SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Ask Michael Burke
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Cynic 2005 who wrote (8119)12/27/1996 11:42:00 AM
From: Sid Turtlman   of 132070
 
Mohan: Profits (as a percent of sales) are at what I believe to be
unsustainable levels. Simple explanation - most companies, instead of
waiting for business to stink before laying off employees, have been
doing that even during the recent good times. That is great for profits
now, but when a recession does come along, whenever that may be, the
traditional way of defending profits - laying off deadwood and closing
down bad divisions - won't be available, because it was done already. So
when the next recession comes along you will see some surprising
negative operating leverage - i.e., companies reporting sales 5% less
than expected, resulting in profits 75% less than expected - and they
won't have a good plan for restoring profits because they are already
operating with skeleton staffs. (One thing they certainly will do in
those circumstances is preserve cash by cancelling all orders for
capital goods, including the world's best servers made by the world's
best computer company, whose name escapes me right now.)
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News