No. of Recommendations: 16
Here's an unpopular opinion or three (buy one, get two free!). A share count that decreases steadily, year after year and quarter after quarter, indicates a company that throws off a lot of cash, run by managers who are lazy, stupid, dishonest, or more interested in virtue signalling than doing right by their shareholders. They may be using repurchases at high prices to hide stock-based compensation, or justifying them under the cloak of "signalling confidence," or they may have an inflated idea what the company is worth.
Well, based on 10 recs (at this writing) I'd say it's not an unpopular opinion at all.
And surely there are lots and lots of examples of the problems you describe, but since this thread is about Berkshire (mostly) and Apple (a little), I'd say your generalization is too sweeping. Berkshire had to be prodded into buybacks, which have since proceeded apace (by one of the best capital allocators in history, I think).
And Apple seems to have a disciplined approach to it; I'm not sure what else they would do with the 'excess' funds except spend it foolishly (see: Google) on projects that will never come to pass, or perhaps double the dividend (temporarily, if things should slow down). It doesn't appear that they're camouflaging outrageous stock grants to executives nor merely stacking up dollar bills in a private room for stripper parties, so where's the beef?
One of the things about buybacks is that - like everyone else from hedgies to mutual fund managers to you and me - you have to decide when a stock is overvalued or not, and not everybody gets it right, and nobody gets it right all the time. So sometimes a buyback is a bad idea, but sometimes it *is* a good idea. In the two cases at greatest discussion in this thread, I'd have to say 'good idea.'
(At this rate Apple will be a private company in a decade or two. Wouldn't that be odd?)
