Money and Value
#zeroto1
The founders, who sold a company, don’t know what to do with it, so they give it to a large bank.
• The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors.
• Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks.
• Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats.
At no point does anyone in the chain know what to do with money in the real economy.
But in an indefinite world, people actually prefer unlimited optionality; money is more valuable than anything you could possibly do with it.
Only in a definite future is money a means to an end, not the end itself.
If you want to change selection, open document below and click on "Move attachment"
Indefinite Financesification becomes supremely important. The indefiniteness of finance can be bizarre. Think about what happens when successful entrepreneurs sell their company. What do they do with the money? In a financialized world, it unfolds like this: • <span>The founders don’t know what to do with it, so they give it to a large bank. • The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors. • Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks. • Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats. At no point does anyone in the chain know what to do with money in the real economy. But in an indefinite world, people actually prefer unlimited optionality; money is more valuable than anything you could possibly do with it. Only in a definite future is money a means to an end, not the end itself.<span><body><html> Summary
| status | not read | | reprioritisations | |
|---|
| last reprioritisation on | | | suggested re-reading day | |
|---|
| started reading on | | | finished reading on | |
|---|
Details