Making A Buck
Ooh, boy. That comment on capitalism yesterday…
As promised, we complete our reader’s missive:
“My father (son of a judge and a bankruptcy lawyer) told me that companies (and stocks) exist for 3 reasons:
- ‘To provide the best product or service that available resources can provide…
- ‘To provide as much employment for as many employees as the business can sustain…
- ‘And ‘to make a buck.’
“Today, however, an investor with some expendable cash skims the WSJ until he finds a rising stock and places a ‘bet’ for which he has no qualms about pulling out of as soon as it slips or tanks — for whatever reason and just when the business needs investment the most.
“It doesn’t matter how essential the product or service might be and employees are just a necessary drag (they’ll soon be replaced by robots anyway).
“Ah, but the opportunity not only to ‘make a buck’ but to make a virtual killing, no matter who’s affected; therein lies the motive, usually the only motive.
“An employee-owned business, then, is the only system I know where capitalism can coexist amicably with a free market system.”
Agree with our reader?
Not only that, have you given much thought to why (or why not) you invest in the stock market?
Your Rundown for Tuesday, Aug. 20, 2019:
A Corporation’s Purpose
Riffing on the theme above, this morning we read: “The Business Roundtable,” reports CNBC, “a group of chief executive officers from major U.S. corporations, issued a statement Monday with a new definition of the ‘purpose of a corporation.’”
(See reasons 1, 2 and 3 above for context. Reasonable enough?)
About 200 CEOs agree the “reimagined idea of a corporation drops the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits.
“Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals, according to the statement.”
This new definition represents a tectonic shift and one that’s long overdue.
As for CEOs — who’ve served as glorified accountants, chasing the 90-day earnings cycle — this new definition makes room for visionaries hand-in-hand with corporate sustainability and (one can hope) better employee treatment.
So now that “shareholder value” is at the bottom of the list — literally — do you think corporations will functionally follow this new guiding light principle?
Market Rundown for Tues. August 20, 2019
S&P 500 futures are down 13 points to 2,910.45.
Oil is down 81 cents to $55.40 for a barrel of West Texas crude.
Gold is up $3.10 per ounce to $1,514.70.
Bitcoin is down $296.33 to $10,626.35.
Have a good day. We’ll catch up tomorrow.
For the Rundown,