The Opposite of Stock Repurchases

Generally, corporations avoid excess cash especially when it is low yielding. Their job is to generate cash and deploy it to generate a return on assets which with leverage becomes a return on equity. Using cash to buy back stock makes sense when you think your stock...

Thoughts on Buybacks

Apparently, many people think buybacks are an inappropriate use of corporate funds and should be banned when receiving a bailout, which is part of the passed Covid Bill.  I do not have a problem with that portion of the bill; buybacks are appropriate when you have no...

QE Distortions

From The Wall Street Journal, The Fed Has Hurt Business Investment by Michael Spence and Kevin Warsh; During the past five years earnings of the S&P 500 have grown about 6.9% annually. As the table nearby shows the current profit picture pales in comparison to...