Why Are Corporations Hoarding Trillions?
nytimes.com
Why Are Corporations Hoarding Trillions?
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Re: Why Are Corporations Hoarding Trillions?
#2It's the same reason I save my money: for opportunities when prices are low. This is especially relevant now that the stock market is tanking.
Most people with any kind of money think this way.
Re: Why Are Corporations Hoarding Trillions?
#3What many outside the government and corporate world do not know is that there is a storm coming(cue ominous music.) Corporations are struggling and only few people know what is going on. What we are seeing from some are just protective measures that will not work long term. The better thing to do is to invest in massive value creation.
Re: Why Are Corporations Hoarding Trillions?
#4It seems to me that holding large amounts of cash is only viable when inflation stays low. So a higher level of inflation might cause the release of some of these huge cash reserves in the form of real investment (real in terms of hands doing work instead of moving the cash to some other financial instrument)...
Re: Why Are Corporations Hoarding Trillions?
#5I've often said that the key to improving investment is to eliminate corporate taxes, tax foreign currency movements (when money moves out of the country), and to put limits on the amount of unutilized/under-utilized assets a corporation can hold onto, and for how long.
Corporations better serve the public good when they are spending, and beyond that spending domestically. By shifting funds out of the country and/or otherwise sitting on assets, there's a reduction in economic potential as a whole and said corporation is less serving of the public good.
Corporations are meant to serve the public good by encouraging investment and limiting liability of investors not involved in decision making. Corporate behavior today doesn't reflect this.
Re: Why Are Corporations Hoarding Trillions?
#6I've often said that the key to improving investment is to eliminate corporate taxes, tax foreign currency movements (when money moves out of the country), and to put limits on the amount of unutilized/under-utilized assets a corporation can hold onto, and for how long. Corporations better serve the public good when they are spending, and beyond that spending domestically. By shifting funds out of the country and/or…
Seems like that's a proposal that's trivial to exploit, I can think of at least a couple of ways off the top of my head: shell companies funds-shuffling, related companies wash buying/selling, etc.
Re: Why Are Corporations Hoarding Trillions?
#7Investing money is work. You have to sink resources into it. If you don't, then you will assuredly lose that money.
A guaranteed return is better than an assured loss.
Re: Why Are Corporations Hoarding Trillions?
#8Investing money is work. You have to sink resources into it. If you don't, then you will assuredly lose that money. A guaranteed return is better than an assured loss.
Holding cash is essentially an investment in the sovereign government that controls that currency. Simply sitting on cash does not imply little or no risk.
Re: Why Are Corporations Hoarding Trillions?
#9Investing money is work. You have to sink resources into it. If you don't, then you will assuredly lose that money. A guaranteed return is better than an assured loss.
Holding cash is essentially an investment in the sovereign government that controls that currency. Simply sitting on cash does not imply little or no risk.
It's not risk-less, but it's way less risky than every other alternative.
Re: Why Are Corporations Hoarding Trillions?
#10It's the same reason I save my money: for opportunities when prices are low. This is especially relevant now that the stock market is tanking. Most people with any kind of money think this way.
> It's the same reason I save my money: for opportunities when prices are low
The problem is: how do you know if the time is right (i.e. ten years later you can say "I invested in the lowest possible price")?
Possibility A: you invest too early, stock drops further and you can't recover in a reasonably long time frame (e.g. 1 year)
Possibility B: you invest too late, and people who invested before you made more profit in retrospect
Possibility C: you invest at the right time frame and made a nice chunk of cash
Possibility D, especially likely with unicorns: either A, B or C after a year... and two more years pass by, and the company goes bust (Myspace!)