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> it's all due to the focus on short-term financial results I've heard that my whole life. If that were generally true, company stocks would be going steadily

> it's all due to the focus on short-term financial results I've heard that my whole life. If that were generally true, company stocks would be going steadily downwards.

toomuchtodo 1y ago
GE [1]? Boeing [2] [3]? The stocks go up because management and shareholders pull forward the gains as financialization destroys the long term value of the enterprises. Works until it doesn't. [1] Power Failure: The downfall of General Electric - https://news.ycombinator.com/item?id=44102034 https://news.ycombinator.com/item?id=44102034 - May 2025 [2] Fatal Recklessness at Boeing Traces Back to Long-Standing C-Suite Greed - https://www.thenation.com/article/politics/boeing-corporate-greed-airline-safety/ https://www.thenation.com/article/politics/boeing-corporate-... - April 9th, 2024 [3] HN Search: Boeing - https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=boeing&sort=byDate&type=story https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
- WalterBright 1y ago
  Boeing consistently went up for many decades prior to the MAX crisis. So did GE. Companies have life cycles. They grow until they become unable to function efficiently anymore, then they go down. It's not about prioritizing short term results.
  - palmotea 1y ago
    >> GE [1]? Boeing [2] [3]? The stocks go up because management and shareholders pull forward the gains as financialization destroys the long term value of the enterprises. Works until it doesn't. > Boeing consistently went up for many decades prior to the MAX crisis. So did GE. The point is they could have probably kept going up if they hadn't done that. It's like how if you choose to eat your seed corn, you'll be fat and happy for a season, then you and your family will certainly starve to death next year. You'd most likely had lived if you hadn't made that short-term decision. > Companies have life cycles. They grow until they become unable to function efficiently anymore, then they go down. And how often are the "life cycles" really just the accumulation of bad short-term decisions catching up with the company? You can kludge and kludge and kludge, but eventually that makes the app unmaintainable. Then you're in "total rewrite" or go under territory.
    - WalterBright 1y ago
      > The point is they could have probably kept going up if they hadn't done that. No company goes up forever. They all eventually strangle themselves with bureaucratic inefficiency.
      - palmotea 1y ago
        > No company goes up forever. They all eventually strangle themselves with bureaucratic inefficiency. So they should act to strangle themselves faster? It feels like your reasoning is equivalent to, "Eventually you'll die, so there's no point taking care of your health. Go save money by avoiding the doctor, take up smoking, and eat junk food all the time."
        WalterBright 1y ago
        > So they should act to strangle themselves faster? Come on.
        palmotea 1y ago
        Being relentlessly focused on the short term will do that, eventually. You seem to think the assumption "all companies die" means you can simplify away their journey, but it matters if they get there faster or slower (at least to society, if not the decision-makers to maximize their personal profit while hoping to not being the ones left holding the bag).
        nradov 1y ago
        Old companies die and new ones take their place. This is not a problem for society. In most cases creative destruction is a net positive.
        palmotea 1y ago
        > Old companies die and new ones take their place. This is not a problem for society. In most cases creative destruction is a net positive. That's what they say, but I don't think it's true (at the high end, at least). For instance: if Boeing dies, the market will not replace it. It'll be an Airbus monopoly for large jets, and maybe the the communists will eventually build a competitor (Comac). IIRC, it's too expesnive for Embraer to make the jump into that market.
  - grumpy_coder 1y ago
    Boeing has consistently underperformed the market massively since the MD merger. Making maybe 3% after inflation
    - WalterBright 1y ago
      The vast bulk of Boeing's history was before that.
      - CamperBob2 1y ago
        Right, and isn't that everyone's point? When their focus was on the product, they excelled.
  - bumby 1y ago
    >It’s not about prioritizing short term results Boeing was forced by courts bolster safety, compliance, and quality programs as well as admitting to conspiracy to thwart FAA oversight. I don’t know about you, but my experience is that when companies undermine those types of oversight, it’s almost always due to schedule and price pressure (ie short term results). (Not to mention, the whole impetus for MCAS was to rush the design to market so they wouldn’t lose out on AA as a customer).
    - WalterBright 1y ago
      Again, the vast bulk of Boeing's history was before that. > the whole impetus for MCAS was to rush the design to market so they wouldn’t lose out on AA as a customer The impetus for MCAS was to make the MAX behave like the previous 737 model to reduce the expense of retraining the pilots. In general, flying is safer when pilots do not need to "code switch" when switching airplane models. Many crashes result from a pilot reflexively doing the right thing for the previous airplane they flew, rather than the one they are flying at the moment.
      - bumby 1y ago
        >Again, the vast bulk of Boeing's history was before that. I’m not sure what you intend to convey with this statement. If price reflects reality, the current price should reflect the current reality, no? Whether the White Sox were the best team 100 years ago has little bearing on my prediction about their chances this year. I fail to see how Boeing’s prior culture prevents them from succumbing to short term incentives. I know your point is the downfall is a bureaucratic one, but the evidence does not point to that (they actually cut corners on bureaucratic requirements). >The impetus for MCAS was to make the MAX behave like the previous 737 model to reduce the expense of retraining the pilots. Go deeper. Why was this considered necessary? (Hint: it’s because they wanted to rush the design to market with a less expensive (and lower quality) product. Ie cost and schedule pressure. You stopped at the proximate cause.)
  - triceratops 1y ago
    > They grow until they become unable to function efficiently anymore, then they go down But why?
  - dsr_ 1y ago
    The book on GE is specifically about how they lied, cheated, and committed fraud -- er, accounting irregularities -- for decades, in order to maintain the illusion of number goes up predictably. In retrospect, it was exactly as unlikely as Madoff's numbers.
    - spwa4 1y ago
      But ALL of the FANGs pride themselves on predictably rising numbers. They all have a semi-believable story, and in fact only Amazon has a unique tactic (which is cheating taxes entirely by having zero profit, hence their revenue goes up predictably instead of profit. The others have steadily rising profit with slight variation in the rise of their revenue) But all of them do it. Facebook/Meta, Amazon, Netflix, Google, Apple. Even the non-FANG fangs like Tesla, Twitter, ... and all have stories about faking it. Most are advertising and that's easy to fake on both sides (buy your own adertising, and of course fake engagement), Amazon has zero profit so they proudly declare they're faking it for the government (but, of course, they're not cheating you), Netflix has steadily rising subscriber numbers where everyone else has failed, even Apple's growth has switched to subscriber growth, the part of their business that would be the easiest to fake. In fact this is quite common in the whole S&P 500, including outside of the US, with numbers not quite as dramatic as the FANGs, but still going up.
  - saghm 1y ago
    > Companies have life cycles. They grow until they become unable to function efficiently anymore, then they go down. > It's not about prioritizing short term results. Why did they need to grow in the first place though? If a company is already profitable, and growing will end up making them less functional and eventually erode profits, that sounds like it's due to prioritizing short-term results over long-term stable profits.
- Aunche 1y ago
  > Fatal Recklessness at Boeing Traces Back to Long-Standing C-Suite Greed I suspect this is true to a certain extent, but IMO this narrative has been exaggerated to the point where it is completely useless. If Boeing execs were only focused on "short term profits," how did commercial aviation deaths decrease despite there being significantly more flights? https://www.statista.com/chart/4854/commercial-aviation-deaths-since-1942/ https://www.statista.com/chart/4854/commercial-aviation-deat...
  - toomuchtodo 1y ago
    > Works until it doesn't. Boeing 737 Max: The troubled history of fatal crashes and 346 deaths in 7 years - https://economictimes.indiatimes.com/news/international/business/boeing-737-max-the-troubled-history-of-fatal-crashes-and-346-deaths-in-7-years/articleshow/111566888.cms https://economictimes.indiatimes.com/news/international/busi... - July 8th, 2024 As Boeing looks to buy a key 737 supplier [Spirit AeroSystems], a whistleblower says the problems run deep - https://www.npr.org/2024/06/16/nx-s1-4998520/boeing-737-spirit-aerosystems-whistleblower https://www.npr.org/2024/06/16/nx-s1-4998520/boeing-737-spir... - June 16th, 2024 Boeing’s Decline Traced to Decades of Catering to Shareholders Above All Others - https://bhr.stern.nyu.edu/quick-take/boeings-decline-traced-to-decades-of-catering-to-shareholders-above-all-others/ https://bhr.stern.nyu.edu/quick-take/boeings-decline-traced-... - April 8th, 2024 Boeing’s long fall, and how it might recover - https://www.seattletimes.com/business/boeing-aerospace/boeings-long-fall-and-how-it-might-recover/ https://www.seattletimes.com/business/boeing-aerospace/boein... - April 7th, 2024
    - Aunche 1y ago
      Are there actually more issues or are people just more aware of them? Like I said, commercial airline flights are significantly safer than they were in Boeing's supposed golden era despite these publicized scandals.
      - toomuchtodo 1y ago
        If your position is "well, it lasted this long and the organizational rot only killed a few hundred people" we may be unable to meet on this topic. How many deaths would be sufficient? I argue the decline in fatalities over time is due to commercial air traffic regulations and systems. https://news.mit.edu/2024/study-flying-keeps-getting-safer-0807 https://news.mit.edu/2024/study-flying-keeps-getting-safer-0...
- badpun 1y ago
  Boeing stock price still almost doubled in the past 10 years. Went up by hundreds of percent in the past two decades. GE stock is worth 40x what it was worth 40 years ago, when Jack Welsh took over management! These two seem like two very successful companies, led by succesful strategies.
  - immibis 1y ago
    A lot of things did. Seems like prices much tend to rise faster than inflation.
    - badpun 1y ago
      A lot of badly managed companies (or just companies in stagnant industries) saw their stock prices stagnate or fall. Boeing and GE had large rises though (meteoric in case of GE).
  - int_19h 1y ago
    Do stock prices even meaningfully represent anything anymore? Looking at some valuations makes me feel like it has all devolved entirely into gambling.
layer8 1y ago
There is no contradiction between stocks going up and things being mediocre due to focus on short-term profits.
- WalterBright 1y ago
  Looks like a contradiction to me. If you're sacrificing the long term for the short term, your stock isn't going up.
  - layer8 1y ago
    Why not? You’re still profitable, just with mediocre stuff.
    - WalterBright 1y ago
      Your competitors will eat your lunch.
      - layer8 1y ago
        I don’t see that happening in practice, because the competitors are focusing on the short term as well. Another reason is that it is easy to deceive customers about the relative qualities of a product as long as it is cheaper than the competition. So it’s rather the short-termists that are driving a race to the bottom (or at least to mediocrity).
      - warkdarrior 1y ago
        When you have a market for lemons and all competitors aim for "good enough", then it is no longer a business threat.
      - CamperBob2 1y ago
        The most successful companies, in my experience, are not successful because they're so much more awesome than everyone else. They are successful primarily because of luck... the luck of having competitors that suck total ass. Microsoft, for instance... or in more modern times, Tesla. I wouldn't put Boeing into that category, though -- it took more than just a lack of good competition to accomplish what they did, back in the day.
bumby 1y ago
Or…PE ratios bloat to provide price support. See:CAPE-adjusted PE ratio.
dowager_dan99 1y ago
are you discounting the supply of new companies that continually replace the decliners? What's happening to those the previously existed for 50+years? Will we ever see a new company last 100+ years?
seadan83 1y ago
The focus on short term results could generally be true. Perhaps... generally nothing is true though of course. (1) consider how many stocks are delisted and/or go out of business. We might be thinking with survivorship bias. A cook google gave this headline "America has lost 43% of listed companies since 1996" (though, more research would be needed to really be sure that's accurate and to determine any more nuances that might be important). (2) If there are an ever-present amount of short term rewards/results, then we would get growth. A series of short term growth would be hard to distinguish from long term growth. (3) Long term and short term growth can be mixed, and the strategy does not have to be static. A company could hop back and forth between them. This point contradicts the premise a bit, at the same time we can't discount long term from the noise that we see (it could be signal). (4) Stock price is not necessarily always tied to financial results. It's supposed to be the sum of all future revenue divided by the number of shares (or something like that), thus, stock price is in part also the expectation of revenue and not actual revenue. Tesla is a notable example, the price of their stock is still very high, with anticipation of amazing revenue gains, but recently their revenue has not been growing by a ton.
lamename 1y ago
Have you ever noticed that stocks can go up as enshittification also goes up?
_DeadFred_ 1y ago
Red Lobster
nostrademons 1y ago
The financial industry isn’t immune to “who cares”-ism, or folks who are bad at their jobs. Heck, the index fund is the ultimate “who cares?” product - you’re explicitly saying that you don’t care about underlying fundamental valuations and are going to piggyback off the price discovery mechanism of other active investors, and you accept average returns as a result. In practice, financial results are driven by transactions, and so any mediocrity that doesn’t lead to the customer going elsewhere isn’t going to show up in the financial results. You need an actual competitor to risk losing money to sucking. But I’ll note that in cases where there is an actual competitor to sclerotic old industries, one that actually does care, the investors in the competitor tend to become fabulously wealthy and the investors in the old industry go broke.
loa_in_ 1y ago
Stocks suck up all the value. For example the value of a house is in the living space it provides. If you convert it to money, you end up with... money.

> it's all due to the focus on short-term financial results I've heard that my whole life. If that were generally true, company stocks would be going steadily downwards.

toomuchtodo 1y ago

GE [1]? Boeing [2] [3]? The stocks go up because management and shareholders pull forward the gains as financialization destroys the long term value of the enterprises. Works until it doesn't. [1] Power Failure: The downfall of General Electric - https://news.ycombinator.com/item?id=44102034 https://news.ycombinator.com/item?id=44102034 - May 2025 [2] Fatal Recklessness at Boeing Traces Back to Long-Standing C-Suite Greed - https://www.thenation.com/article/politics/boeing-corporate-greed-airline-safety/ https://www.thenation.com/article/politics/boeing-corporate-... - April 9th, 2024 [3] HN Search: Boeing - https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=boeing&sort=byDate&type=story https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

WalterBright 1y ago
Boeing consistently went up for many decades prior to the MAX crisis. So did GE. Companies have life cycles. They grow until they become unable to function efficiently anymore, then they go down. It's not about prioritizing short term results.
- palmotea 1y ago
  >> GE [1]? Boeing [2] [3]? The stocks go up because management and shareholders pull forward the gains as financialization destroys the long term value of the enterprises. Works until it doesn't. > Boeing consistently went up for many decades prior to the MAX crisis. So did GE. The point is they could have probably kept going up if they hadn't done that. It's like how if you choose to eat your seed corn, you'll be fat and happy for a season, then you and your family will certainly starve to death next year. You'd most likely had lived if you hadn't made that short-term decision. > Companies have life cycles. They grow until they become unable to function efficiently anymore, then they go down. And how often are the "life cycles" really just the accumulation of bad short-term decisions catching up with the company? You can kludge and kludge and kludge, but eventually that makes the app unmaintainable. Then you're in "total rewrite" or go under territory.
  - WalterBright 1y ago
    > The point is they could have probably kept going up if they hadn't done that. No company goes up forever. They all eventually strangle themselves with bureaucratic inefficiency.
    - palmotea 1y ago
      > No company goes up forever. They all eventually strangle themselves with bureaucratic inefficiency. So they should act to strangle themselves faster? It feels like your reasoning is equivalent to, "Eventually you'll die, so there's no point taking care of your health. Go save money by avoiding the doctor, take up smoking, and eat junk food all the time."
      - WalterBright 1y ago
        > So they should act to strangle themselves faster? Come on.
        palmotea 1y ago
        Being relentlessly focused on the short term will do that, eventually. You seem to think the assumption "all companies die" means you can simplify away their journey, but it matters if they get there faster or slower (at least to society, if not the decision-makers to maximize their personal profit while hoping to not being the ones left holding the bag).
        nradov 1y ago
        Old companies die and new ones take their place. This is not a problem for society. In most cases creative destruction is a net positive.
        palmotea 1y ago
        > Old companies die and new ones take their place. This is not a problem for society. In most cases creative destruction is a net positive. That's what they say, but I don't think it's true (at the high end, at least). For instance: if Boeing dies, the market will not replace it. It'll be an Airbus monopoly for large jets, and maybe the the communists will eventually build a competitor (Comac). IIRC, it's too expesnive for Embraer to make the jump into that market.
- grumpy_coder 1y ago
  Boeing has consistently underperformed the market massively since the MD merger. Making maybe 3% after inflation
  - WalterBright 1y ago
    The vast bulk of Boeing's history was before that.
    - CamperBob2 1y ago
      Right, and isn't that everyone's point? When their focus was on the product, they excelled.
- bumby 1y ago
  >It’s not about prioritizing short term results Boeing was forced by courts bolster safety, compliance, and quality programs as well as admitting to conspiracy to thwart FAA oversight. I don’t know about you, but my experience is that when companies undermine those types of oversight, it’s almost always due to schedule and price pressure (ie short term results). (Not to mention, the whole impetus for MCAS was to rush the design to market so they wouldn’t lose out on AA as a customer).
  - WalterBright 1y ago
    Again, the vast bulk of Boeing's history was before that. > the whole impetus for MCAS was to rush the design to market so they wouldn’t lose out on AA as a customer The impetus for MCAS was to make the MAX behave like the previous 737 model to reduce the expense of retraining the pilots. In general, flying is safer when pilots do not need to "code switch" when switching airplane models. Many crashes result from a pilot reflexively doing the right thing for the previous airplane they flew, rather than the one they are flying at the moment.
    - bumby 1y ago
      >Again, the vast bulk of Boeing's history was before that. I’m not sure what you intend to convey with this statement. If price reflects reality, the current price should reflect the current reality, no? Whether the White Sox were the best team 100 years ago has little bearing on my prediction about their chances this year. I fail to see how Boeing’s prior culture prevents them from succumbing to short term incentives. I know your point is the downfall is a bureaucratic one, but the evidence does not point to that (they actually cut corners on bureaucratic requirements). >The impetus for MCAS was to make the MAX behave like the previous 737 model to reduce the expense of retraining the pilots. Go deeper. Why was this considered necessary? (Hint: it’s because they wanted to rush the design to market with a less expensive (and lower quality) product. Ie cost and schedule pressure. You stopped at the proximate cause.)
- triceratops 1y ago
  > They grow until they become unable to function efficiently anymore, then they go down But why?
- dsr_ 1y ago
  The book on GE is specifically about how they lied, cheated, and committed fraud -- er, accounting irregularities -- for decades, in order to maintain the illusion of number goes up predictably. In retrospect, it was exactly as unlikely as Madoff's numbers.
  - spwa4 1y ago
    But ALL of the FANGs pride themselves on predictably rising numbers. They all have a semi-believable story, and in fact only Amazon has a unique tactic (which is cheating taxes entirely by having zero profit, hence their revenue goes up predictably instead of profit. The others have steadily rising profit with slight variation in the rise of their revenue) But all of them do it. Facebook/Meta, Amazon, Netflix, Google, Apple. Even the non-FANG fangs like Tesla, Twitter, ... and all have stories about faking it. Most are advertising and that's easy to fake on both sides (buy your own adertising, and of course fake engagement), Amazon has zero profit so they proudly declare they're faking it for the government (but, of course, they're not cheating you), Netflix has steadily rising subscriber numbers where everyone else has failed, even Apple's growth has switched to subscriber growth, the part of their business that would be the easiest to fake. In fact this is quite common in the whole S&P 500, including outside of the US, with numbers not quite as dramatic as the FANGs, but still going up.
- saghm 1y ago
  > Companies have life cycles. They grow until they become unable to function efficiently anymore, then they go down. > It's not about prioritizing short term results. Why did they need to grow in the first place though? If a company is already profitable, and growing will end up making them less functional and eventually erode profits, that sounds like it's due to prioritizing short-term results over long-term stable profits.
Aunche 1y ago
> Fatal Recklessness at Boeing Traces Back to Long-Standing C-Suite Greed I suspect this is true to a certain extent, but IMO this narrative has been exaggerated to the point where it is completely useless. If Boeing execs were only focused on "short term profits," how did commercial aviation deaths decrease despite there being significantly more flights? https://www.statista.com/chart/4854/commercial-aviation-deaths-since-1942/ https://www.statista.com/chart/4854/commercial-aviation-deat...
- toomuchtodo 1y ago
  > Works until it doesn't. Boeing 737 Max: The troubled history of fatal crashes and 346 deaths in 7 years - https://economictimes.indiatimes.com/news/international/business/boeing-737-max-the-troubled-history-of-fatal-crashes-and-346-deaths-in-7-years/articleshow/111566888.cms https://economictimes.indiatimes.com/news/international/busi... - July 8th, 2024 As Boeing looks to buy a key 737 supplier [Spirit AeroSystems], a whistleblower says the problems run deep - https://www.npr.org/2024/06/16/nx-s1-4998520/boeing-737-spirit-aerosystems-whistleblower https://www.npr.org/2024/06/16/nx-s1-4998520/boeing-737-spir... - June 16th, 2024 Boeing’s Decline Traced to Decades of Catering to Shareholders Above All Others - https://bhr.stern.nyu.edu/quick-take/boeings-decline-traced-to-decades-of-catering-to-shareholders-above-all-others/ https://bhr.stern.nyu.edu/quick-take/boeings-decline-traced-... - April 8th, 2024 Boeing’s long fall, and how it might recover - https://www.seattletimes.com/business/boeing-aerospace/boeings-long-fall-and-how-it-might-recover/ https://www.seattletimes.com/business/boeing-aerospace/boein... - April 7th, 2024
  - Aunche 1y ago
    Are there actually more issues or are people just more aware of them? Like I said, commercial airline flights are significantly safer than they were in Boeing's supposed golden era despite these publicized scandals.
    - toomuchtodo 1y ago
      If your position is "well, it lasted this long and the organizational rot only killed a few hundred people" we may be unable to meet on this topic. How many deaths would be sufficient? I argue the decline in fatalities over time is due to commercial air traffic regulations and systems. https://news.mit.edu/2024/study-flying-keeps-getting-safer-0807 https://news.mit.edu/2024/study-flying-keeps-getting-safer-0...
badpun 1y ago
Boeing stock price still almost doubled in the past 10 years. Went up by hundreds of percent in the past two decades. GE stock is worth 40x what it was worth 40 years ago, when Jack Welsh took over management! These two seem like two very successful companies, led by succesful strategies.
- immibis 1y ago
  A lot of things did. Seems like prices much tend to rise faster than inflation.
  - badpun 1y ago
    A lot of badly managed companies (or just companies in stagnant industries) saw their stock prices stagnate or fall. Boeing and GE had large rises though (meteoric in case of GE).
- int_19h 1y ago
  Do stock prices even meaningfully represent anything anymore? Looking at some valuations makes me feel like it has all devolved entirely into gambling.

layer8 1y ago

There is no contradiction between stocks going up and things being mediocre due to focus on short-term profits.

WalterBright 1y ago
Looks like a contradiction to me. If you're sacrificing the long term for the short term, your stock isn't going up.
- layer8 1y ago
  Why not? You’re still profitable, just with mediocre stuff.
  - WalterBright 1y ago
    Your competitors will eat your lunch.
    - layer8 1y ago
      I don’t see that happening in practice, because the competitors are focusing on the short term as well. Another reason is that it is easy to deceive customers about the relative qualities of a product as long as it is cheaper than the competition. So it’s rather the short-termists that are driving a race to the bottom (or at least to mediocrity).
    - warkdarrior 1y ago
      When you have a market for lemons and all competitors aim for "good enough", then it is no longer a business threat.
    - CamperBob2 1y ago
      The most successful companies, in my experience, are not successful because they're so much more awesome than everyone else. They are successful primarily because of luck... the luck of having competitors that suck total ass. Microsoft, for instance... or in more modern times, Tesla. I wouldn't put Boeing into that category, though -- it took more than just a lack of good competition to accomplish what they did, back in the day.

bumby 1y ago

Or…PE ratios bloat to provide price support. See:CAPE-adjusted PE ratio.

dowager_dan99 1y ago

are you discounting the supply of new companies that continually replace the decliners? What's happening to those the previously existed for 50+years? Will we ever see a new company last 100+ years?

seadan83 1y ago

The focus on short term results could generally be true. Perhaps... generally nothing is true though of course. (1) consider how many stocks are delisted and/or go out of business. We might be thinking with survivorship bias. A cook google gave this headline "America has lost 43% of listed companies since 1996" (though, more research would be needed to really be sure that's accurate and to determine any more nuances that might be important). (2) If there are an ever-present amount of short term rewards/results, then we would get growth. A series of short term growth would be hard to distinguish from long term growth. (3) Long term and short term growth can be mixed, and the strategy does not have to be static. A company could hop back and forth between them. This point contradicts the premise a bit, at the same time we can't discount long term from the noise that we see (it could be signal). (4) Stock price is not necessarily always tied to financial results. It's supposed to be the sum of all future revenue divided by the number of shares (or something like that), thus, stock price is in part also the expectation of revenue and not actual revenue. Tesla is a notable example, the price of their stock is still very high, with anticipation of amazing revenue gains, but recently their revenue has not been growing by a ton.

lamename 1y ago

Have you ever noticed that stocks can go up as enshittification also goes up?

_DeadFred_ 1y ago

Red Lobster

nostrademons 1y ago

The financial industry isn’t immune to “who cares”-ism, or folks who are bad at their jobs. Heck, the index fund is the ultimate “who cares?” product - you’re explicitly saying that you don’t care about underlying fundamental valuations and are going to piggyback off the price discovery mechanism of other active investors, and you accept average returns as a result. In practice, financial results are driven by transactions, and so any mediocrity that doesn’t lead to the customer going elsewhere isn’t going to show up in the financial results. You need an actual competitor to risk losing money to sucking. But I’ll note that in cases where there is an actual competitor to sclerotic old industries, one that actually does care, the investors in the competitor tend to become fabulously wealthy and the investors in the old industry go broke.

loa_in_ 1y ago

Stocks suck up all the value. For example the value of a house is in the living space it provides. If you convert it to money, you end up with... money.