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Yes, on my part it was a simplistic statement. In the big picture you are right but companies do many times own large portions of their own stocks.
Yes, often times companies might not sell off much of its shares of stock, for example they can get authorization to sell off 100,000 shares of stock but only sell 49,999 on the marketplace in order to protect themself from things like hostile takeovers. The more shares a company puts onto the marketplace, the lower the overall value of each share of stock becomes.
If a company is worth $10,000,000 and they issue 10 million shares, then the stock is technically a penny stock and value is $1 per share
If they only issue 1 million shares, then the stock is worth $10 each, so while the stock market would be higher because the stock is $10, rather than $1, this doesnt change the overall value of the company nor does it change how much money was received when the company went public. Its still $10 million regardless..
What the left would have you believe is because the stock is at $10, then the economy is fantastic, even though it could have been $1 and the company still hold the same value.
If every company on the stock market did a 2 for 1 reverse split, the stock market would double overnight, but the economy, not move one bit.
Their whole notion that the economy is great, look at the market is completely laughable, given the lack of other investment avenues currently in existance. bonds, crap. Savings accounts, crap, Cd's, forget it.. t bills, may as well keep your money in the bank.
right now the ONLY place to put money and get a yield is the stock market, so thats where people have it. Thats not to say the economy is great because people are putting their money there. Their whole argument is complete ignorance.
I do not understand why you believe that corporations are not investing in the real economy.
In what particular business sectors do you believe that there is a shortage of goods and services, or that there are unexploited opportunities to make profits that are sufficiently attractive to attract in new investors?
Last edited by Spartacus713; 03-30-2015 at 09:13 AM..
And the question is, why are they not expanding with the money rolling in from the record rise in stocks? (I've already addressed the question)
Expanding where? Domestically or globally? Not only are profits at all time highs, so is productivity. China has been slowing down and underperforming as of late, but India has been overperforming. I think you are looking at the wrong places for most of the expansion.
Part of the reason why the stock market is at an all time high is because there's not enough investment in the real economy. Why no investment?
One reason is that it discourages some investments because of such low interest rates, and you cannot make money investing with such a low rate of return. With the feds pumping up the stock market for six years, some people can only make money by investing in the stock market.
"Why aren't corporations investing in the real economy?"
Why don't YOU?
Start your OWN corporation and do AS YOU PLEASE.
Let the owners of the other corps, do as they please.
Why do so many people ALWAYS want to tell others what to do when they DON'T own it?
And if you have to ask this question, it only shows your LACK of knowledge on investments.
We COULD tell you but, I don't think you would understand.
Sounded like the OP was asking a question, not making a suggestion about what corps should be doing.
I am curious to know, why aren't corporations investing more? Profits are at record highs. How are they making their money if they are not investing? Many would love to know. Many believe the answers are probably less than wholesome though... Working outside of the realm of "business as usual" perhaps...
One reason I believe there is less investment is uncertainty. On the small business front, it's even more uncertain. Many of those small businesses are owned by folks more worried about retiring than investing in new anything. Hence, America deteriorates from the inside out. Don't forget, small businesses still account for the majority of job creation.
I think if it weren't for QE and all the other government meddling, we would have deflation. Half the country is trying to survive on 13 bucks an hour or less. What good reason would you have for ordinary inflation under such circumstances? And in one of the most important economies in the world to boot...
Sounded like the OP was asking a question, not making a suggestion about what corps should be doing.
I am curious to know, why aren't corporations investing more? Profits are at record highs. How are they making their money if they are not investing? Many would love to know. Many believe the answers are probably less than wholesome though... Working outside of the realm of "business as usual" perhaps...
One reason I believe there is less investment is uncertainty. On the small business front, it's even more uncertain. Many of those small businesses are owned by folks more worried about retiring than investing in new anything. Hence, America deteriorates from the inside out. Don't forget, small businesses still account for the majority of job creation.
They are making their money through global growth along with being much more efficient through technology and reduced worker benefits and hours.
So how do you get small business owners and investors in general to put long term growth over short term growth?
Quote:
I think if it weren't for QE and all the other government meddling, we would have deflation.
Deflation is terrible, I'm glad the govt meddled in that regards. I wish the govt would meddle more in rebuilding our infrastructure, that would be the best way to stimulate growth short term and long term.
Sounded like the OP was asking a question, not making a suggestion about what corps should be doing.
I am curious to know, why aren't corporations investing more? Profits are at record highs. How are they making their money if they are not investing? Many would love to know. Many believe the answers are probably less than wholesome though... Working outside of the realm of "business as usual" perhaps...
One reason I believe there is less investment is uncertainty. On the small business front, it's even more uncertain. Many of those small businesses are owned by folks more worried about retiring than investing in new anything. Hence, America deteriorates from the inside out. Don't forget, small businesses still account for the majority of job creation.
I think if it weren't for QE and all the other government meddling, we would have deflation. Half the country is trying to survive on 13 bucks an hour or less. What good reason would you have for ordinary inflation under such circumstances? And in one of the most important economies in the world to boot...
They are investing. Why some people believe that corporations are not investing is truly baffling. The entire production capacity of the US is built on invested capital. Factories, stores, office buildings, equipment, etc. only exist and produce because of investments made in them, largely by corporations. You can see it around you everywhere.
The question I think you all really want to ask is: Are there specific additional investments that it makes sense for specific corporations to make that so far have not been? Of course there are no shortage of people (and therefore corporations) that are eager to make a buck, and who will be happy to make these investments if they think it will be profitable to do so.
So, what specific additional investments are there for specific corporations to make, that so far have not been made, that would make enough of a profit to warrant additional investments? This is the actual question that drives additional investment "in the real world."
They are investing. Why some people believe that corporations are not investing is truly baffling. The entire production capacity of the US is built on invested capital. Factories, stores, office buildings, equipment, etc. only exist and produce because of investments made in them, largely by corporations. You can see it around you everywhere.
The question I think you all really want to ask is: Are there specific additional investments that it makes sense for specific corporations to make that so far have not been? Of course there are no shortage of people (and therefore corporations) that are eager to make a buck, and who will be happy to make these investments if they think it will be profitable to do so.
So, what specific additional investments are there for specific corporations to make, that so far have not been made, that would make enough of a profit to warrant additional investments? This is the actual question that drives additional investment "in the real world."
Any suggestions?
Instead of investing in technology to eliminate jobs, how about developing technology that will create new market demands, will spur innovation, something that will inspire people and give hope. Because every time I hear about a corporation doing something, the next 5 minutes is usually devoted to how many jobs will be eliminated as a result.
Today, our economy centers around wiping old people's behinds, spending billions to give people an extra 6 months of misery on this planet, finding ways to "grow" by eliminating more jobs, lobbying politicians for favors and kick backs, and insuring for various forms of personal tragedy...
Is there any way to make a legitimate buck in America anymore? Have the margins been squeezed dry by the corporate vultures yet? Corporations don't really have to invest anymore. They just have politicians write a bill dictating that you must purchase the product, regardless of expense. We've deviated far from our humble beginnings.
NEW YORK – March 19, 2015 – At a seasonally adjusted annual rate of $724.3 billion, new construction starts in February advanced 16% compared to the previous month, according to Dodge Data & Analytics. Much of the lift came from three massive projects valued each in excess of $1 billion that were included as February construction starts.
NEW YORK – December 18, 2014 – At a seasonally adjusted annual rate of $677.8 billion, new construction starts in November climbed 13% from the previous month, according to Dodge Data & Analytics (formerly McGraw Hill Construction).
NEW YORK – October 20, 2014 – New construction starts in September advanced 10% to a seasonally adjusted annual rate of $604.1 billion, according to McGraw Hill Construction, a division of McGraw Hill Financial. The increase followed...
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Any moron can get a job in construction today as long as he knows Spanish. I am not kidding either.
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