[Boomer]

There is an old thread deep in the archives of the investment forum here. I started it in the last part of 2018. The topic was Stock Buybacks and I asked for opinions.

At the time, I said that I thought the running bull market was an artificial high because corporations were buying back their own stock with money from their corporate tax breaks. Corporate spending on buybacks had exceeded a trillion dollars.

That old bull kept on running through 2019. But, to me, it just did not feel right.

Just think — if corporations would have put more of those tax break dollars to better use — building, employing, improving the business models, there now would be something solid to show for it. Money on paper can be fleeting. All that money spent on stock buybacks? — much of it gone now.

The 2019 market, and most of the 2018 market, were built like a house of cards, propped up by buybacks. Unrestrained greed is bad economics. I do not feel like we will see the market collapse. What I do see the market doing illustrates that old saying, “Paybacks are hell.”

Cassandra Boomer