A Surprising Connection Between the Bull Market and Stock Buybacks

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Buybacks are more important than economic growth when it comes to equity-market performance, a study says

Buybacks are more important than economic growth when it comes to equity-market performance, study saysWhatever else you may think about stock buybacks, it’s quite likely that, but for them, the U.S. stock market today would be markedly lower.

That is the implication of a study published last year in the Financial Analysts Journal, “Net Buybacks and the Seven Dwarfs,” by three researchers from the Abu Dhabi Investment Authority. They found that net buybacks—the number of shares that companies repurchased across the entire stock market, less the number of new shares issued—explain the bulk of the intermediate- and longer-term...

 

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Companies that print stock screw shareholders via corporate QE. Buybacks benefit corporate insider shareholders selling stock grants back to the company at inflated prices, screwing other shareholders who could receive dividends, and the corp stuck with unpaid bonds. Self dealing

Anyone who isn’t in the top 10% of earners could tell you that. It’s time for some trust-busting.

Surprising to whom, exactly?

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