Not quite true. The board (and by extension, the CEO) have a fiduciary duty to run the company in the best interest of the shareholders, which means maximizing returns, factoring in risk. Boards and CEOs have been sued for this. Now, the courts have taken a very wide broad interpretation of this, normally deferring to the board decisions. Most of the time when the shareholders believe the board is incompetent they either sell their shares (flight) or start a proxy war (fight)

Stock prices have nothing to do with "influence of the company climbs" - I am not even sure what that nebulas term mean.

Stock prices are based on the discounted value for future profits (well, Free Cash Flow if you want to be technical). To use your example, FB is currently valued at 80x of price to earnings (Yes, FB has profits). The reason why it is valued at 80x P/E instead of the S&P 500's P/E of 20x, it is because of expected growth in profits. Same thing when FB was first starting out and had losses. Who cares about current profits and losses? That is water under the bridge. When you buy a stock it is because of expected future profits.

Profits can either be defined as earnings (revenue - costs) or beter yet, Free Cash Flow (FCF) to shareholders.

As to your point, you are confusing profits (a flow variabole, found on the income statement) with wealth (found on the balance sheet.). The "profits" you are pointing to are being caused by low intrest rates which causes future earnings to be more vaulabe. This has nothing to do with the current disccusion, how should Amazon increase it future earnings – by paying it profits in cash to it's shareholders or by reinvesting in new, risky ventures. (The answer, of course, is both – the tricky part is finding the correct balance.)

To explain, the stock market has not jumped up because of increased profits or expected income profits (there is some of that). It is because the Price to Earnings level has jumped to 20x. A better way of saying this is that the Earnings to Price has fallen to 5%, tracking the fall in 10 year US Government bonds, down to a Coupon to Price Yield of 2.5%. As intrest rates fall, the discounted time value of future profits increase.

Bill Gross, from Pimco, explaining why 20x P/E ratio may not be high.
http://www.pimco.com/EN/Insigh...

You are not going to find it on Microsoft's website. By the way, everything I am stating falls under subjective accounting judgments.

Microsoft must disclose any relationship that is material significant. i.e., if the US Government bought 10% of their stuff they would have to disclose that. Of course, Microsoft sells nothing to the "US Government" – they sell to the executive branch, Social Security Administration, etc.

Microsoft must break out results along geographic lines. i.e. North America. Still not going to help us.

Microsoft has the option to break out results along product lines. Commercial, consumer, phone, etc.

But Microsoft does not have that type of relationship with the government to break out the results. (not saying it should not be done.)

I am a huge fan of passive index investing. However, that rests on the efficient mark hypothesis, which assumes the underlying stocks are being priced correctly. In order to do that you need to enter my fantasy world were 1. time machines don't exist, and the future is filled with risk and uncertainty and 2. people have varying risk profiles, some of which are lower than the generic risk profile of the S&P 500.

Without people pricing the individual securities correctly the aggregate index means nothing. Another way of say this is, "What price do you think MSFT should be?"

The S&P is expected to return what this year – 9.65% with a standard deviation (assuming a normal bell curve, which is optimistic) of 9.61%. Is that the right risk / return level for you? Maybe you want to invest in lower return but less risky stocks?

And on a side note, why chose the S&P 500 to invest in? Why not the Russell 3000 or the MSCI World Index?

Microsoft has returned 100% in the past 10 years, dividends reinvested, or 7.25% annually. S&P 500 has returned 118% with dividends reinvested, or 8.2%.

Which, in my mind, makes them kind of equal. Microsft is now considered a value company , so lower risk and lower reward. Adjust for risk and it looks better. Also, chosing the past 10 years is kind of arbitrary - why not 7 or 12 years.

Such things do exist. An early application was to power pacemakers. A automaker (can't remember if it was Ford or GM) even built a prototype. IIRC it uses thermal power from the decaying atoms.

And even those are not earning much money.

In a interview a few years ago with Ani DiFranco, the report was gushing on how much higher her margins, as a independent artist, than The Dave Mathew Band. Which made DiFranco laugh because The Dave Mathew Band was making so much more money. DiFranco pointed out that going independent was about freedom of control not about the money.

It is not about margins it is about market structure. Piracy has trained consumers that music should be cheap.

If we use a broad defention of "elements of communist china's government" you get 1/3. 60% of the stock is firmly in the public market.

oh, it gets worse than this. After MSFT fire everybody their headcount will still be higher than it was last year.

AMZN has lots of people in the warehouses. Redhat is more focused. FaceBook is more focused and has outsourced (depending on you define outsourcing) a lot of its processes. Etc. all are lousy companions.

No, I am not making that assumption. You are right the opponents seek to exploit their opponent's weaknesses, and just because one has a relative strength in one area does not mean you have an absolute advantage. I just think that in this area we have a large potential weakness that would be hard to shore up against China.

Asymmetric warfare. The US has more space assets and is more heavily dependent on them. If space warfare ever occurred the US would be hurt relatively more. And I have a hard time of thing of any decent countermeasures.

But it is headquartered in America, has factories in America, and is run like a real independent stock company. Not giving it a complete pass but let us try to put things in perspective.

No, but that misses the point. Apple wanted into the book market. The publishers wanted to break Amazon's hold on the market so they could jack the prices up. Thus the collusion began. Apple was a knowing participant in this collusion – that was their price of entry into the online book market.

I will point out that it was the publishers, not Amazon, which set the wholesale prices. When Amazon lowered its retail price below the wholesale price Amazon had to eat that loss. Which leads us too.

When customers get a better deal. Let's strike the illegal part. In America monopolies are illegal if they hurt the customer. There is nothing illegal in running a business with zero to no profits to grab market share, which is what Amazon was doing. If they were screwing around with their competitors or their customers - whole different story. (Needless to say this get subtle and complicated fast, dealing which market structure, etc.)

On fines verses damages – o.k. you got me there. Technically it is damages.

But it also goes to illustrate my point. I poked around a little, and while I could not find the exact language but it seems to fall squarely in the realm of opinion and satire. From a factual sense it was more correct than my post with the error on "fines".

Should we live in a society where we must always mind our Ps and Qs? A society where we need to consult lawyers constantly? At best we reduce conversation from a vibrant free flow of ideas into the lowest common denominator of bland and inoffensive language and ideas.