No. of Recommendations: 7
In the article Damodaran says,
"It is true that some companies buy back stock at high prices, and if that is your reason, as a shareholder in the company for taking a stand against buybacks,
I have a much simpler and more effective response than banning buybacks. Just sell your shares back and be on the right side of the redistribution game!"
LOL!
So if you own META, or GOOG, or Cisco, or Amazon, or Pepsi, or Nvidia, or American Airlines, or AT&T or the S&P500, or any of the hundreds of companies that are literally incinerating capital by buying back overvalued shares (some with borrowed money!)....you should, "Just sell your shares back and be on the right side of the redistribution game!"
OK wonderful advice, thanks for that.
In 2018, according to Yardeni Research, borrowing funded 56% of that year's record buybacks. (Insane right? Look it up.)
In 2022 buybacks reached a record high of $1.2 trillion. Yeah, that's trillion with a T! And in 2022 the Buffett indicator was in the 180%-200% range. (Overpay much?)
That's the range that Warren has called "playing with fire"...
YouTube: Play With Fire (Mono) (The Rolling Stones - Topic) 