Quote:
Originally Posted by pwalker8
Health of the company tends to be measured in long term profitability, i.e ability to survive rather than quarterly profits or stock prices. There is quite a bit of debate going on right now about what fiduciary duty actually means. The idea that companies should maximize profit was really a reaction whose best known advocate was Milton Friedman to Keynesian economics. To a certain extent, I think it is really an exaggeration of what Friedman was trying to say and frankly was seize on by investors who are more focused on short term returns to investors than the long term survival of a company. You really have to look at what the norm in corporate governance was when Friedman was talking about profit, not where we are now.
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To be fair, not all investors think long term, or even invest long term. Wall Street is on the side of investors. It is Wall Street that has been complaining about Amazon not making any effort to report overall profit. Amazon doesn't fit the norm for publicly traded companies, but is still judged by it.