US Companies Are NOT Holding Too Much Cash

US Companies Are NOT Holding Too Much Cash

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Over the last few weeks, we have been considering the causes of the rising cash levels at US companies and last week I looked at what academia had to say about it.

Surprisingly, I realized that the question asked was the wrong one.

The question to ask shouldn’t have been: “Why are US companies currently holding so much cash?”

But: “Why did US companies hold so little cash in the 1995-2003 period?”

Article by Dr. Andrew Stotz, Become A Better Investor



About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.