[Boomer]

Originally Posted by Ski Bum

Just some thoughts...

PE at 15... why? That might be an assumption for the market of yesteryear. Lots of things have changed. 18 and 21 are common numbers. At $4200 is 21.

6 month projection... Why? TOTV readers are long-term investors. And the market is forward looking one to five years.

Don't count on stock buy backs. The Brandon Bill taxes buy backs. Businesses will change their behavior.

I never did understand relying on charts of past data. Business is always evolving and very much moves on emotional behavior, especially in the short term. Maybe that behavior is reflected in past charts, I don't know. I really think the biggest pressure on the market right now is expectations for the upcoming election.

I am an MBA and MSIB (MS International Business)... not looking to argue, but explore ideas.

Because I want to ask you a pertinent question, I must ignore the fact that you could not resist dragging your politics into this with that knee-jerk, dog-whistle routine you did.

Here goes.......

Because of your claimed ed cred, it seems like you are the perfect person to ask for a clear explanation that I have been looking for......

Although I know my holdings have benefited quite nicely from stock buybacks, I still do not understand how they are a good thing......

Sure my share prices go up and, obviously, buybacks are really good for high level execs running those companies. But how are buybacks, especially under the 2017 corporate tax law change, not just plain greed in action at the taxpayers' expense?

I know much of the corporate tax cut money was used for buybacks, instead of investing it in cap improvements and employees.

While some investors, who think they're hot stuff, subscribe to that old, "Greed is good" routine, I always say, "Unrestrained greed is bad economics" -- and all those buybacks could be taking us small investors ridin' for a fall. (Should those buybacks have been restrained in the first place when the corporate tax cuts were unleashed?)

I really do want to know what you have to say about buybacks and how they are of actual benefit to the real business of business and not just playing with easy money.

I hope you will take my question seriously and explain the justification for buybacks helping the big picture -- not just making the big-time execs' net worth a whole lot higher -- and lulling us small investors into a false sense of what ours is really worth.

For small investors who are heavy traders, maybe they are having a good time with these buybacks. For me, it feels like buybacks create phantom wealth and that makes a longterm buy and holder like me a little skittish.

I tend to think big picture, and I have not been able to get my head around how all these recent stock buybacks are good for our big picture economics.

Thanks in advance for your explanation of how I am wrong about my concern over buybacks creating phantom wealth.

I remain,
Buy 'n' Hold Boomer