It’s a monster they can’t control because they only look at a quarter ahead. They don’t make multi-year plans for long-term investment. They want maximum profit in short-term investments. If they’re not increasing their short-term profits, the company will lose value in their stock, and the people in control of that company, the people that invest in that company will lose money, which is something they don’t want. So there is no incentive, in fact, there’s an incentive against this type of long-term investing since it will make the balance sheet per quarter look worse when they start their long-term investment project.
It’s a monster they can’t control because they only look at a quarter ahead. They don’t make multi-year plans for long-term investment. They want maximum profit in short-term investments. If they’re not increasing their short-term profits, the company will lose value in their stock, and the people in control of that company, the people that invest in that company will lose money, which is something they don’t want. So there is no incentive, in fact, there’s an incentive against this type of long-term investing since it will make the balance sheet per quarter look worse when they start their long-term investment project.