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Alphabet overtakes Apple to become most cash-rich company

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Re: Alphabet overtakes Apple to become most cash-rich company

#81

Post by spullara »

noego wrote: post #74
jjeaff wrote: post #35

Earlier quoted context omitted.

Ya, that's finance 101. But here's Finance 5400: Smart, wealthy shareholders love cash hoarding. Especially if the cash is held tax free in overseas accounts. The share price is boosted allowing them to get returns in the form of pure capital gains. If the company were to pay dividends, sure, most of those dividends would be taxed at capital gains rates as well. But that money has to be taxed at the highest US corpor…

> "Smart, wealthy shareholders love cash hoarding" Any evidence to back this up? Activist investors generally pressure companies to not hoard cash, for exactly the reasons outlined earlier. Example: http://money.com/money/3484599/icahn-letter-apple-cash/ " Icahn controls 53 million shares of Apple, worth $5.3 billion, which gives him about a 0.9% ownership in the company. In his letter, Icahn lays out his reasons tha…

Repurchasing shares though is better for him than dividends. Decreasing the supply of shares, which increases the per share price, can often be better for investors than getting the cash directly.

Re: Alphabet overtakes Apple to become most cash-rich company

#82

Post by TheGRS »

dahfizz wrote: post #76
nostromo wrote: post #71

Earlier quoted context omitted.

And Bear Stearns, and Washington Mutual, and Deutsche Bank, and AIG, etc., etc. "It is safe to assume they know what they are doing" because they're managing a ton of money has been proven wrong over and over again.

Nobody is claiming that money managers have omniscience. What they do certainly have is more information and expertise than a random internet commenter. They don't know everything, but it's safe to assume they know more than you.

Well the actual decision-making tends to be more important than just what one knows. A pile of cash seems more indicative of investment paralysis than some grander strategy. Like, "we can't figure out the best investment to make with this money, so the safest thing we can do is hoard it until we come up with a better idea".

Re: Alphabet overtakes Apple to become most cash-rich company

#83

Post by neonate »

wpasc wrote: post #4

This reminds me of a talk I watched with Peter Thiel and Eric Schmidt. I know Thiel is controversial, but he was well-meaningly digging at Google for running out of ideas and no longer innovating. The criticism was something like "You have so much cash on hand but no ideas to invest in. However, you can't pay a dividend because the second you do, you're admitting you've run out of ideas and are no longer innovating".…

Here's a section of that debate: https://twitter.com/garrytan/status/1133942478501888000

Re: Alphabet overtakes Apple to become most cash-rich company

#84

Post by parsimo2010 »

It's important to note that what they really mean is most cash-rich of companies for which public information is available. There are some state owned enterprises around the world that might be able to beat this amount of money even if they don't have the name recognition of Google or Apple.

Saudi Aramco may soon be publicly traded, so we have some information on them, but what is interesting is that while we know they are more profitable than Alphabet, we aren't sure exactly where they are putting all their money. It could be going to a holding scheme that could very well top Alphabet in terms of cash on hand.

There is probably a Russian entity that gives Alphabet a run for its money as well.

Re: Alphabet overtakes Apple to become most cash-rich company

#85

Post by sokoloff »

winter_blue wrote: post #56
olde_fortran wrote: post #40

Earlier quoted context omitted.

Dividends at taxed at income tax rates

In the U.S., if you've held the stock for at least one year, its dividends are taxed at a very favorable long-term capital gains rate. Stock held for less than a year is however taxed like regular income.

The required holding period for qualified dividends in the US is typically 60 days, not 1 year.

(It's 90 days for preferred shares.)

Re: Alphabet overtakes Apple to become most cash-rich company

#86

Post by bena »

buzzerbetrayed wrote: post #65
bduerst wrote: post #48

Earlier quoted context omitted.

It is true that my comment is an ad hom attack, but as it speaks to the motive (and potential hypocrisy) of the speaker, it is not fallacious. It also speaks to the question as to whether or not Thiel has a point, hence the idiom "take with a grain of salt".

The fact that it speaks to his motive is exactly what makes it fallacious. People’s motive’s have nothing to do with whether or not what they are saying is true or false. They are either speaking truth or not. Motives can explain WHY they are saying something untrue. But not IF what they are saying is untrue. You are saying that Thiel has a reason to lie. But you aren’t addressing whether or not he is actually lying.…

His motive is fair game when we're discussing his credibility as a source or information.

Re: Alphabet overtakes Apple to become most cash-rich company

#87

Post by zhoujianfu »

ralph84 wrote: post #5
wpasc wrote: post #4

This reminds me of a talk I watched with Peter Thiel and Eric Schmidt. I know Thiel is controversial, but he was well-meaningly digging at Google for running out of ideas and no longer innovating. The criticism was something like "You have so much cash on hand but no ideas to invest in. However, you can't pay a dividend because the second you do, you're admitting you've run out of ideas and are no longer innovating".…

Once you get to Google or Apple scale, you’re essentially a government and run into the same problems with central planning that governments do. It’s absolutely the right move to return the money to shareholders and let them reallocate it to more economically promising endeavors. That doesn’t make a statement about innovation stagnation on the whole, it just reflects the reality of diminishing returns to scale.

This just struck me as the same reason UBI is a great policy for governments. Just distribute the cash people, you’re too big to allocate it well!

Re: Alphabet overtakes Apple to become most cash-rich company

#88

Post by [deleted] »

baobrain wrote: post #19
bduerst wrote: post #7

Earlier quoted context omitted.

Thiel is also on a jingoist bend against Google, so I would take whatever he says with a grain of salt. I saw him on CNBC claiming that Google was unpatriotic for dropping the government project Maven (machine vision for millitary drones) and that Google was also a Chinese sympathizer - despite there being no evidence and also the fact that you can't even use Google in China. The same Google employees that revolted a…

He went way beyond "Chinese sympathy", accusing Google of treason and claiming they're infiltrated by the Chinese. https://www.axios.com/peter-thiel-says-fbi-cia-should-probe-...

[deleted]

Re: Alphabet overtakes Apple to become most cash-rich company

#89

Post by la_barba »

buzzerbetrayed wrote: post #65
bduerst wrote: post #48

Earlier quoted context omitted.

It is true that my comment is an ad hom attack, but as it speaks to the motive (and potential hypocrisy) of the speaker, it is not fallacious. It also speaks to the question as to whether or not Thiel has a point, hence the idiom "take with a grain of salt".

The fact that it speaks to his motive is exactly what makes it fallacious. People’s motive’s have nothing to do with whether or not what they are saying is true or false. They are either speaking truth or not. Motives can explain WHY they are saying something untrue. But not IF what they are saying is untrue. You are saying that Thiel has a reason to lie. But you aren’t addressing whether or not he is actually lying.…

Also motive isn't a global immutable state. One person saying something one time, doesn't make everything that person does in every situation fall into the same context. Maybe its because I hang out in programming nerd circles, but I've seen otherwise intelligent people fall into this trap of using some kind of propositional logic to "prove" things.

Re: Alphabet overtakes Apple to become most cash-rich company

#90

Post by mastratton3 »

gvhst wrote: post #34
mercules wrote: post #29

Earlier quoted context omitted.

At the same time, companies with a strong warchest are better prepared to weather the storm of an economic downturn and to afterwards, purchase valuable assets for pennies on the dollar.

Buffett puts this well when he says: > “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it's imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.” The thing here is you have to be confident in your ability to deploy capital during those downturns. Your average expected return over multiple cycles (cash…

^This.. I don't see why people thinking hoarding cash when capital is cheap is a bad strategy. It totally ignores the fact that ease of raising and cost of capital is time dependent. If you had a war chest of cash in 2008/2009, that'd be insanely valuable.
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