[Annotated] The Santa clause

A festive memo from^[각주:1] one of America’s leading chief executives to his lieutenants^[각주:2]

Dear Team, I trust you are looking forward to your vacations and that the spirit of love and generosity infuses^[각주:3] your family gatherings^[각주:4]. I also hope that this spirit will be left next to the Christmas tree when you return to work at this incredible company on January 2nd. Because 2018 is going to be the year when America Inc loses its head after^[각주:5] a decade of iron financial self-control^[각주:6]. And I am not going to make that mistake. Let me drop some festive wisdom^[각주:7]: when everyone else is throwing money around like Santa, it is best to behave like Scrooge.

During my workout at 5.10am this morning my trainer played U2. I love Bono for his personal advice on charitable^[각주:8] giving^[각주:9], but he is also a perceptive^[각주:10] lyricist^[각주:11]. “It’s a beautiful day” captures the mood in business^[각주:12]. Third-quarter results blew the roof off^[각주:13]. Earnings per share for^[각주:14] the S&P 500 are 23% above the last peak in^[각주:15] 2007. The world economy is rocking. At this week’s digital town halls^[각주:16] our sales teams in^[각주:17] Houston and Guangzhou reported record industrial orders. President Macron—whom I first met in 2008 when he was a junior spreadsheet guy at^[각주:18] Rothschild—tells me that even the Europeans are doing high fives.

The triple adrenaline shot of a stockmarket boom, synchronised global growth^[각주:19] and a worldwide passion for technology is both exciting and dangerous for corporations. Let’s not kid ourselves^[각주:20]. People will get sloppy about^[각주:21] allocating^[각주:22] capital^[각주:23]. My worst blunders were^[각주:24] in the boom years of 1998 to 2001, when we caught the internet bug too early, and between 2006 and 2008 when we invested too much in energy. Every boss is tempted to splurge^[각주:25] right now, cheered on by^[각주:26] politicians, economists and investors.

I waded through^[각주:27] Washington last week. The tax bill will boost our profits by 9%. After I got mad at Mitch McConnell, he reinserted^[각주:28] a helpful clause that^[각주:29] will save us money in Cayman. Our firm will pay only a small levy to^[각주:30] repatriate cash^[각주:31] held offshore^[각주:32] and will benefit from accelerated depreciation^[각주:33]. Like most companies, we’ve also noticed a better attitude from our regulators: unlike the Obama years, I get my calls returned. There is a price, though. Many Republicans are sincere—they believe in “trickle down^[각주:34]” economics and expect us to invest more. A few even expect us to revive the rustbelt^[각주:35]. When I saw the president he gave me his hardest sell yet on^[각주:36] building a new plant in Iowa. Ivanka had to turn on Fox News to^[각주:37] distract him.

The intellectual climate^[각주:38] has turned pro-investment. Most economists claim firms are chronically^[각주:39] underspending^[각주:40]. I know that 67.384% of that is BS. Our job is not to flip-flop^[각주:41] according to their models but to deploy capital over^[각주:42] economic and technology cycles. Gross corporate investment^[각주:43], at 12.4% of GDP, is in line with^[각주:44] the 50-year average, and we have invested a steady share of sales. Still, they are right that many big firms have the resources to let their hair down^[각주:45] and let capex^[각주:46] rise in line with record profits^[각주:47].

Investors are pivoting, too^[각주:48]. The same Wall Street analysts that used to say the “L” in long-term stands for^[각주:49] “loser”, and begged us to buy back more shares two years ago, now hint we should seek to grow. For the first time in years the shares of firms that invest heavily are no longer underperforming^[각주:50], according to Morgan Stanley. Buy-backs are out of style^[각주:51]: just $128bn was spent on them last quarter, 20% less than in the same quarter in 2015.

Twenty years ago CEOs would have looked at all this and asked “how much” more they should invest. But to understand investment today you have to do a deep dive^[각주:52] and answer four other questions: who, what, where and when? Our firm used to be America’s third-biggest investor, just behind ExxonMobil. But “who” invests has changed: Alphabet has taken our place (including research and development). Tech firms are competing with incumbents^[각주:53] and using their dirt-cheap cost of^[각주:54] capital to invest on their behalf^[각주:55]. They account for 24% of investment by S&P 500 firms. My buddy Satya Nadella at Microsoft says if we shift our IT centres to his cloud division, we’ll save $700m of investment a year. If I can trust Microsoft not to steal our data, he’s got a deal.

“What” we invest in has changed, too. Like most firms, a quarter of our budget goes on intangibles^[각주:56], including software. When I grew up AI was an acronym used in animal husbandry^[각주:57], but I know our firm needs to make mid-size bets on new technologies like artificial intelligence. Tech cuts both ways^[각주:58], though: I’m nervous about building factories that may quickly become obsolete^[각주:59].

As for “where”, it’s simple: everywhere. We’re fairly typical for a big American firm, with 40% of our sales and investment abroad. Given that emerging markets will outpace^[각주:60] America, that may rise. Other countries are being protectionist^[각주:61], too. President Xi’s people are clear that if we want full access to China’s domestic market^[각주:62], we have to invest more there. We have to pay to play.

Lastly, “when” should our firm invest more? Now, in the 101st month of a recovery? The longest-ever expansion, in 1991-2001, lasted 120 months. I have got to admit, it’s a tough call^[각주:63].

A turkey shoot in^[각주:64] 2020

Here is my prediction^[각주:65]. Expect a surge in^[각주:66] corporate investment in 2018, with nominal spending^[각주:67] rising by up to 10%, equalling the boom in^[각주:68] 2006. There’s just too much pent-up energy^[각주:69]. But it will be more skewed towards^[각주:70] intangible assets^[각주:71] than in the past, and while it will help the economy, it won’t revive the rustbelt.

As for our firm. I get it, I know our investment committee is besieged^[각주:72]. We need a new campus in Austin, our software is buggy and fleet management^[각주:73] wants Teslas. But leadership is about prioritization, not saying “yes” to everyone. If you doubt it, repeat two words after me: Jeff Immelt. The former boss of General Electric was so soft on^[각주:74] capital allocation the firm has turned to jelly.

So here’s the deal. Santa isn’t coming to this company. We’ll wait as our rivals’ budgets swell^[각주:75] and the tech boom turns into a bubble^[각주:76]. When recession^[각주:77] strikes in 2019 our balance-sheet^[각주:78] will be pristine^[각주:79] and we’ll expand when others are weak. In Christmas 2020 this incredible firm will enjoy the biggest stocking ever^[각주:80].

1. festive ; [형용사] 축제의, 축제일 같은; 흥겨운, 법석대는(jovial), 들뜬, 즐거운. [본문으로]
2. lieutenant ; 3. 부관, (상관(上官)) 대리. [본문으로]
3. infuse ; 2. [타동사][VN] (격식) (속속들이) 스미다[영향을 미치다] [본문으로]
4. family gathering ; [명사] 가족 모임. [본문으로]
5. lose one's head ; 당황하다, 허둥대다. ;; 냉정을 잃다[흥분하다] [본문으로]
6. self-control ;[U] 자제력 [본문으로]
7. drop ; 12. HINT | [타동사][VN] ~ a hint 암시를 주다[흘리다] [본문으로]
8. charitable ; 2. 자선을 베푸는, 궁핍한 사람들을 돕는 ;; 3. 너그러운 [본문으로]
9. giving ; [명사] 증여, 기부 [본문으로]
10. perceptive ; 1. (호감) 통찰력[직관력] 있는 [본문으로]
11. lyricist ; [명사] 작사가 ;; 미국·영국 [|lɪrɪsɪst] [본문으로]
12. capture ; 5. FEELING/ATMOSPHERE | (사진이나 글로 감정・분위기 등을) 정확히 포착하다[담아내다] [본문으로]
13. blow the roof off ; 흐름상 "최고치를 경신하다, 호황을 누리다" 정도의 의미 [본문으로]
14. earnings per share ; [증권] 주당 순익 ((순이익을 발행된 평균 주수(株數)로 나눈 것; 略 EPS)) [본문으로]
15. peak ; 1. [주로 단수로] 절정, 정점, 최고조 ;; 참고 off-peak [본문으로]
16. town hall ; [명사] (영국의) 읍사무소[시청/시공회당] [본문으로]
17. sales team ; [명사] 영업팀 [본문으로]
18. spreadsheet ; [명사] 스프레드시트(숫자, 문자 데이터가 가로 세로로 펼쳐져 있는 표를 입력하고 이것을 조작하여 데이터 처리를 할 수 있게 되어 있는 컴퓨터 응용 프로그램의 하나) [본문으로]
19. synchronize ; ~ (sth) (with sth) 동시에 발생하다[움직이다]; 동시에 발생하게[움직이게] 하다 [본문으로]
20. kid ; 2. ~ sb/yourself ~를/스스로를 속이다[착각하다] [본문으로]
21. sloppy ; (-pi·er; -pi·est) 3. [구어] <일·복장 등이> 너절한; 적당히 얼버무린 ;; 4. 나약하고 감상적인, 실없이 잘 우는, 잔 불평이 많은 [본문으로]
22. allocate ; ~ sth (for sth) | ~ sth (to sb/sth) | ~ (sb/sth) sth (특정 목적을 위해 공식적으로) 할당하다 [본문으로]
23. capital ; 2. MONEY | [sing.] 자본금, 자금 [본문으로]
24. blunder ; [명사] (어리석은) 실수 [본문으로]
25. splurge ; [타,자동사][VN, V] ~ (sth) (on sth) (비격식) 돈을 물 쓰듯 쓰다 [본문으로]
26. cheer on ; 1.to encourage somebody, especially somebody in a race or competition, by shouting [본문으로]
27. wade through ; (수동태로는 안 씀) (지루하고 시간이 많이 걸리는) ~을 처리하다[읽다] ;; …을 간신히 끝까지 읽다(=read through with difficulty). [본문으로]
28. reinsert ; [타동사] 다시 끼워 넣다[써넣다] [본문으로]
29. clause ; 2. (법적 서류의) 조항, 조목 [본문으로]
30. levy ; [U, C] 1. (…에 대한) 세금[기부금, 벌금 따위] 부과, 징수, 강제 할당[on]; 징수액, 부과금. [본문으로]
31. repatriate ; 2. (상업) (돈・수익을) 본국으로 송금하다 [본문으로]
32. offshore ; 3. (상업) (돈・기업 등이) 역외의(세율 및 법 규제가 유리한 지역에서 운용하는) [본문으로]
33. accelerated depreciation ; (회계) 가속 상각(加速償却)(제도) ;; 고정자산에 투자된 금액을 조기에 회수하기 위하여 특정고정자산에 대한 감가상각을 통상의 감가상각보다 짧은 기간에 행하는 것을 말한다. [본문으로]
34. trickle down ; (국가의 경제 시스템을 통해) 부유층에서 서민층으로 흘러가다 [본문으로]
35. rustbelt ; [명사] (특히 美) 러스트 벨트(특히 미국 북부의 사양화된 공업 지대) [본문으로]
36. hard sell ; [sing.] 강매 ;; 참고 ; soft sell [본문으로]
37. turn on ; (기습적으로) ~를 공격하다[~에게 달려들다] [본문으로]
38. climate ; 3. [C] 분위기, 풍조 ;; (어떤 지역·시대 등의) 사조, 풍토; 분위기, 정세; (회사 등의) 기풍 [본문으로]
39. chronically ; [부사] 만성적으로, 질질 시간을 끌어 [본문으로]
40. underspend ; (under・spent , under・spent) 돈을 덜 쓰다, 지출을 불충분하게 하다 [본문으로]
41. flip-flop ; (~ped; ~·ping) 1. [구어] 태도를 돌변하다; 방향전환하다 [본문으로]
42. deploy ; (부대)를 전개하다[시키다]; (사람을) 배치[동원]하다; (자원·논의 따위를) 효율적으로 활용하다 [본문으로]
43. gross investment ; [명사] 총투자, 개략투자 [본문으로]
44. be in line with ; ~와 일치하다, 비슷하다, 연결되어 있다 [본문으로]
45. let one's hair down ; 솔직하게[터놓고] 말하다; 보다 친밀하게 되어 솔직하게 이야기하기 시작하다 ;; 머리를 풀다, (비유) 경계심을 풀다, 스스럼없게 되다(=lose one’s inhibitions) [본문으로]
46. capex ; Capital expenditure or capital expense (capex) is the money a company spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land.[1][2] It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof. [본문으로]
47. record profits ; 기록적인 수익 [본문으로]
48. pivot ; 2. (…에 의해) 결정[좌우]되다[on, upon]. [본문으로]
49. stand for ; [동사] …을 상징하다, …을 의미하다; …을 대표하다; …을 옹호[찬성]하다; …에 입후보하다; …을 용납하다. ;; 동의어 ; symbolize; represent; advocate; run for; tolerate. [본문으로]
50. underperform ; [동사] (예상보다) 기량 발휘를 못하다[실적을 못 내다] [본문으로]
51. out of style ; 유행이 지난. [본문으로]
52. do a deep dive ; 흐름상 "심도깊게, 깊이 있게 알아보다" 정도의 의미 [본문으로]
53. incumbent ; 2. 현직[재직]자, 재임자; [미] 현직 의원 ;; 3. 거주자, 점유자 [본문으로]
54. dirt-cheap ; [형용사, 부사] (美구어) 터무니없이 싼[싸게], 헐값의[에]. [본문으로]
55. behalf ; [U] 이익; 원조, 자기편; 지지 [본문으로]
56. intangible ;[명사] 만질 수 없는 것; (intangibles) 무형 자산, (상거래상의) 신용. [본문으로]
57. animal husbandry ; [명사] (전문 용어) 축산업 [본문으로]
58. cut both[two] ways ; 두 가지 상반된 효과[결과]가 있다 ;; (토론 따위가) 양쪽에 통하다, 선으로나 악으로나 다 쓰이다 [본문으로]
59. obsolete ; 1. 쓸모없게 된, 안 쓰이는 ;; 2. 진부한; 시대에 뒤진 [본문으로]
60. outpace ; [타동사][VN] 앞지르다, 앞서다 [본문으로]
61. protectionist ; [명사] 보호 무역론자 [본문으로]
62. domestic market ; [명사] 국내 시장 [본문으로]
63. tough call ;(chiefly) A choice or judgment which is difficult to make, especially one involving only two alternatives. ;; 힘든 결정 [본문으로]
64. turkey shoot ; [명사] (비격식 특히 美) 한쪽이 월등히 나은[상대가 안 되는] 싸움[경기] [본문으로]
65. prediction ; [C , U] 예측, 예견 [본문으로]
66. surge ; 2. ~ (in/of sth) 급증, 급등 ;; 참고 ; upsurge [본문으로]
67. nominal ; Nominal means very small or far below the real value or cost, and in finance, this adjective modifies words such as fee, interest rate and gross domestic product (GDP). A nominal fee simply refers to a fee that is below the cost of the service provided or presumably easy for a consumer to afford. When describing concepts such as interest rate or GDP, nominal refers to their unadjusted rate, value or current price without taking elements such as inflation, seasonality, loan fees, interest compounding or other factors into account. In contrast to nominal, real expresses the value of something after making adjustments for various factors to create a more accurate measure. For example, the difference between nominal and real GDP is that nominal GDP measures the economic output of a country using current market prices, and real GDP takes inflation into account to create a more accurate measure. [본문으로]
68. equal ; 2. [타동사][VN] 맞먹다, 필적하다 [본문으로]
69. pent-up ; 1. (감정・에너지 등이) 억눌린 [본문으로]
70. skew ; 1. [타동사][VN] 왜곡하다 [본문으로]
71. intangible asset ; 무형 자산 ((특허권·영업권 등)) [본문으로]
72. besiege ; [vn] 1. 포위하다, 에워싸다 ;; 4. (공포·의혹·불안 따위가) …을 엄습하다, 괴롭히다. [본문으로]
73. fleet management ; (e-비즈니스) 기업 차량 관리 [본문으로]
74. be soft on ; 1. …을 부드럽게 다루다, ~에 관대하다 [본문으로]
75. swell ; 3. ~ (sth) (to sth) 증가[팽창]하다, 늘다; 증가[팽창]시키다, 늘리다 [본문으로]
76. turn (from sth) into sth ; (~에서) ~이 되다[~으로 변하다] [본문으로]
77. recession ; 1. [C , U] 경기 후퇴, 불경기, 불황 [본문으로]
78. balance sheet ; A balance sheet is a financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. The balance sheet adheres to the following formula: Assets = Liabilities + Shareholders' Equity [본문으로]
79. pristine ; 1. 완전 새 것 같은, 아주 깨끗한 ;; 미국∙영국 [|prɪsti:n] [본문으로]
80. stock ; 흐름상 크리스마스에 선물을 얻기 위해 걸어 놓는 양말을 뜻하는 Christmas stocking 과 기업의 주식을 뜻하는 stock 을 이용한 언어유희로 보임 [본문으로]