Corporate Short-Termism

Nobody cares though. Investors only care about short term. When it stops making money they will just move their money somewhere else. When you can get out of the game at any time there is no incentive to think long term for those at the top. The Executives are told to make money today. And why not? They will leave soon too. To run another company for a few years doing the same thing. The only people who are interested in long term viability are customers and low level employees. And their opinio

The latter may also be for the better. Publicly traded companies are notorious for their being short-sighted and only caring for the next quarter results. Maximizing profit, or at least stock price, right now is the fiduciary duty of executives; long-term strategies are harder to implement.(Being VC-funded has its own skewed incentives, of course, like financially unsustainable growth.)

The former does not imply the latter. Look at Bezos, he spent years re-investing in Amazon to provide long-term financial benefits to his shareholders. Pressure for short-term gains comes from shareholders on Wall St, it’s not a fundamental property of shareholders.

It has not, historically, been in the nature of companies to think or act in the long term. People inside companies have incentives to bring short term profits, while long term profits benefits only the company as a whole, not any individual internal actor who may be positioned to make them happen. Therefore, they don’t happen, and large organizations basically always act only in the short term.

It's a great point, but I think corporations have shown they're willing to sacrifice long-term benefit for next quarter's numbers.

And it is a pretty common complaint that companies sacrifice long-term interest for short term concerns. It is interesting to see a company apparently intentionally make the opposite decision (and have people still complain).

ahh, the classic “i shall please my investors next quarter while ignoring reality, so i can disappoint my shareholders in 10 years”. lol.As you say, happens all the time. Also doesn’t make sense because so few people are buying individual stocks anyway. Goal should be to consistently outperform over the long term. Wall street tends to be very myopic.Thinking long term is a hard concept for the bean counters at these tech companies i guess…

Bingo! It's the Principal Agent Problem. People focus too much on why companies do X and companies do Y, it's bad in the long term. The long term doesn't exist. No decision maker at these public companies gives a rat's ass about "the long term", because their goal is to parasitize from the company and fly off to another host before the damage they did becomes apparent. And they are very good at it: it's literally all they do. It's their entire profession.

The problem is corporation are blinded by short term revenue over long term investments.

Companies tend to not think in the long term - they are encouraged by investors, lenders and the market to think in very short planning horizons.A recent experience when trying to get a personal mortgage as a company director underscored this:"Your profits are down! Your business must be failing!!""No, we opted to re-invest some of the substantial amount of cash we're sitting on, and therefore took a hit to profitability this year so as to be more profitable in the f