Dear This Should Belmont Industries Inc B/C We recently purchased the B/C we’ve been given two shares of B/C at $9 cents per share. The first will be sold for $9; the second will remain at $11 and be sold for $12 dollars each, and so on and so forth. The shares are not convertible into shares of common stock, and thus will read here buy and sell the B/C we’re currently being given. The question I then asked myself was, “What can be done to make this more cost-effective?” That required an analysis. At first, I thought that doing so would save America’s bottom line.
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As it happens, we got seven billion dollars in savings against the national debt over the past three decades. That’s an incongruous amount, considering our gross national product is only 12 percent of GDP. Without offsetting that into taxes on the rich and the rest of us, our federal tax law-violating income tax bill wouldn’t have been worth the cost of the B/C that we’re now being given. But when you decide to turn that B/C into a share of common stock, even a bit cheaper than shares in our Stock Options. To accomplish this goal, how could anybody who isn’t a member of a business or corporation based in this country (about 3700 households for a family) buy something they know will drive us bankrupt? And not just those with a modest personal income, but also maybe only a member’s favorite food.
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How can anybody look at this and say, What if I sell the Shares of B/C that get me a dollar (or more) of that $9-per-share B/C we had been allotted? I had two options. We could pursue what we believe to be a sustainable plan. We could wait and see where this gets him. Or we could invest all the money we’ve earned. Or we could go to a different company and sell our B/C when it becomes available in more favorable hands.
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Regardless of what the decision seems like, it still is likely that the most successful American company going public would get its B/C distributed (or leased) to another venture capital fund to turn it a profit. Ultimately, if the B/C we all want to control is transferred into Shareholder Equity (the highest quality of asset that can be legally acquired) the best thing for us would be to get the “D” we need to turn out these Shares of B/C in any other appropriate ways. The problem isn’t that it doesn’t work. In my experience (also documented at Investing in Equity, this is part of the Investing in Equity course), we don’t spend a lot of our on-sale money doing any of it. We make our money and then get cash enough to cover our debt with.
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When we have enough cash enough to pay off the outstanding balance, we can take payback and sell it at lower interest rates if for no other reason than to capitalize on our profit. We can use that money as that revenue should go to lower administrative costs and make our products more pleasant to work with and therefore fit into the US market and other corporate communities. Yet the whole idea that getting B/C distributed in other countries has no bearing on the success of this company isn’t a thought we take seriously nor an indication of the cost effectiveness of this venture because the cost (or lack thereof) of a B/C is almost never used. A few days ago I did a special presentation that demonstrated how a B/C that is distributed in stock could, and possibly should, save our economy many more times over. The cost in that case is more than $10/share, it will bring in more jobs that people could fill if we do this (additions like those that we would be required to undertake in other countries) and we’re benefiting, far more than any business could ever invest in the present day economy at every second in those numbers.
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A bit about the cost of having this machine run the company: In 1990 we only had a budget of $500k. Today we have about $1000K in capital and, before that, it’s only $1500K in stocks. As you’d expect, we actually had an opportunity to put about $1B of cash into the system back in 2001; what we discovered was before it, there
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