FT on expensive stocks: “Say you have $1 now. If you could guarantee that pound coin was to grow at 30 per cent per year for the next four years to a price of $2.85, what would you pay for it now? Well, its purchasing power will probably be a touch less by then due to inflation, so probably the $2.85 minus a discount. Let’s say $2.60 or so. Easy enough. But here’s where it gets tricky with the pricey stocks. Not only is buying an expensive scrip a bet that this revenue growth will continue at a pace into the future beyond expectations, but that the particular business — whether it’s PayPal, Twitter or Snapchat — will be able to convert those revenues into meaningful profits. Both outcomes are highly uncertain and idiosyncratic to every company, and depend on a multitude of obvious factors such as competition, management quality and the structure of the sector.”
What Are Stores Even Thinking With All These Emails? from The Atlantic. “Your inbox is now a shopping mall.”
Pierre Lemieux on Anthony de Jasay’s book “The State”: “What’s wrong with the state? The central argument of the book is that, in a society of non-identical individuals, preferences and interests will differ, so the state cannot simultaneously protect the interests of everybody equally; it must choose which interests to further, and which ones to ignore or crush. This fundamental idea seems so obvious, or at least so challenging, once clearly expressed it is surprising how it can have escaped so many analysts. In practice, the state is who happens to run it, what de Jasay calls its tenants. One can view the tenants of the state as the inner circle of political and security rulers. The interests of these people are primarily what the state maximizes; but to stay in power, it must also promote the interests of those whose support it needs to stay in power.”
