Is it possible to have too much cash for your own good?
I believe the average 7th grader would easily recognize the inherent
absurdity of such a question. However, the average economic writer does not
understand what the average 7th grader does.
For example, please consider Apple isn't only company with too much cash on CNN
Money by author Paul La Monica.
preferred shares that pay a big dividend may not be the best use of Apple's
more than $137 billion of cash and liquid investments. But hedge fund manager
and Apple shareholder David Einhorn, who is pushing the maker of iEverything
to reward investors with a new class of high-yielding stock, has a point.
Apple should be doing something more productive with its more than $137
billion in cash. Did I mention that Apple (AAPL) has more than $137 billion
And it's not alone. Several leaders in the tech and pharmaceutical industries
are hoarding cash. ....
Mercy! Corporations have too much cash! And they are hoarding it!
My Goodness. It's no wonder their stocks are doing poorly. Why everyone knows
making money is bad business and spending money isn't.
Yes readers, this is the way economic writers on mainstream media think.
Although I am not opposed to higher dividend yields, I am also not opposed to
the concept of waiting for better opportunities.
Recall that Microsoft
bid $44.6 billion for Yahoo in 2008. Microsoft's offer was over $30 a share.
The current price, after a huge rally is $21.
But No! Heaven forbid corporations "hoard cash". La Monica wants
corporations to do something with their cash now.
The fact is the S&P just had a rally over 100%. Stocks are likely to
correct (and hard). Buying companies at lofty prices is a fool's game, and I
commend Apple for not doing it.
Mike "Mish" Shedlock
"Wine Country" Economic Conference Hosted By Mish
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