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Comment by danieltillett | Hacker News Reader

The article explores a few theories and none really make sense. The only theory that can explain why Yahoo can be worth $13 billion less than two of its three components is that the market believes that its management is so bad that they are going train wreck the group - the hp effect.

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The discount is presumably also due to the fact that no one in management - least of all Marissa Mayer - has any interest in making Yahoo smaller. Although this would likely be the right thing for the shareholders, it would make their domain (and thus their perceived importance) smaller.

The article explains that the whole is less than the sum of its parts because the businesses can potentially leech off each other when they are packaged together as a conglomerate ("the conglomerate discount").

To me this idea conflicts with the fact that they are minority shareholders in the two international components. I'm not sure exactly what the management structure is, but if Alibaba really thought it might be run into the ground by Yahoo it seems that they could do something to kick Yahoo out.

The argument is not that Yahoo! will burn Alibaba to the ground. It's that their asset holding in Alibaba will have to be liquidated to make up for losses by Core Yahoo!

That is, they might burn their stake in Alibaba to the ground.

or that the market is stooooopid

I hear that that's a heresy in some parts of the world that believe in the non-scientific "free market" cargo cult.

Yes, support of the free market is non-scientific in the sense that Mainland China, Russia, Cuba, North Korea and similarly non-'free market' countries are much wealthier than historically pro-market countries like Switzerland, Singapore and Hong Kong. /s

You are so scientific you don't even bother to reason about cause and effect.

Neither did the parent comment, so why am I the one you're calling out on it?

I can't see how the parent comment postulates a causality.

It makes the implicit claim that people interacting freely will lead to worse outcomes under some metric then people interacting under the constraint that actions contravening some centrally determined directives result in punishment via violence or the threat thereof.

No, you make that implicit claim. But if you want me to make MY claims explicit, here we go:

The so-called "free market" is a buzzword. There haven't been any such thing observed in actual life.

From the US to Germany to Hong Kong and Brunei (all on the top 20 of "economic freedom"), markets thrive on heavy subsidies, tons of protections, and heavy military and diplomatic action to win favorable deals for exports and secure cheap resources.

All available means are used under this system, from corrupting politicians to pass favorable laws to direct imposing of "banana republics" in development countries for commercial benefit. Heck, even patent laws and copyright is a kind of state protectionism against competition. In all, existing economies have very little to do with "free agents" competing freely in a fair unskewed marketplace. (I didn't even have to mention things such as the $1 trillion bailout and the Detroit bailout here).

Free market economics are based on made-up ideal notions that go against what actual human societies do, not just in regard to how real markets function, but also in their fundamental laws and models, like "supply and demand". Of course in more refined academic economic research you can find criticisms against such naivety, but at the level of "free market" proponents and policy advisors, even at the highest circles, all that is forgotten.

While no 'true free market' has existed in real life, it nevertheless exists as a fairly clearly specified theoretical construct against which actual markets can be compared. Those countries in the top 20 economic freedom list all have markets closer in various ways to this theoretical 'true free market' than other countries.

They also generally have higher levels of economic development, hence the suggestion of a correlation between market freedom and economic development.

Being richer doesn't mean the free market did it (as the other commenter here noted). If you don't bother checking other factors at play (like a history of having undemocratic regimes and having started from far poorer conditions), then so much for using science /s

Not to mention that you can be filthy rich and not by using a "scientific system" in any sense. A king is not richer from a peasant because he is more scientific -- just because he has the power, and a family heritage.

If you look at all world's countries in terms of GDP per capita[1] and economic freedom[2], the countries with higher GDPs per capita have higher degrees of economic freedom, and conversely the countries with the lowest degrees of economic freedom have lower GDPs per capita. This is obviously not perfectly scientific, but I don't have the time to describe the whole theory of developmental economics in a HN post.

'Filthy rich' in the sense that a king is rich is different from a nation being rich in an economic sense. The wealth of a country, measured by GDP, is a measure of productivity. A king has the ability to purchase many things, but he's not rich in the sense of economic productivity, in fact his economic productivity may well be zero.

1. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP...

2. http://en.wikipedia.org/wiki/List_of_countries_by_economic_f...

>If you look at all world's countries in terms of GDP per capita[1] and economic freedom[2], the countries with higher GDPs per capita have higher degrees of economic freedom, and conversely the countries with the lowest degrees of economic freedom have lower GDPs per capita.

Actually, in the top 20 list we can see Qatar, Brunei and Kuweit(basically rich due to oil), Singapore (where the state owns most infrastructure, from telcos to the "media company", cars are heavily taxed, as in $100,000 for a 10 year licence to drive one, and the state subsidies the citizen's housing), Norway, Denmark and Sweden (which, by Us standards are "socialist"), and other not quite the role models of a "free market".

Also, in the index for "economic freedom", the US is 18th and 12th (in the two different rankings), below Bahrain and Chile -- seems that "economic freedom" is shortcode for "rich corporations are allowed to do whatever they like, including corrupting local power elites".

In any case, they hardly make the case for the "free market".

Qatar and Kuwait are still within the top 20 in the economic freedom list, as is Singapore (at number 2) and Denmark, while Norway and Sweden are still in the top 30. Economic freedom is multi-faceted: while Singapore may be 'socialist' in in the ways you describe, for instance, it also has extremely low personal and corporate taxes, no capital gains tax, and fewer regulations, which contributes to its high economic freedom ranking.

The US scores below Bahrain and Chile because there are some ways in which the US market is quite unfree. For instance, bank bailouts of large corporations, massive agriculture subsidies and tariffs, and incredibly onerous regulations in some industries. Even Sweden has a freer market than the US in some ways, for instance via its voucher system: parents are able to choose to which public school they'd like to send their children, rather than having it determined by where they live like in the US.

Surely it's not a coincidence that the top 20 countries in terms of GDP per capita are almost all within the list of top 30 countries in terms of economic freedom.

It's great, the worst female ceos can destroy value as well as the worst men!

I don't think we should be blaming female CEOs here as Yahoo and HP have certainly had more than their fair share of terrible male CEOs.

I think that that's the OP's point; he's saying that bad CEOs may be both men and women.

I still don't like his comment because it's bringing gender into something that really has nothing to do with gender, but a literal, factual reading of his comment makes exactly the point you do.

Edit: relevant https://xkcd.com/385/

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