Firing a board is generally risky, and the shareholders probably haven't fired them because even though the board has, almost objectively, not been good - firing them is likely even worse for the stock short term, and there aren't a lot of long-term, active investors left in the world.
More often, companies shill bullshit, inestimable long-term growth (AI-bullshit for example) to pump price. Tesla is the poster-child of this strategy.
In contrast, short-term thinking/marketing is a sure fire way to annihilate a stock. Why would the next buyer pay a premium for a squeezed orange?
The dark reality is that most things we customers and employees complain about as “short-term thinking” are tremendously profitable over the long run.
Yes, future earnings are worth far less than current earnings - especially in a non-ZIRP world.
It is only after stocks suffer severe shocks, does private equity spring into action, and discipline executives via the threat of acquisition & firings.
So its is actually executives that can be shortsighted, not an ultra-long-termist passive investment dominated US investor base.
I could see only long-term earnings being available but that's something quite different. Shareholders are often willing to put up with that situation, as long as they believe the long-term story (and see that other investors believe it).
A situation that could make short-term share price increases unlikely is if the stock is just way overvalued for its likely earnings in any reasonable timeframe, in which case shareholders will happily take profits rather than try to make the company change anything.
It's not in the interest of shareholders to buy into tactics that pump up share price at the end of a quarter but we're talking about an information disadvantage; the seller is rearranging their books with respect to intangibles to deceive the buyer.
If an action that hurts the stock short-term but will help int he long-term needs to be performed why would you as an investor enact it or even stay for the ride?
You are better off either opposing it or selling your stock and then waiting to see if someone will enact the changes, then you have the "insider" information to know that the short-term stock drop was a good thing for the long-term and rebuy the shares cheaper.
Tragedy of the commons was an ideological essay designed to justify privatization of public goods. It was disproven by data before it was published. I am sure there are some hyper specific examples where it has happened as described, but as a “fact” about the world and as a justification for any course of action, it’s highly suspect.
https://aeon.co/essays/the-tragedy-of-the-commons-is-a-false...
What do you call that if you can't call it a tragedy of the commons?
I suspect some popular blog/YouTube channel made some waves around it.
You read that and understood “categorically proven to be an invalid concept”?
However, from the parent comment I keyed in on your quote less, and much more on:
> It was disproven
FWIW.
People cite the tragedy of the commons to discourage sharing of resources. The idea that common land should be divvied up into private ownership to prevent them falling into ruin. When really shared resources just need accountability between the people who make use of them. It’s just basic game theory: If there is no cost to abusing your opponent, that strategy will get used. But if you’re going to be playing long term with the same people, systems will form to deter abuse.
A simple search finds more examples and references to literature than you can likely read in years.
I’d recommend starting here https://en.wikipedia.org/wiki/Tragedy_of_the_commons
So, just because it’s old doesn’t mean it’s true. Just like “kids these days” or “seems like nobody wants to work anymore” some bad ideas are evergreen.
No one claimed it's true because it's old. If you like reasoning fallacies, you should love the concept of a strawman.
The tragedy of the commons didn’t claim that crop yields are slightly depressed. The claim is that the commons will be overused to the point of threatening to destroy it.
"What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others."
Maybe you're suggesting that that essay popularized the phrasing? But I'm pretty sure even as a coined "term" it was around before then
You might drive down the share price if earnings go down, but that's not necessarily the case if the long-term value is clear. An example would be any company reinvesting earnings in a new factory.
Yes and this underpins what most consider the disgusting trait of being excessively greedy, not just executives, doctors specialties like dermatology, anything.
The doctor who wants the ultra high paying medical specialty sometimes cares nothing about becoming rich. Fear. Fear of being crushed by all that student debt. Doing everything possible to avoid that. Planning to start a family, fear of homeless, etc. Fear of being unable to retire. Excess, irrational fear. Then, it passes, and now we have what seems in retrospect, simply a greedy bastard with now an excessive amount of money.
Same with executives, the thought may not be "let me cheese short term gains as hard as possible" but "let me hedge against short term losses as much as possible".
Aggression from sheer greed is human human thought modality. Predatory. Aggression when cornered, anxiety / fear response, arguably a more vicious and nasty aggression, is another very much different type of aggression because it is not predatory. The difference is predatory feels more voluntary and fear is about whether I should risk being super aggressive or not. In defense-of-self aggression, fear as already there plenty, so a person can do about any hyper aggressive evil thing in the name of defending from a perceived threat - such as lay off half the work force, destroy customer relationships, etc. In this way a good leader must have a steady hand and outlook with regards to fear.
https://www.theregister.com/2022/08/16/john_deere_doom/
Just for that failure, they should all likely be gone.
They have gone from $4.3b in operating income to $14.5b in three years, while their sales nearly doubled. That's an old industrial company boom the likes of which is almost never seen by those types of companies.
By comparison what you're calling catastrophic is entirely trivial. It's not even in the room as a consideration compared to the soaring profits. Nobody is removing a whole board with that kind of profit growth.
Yes their profit is up, no it is unrelated to the concerns
The company is acting in a way that luts the whole food system at risk
They should be disbanded, by force. I recommend replacement with a farmer cooperative
If Deere is so bad buy from competitors, of which there are many.
I somewhat agree with your earlier comment, but this bit is ignoring the systemic issues involved.
Deere is a leader in much of the efficiency technology that allows large-scale farming operations to reach the economy of scale needed to farm the huge multi-thousand (tens of thousands of acres in many cases) grain operations that are slowly but surely taking over food production in the US.
This trend, unabated, is a weird form of monopoly power for lack of a better word. If one manufacturer is more or less the sole-source for the largest corporate farms, and those farming operations are putting smaller ones out of business due to cost pressure - eventually - and likely sooner than later it becomes a too big to fail situation and a systemic national security risk.
This is starting to get into the realm of arms manufacturing. If these trends continue for another decade or three, and then Deere has say a massive IT failure, planting and harvesting operations literally grind to a halt for the top-end equipment entirely reliant on the automation and data harvesting these machines require to operate. People will be at risk for starvation in the event of an extended outage. Farming as a Service has a hidden cost to it many are not seeing in these comments.
I don't agree with disbanding Deere and nationalizing it - however this really needs to be looked at much more than a simple competition issue. It's rapidly becoming a winner-takes-all market, which is subsequently running the smaller operations out of business and putting the US food supply at a systemic risk if nothing is done.
Of course a competitor could somehow battle through the patent forest and capital requirements, but I wouldn't bet our lives on that.
Deere controls around 40% of the North American agricultural machinery market [1]. This is so far from anything near any kind of monopoly it's ludicrous to call it so. No court has ever ruled anything anywhere near this low as any kind of monopoly. Everything you wrote predicated on this FUD is invalid.
> This is starting to get into the realm of arms manufacturing.
And this takes the hyperbole into crazy land.
> It's rapidly becoming a winner-takes-all market
Nope. The competition for making such machines is rapidly increasing as it's becoming easier, not harder to make ag equipment. Pressure from a huge host of countries whose economies are becoming first world is adding many other worthy candidates. CNH, Agco, Kubota, Case, New Holland, and many others are already making inroads. EU is the biggest ag market, and Deere has far less market share there than here, where the competitors have already made major inroads, and they're now moving imports and even production into the US.
> It's rapidly becoming a winner-takes-all market
Do you look at market data from investment firms or even at SEC filings from the major players? These statements are not based in any fact.
[1] https://www.nasdaq.com/articles/plowing-ahead:-john-deeres-c...
Like what's bad about fixing this growing issue with regulation?
If the goal is some vague "easy to repair" mantra, then tons of things in an advanced economy are going to be hard to repair since technology gets more and more complex. Limiting future inventions to also include "easy to repair," under some complex definition, will limit some innovation. Car engines were once easy to repair, then we added all sorts of emissions control, making them harder, and then as computerized control systems turned out to provide massive benefits (lower gas use, more engine life, better control of timine, fuel injection, and ahost of other things), it again got harder to repair. And engines are simple. Should your internet browser or smart phone allow any neanderthal to consider it easy to repair? Or does an increasingly advanced and complex technological environment reasonably make things harder to repair, even while providing advances that are providing benefits to consumers?
The role of govt is to make an environment where companies compete, and given that JD owns < 40% of the North American Ag Machinery market, it seems there are ample other choices.
Economically, and historically, legislation effectively putting price floors or ceilings on goods (in this case price not as $, but as tech requirements and cutting into company ability to sell goods) pretty much every time comes back to bite consumers. This is econ 101.
And the Deer example is sorta nice in that I don't have to explain to management why that sorta DRM is a horrible idea. They already know.
This does seem like capitalism at work. Still, I really want to hate the players and the game. This has been brutal extractive malevolence against an industry supporting the very base of the pyramid of needs: John Deere is hurting the world incredibly badly.