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By your definition many successful companies would be performing poorly as they immediately invest all their profits.

Marketing is an investment, because the benefits of marketing are in the future and are aimed at increasing business.



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Returns on investment are the highest of almost any industry.

For the established companies with a portfolio full of successful products. You're ignoring all of the investment money that goes into products that don't sell at all.


And they aren't always making money. Its about investment.

> businesses got hooked on (and very good at) investing their money

but what do they invest in? Surely for an investment to pan out, something is produced which is then sold!?


Every business needs an amount of investment in order to usher as successful and to earn revenues. Without investment you cannot expect success to shower on your lap. However this doesn’t signify that just investment will bring you success.

Investment != business.

There may be near infinite opportunities to invest, but that does not mean they can be profitable.

Also, if something is a good investment, it doesn't mean it is a good investment for a given company.


investing is not just that. its putting money where you expect the business to make MORE money in the future. if they dont, you dont make money in the end.

The ability to generate a profit and investment rounds aren’t mutually exclusive, but if you’re focused on growth you’re not going to have profits because you’re going to be spending all of your money on growing. That doesn’t necessarily mean you couldn’t drastically reduce expenditures and become profitable if investment wasn’t an option (or just an unfavorable option)

Isn't it practically investment?

It's actually ironic, most people seem to think:

"getting investment" === "success"

Even my JavaScript runtime knows better.


> encouraging profitable investments rather than sitting on assets

A difficult distinction to make, since profitable investments are also assets that one would presumably like to sit on for a while.


Investing is about increasing production capacity or production efficiency, with the expectation of getting a positive return on investment in the future. Everything else is not investing, but speculation.

Which would be great.

Putting capital into something that can only be extracted years later is a poor investment.

The sooner you can get the benefits of an investment, the sooner you can invest in the next thing, and the less return the investment has to give to be competitive.


So investing in a critical part of my business is the bad thing to do?

How can it be an investment if you are the sole artificer of the outcome of your investment? An investor finds one or more companies that look good and are worth their money and then mostly wait for the profits. But in this case the same people who put the money are the ones planning and executing the business plan. What's the difference in using money earned by running another company rather than using money earned by working for another company? It's the very definition of hair-splitting.

To put it a different way, if you are making an investment then it needs to be a good investment with a return on investment. If you are not making an investment that is fine but then you need to be careful not to destroy your future on bad choices.

Sure, but the thesis is just that on average it's a bad investment, not that there are never winners.

I don’t think I follow.

Suppose I buy a share in a company specifically because I believe in their business and products.

I think that’s pretty clearly investing, but are you claiming it would cease to have been an investment if the company went bust?


It's not a productive investments. It's just taking profits and giving them to the stockholders.
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