Why Unprofitable Companies Are Winning in 2020

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    Economics Explained

    Runtime: 15:05

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    The bottom line is the most important part of any functioning business.
    Profit after costs, expenses, and taxes.
    The money that the founders and investors in companies get to put back into their pockets for the risk and effort they put into a business.
    Sounds like business 101 right? And it kind of is.
    A business that doesn’t turn a profit is like a freezer that kind make ice, it’s more or less pointless.
    And sure there are things like non-profit charity organizations out there but most businesses exist to make money!
    So why is it that some of the biggest companies in the world are not turning profits? Why is it that they don’t even plan to?
    The rise of so-called zombie companies or companies that have not and have never run at a profit are raising more and more eyebrows in the investing world.
    These businesses are getting too big to ignore as by some estimates over 10% of the s&p500 (an index of the largest companies in America), is now made up of these companies that don’t serve the one central goal of being in businesses.
    What’s more, is that this issue is not just endemic to a particular industry, dozens of major companies and countless smaller businesses in every sector of the economy from energy, retail, medical, telecommunications, and of course technology are in this profitless boat together.
    So what is going on here?
    Why would anybody invest in a business that is unprofitable?
    What impacts does this apparent misallocation of resources have on the economy?
    And finally,
    Will the economic fallout of 2020 show these businesses for what they really are?

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tony nicholas
tony nicholas

Non profits are also designed to make money, but in their case it's to pay wages to staff, very little charity money collected goes to good causes, charities pay most money out to staff, the biggest bulk of course going to those running said non profits, this is just as much a scam as any Ponzi scheme, and every year it gets worse as new charities are formed, usually by the super rich, it cleans money and gives them tax write offs, thinking it's for the poor and needy is naive, mostly this all started with Oxfam, they showed the world how, their running costs suck up eighty three cents in every dollar, so little of what they collect goes to any cause, and tracing that money will show you far far less goes to the needy after middle men get theirs, often mere cents in every dollar, some well known charities give out nothing at all to any good cause.

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james maddock
james maddock

There is nothing new about these scams. I just finished a book on the history of railroading , the years 1850 to 1900. The robber barons of that era schemed scammed, cheated investors, the government and the people. No doubt the great pirates have been active throughout time.

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Not Me Not Me
Not Me Not Me

0:08 wait... corporations pay tax?

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Russian View
Russian View

Is america becoming sovietlike?

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BarrieHughes
BarrieHughes

No reference to international freight by train....in fact Chinese containers have recently reached LONDON...A LOT FASTER THAN SHIPPING! Please keep up with the facts.

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B. S.
B. S.

Companeeee Evaaaaa Succesfuuuuull p-UH-blic... Investaaah ;) Still enjoying the vids, keep it up Ozzie.

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Richard Bloemenkamp
Richard Bloemenkamp

People like to gamble even if on average the return is slightly negative. People need believe, purpose and a story to tell their friends how smart they were in this one successful investment even if there were some others that were unsuccessful or even disasters.

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mark salmon
mark salmon

Blame central banks for artificially propping up loser companies like Lyft and Uber. With interest rate so low, to make money, many even more conservative investors will invest in copanies like Uber and Lyft. What many people dont know is pension funds public and private (what’s left) invest in “dogs” like these because years ago, these fund managers conned local and state governments that they can deliver close to double digit growth so these morons dont have to raise taxes to fund these pension funds. Well, higher return could mean higher risk so ....

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Marvin F
Marvin F

Business 10: How to start your own Theranos, Wework or Nikola.

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Jesse Kauffman
Jesse Kauffman

Getting bigger and bigger and make more and more money these days is why the middle class is gone.making a profit isn’t enough

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Stephen Blake
Stephen Blake

Seems like a game of hot potato???

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Seupa Donald
Seupa Donald

Tesla is peculiar

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Michael Mayer
Michael Mayer

This same scenario happened back in 1929. Too much money looking for investment and not enough due diligence in the underlying fundamentals. This will end badly.

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short film natural es
short film natural es

https://youtu.be/crwPM7WVqOg amazing

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Douglas Whitesides
Douglas Whitesides

This is amazing and I'm sure this a good information for someone that still believe in investing in businesses that are not profitable

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boy Afrika
boy Afrika

I'm starting to understand why people are bothered by ads in videos. They are quite annoying

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JRJJJ JJ
JRJJJ JJ

More than 6 ads in 15 minutes of video, what is this? US television??

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J K
J K

Makes me think of debord

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rfvtgbzhn
rfvtgbzhn

11:39 efficient market is a fiction.

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Lionel Burns
Lionel Burns

Here's one of the biggest ponzi schemes ever. It called CALPERS, with $3 trillion in unfunded liabilities. For those that don't know it's the CA public workers pension plan. It pays out a lot more money annually than it takes in and will go broke eventually. It's already on life support.

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ProductBasement
ProductBasement

I've made a killing in the market since I jumped in around the lowest point in 2020, and most of my money has been in profitable companies Also, I love your videos, but I hate the kind of ads your videos attract. All these scammers who use buzzwords like "passive income" to snare the uninitiated into their overpriced and useless classes

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Ailm LVR
Ailm LVR

Its blur the line not bluow the line. Learn some English you Auz

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Brian Rusher
Brian Rusher

honesty, is such a lonely word...

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bp qd
bp qd

capitalism is a massive scam got it.

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Galactic Rooster
Galactic Rooster

Sounds like you are talking about Uber. Yet to make a profit

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Rob Babcock
Rob Babcock

It's kind of expected with the crony capitalism we have now. Investors know that ultimately the government will a backstop to really meaningful losses (especially in the banking and transportation sectors) and there are a lot of companies that socialize the losses and capitalize all the gains. Since every American thinks they're just temporarily inconvenienced millionaires a "powerball mentality" has taken over the market. It's not enough to make a profit and a decent living anymore; everyone is looking for that grand slam home run that will elevate them from relative poverty to opulence and wealth. As long as everyone is convinced they'll be the guy to buy the next Amazon or $50/share there will be "entrepreneurs" looking to separate the rubes from their cash.

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Corey Hanson
Corey Hanson

Every Government, Religion, industry ever lol.

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Michael Ferri
Michael Ferri

This is classic corruption and Satan is destroying capitalism

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Sim John Daniel Bastareche
Sim John Daniel Bastareche

The nonprofit org have "profit" through an excess of their collection. It is called nonprofit for tax purposes. Those excess collection or fund can be allocated for additional beneficiaries or set aside in a bank for long term assests depending on the condtions set by the benefactor of the grant.

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On Taka
On Taka

Maybe some of those companies are keeping their books slightly in the red to avoid paying corporate taxes.

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Zuffin -
Zuffin -

Man the government, so genius at spending our tax dollars

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Andrew Smith
Andrew Smith

These videos are more informative than many master's degree level classes I have taken.

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Faseio Lasec
Faseio Lasec

The minor statistic coincidently rot because plot distinctly spell across a waiting storm. graceful, sturdy cowbell

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Anik Samiur Rahman
Anik Samiur Rahman

It seems like finally capitalism is turning into communism, when goods and services aren't produced to make profit but are racing to fill up the needs of the community. But make no mistake people - it's the new and shiny privately run communism.

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H Zoonka
H Zoonka

Keep a eye on Elon Mask.To good to be true.

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Venkata Ramayya
Venkata Ramayya

Isn't Donald Trump's Real Estate business a Ponzi Scheme or is it a Money Laundering Activity???

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John de Haan
John de Haan

Case in point, fusion v fission, solar v fossil fuels, EV v ICE

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Liquid Snake
Liquid Snake

The trick is not profitability but rather cash flow. Yes profit is what we all look for and should look for. But as you stated , company can still go under even if they are profitable and have low cash flow. The trick with these uber style companies is that they got the cash flow man. During the 2008 real estate crisis. Who do you think benefitted a lot ? Those with good cash flow and could keep paying their mortgages and even purchase a few more or a lot more. Lol. Properties for basically nothing. Anyway i aint as smart as the presentation but i know cash flow is one of the primary reasons a company fails or succeeds.

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TheBunnan
TheBunnan

The ads! Oh my wow too many ads!

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Austin Mackell
Austin Mackell

The bet with Uber is they will get and hold market share until driverless cars can take over, then clean up.

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Gregory Sullivan
Gregory Sullivan

Unprofitable, usually means best customer value like always lol that's how scam capitalism works. If it don't break fast it doesn't sell fast durrrr

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Robert E. Smith
Robert E. Smith

Way to much Patreon advertising and ad nauseum detail. Stop that. If they do, reconsider.

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Joysinglion89 Richard4532
Joysinglion89 Richard4532

On this day 65 years ago, Rosa Parks was arrested for refusing to give up her seat on a Montgomery, Ala. bus, prompting a year-long bus boycott and the Civil Rights movement. (Photo: AP Photo/Daily Advertiser, File) https://fxn.ws/39x2LEp

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Ken Thompson
Ken Thompson

Kinda feels like the pre-2008 collapse. Too good to be true.

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Christopher Hernandez
Christopher Hernandez

People are dumb af.

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Joe Bragg
Joe Bragg

Social Security is the biggest Ponzi of them all

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Benito Camelas
Benito Camelas

this somehow has a mega recession written all over it. I just feel it.

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C B
C B

tax policy is a central part of this. No profit = no taxes. The founders and investors may receive payouts without profits.

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Jeffrey Walker
Jeffrey Walker

Send us your Money - we will fight the Fake voter fraud from nice resorts and my newly remodeled homes. Send every peso so we can fight this terrible fake voter fraud, or I can pocket your money. If I'm triggering your anger then that's what we do; fake conservative news to manipulate you. fakefraudester.org.. just in, now we are adding fake covid fight too.

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ZhiJie Li
ZhiJie Li

uber dont make money, but uber driver dose right? Dosen that help economy by providing platform for driver and customer? people are less willing to take regular tax than uber.

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Guy van Rijn
Guy van Rijn

I liked this video! Sorry for being so negative on one of your other video's. Thruth bomb dropped I think.

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Andrius
Andrius

So Tesla is a zombie company.

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Lynndon Harnell
Lynndon Harnell

Sounds like renewables being subsidised by the taxpayer who has been conned that renewables are cheaper, but stupidly pay the higher prices.

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Jay Q. McBurger
Jay Q. McBurger

It is a house of cards

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Rudy Vitangcol
Rudy Vitangcol

Million Dollar Potential in Ruvol I have invented a Board Game [still unpublished and not yet out in the market] that is guaranteed to be far more challenging and exciting than CHESS. I called it “RUVOL.” Over time, Ruvol will surpass chess as the “Number One Board Game in the World.” Why am I so sure about this? Because I am an avid chess player myself. The weakness of chess is it always starts in fixed positions that the opening moves become “memorizable.” In fact, not a few have so mastered the moves that they can play against their opponents “blindfolded.” It is for this very reason that the great Bobby Fischer introduced his so-called “Fischer Random Chess,” where the starting position of the pieces is “randomized” to make the memorization of openings impracticable. Fortunately, it is also for this reason that I invented Ruvol where “every game” has been calculated to be a challenging one to play. HOW IS RUVOL PLAYED? Ruvol is played somewhat like chess. It is played by two players. It uses a board that is rectangular in shape but containing more number of squares than chess. It has equal number of pieces on each side of the board, where each type of piece moves in distinct ways. However, if the way to win chess is to checkmate the opponent’s king, the way to win Ruvol is to be able to cross a designated line. But there’s one big advantage Ruvol has over chess: The Ruvol pieces are randomly placed at the start of “every game” which makes it impossible for any clever player to memorize the moves. It is the players themselves who separately dictate the starting positions of their pieces on their respective sides of the board, depending on the strategies they’ve planned before the start of each game. Ruvol was intended to give chess a direct “apple-to-apple” competition. At present, there is no other board game in the world within the same category of chess “where chess players can switch to.” Chess is totally a monopoly in its class. Chess players can now have an alternative in Ruvol. A MILLION DOLLAR POTENTIAL IN RUVOL! The people who play chess will be the same people who will play Ruvol. In my Google search, I learned there are around 800 million chess players in the world. These 800 million players comprise the “Total Potential Buyers” of Ruvol across the globe. At an average profit of just US$3 per set, the “Global Income Potential” of Ruvol then is US$2.4 billion. Assuming only 1% of it will buy each year, the annual global potential sale of Ruvol is US$24M. I AM LOOKING FOR AN INVESTOR! For the reason that I don’t have the resources to publish Ruvol on a global scale, you might be interested to “FINANCE THE PUBLISHING” of my Ruvol on a profit-sharing arrangement. Or better yet, just “BUY MY COPYRIGHT” and Ruvol is entirely yours. If interested, email me at: rodolfovitangcol@gmail.com. Thanks and God bless! RODOLFO MARTIN VITANGCOL The Ruvol Inventor

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Vinci Andreozzi
Vinci Andreozzi

Someone’s never heard of EBITDAC

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Adam Smith
Adam Smith

EE well done but short sellers should have been discussed.

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Master80059
Master80059

well amazon always turned a profit. but they spent the profits on growing the company in a tax saving way that caused them to on the books to be in the negative.

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John C Gibson
John C Gibson

Really learned a lot from this channel. Love this channel.

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Camden Capps
Camden Capps

Nikola founder sounds a lot like this Steve Jobs guy I’ve heard of a couple years ago

4 dager siden
Shawn Green
Shawn Green

These companies are robbing Peter to deliver cheaply to Paul. This companies are going cause huge long term problems for the consumer at large. These companies are being propped up by consumer cash via retirement funds and state run pensions. These individuals will be left penniless when these zombies finally die.

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Asemota Nosa
Asemota Nosa

This has kept me wondering

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Aaron R
Aaron R

Take on debt at near zero interest rates, sell treasury stock... Different kind of voodoo economics involving moral hazard and wall street. Many of this isn't just start ups, its also old dinosaur companies.

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Amit kumar
Amit kumar

Like the Virgin hyperloop, or the star citizen game

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Rosyid Wahyudi
Rosyid Wahyudi

South sea Company : ma boyy

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Rosyid Wahyudi
Rosyid Wahyudi

Economic crash in 3.... 2... 1....

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Arvind Talukdar
Arvind Talukdar

This is basically a Ponzi scheme, but this time other rich ppl are financing it which makes the windfall gargantuan.

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Evie Levinson
Evie Levinson

nothing could’ve prepared me for the what he pronounces “genuine”

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Born vs. Me
Born vs. Me

0:10 where does this scene come from?

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Gordon Davies
Gordon Davies

Uber is cheap because the employer... Uber, is allowed to pass all the risk on to the employee...the driver. Uber and the other gig economy companies are destroying centuries of efforts to acheive decent working conditions and terms of employment. This process is being encouraged, especially in US, leading to accelerating inequality, the end of social mobility. The American Dream issuffering death by a thousand cuts.

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playgrrrr
playgrrrr

Taxis aren't a competitive market. Very poor transition from example to theory there.

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playgrrrr
playgrrrr

Businesses first and foremost exist to make products or provide services. Profit is what's supposed to ensure the financial sustainability of the operation.

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Arcadia Nemetai
Arcadia Nemetai

This unending mass of greed will soon come to an end... Death of capitalism. May it not take humanity down with it.

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lunacron
lunacron

Hmmm, is this what they're doing with the hyperloop.

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Gene T
Gene T

This schema will not collapse for the simple reason that low interest will stay with us for a long time considering staggering debt such countries as USA, UK, Japan and now China (province-level) have. CBs will continue their printing press. So, while an excess capacity is still large, the inflation moves to assets: housing, stocks, commodities, etc. We are living in a high asset inflation environment, which will spread to the consumer basket within a few short years. Central banks are powerless and will not be able to jack up interest rate in any meaningful way (countries can't serve the debt), and the roller coaster continues. For now, enjoy the ride, buy inflationary high tech stocks, cash out on time into?? Beware of Weimar though.

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Gregarious3
Gregarious3

No profit, no corporate tax. Governments that plan punitive taxes seem to ignore that people will find ways around them.

7 dager siden
Francisco Borja
Francisco Borja

I guess this is market regulating itself at work. They will become profitable when they become monopolies in their respective markets as Amazon did. Then they will profit from their position of power

7 dager siden
Trimbo Tee
Trimbo Tee

This is a good video

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Hull Style Productions Change the World
Hull Style Productions Change the World

Trump is the greatest scammers if all time

7 dager siden
thomas aquinas
thomas aquinas

It's breathtaking to see questionable companies hit the right tones so that everyone out there invests their money. Many of these companies are now well-known, but many of them still have red ink dominating their balance sheets. Of course, the casual investor defers his due diligence to his broker, or to no one.

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annarboriter
annarboriter

beared?

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Jeff Lynch
Jeff Lynch

I like your channel, but your videos have the most ads of any that I watch - if they don't get cut in half, I will stop watching

8 dager siden
Derek Whittom
Derek Whittom

So let me get this straight. The investors of Uber are subsidizing me paying for a driver to be in debt for a car, make less than if they worked full time at McDonalds, and ruin the lives of professional taxi drivers. Beautiful. Who wins here? Is it me?

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frubical
frubical

Imagine having a competitor with 10,000 times more cash and no expectation too profit ever ? Nice

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ThePhiphler
ThePhiphler

This is a disease brought on by endless money printing. It is more or less explicit central bank policy across the world to not allow companies to go bankrupt, especially publicly traded companies, even if they can not pay down their debt. Thank your Fed, ECB, PBOC chairmen for their gift of zombie companies.

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Kenton dragon
Kenton dragon

Well if you lend me money at 0% interest I'll prop up my shares, pay back some investors "dividends",buy myself a mansion and supercar, sell my stocks, hide it offshore and then claim bankruptcy😁..its call taking a risk in the business world😌

11 dager siden
GBM0311
GBM0311

Lololol it's great because they are just taking a page out of the US government playbook. Just spend more today and get tomorrow to pay for it. Never pay taxes or interest that way cause losses and inflation are your friend when you're in the negative.

12 dager siden
alejandro casalegno
alejandro casalegno

If you are waiting the Nikola trucks or WeWork profits.............make the analisys in the Theranos machine...............

12 dager siden
Lubos Kovac
Lubos Kovac

Another reason to go for comunism.

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Kc
Kc

Don’t pay taxes. That’s “Clever Accounting “

14 dager siden
john patrick
john patrick

Slammed with 4 completely irrelevant ads so advertisers are being robbed running 8 minutes in the first 5:14 mins of the show. Youtube blows so I dumped out.

15 dager siden
Helle Fyre
Helle Fyre

Just get into politics. Get your kid involved in a company in a foreign country.. Burisma might be hiring.

15 dager siden
Alex Thomsen
Alex Thomsen

Who cares if the business makes money as long as the price of the stock is rising

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Vicious
Vicious

calling it now; these companies will cause the next 1929/2008 financial crisis.

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Ice Matt
Ice Matt

Lierally an ad every 2 minutes. I understand you have to eat, but the video is borderline unwatchable

19 dager siden
Andrew Bow
Andrew Bow

I wish my economics teachers had the ability to economics like this channel does.

19 dager siden
PhilfreezeCH
PhilfreezeCH

Amazon go brrrr!

19 dager siden
Seki Koh
Seki Koh

Are these unprofitable companies paying much less tax than regular companies?

19 dager siden
Respawn_Point
Respawn_Point

It's a good thing that cheap money being invested in profitless companies with bad fundamentals has never crashed a market before. He said, buying up gold stocks.

23 dager siden
Ereder
Ereder

hi tesla

25 dager siden

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