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by nine_zeros 1097 days ago
It just looks like the game is up. Every company is trying to raise prices and squeeze more, so that stock prices remain up.

If they could accept a lower stock price instead, they'd just be more stable, and retain loyalty on the other side of the recession curve.

3 comments

Inflation is high. And before you say, "Record profits are causing inflation," that's only a part of the explanation. [1]

The fact is, the median-aged person was in diapers when their parents were getting double-digit mortgages. We are now looking at home loans and car loans at 7%. This is different from the last decade or two of low, stable inflation.

We should expect almost everything we buy to have significant price increases and wage increases much more frequently than we are used to. [2]

[1] https://fred.stlouisfed.org/series/CURRCIR

[2] https://www.atlantafed.org/chcs/wage-growth-tracker?panel=1

They should have stayed private then. If you're issuing stock you better make sure it goes up or you're paying dividends or nobody will buy it.
Stock going up is not the purpose of public companies. In fact you should always assume that the current price of a security considers all available information and has no reason to diverge from natural market returns.
Company exists to return capital to shareholders. In the absence of a dividend, that has to be from stock price going up. If neither happens, leadership will be changed. Efficient market hypothesis is also nonsense.
Public companies are meant to have public voting rights. The capital part of it is not the priority. Also, it’s not “Efficient Market Hipothesis”. If you have material non public information you definitely can make alpha purchasing stocks. If you don’t, then you are only betting on a decentralized casino.
Soon they'll learn that eventually you run out of other peoples money