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Tom Au, CFA
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In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s. In the early... More
My company:
Carryl Capital Management
My book:
A Modern Approach to Graham and Dodd Investing
  • Why America Isn't Sharing in the Good Fortune of Corporate America 2 comments
    Mar 31, 2011 1:29 PM

    The fortunes of corporate America have pretty much recovered from the 2008-09 crash. Profitability is close to 2007 peaks, and should cross that level sometime this year. Corporate cash balances, meanwhile, are at an all time high.

    But you wouldn't guess this from looking at what is happening the rest of America. Unemployment,while off its peak, is nowhere near 2007 levels. For stockholders, meanwhile, dividendshave lagged the rebound in profits, and may not challenge record levels.

    So who are the beneficiaries of the prosperity of American corporations if not Americans? A lot of it is taking place overseas, where American companies are finding new customers and hiring new workers. Capital is "trapped" outside our borders, as well, because of the prospect of heavy taxation. American corporations are flush with cash, but they are not spending it here in America.

    The U.S. government needs to do more to incentivize American companies to do more at home. A "tax holiday" on repatriation would help. So would the restoration of an investment tax credit. But the biggest boost to hiring, might be tax credits for new hires.

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  • Ray Merola
    , contributor
    Comments (6502) | Send Message
    Agree with much of this perspective. There's a big global economic party ongoing, but the average U. S. citizen has not been invited.


    I believe part of it is the depth of the Great Recession and the related structural damage to our economy. While the Fed has done their part to avoid another 1930s scenario, the President and 2008-2009 passed a plethora of damaging legislation.


    Big Government and social engineering is not the answer.
    28 Apr 2011, 01:53 PM Reply Like
  • Kiisu Buraun
    , contributor
    Comments (1186) | Send Message
    If my memory is correct, seems a similar situation occurred years ago in England/Great-Britain... when their version of "silly" economic and high-tax policies "encouraged" the flight of both money and entrepreneurs to the USA and elsewhere.
    9 Jul 2011, 02:40 PM Reply Like
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