A Quote by Steve Stivers
You know, capital isnt patriotic. Capital goes to where it needs to go to get a return.
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If, for example, each of us had the same share of capital in the national total capital, then if the share of capital goes up it's not a problem, because you get as much as I do. The problem is that capital in capitalist countries is very heavily concentrated, especially financial capital. So then if the share of income from that source goes up, that actually exacerbates inequality.
Obviously, consideration of costs is key, including opportunity costs. Of course capital isn't free. It's easy to figure out your cost of borrowing, but theorists went bonkers on the cost of equity capital. They say that if you're generating a 100% return on capital, then you shouldn't invest in something that generates an 80% return on capital. It's crazy.
The financial doctrines so zealously followed by American companies might help optimize capital when it is scarce. But capital is abundant. If we are to see our economy really grow, we need to encourage migratory capital to become productive capital - capital invested for the long-term in empowering innovations.
The advantage of the free market system is that people invest their capital, they create jobs by investing their capital, and hopefully they get a return on that investment. I don't think there's anything wrong with good old American capitalism.
Because in the New Normal you are more worried about the return of your capital, not return on your capital.
Efficiency innovations provide return on investment in 12-18 months. Empowering innovations take 5-10 years to yield a return. We have ample capital - oceans of capital - that is being reinvested into efficiency innovation.
To see how much a company is truly earning on the capital it deploys in its businesses, look beyond EPS to Return on Invested Capital (ROIC).
Capital, however capital may be defined, would practically cease to exist as an income producing fund, for the simple reason that if money, wherewith to buy capital, could be obtained for one-half of one per cent, capital itself could command no higher price.
Empowering innovations require long-term investments, which tie up capital for years and years. So companies are using capital to create more capital, and consequently, the world is awash in capital, but the innovations we need to advance aren't there.
Investors must remember that their first job is to preserve their capital. After they've dealt with that, they can approach the second job, seeking a return on that capital.
One of the special characteristics of New York is that it is different from a London or a Paris because it's the financial capital, and the cultural capital, but not the political capital.
It seems to me self-evident that we cannot have capitalism without capital and, very importantly, that the ultimate source of all economic capital is Nature's capital
I certainly agree that capital is not a one-dimensional object, and that the return on capital takes very different forms for different assets or different people.
Thus, the capital owner is not a parasite or a rentier but a worker - a capital worker. A distinction between labor work and capital work suggests the lines along which we could develop economic institutions capable of dealing with increasingly capital-intensive production, as our present institutions cannot.
Capital is always available for good companies, but the only question is value at which you raise capital. In bad times, you raise capital at low valuation, and in good times, you get a fair price. It separates winners from the rest.
Indeed, we have reached a level of complexity where simplicity itself is suspect. For example, the simple reality is that jobs migrate to less difficult nations. It's the old Rule of Capital: Capital goes where it is treated well.
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