Like you can’t expect everything to be a success and money isn’t infinite. Infinite growth can’t exist, especially for all shareholders around the world. And yet they expect full return on their investment whereas companies should focus on their clients who buy their products and employees who want to help the company and be rewarded but yet the bosses only seen to focus on making shareholders happy. There seems to have been a shift in this mindset somehow over the decades.
It’s naive on my part and it’s more complicated than what I wrote, but I’m curious and I would like to understand. Thank you for your help!
In: Economics
Lot to unpack there:
(1) people buy stocks as investments. That means they expect that either the stock will increase in value and/or it will produce income for them. If they didn’t have that expectation, they would just keep their money in a bank
(2) there’s also risk in investment. If you are investing in something that is risky, you expect that, on average, the return will be higher than if you invest in something that is not risky. But, you also know that you have a higher chance of.losing part or all of your investment.
(3) Shareholders *own* the company. Companies exist mainly to benefit their owners. Yes, along the way, they benefit other people (customers and employees, among others), but if a company’s management decides that the company’s owners are not important, those owners will find new managers.
(4) Money (i.e. cash) may be finite, but the total amount of wealth increases and decreased constantly. A woodworker can take $200 worth of wood and produce a $1000 dining room table. He has made.himself wealthier by $800. On a larger scale, 30 years ago, Amazon didn’t exist. Today, it’s worth something like $1.6T. That’s $1.6T that just didn’t exist 30 years ago.
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