When I was in B-school, in the 70s, we talked about the risk to companies of carrying a lot of leverage. Basically, it works great, as long as things are going up. Leverage also amplifies moves on the downside, and the company doesn’t have a financial cushion to fall back on.
You’re comparison of a “trading” mentality is a good shorthand for it. Seems that the Shiny management strategy today has two rules:
1: see money
2: take it, all of it, don’t leave anything for your successor.
How long after Welch left did GE hit the wall? How long after McNerney left did Boeing hit the wall? (retired as CEO July 2015, retired from the BoD March 2016. First 73 crash that exposed their shoddy design October 2018. Shoddy assembly and QC at the 78 plant exposed 2019)
This is “good business practice” in Shiny-land. Is Eddie Lampert stabilizing and securing the future of K-Mart and Sears? Nope. He’s looting them. Did the PE group that bought Art Van Furniture in Michigan secure the future of the company? Nope, they looted it and dumped it into bankruptcy in three years.
Steve