Throughout the recession and fiscal cliff debate, CEOs and other business leaders have echoed the same thing over and over, that "uncertainty" about taxes, the economy, or regulation prevents them from investing or hiring.
All of that despite the fact that corporate balance sheets and cash reserves have been historically high. ??
In an extensive Q&A with Connie Guglielmo at Forbes, AT&T CEO Randall Stephenson argues that uncertain times create the best opportunities to invest:?
"...I?ve learned an important lesson over time from two guys, Carlos Slim and Ed Whitacre. And that is when you see people pull back that?s usually a good time to go in. When you hit difficult times, people tend to pull back, entrench, and it creates a bit of a vacuum. And those have always been the times that we?ve invested the most, and it?s always been the times when the returns were the greatest."
We did it in 2008 and 2009. The whole world contracted and pulled in. We invested more in wireless than we?ve ever invested in the history of our company."
And it's not just that others are pulling back. Stephenson has acted on the idea that the combination of that reality with historically low interest rates make this an opportunity that we may never see again:
"..You sat there in December and said, ?We are in a unique moment in time from a historic standpoint. That is, interest rates are at levels that I believe in my lifetime we probably don?t see them again. It?s just a once in a lifetime opportunity. And so what do you do with the business from a shareholder standpoint ? do you rethink capital structure? If you?re going to make big investments, you ought to do it now while capital availability is at these prices."
His attempted purchase of T-Mobile didn't go through, but the company made very large investments in expanding its LTE and other capacity anyway. ?
Sitting back until everyone else jumps back in and potential acquisitions, new hires, and everything in between become more expensive doesn't seem like a winning strategy. The danger of over committing?is always present, but waiting carries its own penalty.?
Find the full interview at Forbes
NOW READ:?CEO Went On A Hiring Spree For Top Talent During The Recession?And It Paid Off
Source: http://www.businessinsider.com/att-ceo-on-investing-during-recessions-2013-1
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