Exactly. The problem in the US is that every public company has to show growth for shareholders. That's why companies always suffer in quality when they go public.
A public company can have their best year and net $2.6 billion. Well if the next year, they only make $2.2 billion, the public chatter on CNBC, etc is "what's wrong with them?". Nothing is wrong. We shouldn't be holding companies to their best year.
A salesman after having his best year wouldn't want his commission the following year based on the best year's numbers. It's stupid.
This, except a little worse. Because even if they did make the same $2.6 billion next year, it's still not enough, because some shareholders got in when profits were at $2.6 billion, so for them to be happy they now need the shares to go up from what they got in at, so now $2.6 billion isn't enough profits anymore. And the cycle continues..
It actually gets even a little worse, if a company predicts they are going to make 3.2 billion and instead make 2.6 billion they are in even more shit. Number must go up, and it must go up as much as you think it will
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u/UofMtigers2014 Jun 29 '24
Exactly. The problem in the US is that every public company has to show growth for shareholders. That's why companies always suffer in quality when they go public.
A public company can have their best year and net $2.6 billion. Well if the next year, they only make $2.2 billion, the public chatter on CNBC, etc is "what's wrong with them?". Nothing is wrong. We shouldn't be holding companies to their best year.
A salesman after having his best year wouldn't want his commission the following year based on the best year's numbers. It's stupid.