What makes a good share buyback? Barron's cites four factors: i) Shares are in a downtrend. ii) It's a long-term strategy and not a short-term fix ( = >1% share count reduction/quarter). iii) Shares are cheap based on price-to-book. iv) The company has a rising dividend. The stocks that pass the test? Wellpoint (WLP), Seagate (STX), Western Union (WU) and AT&T (T). [View news story]
From Seagates fiscal 2008 10-K:
"During fiscal year 2008, we repurchased approximately 65 million common shares through open market repurchases at an average price of $22.89 for a total of approximately $1.5 billion."
During fiscal 2009, as shares traded at prices well under $5, the company didn't buy back any shares.
I don't care what Barron's says, STX is stupid to buy back shares.
Once again in 2012 equity investors failed to keep up with their benchmark; the S&P rose 8.21%, while equity-fund investors made just 4.25%. According to Barron's, learning to sell puts when financial news turns dour is the antidote to underperformance. [View news story]
I tried selling puts in 2008, it didn't work for me...
I've seen it argued the other way - that banks preferred to make loans under terms and conditions that guaranteed they could not be repaid. The point was, they could charge exhorbitant interest and reap an ongoing stream of fees for refinancing after the resets.
Lax regulation permitted predatory lending. The resulting product was fraudulently bundled and sold as subprime RMBS.
Leaving the ideology out of it, which you and I sit on opposite sides of the center, the investment implication is, that huge amounts of demand were brought forward. As such, for CBP to assert that the trend line should be drawn such as to make 2002-2007 the norm is rediculous. The trend line should be drawn so as to make the period clearly visible as one of wretched excess.
Politically, the idea of reverting real GDP growth to a sustainable level is not popular, not popular at all, to anyone. Both sides agree, we should get back to an unsustainable level of growth, from there, it's ideological differences as to the preferred route.
Our financial system is not the best in the world. Far from it.
Just remember, the extremely severe recession we are slowly recovering from was caused by our financial system, specifically our too big to fail banks, our predatory hedge funds and private equity, and our stock market dominated by alogrithmic trading.
CPB wants to blame the slow recovery on "uncertainty" and Obamacare. I blame it on lasting damage to the 99% caused by the financial crisis. The crisis, as previously stated, was caused by Financialism.
A Safe And A Shotgun, Or Public Sector Banks? The Battle Of Cyprus [View article]
"A system in which tiny cadres of elites call the shots and the rest of us pay the price."
The US needs an economy and financial system that are run for the benefit of the 99%. That would include banks as heavily regulated utilities, taking in deposits and making loans, not speculating and manipulating with derivatives.
According to Sheila Bair, on page 81 (and 100) of her book, "Bull by the Horns", uninsured depositors in IndyMac took haircuts, while bondholders and big bank counterparties did not. She saw injustice, although she did mention the need to keep deposits less than or equal to the insured amount, which depositors could have done.
Many observers have pointed out that US depositors are still paying for the big bank bailout, due to the artificially low interest rates imposed by the Fed. Just speaking for myself, I went to cash in my discretionary account on Valentine's day, so now I have the money in an FDIC insured bank account, earning nothing. The beat goes on, and I'm paying, while Lloyd Blankfein, Jamie Dimon, John Paulson, etc., are not.
It really is only different in degree over here, the same rules apply as in Cyprus.
Regretfully much of finance relies on promises, conditioned on future occurences, and frequently more than can be delivered: there is some element of Ponzi scheme in it. At intervals, the question comes up, who will take the losses when we do a reset?
Those who view their winnings as altogether real (and totally theirs) when they are denominated in fiat currencies and in the custody of state sponsored institutions must eventually resort to political means to conserve their wealth.
It should be noted that in the US during the financial crisis depositors took losses, sometimes substantial and heartbreaking, like the mother who put the life insurance from her son who died in Afghanistan into a bank, thinking it was safe. I've been reading Sheila Bair's book, it's an eye opener.
Europe still has that problem, who is going to take the losses?
We have answered that question here in the US (for now), although it will come up again, when you least expect it.
Well Tim you are missing the point, it's OK to steal from robbers. Once money has been stolen once, from there it's in play, any way you can get your hands on it is legitimate.
Now clearly this Russion Oligarch money was stolen, from the people of Russia, so it's up for grabs.
Once you understand the basic principles here, the entire US financial system makes a lot of sense too.
I like the tables presenting Bull Runs and Bull Market Corrections. Particularly looking at the Bull Runs it seems as if there is a pattern there, diminishing returns and length of the run.
The author kind of loses me when predicting the final outcome, with the S&P 500 between 1,800 and 2,000 within two years. It seems like a great leap of faith, or a display of irrational exhuberance. I can buy into the lower end of that range, given a longer time frame.
'Sell In May And Go Away' Might Come Early This Year [View article]
Dave,
It just makes me think of the Sheriff of Wall Street, Eliot Spitzer, he consorted with high class call girls, none of those street corner types for him.
It's puzzling, in retrospect, why his peccadillos were such as to disqualitfy him from his duties as Sheriff. After all, Wild Bill Hitchcock did a fine job, and got his training collecting registration fees from brothels. Not to mention his wife once worked in one.
Spitzer would have gone in there with the Martin Act and sent a few of them to prison.
'Sell In May And Go Away' Might Come Early This Year [View article]
perplexedtex,
If you want to mellow out and forget it all happened, oh well, water over the dam, no use crying over spilt milk, boys will be boys, accept the world we have, accept the market we have, accept the leaders we have, nobody could have forseen it would end that way, it was totally unpredictable, just a strange random thing that happened to all those financial wunderkind, John Paulson is a great entrepreneur creating jobs, Bill Ackman is financial genius, Magnetar is God's gift to the investment community, Lloyd Blankfein is doing God's work, it was necessary to clean out the deadwood, a nice Deep Recession renews the national vigor and rejuvenates the economy and gets the entrepreneurial juices flowing and any other lullabies you can think of,
Go ahead,
It will greatly console you when investment decisions made in that frame of mind go very badly against you.
What makes a good share buyback? Barron's cites four factors: i) Shares are in a downtrend. ii) It's a long-term strategy and not a short-term fix ( = >1% share count reduction/quarter). iii) Shares are cheap based on price-to-book. iv) The company has a rising dividend. The stocks that pass the test? Wellpoint (WLP), Seagate (STX), Western Union (WU) and AT&T (T). [View news story]
"During fiscal year 2008, we repurchased approximately 65 million common shares through open market repurchases at an average price of $22.89 for a total of approximately $1.5 billion."
During fiscal 2009, as shares traded at prices well under $5, the company didn't buy back any shares.
I don't care what Barron's says, STX is stupid to buy back shares.
Once again in 2012 equity investors failed to keep up with their benchmark; the S&P rose 8.21%, while equity-fund investors made just 4.25%. According to Barron's, learning to sell puts when financial news turns dour is the antidote to underperformance. [View news story]
Why Is Everyone So Gloomy? [View article]
The essence of Financialism is, that politicians are willing and eager participants.
Why Is Everyone So Gloomy? [View article]
I've seen it argued the other way - that banks preferred to make loans under terms and conditions that guaranteed they could not be repaid. The point was, they could charge exhorbitant interest and reap an ongoing stream of fees for refinancing after the resets.
Lax regulation permitted predatory lending. The resulting product was fraudulently bundled and sold as subprime RMBS.
Leaving the ideology out of it, which you and I sit on opposite sides of the center, the investment implication is, that huge amounts of demand were brought forward. As such, for CBP to assert that the trend line should be drawn such as to make 2002-2007 the norm is rediculous. The trend line should be drawn so as to make the period clearly visible as one of wretched excess.
Politically, the idea of reverting real GDP growth to a sustainable level is not popular, not popular at all, to anyone. Both sides agree, we should get back to an unsustainable level of growth, from there, it's ideological differences as to the preferred route.
Why Is Everyone So Gloomy? [View article]
Our financial system is not the best in the world. Far from it.
Just remember, the extremely severe recession we are slowly recovering from was caused by our financial system, specifically our too big to fail banks, our predatory hedge funds and private equity, and our stock market dominated by alogrithmic trading.
CPB wants to blame the slow recovery on "uncertainty" and Obamacare. I blame it on lasting damage to the 99% caused by the financial crisis. The crisis, as previously stated, was caused by Financialism.
A Safe And A Shotgun, Or Public Sector Banks? The Battle Of Cyprus [View article]
The US needs an economy and financial system that are run for the benefit of the 99%. That would include banks as heavily regulated utilities, taking in deposits and making loans, not speculating and manipulating with derivatives.
Yes, Stealing Really Is That Bad [View article]
Many observers have pointed out that US depositors are still paying for the big bank bailout, due to the artificially low interest rates imposed by the Fed. Just speaking for myself, I went to cash in my discretionary account on Valentine's day, so now I have the money in an FDIC insured bank account, earning nothing. The beat goes on, and I'm paying, while Lloyd Blankfein, Jamie Dimon, John Paulson, etc., are not.
It really is only different in degree over here, the same rules apply as in Cyprus.
Yes, Stealing Really Is That Bad [View article]
I was being sarcastic and/or cynical.
Regretfully much of finance relies on promises, conditioned on future occurences, and frequently more than can be delivered: there is some element of Ponzi scheme in it. At intervals, the question comes up, who will take the losses when we do a reset?
Those who view their winnings as altogether real (and totally theirs) when they are denominated in fiat currencies and in the custody of state sponsored institutions must eventually resort to political means to conserve their wealth.
It should be noted that in the US during the financial crisis depositors took losses, sometimes substantial and heartbreaking, like the mother who put the life insurance from her son who died in Afghanistan into a bank, thinking it was safe. I've been reading Sheila Bair's book, it's an eye opener.
Europe still has that problem, who is going to take the losses?
We have answered that question here in the US (for now), although it will come up again, when you least expect it.
Yes, Stealing Really Is That Bad [View article]
Now clearly this Russion Oligarch money was stolen, from the people of Russia, so it's up for grabs.
Once you understand the basic principles here, the entire US financial system makes a lot of sense too.
Get Ready For A Correction [View article]
The author kind of loses me when predicting the final outcome, with the S&P 500 between 1,800 and 2,000 within two years. It seems like a great leap of faith, or a display of irrational exhuberance. I can buy into the lower end of that range, given a longer time frame.
'Sell In May And Go Away' Might Come Early This Year [View article]
Don't distract him with facts.
'Sell In May And Go Away' Might Come Early This Year [View article]
It just makes me think of the Sheriff of Wall Street, Eliot Spitzer, he consorted with high class call girls, none of those street corner types for him.
It's puzzling, in retrospect, why his peccadillos were such as to disqualitfy him from his duties as Sheriff. After all, Wild Bill Hitchcock did a fine job, and got his training collecting registration fees from brothels. Not to mention his wife once worked in one.
Spitzer would have gone in there with the Martin Act and sent a few of them to prison.
'Sell In May And Go Away' Might Come Early This Year [View article]
If you want to mellow out and forget it all happened, oh well, water over the dam, no use crying over spilt milk, boys will be boys, accept the world we have, accept the market we have, accept the leaders we have, nobody could have forseen it would end that way, it was totally unpredictable, just a strange random thing that happened to all those financial wunderkind, John Paulson is a great entrepreneur creating jobs, Bill Ackman is financial genius, Magnetar is God's gift to the investment community, Lloyd Blankfein is doing God's work, it was necessary to clean out the deadwood, a nice Deep Recession renews the national vigor and rejuvenates the economy and gets the entrepreneurial juices flowing and any other lullabies you can think of,
Go ahead,
It will greatly console you when investment decisions made in that frame of mind go very badly against you.
'Sell In May And Go Away' Might Come Early This Year [View article]
This whole thing is like arguing about blaming the pimp, the whore, or the john.
Sound investment advice would involve staying as far away as possible from any area where one the three is doing their thing.
'Sell In May And Go Away' Might Come Early This Year [View article]
Who controls the federales?
Banks. Bought and paid for long ago.