Nervous Stockmarket = Nervous CEOs

An Economist article here talks about the recent ups and downs of the S&P500. An interesting point it makes is that companies (at least large ones) are not reinvesting their money into high Net Present Value projects. In order to sustain growth, a company must continue to reinvest their revenues into projects that provide a significant return. The article points out that companies are keeping large stocks of cash or paying it out to investors rather than looking for a great product or service that might increase its longterm revenues. This has the effect of causing companies to rise and fall with the large-scale economy rather than let them be the masters of their own destinies. Unfortunately, this also stifles innovation.