logo1
Follow me on Twitter  View our profile on LinkedIn  View our videos on YouTube  Like us on Facebook
 
December 14, 2018
Down markets are to be expected,
but this should really piss you off  
  
  
I'm talking about stock buybacks. When a company announces one, it's supposed to send a bullish signal that says "holy cow, the company is raking in so much cash that it could afford to spend excess cash on its own stock!"
 
Turns out some companies are faking it, like the ones that issue debt to buy back their own stock. There are also the ones, other fakers, that send this signal even though they really need to preserve their cash for a rainy day. Then again, all companies need to be ready for a rainy day, right?
    
The top 20 stock buyback programs in corporate America have spent $1.4 trillion on their own shares since the Great Recession ended. What excess return did shareholders get for this? Not much. 15 of the 20 underperformed the S&P 500. But that's only part of the story. A big percentage of these companies' performance over the last 10 years was horrendous. 
 
I'm not anti-buyback. I just have all the proof that I need to share with you my belief that there are really very few companies that should initiate them and that a lot of companies that did initiate them will find themselves short on cash when the next rainy day arrives.  
 
With the stock market down this year over worries about global growth, it appears that the rainy day may have arrived for some  companies that did buybacks. Are they prepared to ride out the storm?  It was a privilege to write this article, below, about this for CNBC. There's a lot more to it than just what I wrote above. It gives examples of widely held buyback stocks, shares opinions about buybacks from Jeff Bezos (Amazon) and Jamie Dimon (JP Morgan), tells you something about Apple that you probably didn't know, and will make you a more educated investor.
 
  
                 

 
 
If you're looking for a better way to save, invest, and plan for your retirement, click on the "Let's Talk" picture below to schedule a 15 minute phone call with me.
   

Click below  
 
   
 
Thank you for taking the time to read this!
Mitch
 
 
I opened ClientFirst Strategy, Inc. because I believe that the only way to help my clients potentially achieve their goals is by offering unbiased advice & investment management expertise. To my clients, thank you for your continued vote of confidence. If you are not a client but would like to explore the possibility of becoming one, I invite you to call me directly, visit my website, join my email list, and/or connect with me on social media.      

To view articles and original content, click HERE.

Your thoughts are valuable! Email me to let me know what you think of this. I'll reply!
MGoldberg@ClientFirstStrategy.com

   
All the views expressed in this report/commentary accurately reflect our personal views about any and all of the subject securities or issuers and no part of our compensation was, is, or will be, directly or indirectly related to the specific recommendations or views we have expressed in this report. This material is not intended as an offer or solicitation for the purchase of sale of any security or other financial instrument. Securities, financial instruments, or strategies mentioned herein may not be suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. Prices, values, or income from securities or investments mentioned in this report may fall against your interests, and you may get back less than the amount you invested. The information contained in this report does not constitute advice on the tax consequences of making any particular investment decision. You should consult with your tax adviser regarding your specific situation. Diversification is a method of managing risk and doesn't protect against loss in a down market. 
  
  

Mitchell O. Goldberg, AIF®, AAMS

President | Investment Professional

OSJ Manager 

 

ClientFirst Strategy, Inc.

290 Broadhollow Road, Suite 200 E, Melville, NY 11747  

(D) 631-920-6622 (F) 631-920-6624 (C) 516-818-0338

mgoldberg@clientfirststrategy.com | www.clientfirststrategy.com

      

MissionStatement:

To financially empower our clients so that they can achieve their most

important goals and to confidently plan for the future that they envision.

  

 

 

 

Securities & Investment Advisory Services Offered through NEXT Financial Group, Inc., member FINRA/SIPC.

ClientFirst Strategy, Inc. is not an affiliate of NEXT Financial Group, Inc.