U.S. economy shrank at a 1.4% annual rate in the first quarter • Hacker News Board

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#341

Post by anamax » Sat, Apr 30, 2022, 12:07 AM UTC

MuffinFlavored wrote: post #339

MisterMower wrote: post #323

Earlier quoted context omitted.

I think you are confused about the causation. Shares of stock represent ownership in a company. If the company performs well and earns increasing amounts of money over time, that means the company is more valuable. If the number of shares remain static, increasing earnings means the value of the company is higher on a per share basis and justifies a higher price per share. The company performance drives the stock pri…

what benefits does the company being more valuable bring to it? better financing with banks?

I'll repeat myself.

If I own stock in a company whose executives do not work to keep the stock price up or even increasing, I will replace those executives with executives who will work to keep the stock price up/increasing. (Corollary - I will not buy stock in a company whose executives are unconcerned with stock price. That unwillingness means that folks who own stock and might want to sell it to folks like me will "encourage" executives to make that possible.)

Is it really hard to understand that stockholders care about stock prices and that they will "encourage" the company to maintain/increase the value of their investment?

Would you buy stock in a company that didn't try to maintain/increase the stock price? Why?

This has nothing to do with bank financing or further stock sales by the company, although those can also be factors.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#342

Post by anamax » Sat, Apr 30, 2022, 12:16 AM UTC

MuffinFlavored wrote: post #316

anamax wrote: post #306

Earlier quoted context omitted.

The question is not whether the executives are paid in stock, it's whether they're paid at all. Executives who don't worry about share price get to work somewhere else.

i’m not asking about the executives or the board. Why does a company benefit financially if it stock goes up other than being able to issue stock more easily?

> i’m not asking about the executives or the board.

Since the executives and the board decide what a company does, it's absurd to ignore them.

I get that you have a model of companies that isn't consistent with how companies behave. That mismatch tells you that your model is wrong.

It isn't reality's job to explain itself in terms that you choose.

Your model doesn't account for all relevant facts, such as the interests of stock-holders.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#343

Post by mbrodersen » Sat, Apr 30, 2022, 4:10 AM UTC

It’s always good to remind people that GDP is a useless indicator for anything that really matters to people (health, safety, education, freedom etc.)

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#344

Post by Gibbon1 » Sat, Apr 30, 2022, 4:30 AM UTC

mbrodersen wrote: post #343

It’s always good to remind people that GDP is a useless indicator for anything that really matters to people (health, safety, education, freedom etc.)

Income stability is a big one too. I'd rank that right behind health in importance.

If you are healthy and know you're going to have income for the foreseeable future that counts for a lot.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#345

Post by mbrodersen » Sat, Apr 30, 2022, 5:47 AM UTC

Gibbon1 wrote: post #344

mbrodersen wrote: post #343

It’s always good to remind people that GDP is a useless indicator for anything that really matters to people (health, safety, education, freedom etc.)

Income stability is a big one too. I'd rank that right behind health in importance. If you are healthy and know you're going to have income for the foreseeable future that counts for a lot.

Yep agree. Good point.