Skip to comments.Here Is The Mystery, And Completely Indiscriminate, Buyer Of Stocks In The First Quarter
Posted on 05/28/2014 1:04:37 PM PDT by Lorianne
According to the most recent CapitalIQ data, the single biggest buyer of stocks in the first quarter were none other than the companies of the S&P500 itself, which cumulatively repurchased a whopping $160 billion of their own stock in the first quarter!
Should the Q1 pace of buybacks persist into Q2 which has just one month left before it too enters the history books, the LTM period as of June 30, 2014 will be the greatest annual buyback tally in market history.
And now for the twist.
Unlike traditional investors who at least pretend to try to buy low and sell high, companies, who are simply buying back their own stock to reduce their outstanding stock float, have virtually zero cost considerations: if the corner office knows sales and Net Income (not EPS) will be weak in the quarter, they will tell their favorite broker to purchase $X billion of their shares with no regard for price: the only prerogative is to reduce the amount of shares outstanding and make the S in EPS lower, thus boosting the overall fraction in order to beat estimates for one more quarter.
(Excerpt) Read more at zerohedge.com ...
I love Common Core Math Standards.
Showing why those of the Freepers who kept posting Zero Hedge ‘The Sky is Falling’ articles on the Dow were wrong . . . the companies know more about what their stocks are worth than Zero Hedge does.
Surprised Zero Hedge has any followers left at this point.
I hate Common Core Math Standards.
With the crappy economy that the Obama regime has produced, stock buybacks may be the “investment” that gives the most return to these companies.
When it becomes clear that Obama is history (and replaced by a constitutional conservative president with a Republican Congress) after the 2016 election REAL INVESTMENT of capital will kick in and massive growth will ensue. Until then...stagnation (and possibly recession) continues.
Don't make me laugh.
There's every indication that Republicans are too shallow to realize that, whatever party is in power, the left control the mechanism of government, education, and the law, and that means they control the economy.
A Republican might sit in the White House, but reds will be sitting in all the other important chairs.
Actually, with the right constitutional conservative President (e.g., Ted Cruz) in power and leading a Republican Congress, much of the standing federal institutions and bureaucracies could be eliminated.
The Education Department could be abolished with education responsibilities left to the state where they belong.
Laws could be passed declaring that CO2 is NOT a pollutant and laws could be passed removing ANY responsibilities to manage waterways’ pollution from EPA management (e.g., move all that responsibility to the Army Corps of Engineers). Those are just several things (there are MANY others) that can be done to rein in the EPA’s jihad against the American economy and the American people & businesses. Funding for EPA staffing could also be vastly reduced so that they would have to RIF 90% of their sitting bureaucratic overlords. EPA could have its staffing payroll also vastly reduced by only allowing a SPECIFIED certain number of employees at each pay level. They would have to have massive down gradings with senior folks bumping more junior folks at lower levels. This couldn’t happen to folks more deserving of this treatment. Let most of them go out into the economy they have been trying to destroy and compete with the rest of us. Most of those that remain would have to do with lower pay and lower expectations of promotion possibilities.
True tax reforms/simplification could be undertaken followed by MASSIVE reduction in IRS staffing levels.
Much of the land that the Bureau of Land Management “manages” could be transferred to the state in which the land sits. The individual sovereign states and their citizens should be responsible for their lands.
I recently bought Apple - aapl
So far it is up about $20 from where I bought it.
It will split 7 to 1 in June.
IMO market is about 50-100% oversold. We are living in unprecedented financial territory where there basically is nada to invest in for what now is about a 2 year period. CD’s?... nope. Bonds?...Ouch. Decent divvy yielding stocks are artificially keeping the indices from the obvious correction this market needs. Add the government’s shell game of inflationary pressures and things really aren’t as rosy as they appear.