boom the likes of which is almost never seen by those types of companies. By comparison what you're calling catastrophic is entirely trivial. It's not even in the room as a consideration compared to the soaring profits. Nobody is removing a whole board with that kind of profit growth.
  - worik 2y ago
    > Their business is booming. That significantly overwhelms the concern you're raising. Yes their profit is up, no it is unrelated to the concerns The company is acting in a way that luts the whole food system at risk They should be disbanded, by force. I recommend replacement with a farmer cooperative
    - SideQuark 2y ago
      Countries that act so ignorantly of consequences or little regard for private property never end well. If Deere is so bad buy from competitors, of which there are many.
      - phil21 2y ago
        > If Deere is so bad buy from competitors, of which there are many. I somewhat agree with your earlier comment, but this bit is ignoring the systemic issues involved. Deere is a leader in much of the efficiency technology that allows large-scale farming operations to reach the economy of scale needed to farm the huge multi-thousand (tens of thousands of acres in many cases) grain operations that are slowly but surely taking over food production in the US. This trend, unabated, is a weird form of monopoly power for lack of a better word. If one manufacturer is more or less the sole-source for the largest corporate farms, and those farming operations are putting smaller ones out of business due to cost pressure - eventually - and likely sooner than later it becomes a too big to fail situation and a systemic national security risk. This is starting to get into the realm of arms manufacturing. If these trends continue for another decade or three, and then Deere has say a massive IT failure, planting and harvesting operations literally grind to a halt for the top-end equipment entirely reliant on the automation and data harvesting these machines require to operate. People will be at risk for starvation in the event of an extended outage. Farming as a Service has a hidden cost to it many are not seeing in these comments. I don't agree with disbanding Deere and nationalizing it - however this really needs to be looked at much more than a simple competition issue. It's rapidly becoming a winner-takes-all market, which is subsequently running the smaller operations out of business and putting the US food supply at a systemic risk if nothing is done. Of course a competitor could somehow battle through the patent forest and capital requirements, but I wouldn't bet our lives on that.
        SideQuark 2y ago
        > This trend, unabated, is a weird form of monopoly power for lack of a better word. Deere controls around 40% of the North American agricultural machinery market [1]. This is so far from anything near any kind of monopoly it's ludicrous to call it so. No court has ever ruled anything anywhere near this low as any kind of monopoly. Everything you wrote predicated on this FUD is invalid. > This is starting to get into the realm of arms manufacturing. And this takes the hyperbole into crazy land. > It's rapidly becoming a winner-takes-all market Nope. The competition for making such machines is rapidly increasing as it's becoming easier, not harder to make ag equipment. Pressure from a huge host of countries whose economies are becoming first world is adding many other worthy candidates. CNH, Agco, Kubota, Case, New Holland, and many others are already making inroads. EU is the biggest ag market, and Deere has far less market share there than here, where the competitors have already made major inroads, and they're now moving imports and even production into the US. > It's rapidly becoming a winner-takes-all market Do you look at market data from investment firms or even at SEC filings from the major players? These statements are not based in any fact. [1] https://www.nasdaq.com/articles/plowing-ahead:-john-deeres-crop-of-success-in-turbulent-markets https://www.nasdaq.com/articles/plowing-ahead:-john-deeres-c...
- jauntywundrkind 2y ago
  This post appears to be complaining that John Deere didn't do a good enough job DRM'ing their tractors? We should fire them and fine even worse dictators, who will draw even more ire & rage? This does seem like capitalism at work. Still, I really want to hate the players and the game. This has been brutal extractive malevolence against an industry supporting the very base of the pyramid of needs: John Deere is hurting the world incredibly badly.
badsandwitch 2y ago
Tragedy of the commons is why short term is all that matters and will ever matter to non-ideological investors. If an action that hurts the stock short-term but will help int he long-term needs to be performed why would you as an investor enact it or even stay for the ride? You are better off either opposing it or selling your stock and then waiting to see if someone will enact the changes, then you have the "insider" information to know that the short-term stock drop was a good thing for the long-term and rebuy the shares cheaper.
- kennywinker 2y ago
  > Tragedy of the commons is why short term is all that matters and will ever matter to non-ideological investors. Tragedy of the commons was an ideological essay designed to justify privatization of public goods. It was disproven by data before it was published. I am sure there are some hyper specific examples where it has happened as described, but as a “fact” about the world and as a justification for any course of action, it’s highly suspect. https://aeon.co/essays/the-tragedy-of-the-commons-is-a-false-and-dangerous-myth https://aeon.co/essays/the-tragedy-of-the-commons-is-a-false...
  - eutropia 2y ago
    This is the first I've heard that it's false; however it seems like many times in my life I've observed something suffering, seemingly from lack of ownership despite being a common good. What do you call that if you can't call it a tragedy of the commons?
    - reaperman 2y ago
      On HN I’ve seen regular claims that “tragedy of the commons has been disproven”. I’ve not yet identified which social bubble propagates this or what it is based on but there seems to be some niche in which people are being taught that it is categorically proven to be an invalid concept.
      - bombcar 2y ago
fny 2y ago
The myth that shareholders largely care about short-term returns has been disproved empirically over the last 30 years. Every mammoth stock exploded due to assumptions about revenues far, far into the future (dotcom stocks, FATMANG stocks, crypto.) And this should come as no surprise: company valuations are the discounted value of future returns after all. More often, companies shill bullshit, inestimable long-term growth (AI-bullshit for example) to pump price. Tesla is the poster-child of this strategy. In contrast, short-term thinking/marketing is a sure fire way to annihilate a stock. Why would the next buyer pay a premium for a squeezed orange? The dark reality is that most things we customers and employees complain about as “short-term thinking” are tremendously profitable over the long run.
- onlyrealcuzzo 2y ago
  > company valuations are the discounted value of future returns after all. Yes, future earnings are worth far less than current earnings - especially in a non-ZIRP world.
  - anonylizard 2y ago
    Stockholders don't even have that much influence. Because of all the index investing, board votes are often decided by say Vanguard/Blackrock, not mom and pop investors It is only after stocks suffer severe shocks, does private equity spring into action, and discipline executives via the threat of acquisition & firings. So its is actually executives that can be shortsighted, not an ultra-long-termist passive investment dominated US investor base.
- 7952 2y ago
  But an assumption about long term gain can still deliver short term returns. Would shareholders behave the same if long term returns were the only returns available?
  - DennisP 2y ago
    Based on your first sentence, it seems that by "returns" you mean increases in stock price. Given that, I don't think there's a clear dividing line, since investors are always forward-looking. I could see only long-term earnings being available but that's something quite different. Shareholders are often willing to put up with that situation, as long as they believe the long-term story (and see that other investors believe it). A situation that could make short-term share price increases unlikely is if the stock is just way overvalued for its likely earnings in any reasonable timeframe, in which case shareholders will happily take profits rather than try to make the company change anything.

chasil 2y ago

The board's goal was to lock-in maintenance with computer security, which failed catastrophically. All previous generations of Deere tractors have on-board electronics that can be jailbroken. https://www.theregister.com/2022/08/16/john_deere_doom/ https://www.theregister.com/2022/08/16/john_deere_doom/ Just for that failure, they should all likely be gone.

adventured 2y ago
Their business is booming. That significantly overwhelms the concern you're raising. They have gone from $4.3b in operating income to $14.5b in three years, while their sales nearly doubled. That's an old industrial company boom the likes of which is almost never seen by those types of companies. By comparison what you're calling catastrophic is entirely trivial. It's not even in the room as a consideration compared to the soaring profits. Nobody is removing a whole board with that kind of profit growth.
- worik 2y ago
  > Their business is booming. That significantly overwhelms the concern you're raising. Yes their profit is up, no it is unrelated to the concerns The company is acting in a way that luts the whole food system at risk They should be disbanded, by force. I recommend replacement with a farmer cooperative
  - SideQuark 2y ago
    Countries that act so ignorantly of consequences or little regard for private property never end well. If Deere is so bad buy from competitors, of which there are many.
    - phil21 2y ago
      > If Deere is so bad buy from competitors, of which there are many. I somewhat agree with your earlier comment, but this bit is ignoring the systemic issues involved. Deere is a leader in much of the efficiency technology that allows large-scale farming operations to reach the economy of scale needed to farm the huge multi-thousand (tens of thousands of acres in many cases) grain operations that are slowly but surely taking over food production in the US. This trend, unabated, is a weird form of monopoly power for lack of a better word. If one manufacturer is more or less the sole-source for the largest corporate farms, and those farming operations are putting smaller ones out of business due to cost pressure - eventually - and likely sooner than later it becomes a too big to fail situation and a systemic national security risk. This is starting to get into the realm of arms manufacturing. If these trends continue for another decade or three, and then Deere has say a massive IT failure, planting and harvesting operations literally grind to a halt for the top-end equipment entirely reliant on the automation and data harvesting these machines require to operate. People will be at risk for starvation in the event of an extended outage. Farming as a Service has a hidden cost to it many are not seeing in these comments. I don't agree with disbanding Deere and nationalizing it - however this really needs to be looked at much more than a simple competition issue. It's rapidly becoming a winner-takes-all market, which is subsequently running the smaller operations out of business and putting the US food supply at a systemic risk if nothing is done. Of course a competitor could somehow battle through the patent forest and capital requirements, but I wouldn't bet our lives on that.
      - SideQuark 2y ago
        > This trend, unabated, is a weird form of monopoly power for lack of a better word. Deere controls around 40% of the North American agricultural machinery market [1]. This is so far from anything near any kind of monopoly it's ludicrous to call it so. No court has ever ruled anything anywhere near this low as any kind of monopoly. Everything you wrote predicated on this FUD is invalid. > This is starting to get into the realm of arms manufacturing. And this takes the hyperbole into crazy land. > It's rapidly becoming a winner-takes-all market Nope. The competition for making such machines is rapidly increasing as it's becoming easier, not harder to make ag equipment. Pressure from a huge host of countries whose economies are becoming first world is adding many other worthy candidates. CNH, Agco, Kubota, Case, New Holland, and many others are already making inroads. EU is the biggest ag market, and Deere has far less market share there than here, where the competitors have already made major inroads, and they're now moving imports and even production into the US. > It's rapidly becoming a winner-takes-all market Do you look at market data from investment firms or even at SEC filings from the major players? These statements are not based in any fact. [1] https://www.nasdaq.com/articles/plowing-ahead:-john-deeres-crop-of-success-in-turbulent-markets https://www.nasdaq.com/articles/plowing-ahead:-john-deeres-c...
jauntywundrkind 2y ago
This post appears to be complaining that John Deere didn't do a good enough job DRM'ing their tractors? We should fire them and fine even worse dictators, who will draw even more ire & rage? This does seem like capitalism at work. Still, I really want to hate the players and the game. This has been brutal extractive malevolence against an industry supporting the very base of the pyramid of needs: John Deere is hurting the world incredibly badly.

badsandwitch 2y ago

Tragedy of the commons is why short term is all that matters and will ever matter to non-ideological investors. If an action that hurts the stock short-term but will help int he long-term needs to be performed why would you as an investor enact it or even stay for the ride? You are better off either opposing it or selling your stock and then waiting to see if someone will enact the changes, then you have the "insider" information to know that the short-term stock drop was a good thing for the long-term and rebuy the shares cheaper.

kennywinker 2y ago
> Tragedy of the commons is why short term is all that matters and will ever matter to non-ideological investors. Tragedy of the commons was an ideological essay designed to justify privatization of public goods. It was disproven by data before it was published. I am sure there are some hyper specific examples where it has happened as described, but as a “fact” about the world and as a justification for any course of action, it’s highly suspect. https://aeon.co/essays/the-tragedy-of-the-commons-is-a-false-and-dangerous-myth https://aeon.co/essays/the-tragedy-of-the-commons-is-a-false...
- eutropia 2y ago
  This is the first I've heard that it's false; however it seems like many times in my life I've observed something suffering, seemingly from lack of ownership despite being a common good. What do you call that if you can't call it a tragedy of the commons?
  - reaperman 2y ago
    On HN I’ve seen regular claims that “tragedy of the commons has been disproven”. I’ve not yet identified which social bubble propagates this or what it is based on but there seems to be some niche in which people are being taught that it is categorically proven to be an invalid concept.
    - bombcar 2y ago

fny 2y ago

The myth that shareholders largely care about short-term returns has been disproved empirically over the last 30 years. Every mammoth stock exploded due to assumptions about revenues far, far into the future (dotcom stocks, FATMANG stocks, crypto.) And this should come as no surprise: company valuations are the discounted value of future returns after all. More often, companies shill bullshit, inestimable long-term growth (AI-bullshit for example) to pump price. Tesla is the poster-child of this strategy. In contrast, short-term thinking/marketing is a sure fire way to annihilate a stock. Why would the next buyer pay a premium for a squeezed orange? The dark reality is that most things we customers and employees complain about as “short-term thinking” are tremendously profitable over the long run.

onlyrealcuzzo 2y ago
> company valuations are the discounted value of future returns after all. Yes, future earnings are worth far less than current earnings - especially in a non-ZIRP world.
- anonylizard 2y ago
  Stockholders don't even have that much influence. Because of all the index investing, board votes are often decided by say Vanguard/Blackrock, not mom and pop investors It is only after stocks suffer severe shocks, does private equity spring into action, and discipline executives via the threat of acquisition & firings. So its is actually executives that can be shortsighted, not an ultra-long-termist passive investment dominated US investor base.
7952 2y ago
But an assumption about long term gain can still deliver short term returns. Would shareholders behave the same if long term returns were the only returns available?
- DennisP 2y ago
  Based on your first sentence, it seems that by "returns" you mean increases in stock price. Given that, I don't think there's a clear dividing line, since investors are always forward-looking. I could see only long-term earnings being available but that's something quite different. Shareholders are often willing to put up with that situation, as long as they believe the long-term story (and see that other investors believe it). A situation that could make short-term share price increases unlikely is if the stock is just way overvalued for its likely earnings in any reasonable timeframe, in which case shareholders will happily take profits rather than try to make the company change anything.