It's bad for a company to go bad.
It's bad for a company to lock out competition.
Hard disagree, so I wonder what your basis for this bullet is.
Agree on the other two though.
1. Tautological: from company's perspective, it's bad for the company (itself) to go bad.
2. More broadly, it's reasonably self-evident that it's bad for employees, and bad for shareholders of a company, for that company to go bad
3. Where we can have discussions, and probably for a long and fun if not necessarily fruitful time, is whether it's "good" or "bad" from market's, or consumer's perspective for companies to go bad. I personally think not.
I think we'll likely mostly agree that it's good for market to filter out and punish bad companies or companies that go bad, once they go bad, for whatever reason; but that doesn't necessarily imply or follow that's it's good for companies to go bad.
In other words, what's your perspective/bias - why would it be GOOD for a company to go bad? Why would it not be absolutely fantastically wonderful if all companies perpetually stayed good and we lived in utopia of rainbows and unicorns? :>
(all this without defining what "company going bad" means, left as an exercise for the student :)
Generally where my head was at. The other two points were better scoped. I personally think it's good that companies go bad, as it moves control over productive assets from one group to another. This is good for society for a variety of reasons, not the least of which is enabling new ideas to be tried. Can a long lived company try new ideas? sure, but the degree to which they avoid risks (if they live a long time they necessarily avoid undo risk) puts on upper bound on how ambitious they are with new things.
Sometimes on net things are good because of other effects like "ah, promising new competitor gets a chance to shine!" but if you could have _both_, you absolutely _would_. A company going bad is a _cost paid_ for new blood, not an _added benefit_.
It's not good that you have 100 fewer hours when you spend 100 hours creating something awesome. It's bad that you have 100 fewer hours. If you could create the same awesome thing and still have those 100 hours to do something else, that'd be fantastic.
All other things being equal, I would far rather Intel be awesome than not. If it turns out the world is such that all other things can't be equal, it might be worth having Intel not be awesome in favor of other benefits, but I'm never going to be _happy_ about Intel not being awesome.
When they can't it's good companies come and go, or Kodak would still be blocking digital cameras (https://www.reuters.com/article/us-kodak-bankruptcy-idUSTRE8...) but the price we pay is things like wasted effort on re-implementing everything that didn't need to change at the new place, good people can't always move to it as you mention, etc.
Different countries at different times adopt different positions on the scale between inefficient (?) state-linked monopolies with jobs for life and letting the market do its thing. I'm not sure what factor means that sometimes we end up with Samsung and other times British Leyland.
That itself is an example of capitalism as the least worst option... similarly how much effort goes into trading currencies or commodities or whatever just so people get a fair price and aren't screwed over by whoever is the only person selling at the moment they need something. But we're self-interested, biased, and this is the workaround (or the system that emerges from our nature - self-interest is turned into the energy behind it all and "greed is good").
Except that semiconductors are a national security issue at the moment.
Plus, dictatorships arent against the US per se, they re against the US convincing the populace they too could act like americans, and are extremely dependent on that Schrodinger state where you re both the factory for the US and a public political opponent. Symbiotic parasite pretending to be the host's alternative.
Plus the US might change heads at the top, but it s hardly a safe ally to have. Ukraine nearly went to complete disaster thanks to Trump and having morons elected there is a security risk for many too...
Maybe too big is a national security issue, too.
Too big to fail is a real problem for any part of our economy.
Perhaps, or perhaps we're dealing with monopolization.
Perhaps this is too much of a radical idea, but if a company is so critically important that it can't be allowed to falter without government support, then it should be nationalized.
At the very least the government support should be made explicit, and large, critically important companies should be forced to pay much higher insurance, i.e. the equivalent of what banks need to pay for FDIC insurance. Sick of the whole "privatize the profits and socialize the losses" mindset.
Don't you have on the order of tens of thousands of dollars invested in Intel through retirement savings, though? When S&P 500 companies fail, your retirement savings become worthless. (Apple is really the one you want to watch out for, though!)
If a major player is massively overvalued, though, then index funds, too, will feel some pain as the exuberance in a major player dissipates.
I hold some INTC directly after having been extremely impressed with the company's dedication to rigorous process in engineering interviews in the mid-2010s. I'm sad to see such a great company go through hard times.
I don't love this; the total stock market is a lot of tech companies, and I already have plenty of exposure to tech by working in the field. It's a good heuristic for most people, though. (And no, I don't do anything about this underlying fear of tech sector exposure. I just buy the Target Date 20XX funds like everyone else.)
My only point is that the grandparent comment generally expects companies to die when they get into the S&P 500. If that's true, we're all screwed. If one S&P 500 is just stealing business from some other S&P 500 company, though, it's probably a net gain. But if it's some privately owned startup, then it's not as concrete a win, and let's be honest, startups are driving a lot of the innovation in tech.
If I had a time machine, I would definitely use it to time the market!
My savings account is not what I'm talking about. Inflation or not, it is still a number I can describe as "positive".
I'm referring to bonds that retirement and wealth management add to funds use to supposedly counter volatility. These are investments that at best will only pay single digits. They have suffered the worst year since 1931 or something. And we're just getting going. The frustrating part is as I said, the underlying bonds themselves still pay that 4% or so which would be much better than the funds are achieving. But for some reason they have to sell the bonds at a loss.
fund managers don't have "personal" or "corporate" assets that are anywhere near the scale of the (retirement) funds they manage; being held responsible for mismanagement would not lead to a source of capital to replace that which had been lost through mismanagement.
All investment has risk.
It seems the person upthread owns a target date fund and this means they probably are diversified. Their post doesn't make a lick of sense.
"When S&P 500 companies fail, your retirement savings become worthless. (Apple is really the one you want to watch out for, though!)"
Why is my fund in Intel but not in Apple? The whole point of choosing the index is so that you are diversified. You would only lose if Intel lost out to a foreign company, otherwise the demise of Intel is made palatable by the rise of Apple and AMD.
Companies come and go from it all the time:
https://www.inc.com/ilan-mochari/innosight-sp-500-new-compan...
"Unless you bought inte directly, the rewighting should handle it. Unless it fails quickly and spectacularly"
I would find little comfort in the fact that if Intel goes down 85% -slowly but somewhat spectacularly- from its current level it will eventually be excluded from the index.
The fact that I had to google for the details of its fall gives me comfort that when intels time comes it won’t cause harm on its slow exit.
An investor would need to front many billions of dollars for an uncertain payoff over a decade or two, and Intel could at any moment become competent again. And if no investor is willing to take that risk, there would be no new competitor.
Adobe and Figma are software companies, so don't require capital investment. So if one shuts down, it's relatively easy to make a new UI modeling tool(or for an existing one to take over their customers).
It's a disastrous process, I passionately hate it
To be frank, I think that's a great thing. I don't want companies to stay giant in perpetuity, I think it's great that they are essentially "recycled" when new, better companies come along and eat their lunch.
If anything I think it's quite bad that over the past 25ish years that a lot of big companies have really learned the lessons of "disruption" and have responded by just buying up the smaller but up-and-coming competition before they can overtake (looking at you Adobe and Figma).