[ale] OT: corporate finance 101

[James P. Kinney III]

On Tue, 2002-01-22 at 08:42, Geoffrey wrote:
> Chris Farris wrote:
> 
> 

> I'm not saying that the CEO should lie.  My concern is that the life 
> blood of many companies (stock) is in the hands of a lot of impatient, 
> and often times ignorant people.

I don't see the stock prices as being the lifeblood of a company unless
it is being sold by the company as IPO or new release. I have always
viewed the lifeblood of the company as being the people with the talent
to do the things that bring in the cash. Cash is the food, people are
the lifeblood. Investors are like MiracleGrow fertilizer. If you pour it
on, things can get big, but not necesarily tasty. It's a poor substitute
to a well prepared field to plant in. If you suddenly don't add the
fertilizer, things don't grow as ridiculously large since their roots
aren't well established.  Just as it takes time to establish a
self-sustaining farm system using organic methods, it takes time to grow
a viable business that is self-sustaining. 

It also takes lots of patience, something that is lacking today in
investors and executives. In fact, I think executive stock perks are
contrary to long-term, sustained health of a company. Having stock perks
in another company that the execs don't have inside manipulation access
is a good idea. But keep their income based on the going concern health
of the company they run. Since stocks are so volatile due to investor
psycology, removing the short-term vested interest of the decision
makers might allow for clearer thinking.

-- 
James P. Kinney III   \Changing the mobile computing world/
President and COO      \          one Linux user         /
Local Net Solutions,LLC \           at a time.          /
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GPG ID: 829C6CA7 James P. Kinney III (M.S. Physics)
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