> Doesn't this just mean that companies know when they are overvalued and take advantage of that overpricing by issuing more stock?

Yes. This is also how AMC continuously messed with WSB: "You pump, we dilute. Thanks for your cash infusion."

optimism

very confusing indeed. 

I also suppose that _is_ the lesson in much investing outperformance. Excessive risk (i.e., you get lucky) or private information (e.g., pizzas https://stacker.news/items/1008955/r/denlillaapan)

denlillaapan

a growing body of work suggests that corporations, far from being passive observers, are some of the market’s most effective arbitrageurs. In 2000 Malcolm Baker of Harvard University and Jeffrey Wurgler, then of Yale University, found a tight connection between firms’ net equity issuance and subsequent stockmarket returns. Years in which companies issued relatively more stock were typically followed by weaker market performance. More tellingly, companies seemed to issue precisely when valuations were rich, and especially when other frothy signals, such as buoyant consumer sentiment, were drawing attention.

I'm a bit confused by this.  Doesn't this just mean that companies know when they are overvalued and take advantage of that overpricing by issuing more stock?

I don't know if that qualifies as making them "good investors" since they have access to private information that others don't?

econ

Who Are the World’s Best Investors? (The Economist)

> a growing body of work suggests that corporations, far from being passive observers, are some of the market’s most effective arbitrageurs. In 2000 Malcolm Baker of Harvard University and Jeffrey Wurgler, then of Yale University, found a tight connection between firms’ net equity issuance and subsequent stockmarket returns. Years in which companies issued relatively more stock were typically followed by weaker market performance. More tellingly, companies seemed to issue precisely when valuations were rich, and especially when other frothy signals, such as buoyant consumer sentiment, were drawing attention.

I'm a bit confused by this.  Doesn't this just mean that companies know when they are overvalued and take advantage of that overpricing by issuing more stock?

I don't know if that qualifies as making them "good investors" since they have access to private information that others don't?

