The new tax legislation will encourage companies to repatriate much of the cash they now hold outside the U.S., much of which could find its way to stock repurchases, writes Mark Hulbert in a recent Barron’s article. But the expected surge in buybacks, he argues, “isn’t going to extend the bull market’s life longer than it would have lasted otherwise.” Hulbert cites the first research regarding share repurchases (published in the 1990s) which found that… Read More
A periodic look through the archives of the greatest investor in history In Berkshire Hathaway’s 2011 Letter to Shareholders, Warren Buffett offered his thoughts on why he sometimes hopes that his holdings will decline in value, using IBM as an example. Below is an excerpt from the letter.
While many bears have said that a boom in share buybacks has been a drag on growth and a way of masking weak earnings and revenues, top strategist Kenneth Fisher says that’s nonsense.
Spinoffs, share buybacks, stock splits, insider purchases — investors’ ears often perk up at the mention of these corporate moves. But are they really reliable stock indicators? In a recent piece for The Wall Street Journal, Liam Pleven and Joe Light take a look. While a good deal of research shows that companies that engage in these actions can outperform the market, Pleven and Light also advise caution. “Investors can’t know all the considerations and… Read More