Corporate Investing in a Time of Record Cash

How to invest in an evolving economy?

As businesses -- many of whom have record levels of cash on hand --  look for new opportunities, readers and experts chime in on where to put corporate investments.

In a recession, business hold fast, reducing costs and overhead while waiting out the slow economy. The return of the economy heralds a return -- often very much like to the one that existed before the recession -- albeit with some new efficiencies.

The Great Recession is different.

By the start of this year, we saw businesses reaching the conclusion that business-as-usual was not going to happen. There is a realization that oil and energy prices are now fundamental to decision making at all levels. (One example is the auto industry, which fought fuel efficiencies for years. Now they are entering new markets with innovative cars, and bringing back buyers who have bought foreign for years.) Limitations in global outsourcing -- including customer dissatisfaction and the costs of doing business abroad --are making board rooms re-examine policies once held as best practices. There is talk about supply-chain efficiencies that are broader and more complex than ever before. Companies with the technologies and skills to manage that process are becoming the new Google and the new Microsoft.

Amidst the on-going malaise at the federal level, states and local communities are moving ahead with water and air quality policies. Innovative leaders are leaping ahead of those regulations, developing new products that manage resources better, either in the manufacturing process or as used by consumers.

Yet, with all this opportunity, at the beginning of January, Reuters reported that Apple Computer (APPL) had $93 Billion in cash, as well as long and short term investments. In September of 2011, the Wall Street Journal reported that corporations had a higher share of cash on their balance sheets than at any time in nearly half a century, with the Federal Reserve reporting that non-financial companies had more than $2 trillion in cash and other liquid assets, up more than $88 billion from the end of March of last year.

There are many reasons that businesses chooses to hold onto cash, including concerns over bank lending practices. In order to examine the future, however, we took the opportunity to ask the question: What could Apple do? 

In this issue we feature:

  • Measure, Analyze Decide | SAP measures to give board rooms more data.
  • Invest in Innovation | New innovations and the companies that are investing them.
  • U.S. Factory Report | On-shoring, exporting and other surprising results from manufacturers.
  • 2nd Generation Ethanol | The new ethanol is better technology, uses better sources and can be part of a local economy.
  • Solar is Big Business for Business | Not just rooftops, unlikely businesses invest in financing, M&A, and new technologies.​
  • Design | Futuristic proposal for a South Korean “Power Center”.
  • Alloterra | Growing grass for profit and energy.
  • Hybrids | Commercial hybrids for fleets and industry.