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Good ideas do not need lots of lies in order to gain public acceptance (2008)

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Re: Good ideas do not need lots of lies in order to gain public acceptance (2008)

#101

Post by camgunz »

nostrademons wrote: post #75
pjc50 wrote: post #22

Earlier quoted context omitted.

The specific lie discussed was the idea that granting options was not somehow an "expense" and could be excluded from the accounts. (Google tells me this is a relevant summary of US GAAP https://carta.com/uk/en/learn/startups/equity-management/asc... )

That's not what the quote in the article is: > Our lecturer, in summing up the debate, made the not unreasonable point that if stock options really were a fantastic tool which unleashed the creative power in every employee, everyone would want to expense as many of them as possible, the better to boast about how innovative, empowered and fantastic they were. That's saying that it's stock options themselves which are…

Nah I think the advice generally is "ignore options."

Re: Good ideas do not need lots of lies in order to gain public acceptance (2008)

#102

Post by [deleted] »

roenxi wrote: post #32

It is also a useful trick to keep in mind the opposite of critical thinking - following the herd. Just copying everyone around you is often a great strategy. So good that even if everyone around you are making mistakes it can still be the dominant strategy (there is a reason a lot of people who don't like war are cowed into silence when war fever descends). Most people are using it. That implies that it is ridiculous…

[deleted]

Re: Good ideas do not need lots of lies in order to gain public acceptance (2008)

#103

Post by p_l »

nostrademons wrote: post #74
bluGill wrote: post #66

Earlier quoted context omitted.

I learned long ago (when my company decided they couldn't give me options because we were too big so they did these "I can't believe it isn't an option", which expired worthless): until cash is in my bank account it is just a promise waiting to be broken. If I want to invest I want it my choice. In any case, it is a bad idea to invest in the company you work for - unless you are high enough up in the company that you…

> In any case, it is a bad idea to invest in the company you work for I'd question this conventional wisdom, simply because you have a lot more information about the company as an employee than a random investor does, even if you are not in possession of things like financials that the SEC considers "material non-public information". Things like culture, intelligence of your coworkers, whether or not you're actually…

I used to be on a project that, IMHO, had possibly considerable impact on capabilities and even some specific financials in a publicly traded corporation.

After about third earnings call (which happened a tiny bit before the trading window for our stock grants opened), I (re)learned the hard lesson that even if we delivered and I had actual, material, move the needle impact on corporate financials, that would not translate in any way to stock price. Except maybe if I pushed it really, really, down by causing an avalanche of problems that resulted in some big name deal going down.

The stock prices are vibe based, once its publicly traded your share value will be based on whatever vibes pushed numbers in excel around earnings call, and it's perfectly normal occurrence to beat expected earnings per share for 3 quarters straight and every quarter get a different vibed-off reason as to why the price should go down.

Re: Good ideas do not need lots of lies in order to gain public acceptance (2008)

#104

Post by zdc1 »

camgunz wrote: post #101
nostrademons wrote: post #75

Earlier quoted context omitted.

That's not what the quote in the article is: > Our lecturer, in summing up the debate, made the not unreasonable point that if stock options really were a fantastic tool which unleashed the creative power in every employee, everyone would want to expense as many of them as possible, the better to boast about how innovative, empowered and fantastic they were. That's saying that it's stock options themselves which are…

Nah I think the advice generally is "ignore options."

People who sell lottery tickets, on average, do better than those who buy them. The same applies to stock options. Which is why "bonus" options are fine, but "buying" them by taking ESOP over potential salary, can be a bad choice.

Re: Good ideas do not need lots of lies in order to gain public acceptance (2008)

#105

Post by AnthonyMouse »

pjc50 wrote: post #22
nostrademons wrote: post #7

Interesting that this quote was initially about stock options at tech companies. It turned out that stock options did become nearly universal in tech compensation, and companies that granted them outcompeted companies that did not. So the management that was ostensibly “doing a massive blag at the expense of shareholders” wasn’t really, time vindicated their practices and things like option backdating and not treatin…

The specific lie discussed was the idea that granting options was not somehow an "expense" and could be excluded from the accounts. (Google tells me this is a relevant summary of US GAAP https://carta.com/uk/en/learn/startups/equity-management/asc... )

> The specific lie discussed was the idea that granting options was not somehow an "expense" and could be excluded from the accounts.

Stock options for the company's own stock are kind of weird because the company can issue its own stock, which puts them in a much different position than someone selling uncovered calls.

An uncovered call is a potentially unbounded liability. If you issued someone options to buy 10,000 shares for $10 each and then the price went up to $1000, you could be on the hook to have to buy $10M in shares and then sell them for $100,000, i.e. you'd take a $9.9M future loss, and the risk of that is a significant liability.

Whereas if you have 10,000 shares and agree to sell them for $10 each and then the the price goes up to $1000 before they pay you, you don't actually owe anyone that extra money, you just failed to make the $9.9M gain you otherwise would have. It's the same as if you'd sold (or issued new) shares for $10 immediately. But we don't generally book "opportunity cost of selling shares for the current market price" as an expense, do we?

Re: Good ideas do not need lots of lies in order to gain public acceptance (2008)

#106

Post by pmg101 »

I'm not sure. Don't underestimate the power of inertia.

I bought an EV last year and it's definitely been a "good idea" for me. Luxurious ride, fuel costs a tenth, doesn't stink.

Seems such an obvious upgrade it slightly confuses me take-up hasn't been quicker among people who like me can charge at home.

Re: Good ideas do not need lots of lies in order to gain public acceptance (2008)

#107

Post by IshKebab »

pmg101 wrote: post #106

I'm not sure. Don't underestimate the power of inertia. I bought an EV last year and it's definitely been a "good idea" for me. Luxurious ride, fuel costs a tenth, doesn't stink. Seems such an obvious upgrade it slightly confuses me take-up hasn't been quicker among people who like me can charge at home.

> it slightly confuses me take-up hasn't been quicker among people who like me can charge at home

No big mystery: a) most people keep cars for 20 years or more, b) most people don't buy new cars - they're too expensive.

Re: Good ideas do not need lots of lies in order to gain public acceptance (2008)

#108

Post by austin-cheney »

I completely disagree with the title. Good ideas should be either self evident or at least become clearly apparent with strong evidence. Typically that is not the case.

People are social critters that typically fear originality, and not by just a little bit either. Most people find originality repulsive no matter how well qualified a good idea may be. Instead, most people look towards social validation. A socially validated bad idea has vastly superior acceptance for most people as compared to any good idea.

We all like to think we are rational actors, but most of us aren’t and never will be.

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