The rationale behind this idea is that such companies:
• They have better conditions to face the adversity of a moment of a stagnant economy.
• They offer to investors greater flexibility regarding business decisions and potential investments.
• They can take advantage of sector consolidation opportunities, or investments in other segments.
• The investor’s future plans and projects can be thought and oriented with a focus on the long term and not on the short-term emergency cash flow needs, as their high liquidity mitigates these.
• They provide greater comfort for the company’s management and employees, creating an environment of less internal tension that tends to be beneficial for the operations of the corporation.
With these factors in mind, it is quite possible that the shares of such companies could perform relatively better to their peers in times of crisis.
Another point is that, if the fair price of a share comes from the amount of cash generated by the company, the shares of companies that today have a larger share of money may depend less on future expectations. In other words, part of its value derives from cash that already exist, and not just from what will be generated in the future.