One blogger ZeroHedge has published the opinion of Dan Steinhart from Casey Research. Now in the possession of American corporations is more money than any other period since the Second World war. Not counting, of banks, of course. It comes to non-financial corporations, i.e., those that sell goods and services. These companies keep the 1.4 trillion. dollars. In absolute terms, it’s a record.
As investors, we can conclude that the inability (or unwillingness) of the corporations to use their money. This can only mean one thing – the business took a defensive position.
Cash, of course, are a kind of protection against uncertainty, which leads to slower business for any reason. Management wants to maintain a healthy reserve of cash with which it can pay the bills and stay afloat, if suddenly there will be something unexpected. I think many will agree with me, because it is reasonable and good business practice. Continue reading