[Skybird]

Originally Posted by August

If my theory is utopian Skybird then yours is myopic. 4 out of 5 companies (at least)? Really. If that were even close to being true there would be no stock market at all because investors would be throwing their own hard earned money away (at least) 4 out of 5 times.

Those who purchase stock in a company are looking to see the company grow so they can make a profit on the money they've invested. Allowing management or anyone else (including the workers) to run the company into the ground not only eliminates that profit but most, if not all, of their investment as well.

Who cares as long as the first profit earnings were maximized. Common practice is that then you retreat and withdraw your money, and rush to your next victim to suck it's blood. In fact modern investement fonds tend to do especially like this: buy as many shares as needed to gain influence, then enforce business policies that help to get out as much profit as possible in the shortest ammount of time, and then leave it behind. It often includes oa healthy company taking credits and making debts - with which it is left after the investors retreated. There was no interest in the longterm perspective of that company one is investing in from the very beginning. - If you give somebody money and then demand that he should give you regular profit that finally even exceeds your investement, while you do nothing when he does the dirty work with his hands, so that he is effectively working for you and your financial interests, then this is in the end just this: buying a slave. From a moral standpoint, the system is undefendable. - You said investements so that the company can grow and modernize. Well, healthy economizing is if they run their business in that way that they do not give away the profits they make, but use these profits to invest in their modernization. what have other foreigners to do with that? If you do a good job, and produce something that attracts customer's interests, you will not only cover your running costs, but have a profit left. that is not exclusively reserved for the management, but for the workers as well. A part for each of them, and a part for further investment. Solid, and easy. The brother of my grandmother was running a textile company in exactly this way, men's fashion, shirts for the most - no foreign investors, no taking credits, the man said you cannot spend money that you have not earned before. There was a much slower growth than with other companies, but it was a solid increase, a constant continuation of the trend of slow growth - even in times were the branch already started to suffer from imports from Asia, and the general trend of fashion companies in Germany was pointing down. The company was healthy when he sold it. The new management "invested", and vbrought in capital from foreign investors, in order to modernize (whatever that should have meant, for the company obviously was competitive and had slowly increasing profits and offered safe jobs). The new investors ewanted to see quicker profits, the polcies were chnaged, and it became more risdky and less solid, and more and more it all was run with money that the company did not own. It ended how sooner or later every such story must end, if not after years then after decades: the once healthy business collapsed, finacial reserves were transfered into fonds of foreign investors, then bankruptcy, all jobs lost, debts, a social plan for which the state and the tax payer had to come up for. Only winner in this: thoise people who pumped money into it to gain control, take all profit, and once there was no more blood to be sucked out, they left the sinking ship. Fan-tas-tic. Our medias are filled with such stories, since many, many years.