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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

#201

Post by ryzvonusef »

skybrian wrote: post #58
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".…

This argument relies on a fallacy of binary thinking: either you have ideas or you don't. It's perfectly fine to say that you have lots of investment ideas, but they don't add up to needing $100 billion to implement them. Especially when you are earning more cash every quarter.

>but they don't add up to needing $100 billion to implement them

Then give dividends?

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

#202

Post by wahern »

jjeaff wrote: post #129
_delirium wrote: post #53

Earlier quoted context omitted.

True for ordinary dividends, but almost all stock dividends meet the criteria to be treated as qualified dividends, taxed at capital gain rates. For example, in Vanguard's S&P 500 index fund, about 98% of dividends are qualified [1]. Of commonly traded classes of stocks, only real-estate funds mostly pay out ordinary dividends. [1] https://advisors.vanguard.com/VGApp/iip/advisor/csa/investme...

But you are forgetting the fact that the corporation will have to pay corporate income tax on that money before they can use it to pay your dividend.

That's true, regardless. They paid tax earning that $100M. What they do after is irrelevant, as neither dividends nor buybacks are tax deductible.

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

#203

Post by kensai »

partiallypro wrote: post #156
jameslk wrote: post #153

Personal conspiracy theory: these tech companies are sitting on their piles of cash waiting for the next recession so they can go on a shopping spree for all the cheap startups unable to raise any further rounds and unprofitable IPO'd unicorns crashing on the stock market

That's not a conspiracy theory

And not even personal. I share it myself. :)

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

#204

Post by bryanrasmussen »

nostrademons wrote: post #42
bjelkeman-again wrote: post #15

Earlier quoted context omitted.

I wouldn’t start one company. I would take a leaf out of Y Combinator’s book, and start funding lots a small startups, as well as advising them. I’d would attempt at investing in such a way that I create an ecosystem of companies that can learn from each other and support each other. I’d focus on climate resilience. Lots of current practices will be disrupted by changes we are already seeing. Easy? Probably not, but…

Google's done that repeatedly with Google Labs, GMail Labs, Google X, Area 120, department-internal projects like Search Demo Days, 20% time, Google Ventures, giving high-performing employees a charter to work on whatever they want for a couple quarters, etc. It never seems to work, and it never seems to work for the reasons outlined in The Innovator's Dilemma. Big companies are held hostage by their customers. A new…

I thought that was what the creation of Alphabet was meant to solve.

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

#205

Post by chrischen »

scarface74 wrote: post #152
chrischen wrote: post #149

Earlier quoted context omitted.

Yes most companies do that on the books, including movie productions, Amazon, etc. It’s not because their business model still doesn’t work, it’s because the point of corporate income tax is to make sure the corporation doesn’t hoard money and instead reinjects it into business expenses such as payroll.

I realize that, but the companies I’m referring to - the VC backend companies and the YC backed public companies aren’t cash flow positive.

Yes but my point is that if they're reporting profits it'd mean they'd have run out of things to spend money on (R&D, employees, product dev, etc). The whole point of VC funding is that so much money will go towards product dev that they'd need external funding.

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

#206

Post by AnthonyMouse »

meddlepal wrote: post #199
AnthonyMouse wrote: post #168

Earlier quoted context omitted.

> That's just an argument for lowering taxes. It's both . You don't tax people and then provide everyone with a free dog, you just let people keep their money and they'll use it to get a dog if they want one. If you want to help the poor, you don't give them bureaucratic programs that require them to buy specific amounts and types of food, housing and education, you just give them the money and they can figure out wh…

> you just give them the money and they can figure out what they need better than you. Alternatively they fall prey to lotteries, casinos, drugs, alcohol, or any other number of things and you're right back at square one... give them more money. It's a blackhole feel-good policy that ignores reality. It's better to put strong social safety nets in place. Buy the food and the clothes for them, maybe even establish a d…

> Alternatively they fall prey to lotteries, casinos, drugs, alcohol, or any other number of things and you're right back at square one...

This is contrary to evidence. There are people who are poor and there are people who are addicts, but the extent to which they overlap is only because of the tendency of addiction to make you poor. The bulk of the poor are not poor because they piss their money away on drugs and casinos.

Moreover, giving people stuff instead of money doesn't help the addicts -- or anyone else -- because stuff is fungible like money, only less efficiently. You give an addict food and shelter and they'll sell the food and sublet the shelter and go blow the money on their addiction. Because the root of their problem isn't that they don't have enough food or housing or money, it's that they need to break their addiction or they will never hold onto those things.

Meanwhile giving out stuff instead of money only costs the taxpayer more for the same amount of benefit, because that inefficiency is universal. You give people money for clothes and they'll buy clothes with it, even if they already have clothes, because they can't spend it on anything else. But that's just a waste of the taxpayer's money, when it could otherwise have gone to something they actually needed.

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

#207

Post by AnthonyMouse »

inlined wrote: post #174
AnthonyMouse wrote: post #170

Earlier quoted context omitted.

> Why not buy some companies and get some proper entrepreneurs back into the mix of management? Because it's inefficient. Google could buy a thousand biotech startups that are all doing innovative work trying to cure cancer and things like that, but that work has nothing to do with search engines or data centers, so it makes no sense to put it under the same roof. The same management staff isn't going to be effective…

> Google could buy a thousand biotech startups that are all doing innovative work trying to cure cancer and things like that, but that work has nothing to do with search engines or data centers Yet it has a lot to do with Calico, another Alphabet company.

That's just them doing the silly thing they ought not to be doing. What synergy exists that causes Calico to be better off as part of Alphabet instead of as an independent company?

What if I want to invest in Calico but not Google, or vice versa? All it's doing is making the market less efficient.

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

#208

Post by AnthonyMouse »

whatshisface wrote: post #189
AnthonyMouse wrote: post #170

Earlier quoted context omitted.

> Why not buy some companies and get some proper entrepreneurs back into the mix of management? Because it's inefficient. Google could buy a thousand biotech startups that are all doing innovative work trying to cure cancer and things like that, but that work has nothing to do with search engines or data centers, so it makes no sense to put it under the same roof. The same management staff isn't going to be effective…

Google investors won't be able to invest in high-risk biotech startups if they aren't accredited. Everyday investors are only allowed to access weird investments through the left-field bets of big companies.

> Google investors won't be able to invest in high-risk biotech startups if they aren't accredited. Everyday investors are only allowed to access weird investments through the left-field bets of big companies.

Only they can't do it that way, because if you buy a share of Alphabet, basically the entire value is from Google and even if one of the little left-field bets triples in value it would have only marginal impact on the overall share price.

Meanwhile if you did want to do such a thing, the better solution would be to have a fund with the sole purpose of investing in high-risk biotech startups, and then invest in a slew of them to better diversify the risk. Then let retail investors buy shares in that entity, which is all biotech instead of being a tiny sliver of biotech but really mostly Google.

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

#209

Post by bsder »

ludicast wrote: post #171
bsder wrote: post #114

Earlier quoted context omitted.

> If you had $25B to start a company what idea would you tackle? Medical. I would provide FDA approval process funding and indemnification for medical devices. Medical is rife with areas that could be disrupted by startups. The blocking limitation is that you can't afford the funding to get clearance for your product.

Great idea, not sure why you're bored down. The slow as shit FDA has killed more people than Stalin.

And yet the FDA was the reason why thalidomide didn't get approved and affected the US much less than elsewhere.

While I have lots of beef with the FDA and could easily write encyclopedic tomes on the subject, there is practically no other agency anywhere that actually makes sure before the fact that drugs or devices are actually better than nothing and actually fit for purpose.

The biggest problem is that the FDA could move much faster if they had a way to do detailed monitoring on things after approval. Alas, there is no incentive or system to handle that.

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

#210

Post by lonelappde »

ryzvonusef wrote: post #201
skybrian wrote: post #58

Earlier quoted context omitted.

This argument relies on a fallacy of binary thinking: either you have ideas or you don't. It's perfectly fine to say that you have lots of investment ideas, but they don't add up to needing $100 billion to implement them. Especially when you are earning more cash every quarter.

>but they don't add up to needing $100 billion to implement them Then give dividends?

Like the ones they just announced?
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