Cash isn’t King

As companies dealt with the challenges of the most recent recession, many hoarded cash and strengthened their balance sheets.  According to CFO Magazine, cash reserves for U.S. nonfinancial companies now total nearly $2 trillion.  With the economy seemingly on slightly better ground, are they now ready to deploy this cash rather than save for the next rainy day?
 
Forty one percent of nearly 1,000 financial services, consumer and industrial products, technology, media and telecommunications banking and securities, and energy and resources industry professionals said their companies plan to dip into their cash reserves and resume spending in 2012.  The
Deloitte survey results showed that planned uses of cash include acquisitions, capital budget increases, share repurchases, one-time dividend payments or dividend increases.  Even Apple, who has amassed an incredible $98 billion in cash after years of spending reluctance, may be reconsidering its strategy.
 
Interestingly, one-third of those surveyed by Deloitte believe that investors want them to conserve their cash instead of spending it.  This didn’t appear true last April when one hedge fund manager told the Associated Press that “We’ve been in a bunker mentaility for too long,” and the Chairman and CEO of Legg Mason commented that, “The best use of cash is to deploy it.”  Or in a survey conducted by The Boston Consulting Group in May, where investment community respondents noted that the time had come for companies to start utilizing cash to create shareholder value by investing in profitable growth opportunities or returning it directly to shareholders.
 
Only time will tell if the purse strings have been loosened, but it seems as if that’s just what may be needed to help stimulate the economy.

 

Laurie Berman, lberman@pondel.com
 
 

Enslaved to Technology

Is technology an addiction? Well, spend a few hours around my 17-year-old who treats her iPhone like it’s her first born and you’ll have your answer.
 
On a typical weeknight, I come home after a day connected to my computer and “Smart” phone to find the family in the following positions:
 
Wife: On computer with headset or Skype-ing with someone on the other side of the globe.
 
Son: Sitting on couch watching TV, playing games on iTouch with laptop nearby.

Photo Credit: wikipedia.com

 
Daughter: Holed up in bedroom video chatting on her MacBook Air while Tweeting at speed that crushes the sound barrier.
 
These are the reasons I could enthusiastically relate to Bill Davidow’s recent article in The Atlantic, “Technology Addiction Will Lead to Our Evolution or Enslavement.”
 
After reading Davidow’s piece, I’m not so sure that machines enslaving the human race someday is so far-fetched. I’m certain Newt “Fly Me to The Moon” Gingrich might agree.
 
Anyway, one of the most captivating points Davidow makes is that “for the past 150,000 generations, evolution has designed our minds, brains, and body to live in only one world at a time. When we attempt to live in two simultaneously – the physical and the virtual – the consequences can be very serious.”
 
Davidow highlights how technology can be a marvel (laptops in the operating room) and a menace (driving while under the influence of texting), and ponders whether or not Orwellian control over our technology use might actually be a good idea.
 
Frankly, if I had more time, I’d consider it, but I’m too busy answering my daughter’s text, while simultaneously on hold with customer service about my Android phone, Tweeting about last night’s dinner and drafting my blog item on my iPad.

 

– Ron Neal, rneal@pondel.com