Can People or Corporations Have Too Much Cash?

Townhall.com ^ | February 15, 2013 | Mike Shedlock

[Carry_Okie]

You are quite welcome. I just happen to be untangling the structural relationships in those very laws in Lev. 25 & the corresponding blessings and curses of Lev. 26 as compared to known principles of ecology, politics, and economics.

It's been quite the challenge.

[Alberta's Child]

If my company was sitting on a lot of cash, I'd question whether the company was being managed well. There's nothing wrong with cash per se, but when I own a company I'm looking for it to do what it does well. Anyone can hold a pile of cash indefinitely. But if I own Ford, I want to know that the company is manufacturing new cars and developing new models of cars. For Microsoft, I want to see the company develop new software. If I own McDonald's stock, I sure hope they're selling lots of hamburgers and Happy Meals.

Maybe I'm missing the point here, but isn't a cash position even more ridiculous when interest rates are at record lows and inflation is a serious threat?

[discostu]

Or you’ve run out of ideas on how to grow and the younger hungrier companies are going to eat your lunch.

[P.O.E.]

Depends on what they mean by “cash”. Bills and coins? CD’s? Munis or T-bonds? Ledger entries?

Each has it’s own opportunity cost, risk, and valuation.

[P.O.E.]

it’s s/b its.

I hate when I do that.