Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Barrons in this article certainly side-stepped the controversial nature of these buybacks, a topic that exercised many on this board when I brought it up.
It's an enormous mis-allocation of capital. Disgusting! As you research various stocks (say, the stocks in your stock MFs), do yourself the shocking favor of clicking on the insider trading tab/link. There you will see just where these buybacks are happening: conversion of stock options held by directors and co. executives, then immediately sold. Not the 10-20K per person we're used to seeing; it's 100, 200, 500K+ per person, over and over, company after company. And from where is the money coming to do these buybacks? Cash on the books? In some cases, yes, but increasingly it is coming from cheap corp debt issuance. So out the door walks the cash (as shareholder, it's your cash, the product of your investment) and you're left with .... the debt to service.
@Old_Joe Are you sure? I could swear I read somewhere or other that someone once said it was supposed to be. I guess they're "enhancing shareholder value" yada-yada-blah-blah-blah; I just didn't realize it applied so much to their shares uber alles.
Comments
http://www.bloomberg.com/news/articles/2015-03-03/company-cash-bathes-stocks-as-monthly-buybacks-set-record
@BenWP You might like this:
https://hbr.org/2014/09/profits-without-prosperity