Earlier quoted context omitted.
But dividends also result in a concrete financial reward for all shareholders, yes?
> all shareholders That's the key phrase, they benefit all shareholders. Buybacks on the other hand only benefit the following shareholders: 1. those with regularly vesting stock options and stock grants - basically employees. For non-tech companies especially, this only means high-ranking employees 2. those who intend to sell - that is, soon-to-be-ex shareholders 3. those who borrow against their stock - typically h…
No science, no startups: The innovation engine we're switching off
91–100 of 528 posts
Re: No science, no startups: The innovation engine we're switching off
#92Maybe we shouldn't have required 'kissing the ring' segments in every scientific grant proposal
Re: No science, no startups: The innovation engine we're switching off
#93Earlier quoted context omitted.
It's not even clear that the premise is true. There's lots of 'research' done in the big tech companies. The biggest reason why companies don't seek to emulate "Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE", is probably that it reads like a list of textbox examples of "companies that failed to execute on their research findings", so clearly there was something wrong with this approach.
Xerox and Kodak, at least, stumbled into the future and then refused it. The same thing will happen to Google & co. And DuPont is very much alive doing DuPont things.
Its worked out ok for Google and others, because there's little teeth to anti monopoly, so all the big tech players can just buy the successes, which is safer than trying to grow them (esp. once the talent left). I really have no idea if this is an accurate take as its mostly vibes, sans for a few of said smart Google folks I've met in startup land(s). Yet Google is so big, they could bleed all kinds of employees telling all kinds of stories and it could all be simply random. Yet at the same time I can't help but think about every aging tech companies biggest / best products being via acquisition.
While I think monopoly is bad, I don't know if ^ otherwise is so bad. Maybe its just creative type folks _should_ avoid big tech, and build their own labs. Capital and compute are readily available to people who can demonstrate success, and its easier than ever to build and experiment in some fields. i.e. if we had stricter capital accumulation associated taxes, maybe the ills of this process wouldn't be so bad.
Re: No science, no startups: The innovation engine we're switching off
#94> In the 20th century, U.S. companies put their excess profits into corporate research labs. Basic research in the U.S. was done in at Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE, et al. This changed in 1982, when the Securities and Exchange Commission ruled that it was legal for companies to buy their own stock (reducing the number of shares available to the public and inflating their stock price.) Very quickly B…
Re: No science, no startups: The innovation engine we're switching off
#95Earlier quoted context omitted.
Because whilst universities claim they do that, there is no evidence to suggest it is true. People genuinely trained in critical thinking would be highly skeptical of this claim. For example, - What exactly is the definition of critical thinking they are using? - Which part of a {computer science, art history, etc} course teaches this? - How is it assessed? - If it's a teachable skill, why are there no qualifications…
That's an interesting perspective. Thanks for sharing. If you had free rein of an engineering school in a university system, how would you re-design curriculum to address your concerns and establish proof of teaching critical thinking?
The issues with critical thinking really show up in the other areas of academia, the humanities and natural sciences. But it's hard to get people to do it because often there are strong incentives not to think critically, or to be outright misleading deliberately.
I guess a curriculum focused around finding subtle flaws in arguments would be a reasonable place to start. It could be a lot of work to compile teaching materials that are tough enough. You could take papers that you know contain logic errors and ask students to find them. For instance, a lot of COVID papers work like this:
1. A COVID case is defined as anyone who gets a positive PCR test.
2. A positive PCR test is defined as detecting a COVID case.
When you see it spelled out so simply the problem is obvious but the whole field of public health managed to not see it (there were a few papers that timidly pointed out the circular logic, but it never reached public awareness). Of course maybe it was deliberate. But you could assign students a few relevant papers and ask them to analyze them critically.
Re: No science, no startups: The innovation engine we're switching off
#96> In the 20th century, U.S. companies put their excess profits into corporate research labs. Basic research in the U.S. was done in at Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE, et al. This changed in 1982, when the Securities and Exchange Commission ruled that it was legal for companies to buy their own stock (reducing the number of shares available to the public and inflating their stock price.) Very quickly B…
if the company has a vision - then reinvesting that money into research or what else is better. it might reap the benefits, it might not.
companies use buybacks if they can't do anything productive with the money - Apple is a recent example.
Re: No science, no startups: The innovation engine we're switching off
#97Earlier quoted context omitted.
Not why it can’t be done so much as why it isn’t done. Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are. Before Tim Cook Apple had never done a buyback - Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. W…
> Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. To be fair share owners also like the stock price to go higher, they also like dividends (and higher dividends would tend to drive the stock price higher too), but an X% increase in share price caused by buybacks is favoured over an X% dividend because it isn’t immediately taxed.
Re: No science, no startups: The innovation engine we're switching off
#98Earlier quoted context omitted.
But dividends also result in a concrete financial reward for all shareholders, yes?
> all shareholders That's the key phrase, they benefit all shareholders. Buybacks on the other hand only benefit the following shareholders: 1. those with regularly vesting stock options and stock grants - basically employees. For non-tech companies especially, this only means high-ranking employees 2. those who intend to sell - that is, soon-to-be-ex shareholders 3. those who borrow against their stock - typically h…
I’m just not following the connections here.
It seems like your assumption is that a stock buyback is a short term gain.
One of your arguments is that the strike price for options is set based on a certain amount of stock in circulation, and decreasing that amount will “artificially” raise the stock price, making the options more valuable. I agree that higher stock price benefits those with options, and I would even agree that it is possible that when those strike prices were valued, the valuation did not take into account the possible global change in the amount of stock (although a market would have included this valuation).
I suppose the other part of the argument could be that R&D is good for the stock in the long term in a way that stock buybacks are not… the buybacks pumping up the price of the stock before it is driven into the dirt by competitors who do invest in R&D.
There, I’ve done my best for your argument but I still don’t really believe that increased stock prices for everyone is not benefiting everyone more or less equally.
Re: No science, no startups: The innovation engine we're switching off
#99Earlier quoted context omitted.
> all shareholders That's the key phrase, they benefit all shareholders. Buybacks on the other hand only benefit the following shareholders: 1. those with regularly vesting stock options and stock grants - basically employees. For non-tech companies especially, this only means high-ranking employees 2. those who intend to sell - that is, soon-to-be-ex shareholders 3. those who borrow against their stock - typically h…
Can't group #2 sell 4% of their holdings, thereby remaining shareholders, and delivering to themselves the tax-advantaged equivalent of a 4% dividend?
Re: No science, no startups: The innovation engine we're switching off
#100Earlier quoted context omitted.
> all shareholders That's the key phrase, they benefit all shareholders. Buybacks on the other hand only benefit the following shareholders: 1. those with regularly vesting stock options and stock grants - basically employees. For non-tech companies especially, this only means high-ranking employees 2. those who intend to sell - that is, soon-to-be-ex shareholders 3. those who borrow against their stock - typically h…
Can you make this argument more rigorous? I’m just not following the connections here. It seems like your assumption is that a stock buyback is a short term gain. One of your arguments is that the strike price for options is set based on a certain amount of stock in circulation, and decreasing that amount will “artificially” raise the stock price, making the options more valuable. I agree that higher stock price bene…