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Guest Message by DevFuse

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How investors may be getting fooled by buybacks.


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7 replies to this topic

#1 OFFLINE   onan38

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Posted 11 March 2014 - 10:19 PM

NEW YORK (AP) — If you're puzzled why the U.S. stock market has risen so fast in a slow-growing economy, consider one of its star performers: DirecTV.    http://www.businessw...led-by-buybacks



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#2 ONLINE   Laxguy

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Posted 12 March 2014 - 08:02 AM

Buybacks have been happening since the NY stock exchange started trading under the Buttonwood tree. There can be very good reasons for buybacks, but buying solely to increase EPS is not among them. Besides, EPS alone is meaningless. From the article:

 

"The vast majority of our shareholders are sophisticated investors who not only use EPS growth but other important measures to determine the success of our company," says Darris Gringeri, a spokesman for DirecTV.


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#3 OFFLINE   JosephB

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Posted 13 March 2014 - 02:30 PM

1. If you're dumb enough to fall for this, then you deserve to lose your money. If you don't understand the relationship between number of shares outstanding, the price of shares, and the earnings per share then you probably shouldn't be investing in the stock market.

2. they do have a point about share buybacks taking money away that could be put into capex, but that is a whole other issue from stock buybacks being some kind of "fraud"

3. this is how companies return money to shareholders. companies are sitting on mountains of cash. this gets that cash out of corporations and back into circulation.



#4 ONLINE   Laxguy

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Posted 13 March 2014 - 06:05 PM

1. If you're dumb enough to fall for this, then you deserve to lose your money. If you don't understand the relationship between number of shares outstanding, the price of shares, and the earnings per share then you probably shouldn't be investing in the stock market.

2. they do have a point about share buybacks taking money away that could be put into capex, but that is a whole other issue from stock buybacks being some kind of "fraud"

3. this is how companies return money to shareholders. companies are sitting on mountains of cash. this gets that cash out of corporations and back into circulation.

If who is stupid enough to fall for what? Without antecedents, your statement is indecipherable. 


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#5 OFFLINE   JosephB

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Posted 18 March 2014 - 09:42 PM

If who is stupid enough to fall for what? Without antecedents, your statement is indecipherable. 

 

The article claims stock buybacks are a "scam". What else would I be referring to? 

 

Sorry that this thread was a 9th grade grammar exam. I'll rephrase:

 

If you're dumb enough to fall for stock buybacks boosting the earnings per share, then you deserve to lose your money. If you don't understand the relationship between the number of shares outstanding, the price of shares, and the earnings per share you probably shouldn't be investing in the stock market.



#6 OFFLINE   James Long

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Posted 19 March 2014 - 02:23 AM

Please leave the insults outside of our forums ...

As far as the overall topic - all investors should look at the entire picture before deciding to invest in a company. How that company makes their money and how much money can be made in investing in that company.
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#7 OFFLINE   Satelliteracer

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Posted 19 March 2014 - 01:30 PM

Warren Buffett seems to be a pretty smart guy on this stuff.


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#8 ONLINE   Laxguy

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Posted 19 March 2014 - 01:47 PM

Really???!! I guess a few billions is a pretty good indication....

 

 

 

:hurah:


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