Hacker News Reader

Comment by m1117 | Hacker News Reader

It's psychology-fueled. Also, a lot of companies reinvest profit so they don't have to pay taxes.

Don't they use accounting tricks these days so they can keep their cash and then carry it to the stock market? This has the double advantage to keep the stock market inflated and compared to R&D where you risk product failure, the stock market is backstopped by the government and risk-free.

That's why we don't have flying cars. Instead of investment in core competencies we invest in the market.

We don't have flying cars because it's a silly concept.

We have flying cars. They are called Helicopters.

Have you SEEN the way most people drive?

Ugh flying cars would require a whole different level of infrastructure to protect pedestrians and property from idiots/malignants in vehicles. We already have giant cement blocks and metal poles everywhere, now we need human-permeable cages.

You should take an intro flight lesson at a flight school. There's no way the majority of people could safely fly a personal aircraft in all weather conditions. Flying cars will have to be 100% dependent on a really good autopilot which hasn't been developed yet (which I guess is sort of the point you're trying to make).

>companies reinvest profit

There central company to the article’s point (Snowflake) has no profit to reinvest

it does actually, when you reinvest profit you don't make any profit.

They reinvest the money before it could become profit, mostly by hiring more sales

Isn’t that exactly what the article is claiming they should do? Investing in sales and marketing now to drive future annuities isn’t the same strategy as reinvesting profits to dodge taxes as the OP claims

Depends on what do you mean by "reinvest". If you have $1b in profits and build a $1bn factory you still have to pay almost the same taxes.

If you increase payroll in the current year by $1bn you won't make a profit and you won't pay taxes... but it may not be as good an investment.

is it fair to say that investors see more return through reinvestment rather than distributions? Reinvestment sees 100% of the capital, but distributions are at best 75%? Assumptions are that the reinvestment creates value fairly quickly and drives the stock price up.

The company could also distribute profits to investors repurchasing shares.

Reply on news.ycombinator.com