Tom Armistead

First Step to Fix the Markets: Let Shareholders Vote on Buybacks

I agree on Macy's - I had a small position which became a very small position. After they got the waiver on their covenants and the stock rallied for a minute I took what was left of my money and went on to other ideas, primarily out of disgust at the 3 billion I think it was somebody said they spent buying back shares and now they need the money badly.

TESS I owned in 2006 and got out in early 2007 a very happy memory, During that time they used their line of credit and bought back a block of shares at prices well less than what I sold out for.

The situation as it stands today is if a company needs equity capital they can't get it because they will be shorted mercilessly while trying to raise the money and nobody in their right mind will put their money in front of that process. Financial companies in particular almost need a separate warchest so they can defend themselves when attacked.

Allstate is another company that has a history of buying back their shares that I think adds to their value.

You are correct that buybacks are more often a waste of money than not, I still think therer are exceptions to the rule.




On Jan 01 07:42 PM icandoitdon wrote:

> by the way....
>
> i looked at a chart of TESS.....
>
> at the end of september 1994 the share price stood at $11.33 adjusted
> for a 3:2 split in nov 06. it reached a high of 31.38 in February
> 07. it's current price is $8.71. it has never paid a dime in dividends.
>
>
> during the 14 year period, the stock had one two year period where
> it tripled in value before collapsing in price. if you made money
> that's great. but the stock buyback had utterly nothing to do with
> it.
>
> thanks for providing just one more example of ignorant managements
> squandering precious capital because they think they have an undervalued
> stock.
>