Alphabet overtakes Apple to become most cash-rich company • Hacker News Board

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

#121

Post by bllguo » Fri, Aug 02, 2019, 9:15 PM UTC

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.…

> They are either speaking truth or not.

I don't understand. Supposedly Thiel "claimed that Google was unpatriotic for dropping the government project Maven" - why are we talking about truthiness? How is this a provable statement?

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

#122

Post by scarface74 » Fri, Aug 02, 2019, 9:17 PM UTC

bjelkeman-again wrote: post #15

Jun8 wrote: post #8

Earlier quoted context omitted.

Here's an HBR article that addresses some of the misunderstandings in maligning buy back programs: https://hbr.org/2018/03/are-buybacks-really-shortchanging-in... . They comment that: "... when we look at CAPEX and R&D as a percentage of revenue ... over the past 25 years, we see that the overall investment intensity of S&P 500 firms, while quite volatile on a year-to-year basis, has been rising over the past decade,…

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…

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

There are only two YC companies that have gone public and both of those are still losing money -- PagerDuty and Dropbox and as far as I know, none have reached profitability.

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

#123

Post by andrekandre » Fri, Aug 02, 2019, 9:22 PM UTC

xur17 wrote: post #109

andrekandre wrote: post #98

Earlier quoted context omitted.

it would be interesting if companies that size would distribute more to their employees one fantasy calculation i do a lot is google-profits / total-google-employees or apple-profits / total-apple-employees and you get something like half a million dollars a year (60 billion dollars of profit divided by 132,000 apple employees for example) in the above scenario, work a few years at a company like google or apple and…

Isn't that already what is happening at FAANG companies? According to levels.fyi, a senior developer at Facebook and Google is at ~$360k in total comp. After working 5 or 10 years, you could easily have $1M in savings (perhaps a bit more challenging given the cost of living where these companies are located, but still possible).

yea, that is definitely true that they are compensated very well, but i was thinking in a more “equitable” way considering the insane profits they are generating

if you added say half the profits to employees and half the stock as well, they could become multi-millionaires even sooner.... maybe it’s just my bias, but i feel like if those employees were really empowered by their earnings they would be more entrepreneurial and start all kinds of new ventures

i guess this is just my crazy idea, but it’s something i feel strongly recently... it’s just weird to me to see such huge amounts of capital just sitting there (or being used in buybacks)

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

#124

Post by high_derivative » Fri, Aug 02, 2019, 9:22 PM UTC

izzydata wrote: post #108

beefalo wrote: post #93

Earlier quoted context omitted.

I think it will be really enticing for people that want to play sports games but don't want to invest in a console. Those customers are also not going to be the ones concerned about latency.

It has no real advantages to buying a console because you still have to buy the games individually as they explained. It is no different than financing a gaming console except you could eventually pay it off unlike Stadia.

n=1 but I if were considering the two options, I would simply not want one that has me owning more electronic waste (console). I am not sensitive to the price either way, but I am sensitive to owning more electronics.

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

#125

Post by robertAngst » Fri, Aug 02, 2019, 9:23 PM UTC

This is USD?

I know it seems like a doomsday scenerio, but if the US goes through a moderate hyperinflation, do these companies die?

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

#126

Post by johannes1234321 » Fri, Aug 02, 2019, 9:23 PM UTC

andrekandre wrote: post #98

johannes1234321 wrote: post #26

Earlier quoted context omitted.

Buying the stock is a way for distributing money to their share holders. Similar to a dividend.

it would be interesting if companies that size would distribute more to their employees one fantasy calculation i do a lot is google-profits / total-google-employees or apple-profits / total-apple-employees and you get something like half a million dollars a year (60 billion dollars of profit divided by 132,000 apple employees for example) in the above scenario, work a few years at a company like google or apple and…

Well this is not a new thought. That discussion goes back to the early days of industrialization and involves thinkers like Karl Marx and Friedrich Engels, where a chain of thoughts (alternative to "socialist mainstream" of giving the "production capital" to the state, where those two mentioned ended up) to put companies into a collective/cooperative, where the company is owned by the workers, thus workers make the decisions and take the profits. These thoughts are part of the roots of many social democratic parties in Europe. While this debate came to an end when the East collapsed, the capitalistic system won an Social Democrats became more market oriented (i.e. "New Labour" in UK or German SPD with Gerhard Schröder's reforms of unemployment and social systems)

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

#127

Post by jjeaff » Fri, Aug 02, 2019, 9:23 PM UTC

eigenvalue wrote: post #67

usrusr wrote: post #64

Earlier quoted context omitted.

> They can get low interest loans using the shares as collateral. This deferring taxes indefinitely And in case a superinflation strikes, all those loans are effectively wiped out while they keep the assets (the corporate off-shore hoard might suffer as well though, but it might be sufficiently mobile and well-managed to avoid the worst). If capitalism was a video game, it would get terrible ratings due to utterly bo…

Yeah, but in a sharp downturn you get margin called and possibly wiped out if you aren’t careful. A lot more rich people have lost everything from that sort of problem than the number of rich people made even richer as a result of extreme inflation. And Weimar like inflation seems increasingly less of a near term risk considering that German 30 year yields just turned negative for the first time ever today.

These ultra high net worth people are getting loans at such low interest rates because the collateral is so much larger than the loan.

If you have $10B in stock, you probably aren't going to borrow so much as to even get close to a margin call in a market downturn.

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

#128

Post by adamlett » Fri, Aug 02, 2019, 9:24 PM UTC

ergothus wrote: post #10

defertoreptar wrote: post #6

Earlier quoted context omitted.

The only way he doesn't have a point is if Google thinks its company is significantly undervalued, in which case buybacks are smart. Their CEO, Sundar Pichai, gets a huge stock-based compensation, so you have to factor in how management has a large incentive to grow the stock value, but not necessarily in the long term (making buybacks desirable regardless of whether the company is actually cheap or not).

> if Google thinks its company is significantly undervalued, in which case buybacks are smart Honest questions here, as my stock understanding is fairly limited: Why does a company care if it's "undervalued"? How does a buyback actually change that valuation? (doesn't the market cap remain the same after the purchase?)

The value of a company’s shares is the sum of its assets and its expected future earnings, both divided by the number of shares. The assets are a known quantity and do not fluctuate much in value, but the expected future earnings may. When a company makes a buyback, it is changing the constituent parts of its shares’ value to be less asset(ie. cash) heavy and more expected future earnings heavy. If the expected future earnings were underestimated for some reason, the result will be a more share than if the company had kept its cash. If OTOH the future earnings were overestimated, the value of the share will decline more than if the company had kept its cash.

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

#129

Post by jjeaff » Fri, Aug 02, 2019, 9:25 PM UTC

_delirium wrote: post #53

olde_fortran wrote: post #40

Earlier quoted context omitted.

Dividends at taxed at income tax rates

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.

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

#130

Post by ethbro » Fri, Aug 02, 2019, 9:26 PM UTC

cameronbrown wrote: post #66

dmix wrote: post #22

Earlier quoted context omitted.

Why not buy some companies and get some proper entrepreneurs back into the mix of management? I can't remember any recent major Google acquisitions. No mega company really has to have internal innovation. And I doubt the pretend internal startups ala skunkswork with an unlimited budget and extensive runways are a real replacement for innovation popping out of the marketplace among the bodies of a hundred other failed…

> Why not buy some companies and get some proper entrepreneurs back into the mix of management? I can't remember any recent major Google acquisitions. Firebase (acquired in 2014) seems to qualify as semi-recent given it's become a massive product line in a few years.

Buying best of breed solutions that integrate with their cloud is as good an ever-present option as I can think of.

It adds value to their cloud, is responsive to actual customer desires, and generally seems like a bargain at the right stage (a Google-supported tool being more valuable than a third-party GCP tool, even with Google's questionable dedication to longevity).

Just don't make the IBM / MS mistake and think adding more PMs to previously successful company is a good idea.