this post was submitted on 08 Sep 2023
630 points (98.0% liked)
Memes
45686 readers
742 users here now
Rules:
- Be civil and nice.
- Try not to excessively repost, as a rule of thumb, wait at least 2 months to do it if you have to.
founded 5 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
That's the thing, in theory that's correct - until it rains.
But since our entire economy is based on unjustified optimism, it can't rain.
I don't agree with the statement at all. It fails to account for any variance in the money coming in. But, I'm not going to argue with my future brother inlaw. Not worth it.
It's like you said, he's right, until he's not. The entire company can go under if they have a few bad quarters.
That's my point, if you assume it stays sunny, buying an umbrella is a wasteful expenditure.
And in business terms, not investing a certain part of your capital means, you don't get a return on that investment (and interests are most likely much lower), so effectively you lose money.
What our economy and our CEOs often ignore is, that the universe doesn't end next quarter. Holding capital back essentially smoothes the overall profits/losses over time, that's awesome for workers, customers and stakeholders - but CEOs need line go up, so they can get a bonus. So no money is held back.
Sorry, poor wording on my part. I meant I don't agree with the statements my future brother inlaw made.