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.
I am inclined to prefer paying off debt. However, I know; although not a CPA; that features of company debt can be an advantage to some point when it comes time to do the taxes.
As to time periods; I look at everything from current and going back 10 years. The true picture may not always be obtained; at least with an active managed fund, as styles and holdings may have varied. But, one may still have some guage as to performance when placed against a benchmark that is of value for a particular fund type..........this is a tough measurement to guage.
Of particular note is the recent past; and that the 3 year charts soon will not have the low points of the market melt that began in 2008. Hard to believe that almost three years have passed from the bottom point.
A side view of share buybacks reminds me of the mantras that come and go in the business cycles; that are slightly related. We would get the big speeches about working our butts down to the tailbone area...........too build "shareholder value". The only value that became reflected were the stock options passed to those near or at the high throne of enlightenment. Yikes, give me a break, please.
There was an article (can't find it now), where the peak in buybacks in 2008 were also near the peak in the market. I'd be more interested in dividends (not hard/fast rules - I'd be interested in buybacks if I had considerable confidence in management, and that is rare.)
I think as a whole, stock buybacks tend to be a terrible use of funds. I tend to shy away from companies that are using large amounts for buybacks. First thing you should think is why can't they find a better use of funds? Second and probably the biggest issue is CEOs have shown that they have no clue when their stock represents a value. Stock buybacks peaked at the 2000 market peak and cratered just as the market did. Then again buybacks rose right along with the market and once again peaked before the 2008 market crash. This article doesn't show the buybacks leading up to 2000 but it does show the more recent example http://finance.fortune.cnn.com/2011/07/11/stock-buybacks-buy-high-and-sell-low/
Buy backs are bad and are an indication that management is lazy. Remember just because a company announces a buy back doesn't mean it has to follow through with the buyback. Pay out a dividend make me want to own your stock for the long term-- a buyback is just an invitation for traders to dive in and out on the news with no long term commitment from management.
Comments
As to time periods; I look at everything from current and going back 10 years. The true picture may not always be obtained; at least with an active managed fund, as styles and holdings may have varied. But, one may still have some guage as to performance when placed against a benchmark that is of value for a particular fund type..........this is a tough measurement to guage.
Of particular note is the recent past; and that the 3 year charts soon will not have the low points of the market melt that began in 2008. Hard to believe that almost three years have passed from the bottom point.
A side view of share buybacks reminds me of the mantras that come and go in the business cycles; that are slightly related. We would get the big speeches about working our butts down to the tailbone area...........too build "shareholder value".
The only value that became reflected were the stock options passed to those near or at the high throne of enlightenment.
Yikes, give me a break, please.