I appreciate that large companies do have other options today, for better or worse.
What I'm asking is whether we should allow them to exercise those options. Doing so, as you hinted in your own comment, means that large companies have to become skilled investors, and this will inevitably become a significant or even the dominant part of their existence instead of actually making useful things or providing useful services.
As we've observed all too recently, not all of those extra investment options are quite as effective as they were supposed to be. Moreover, any investment option that is legitimate could probably offered to (now richer) individual investors if large companies were not allowed to use it. So I'm not sure where the big downside is of restoring the natural links between companies that do socially useful things like make good products, companies that make profits, and companies that are attractive to outside investors when they need extra funding to grow faster.
Alternatively, if these companies are going to be allowed to invest their profits on behalf of their own shareholders, perhaps it's about time they were regulated as financial institutions. If nothing else, shareholders should be protected from senior management who are erroneously convinced that they can do a better job gambling^Winvesting their shareholders' profits than the shareholders themselves can do of choosing where to spend a legitimate return on their investment.
I was thinking more in terms of investments related to the company's business (e.g.: Apple pre-paying billions of dollars to lock up massive amounts of flash storage or to fund new factories for suppliers) that often have a much higher ROI than any investment you or I might reasonably make in any investment available to us.
Large companies carrying trading/gambling departments not related to the rest of their business is, as you say, probably not a good thing.
Sure, if the money is being spent on things like stock and operating expenses that are a normal part of the business, I have no problem with that. If it's being done on an industrial scale and there are economies that go with that, it makes perfect sense. I'm just not convinced that (for example) certain large tech companies -- particularly those that are in the software or services businesses rather than in manufacturing -- need reserves on the scale they are holding for the kinds of purposes we're talking about here, which leads me to ask why the rest isn't being paid out in dividends to shareholders.
What I'm asking is whether we should allow them to exercise those options. Doing so, as you hinted in your own comment, means that large companies have to become skilled investors, and this will inevitably become a significant or even the dominant part of their existence instead of actually making useful things or providing useful services.
As we've observed all too recently, not all of those extra investment options are quite as effective as they were supposed to be. Moreover, any investment option that is legitimate could probably offered to (now richer) individual investors if large companies were not allowed to use it. So I'm not sure where the big downside is of restoring the natural links between companies that do socially useful things like make good products, companies that make profits, and companies that are attractive to outside investors when they need extra funding to grow faster.
Alternatively, if these companies are going to be allowed to invest their profits on behalf of their own shareholders, perhaps it's about time they were regulated as financial institutions. If nothing else, shareholders should be protected from senior management who are erroneously convinced that they can do a better job gambling^Winvesting their shareholders' profits than the shareholders themselves can do of choosing where to spend a legitimate return on their investment.