GE Smith

Where Have All the Buybacks Gone?

Thanks to the author for the comments and link to the press release.

This makes me think of an analogy - the squirrels in my backyard, also during Q4 of 08, were burying their nuts in preparation for the winter. It seems a lot of companies (both fat and thin) were/are burying their cash in anticipation of a long cold economic winter.

My first thought was that the large drop in buybacks might be sector specific (financials, consumer discretionary) but as the data shows, it's across the board. Sure some sectors display larger drops (Telecom, Cons Disc, Financials, Utilities - this last one surprises me) but even the "small" drops for Industrials and Materials is still of the order of 50%.

So what triggered the start of the buyback boom in '04 anyway?