Markets Insight: US companies must use cash piles for capex

by | May 1, 2013

Originally published at Financial Times | May 1, 2013

The first-quarter earnings season is well under way and the S&P 500 has hit a record high. US companies are earning more per dollar of sales than at any time in history, and total corporate profits stand at around 13 per cent of GDP, the highest on record.

Chief executives have reason to feel smug, but cannot be complacent, and now face a fork in the road. To earn their pay from here, they will be forced to invest. The alternative, sitting on piles of cash, is one that ultimately leads to uncompetitive businesses with sinking profitability.

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Filed Under: Economics

About the Author

Alex is the co-founder of Jackson Hole Economics, a non-profit research organization which provides analysis of key topics in the political economy, and develops actionable ideas for how sustainable growth can be achieved

Alex is also the co-founder and Chief Executive Officer of Novata, a mission-driven and technology-powered public benefit corporation designed to improve the process of Environmental, Social, and Governance (ESG) diligence in the private markets. Backed by a unique consortium, which includes the Ford Foundation, S&P Global, Hamilton Lane and Omidyar Network, Novata has created an independent, unbiased and flexible platform for the private markets to more consistently measure, analyze and report on relevant ESG data.

With two decades of experience in the financial and non-profit spaces, Alex has led a number of sustainable growth and transformation efforts. He is a former CEO of GAM Holdings and Chief Investment Officer of UBS, and also served as the Chief Financial Officer of the Bill & Melinda Gates Foundation, where he created the foundation's strategic investment fund.

Alex was a White House Fellow and an assistant to the Secretary of Defense. He is a member of the Board of Directors of Franklin Resources, Inc. (Franklin Templeton), a member of the Council on Foreign Relations, Chair of the Advisory Board of Project Syndicate and a board member of the American Alpine Club. Alex also writes regularly for various news outlets and is the author of Babu's Bindi and The Big Thing: Brave Bea, both children's books.

Alex holds a JD from Columbia Law School, where he was a Harlan Fiske Stone Scholar, an MBA from Columbia Business School, and a BA from Princeton University.

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