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Feature Article by Terry Coxon
Absent the state’s involvement in the workings of the marketplace, an
investor’s central task would be to evaluate companies for their
ability to efficiently produce and market what customers want.
Shrewdness at that one task would lead to the profits investors are
looking for. And there would be other consequences.
The stocks of
companies that succeeded in convincing investors that they had the right
stuff (primarily through good performance) would be bid up. Stocks of
companies that failed to make their case to investors would tend to
drift down, and any company whose stock drifted low enough would become a
takeover target. A takeover would replace underperforming management
with a new team of officers and directors – individuals picked by the
people who laid out their own money to buy enough shares to control the
company.
That’s how things work when the government isn’t a player
in the process. It’s a marvel of efficiency and impartiality. Managers
who serve in
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