When governments become top shareholders, corporate focus shifts from pleasing customers to securing political favor and appropriations. R&D budgets are reallocated to lobbying, and market competition devolves from building the best product to playing the policy game most effectively, strangling innovation.

The South Sea Bubble wasn't just a market mania; it was enabled by government corruption. Directors secretly gave shares to government officials who, in turn, had a direct financial incentive to keep the share price rising, regardless of the cost to the nation. This highlights how state actors can be complicit in creating systemic risk.

The blanket assumption that State-Owned Enterprises (SOEs) are poor capital allocators is flawed. Investment success depends on the price paid for the risk, not on avoiding SOEs entirely. Some SOEs are effective capital allocators, while many private companies are not, making a case-by-case analysis essential.

With the long-term cost of capital rising to 8-11%, half of large US companies now cannot deliver returns that exceed this benchmark. This fundamental business challenge underscores the high stakes for enterprises considering AI, as they cannot afford to cede their competitive edge to model providers.

The first corporations in Ancient Rome were private companies contracted for state functions like tax collection and equipping armies. As their power grew, they bribed senators, encouraged wars, and backed politicians who dismantled the Republic, providing a stark historical warning about the alignment of corporate and state interests.

China's economic structure, which funnels state-backed capital into sectors like EVs, inherently creates overinvestment and excess capacity. This distorted cost of capital leads to hyper-competitive industries, making it difficult for even successful companies to generate predictable, growing returns for shareholders.

The idea of an infinite holding period is a myth, even for great companies. After Buffett bought Coca-Cola, it eventually traded at 58x earnings in 1998. By not selling, Berkshire endured a meager 4.5% annual return for the next 27 years, proving that even great businesses become sells at exorbitant prices.

Contrary to popular belief, the doctrine of shareholder primacy is a recent invention. For most of corporate history, companies were chartered for a specific public benefit, and subverting that mission purely for shareholder profit would have been considered a crime.

Contrary to popular belief, widely accepted corporate governance principles often lack supporting data. Research indicates these practices are destructive, while mission-driven alternatives consistently show superior performance across financial, loyalty, and other key metrics.