Objectively intelligent.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

We weren't talking about Boeing, we were talking about airlines. They are *all* going under without government help. Is that bad management? Not if all of them go. Boeing is a different story, one of obviously poor management.

You say that businesses select buybacks "solely because it’s the lazy path of least resistance." You don't know that. For some, maybe, but cash is cheap. Businesses that see a way to innovate aren't struggling for cash to invest in something new.

You seem to think that buybacks somehow fool people into thinking the business is more valuable. Who is fooled? Institutional investors understand what's going on. If they think it's a bad strategy, they can sell the stock and it goes back down.

Why is anyone better off if a business chooses to pay a dividend instead of buying stock back?

https://fortune.com/2019/08/20/stock...debt-financed/

[Icky Thump]

https://www.nytimes.com/2020/04/23/o...us-states.html

BREAK IT UP: Secession, Division, and the Secret History of America's Imperfect Union is out August 18.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

https://fortune.com/2019/08/20/stock...debt-financed/

Not answering my question, but thanks for trying. Do you think I'm defending all stock buybacks?

[Tyrone Slothrop]

Originally Posted by Icky Thump

https://www.nytimes.com/2020/04/23/o...us-states.html

BREAK IT UP: Secession, Division, and the Secret History of America's Imperfect Union is out August 18.

But the Supremacy Clause gets in the way of all those plans.

[LessinSF]

Originally Posted by Tyrone Slothrop

Equally true of (1) and (2), my friend.

Partially agreed. Having a rainy day fund, i.e. option (1), however is not necessarily bad, as shown here. Bup option (3) is almost always worst given the evidence that stock buybacks do not generally add value equal to even paying a dividend.

[Tyrone Slothrop]

Originally Posted by LessinSF

Partially agreed. Having a rainy day fund, i.e. option (1), however is not necessarily bad, as shown here. Bup option (3) is almost always worst given the evidence that stock buybacks do not generally add value equal to even paying a dividend.

Having a rainy day fund is better for the company when the rainy day comes, but investors don't like it, because they get nothing from it. If things are otherwise going well and a company's management can withstand the pressure from investors, like Apple has, great. But when management is under pressure because they aren't outperforming other companies, (1) is not realistically an option because investors won't stand for it.

I don't understand the suggestion that buybacks add less value than paying a dividend. Neither adds any value. If a company has $50 million for either, it can either distribute $50 million to its owners in cash, or it can spend $50 to buy some of the owners out. The stock is worth more in the latter case because there's less of it, and the remaining owners each own more of the company. That's not creating value, but neither is paying a dividend.

To the point of Sebastian's Forbes article, some companies do these things with debt, especially lately, since debt has been so cheap. That seems like a way to try to fleece people into thinking that the company is performing well when it isn't. But the vice there is not the buyback -- a dividend achieved by taking on debt is just as suspect. The vice is taking on the debt in the first place when there's no good reason to do it.

Maybe someone from corporate finance can explain why there are circumstances when a company should borrow in order to distribute money to its investors.

[sebastian_dangerfield]

https://thehill.com/opinion/healthca...otal-isolation

[Icky Thump]

Originally Posted by Tyrone Slothrop

But the Supremacy Clause gets in the way of all those plans.

Not of secession. Take a few crates of tea, throw them into the river and put a fucking tank at the Holland Tunnel.

[Icky Thump]

Originally Posted by sebastian_dangerfield

https://thehill.com/opinion/healthca...otal-isolation

Someone made a good point in the comments. Have we ever found a vaccine for ANY Coronavirus?

[LessinSF]

Originally Posted by Tyrone Slothrop

I don't understand the suggestion that buybacks add less value than paying a dividend. Neither adds any value. If a company has $50 million for either, it can either distribute $50 million to its owners in cash, or it can spend $50 to buy some of the owners out. The stock is worth more in the latter case because there's less of it, and the remaining owners each own more of the company. That's not creating value, but neither is paying a dividend.

When the amount of gain per share to an investor in market value after the buyback is less than what could have been paid with the same money as a dividend. I understand that studies show this mostly to be the case with stock buybacks. i.e. not a suggestion.

[Hank Chinaski]

Conf to Coltrane- Michigan opened golf courses starting I think tomorrow.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

https://thehill.com/opinion/healthca...otal-isolation

The recent Stanford University antibody study now estimates that the fatality rate if infected is likely 0.1 to 0.2 percent, a risk far lower than previous World Health Organization estimates that were 20 to 30 times higher and that motivated isolation policies....

That's all I read. Why? Because the Santa Clara study has been shredded. But you don't need to understand the math involved. The death toll so far in New York City is 11,500 or so, from a population of 8,300,000. That's a death toll -- so far! -- of .139%. But people are still dying, lots, and no one thinks the entire population has been infected. A recent study suggests that 21% of the people in New York City has been infected, so multiply that death toll by 5 and you get a death rate of .693%, assuming no one else dies. But we also have reports that there are as many as 10x deaths in New York City as normal.

I have a full-time job that isn't this, though I do read the Twitter some (hi Hank), and even I know that this guy's fatality rate is way, way too low. Does he know? Is he misinformed, or trying to mislead? Did you think about this?

[Tyrone Slothrop]

Originally Posted by Icky Thump

Not of secession. Take a few crates of tea, throw them into the river and put a fucking tank at the Holland Tunnel.

The feds have more tanks. Try that, and a hundred and fifty years later you get this.

[Tyrone Slothrop]

Originally Posted by LessinSF

When the amount of gain per share to an investor in market value after the buyback is less than what could have been paid with the same money as a dividend. I understand that studies show this mostly to be the case with stock buybacks. i.e. not a suggestion.

Interesting. Neither is creating value, but that suggests that buybacks squander it. I gather that some companies don't like paying dividends because they think investors will expect them regularly. Maybe they prefer buybacks as a one-time thing?

[Hank Chinaski]

Originally Posted by Tyrone Slothrop

The feds have more tanks. Try that, and a hundred and fifty years later you get this.

Body shaming others is exposing yourself as deserving moral shaming.