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Basics of stock buybacks - Views on News from Equitymaster
 
 
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  • Jul 12, 2013

    Basics of stock buybacks

    Here is today's recommended reading list from Equitymaster...

    Does Bernanke think he is God?
    Ever since the financial crisis broke out in 2007, central bankers have played a very active, or shall we say hyperactive, role in trying to revive the economy. Trillions of dollars of cheap liquidity has been pumped into the financial system. The cheap money has done little to prop up the economies. But it has rather created several asset bubbles across the globe. Increasing market intervention by central bankers has betrayed the capitalistic ideals that have been the basis on the economic success in the past. How is this changing the investing dynamics? Are economic fundamentals no more important? Or is the world at a very dangerous juncture? Read on to know more... (Minyanville Media)

    Should companies save their employees from Wall Street?
    One of the most respected companies in the world safeguarded its employees from the Wall Street sharks just when they were set to become easy targets. Should other companies follow this example and insist investing discipline amongst employees? Read on to find out. (StockTwits Inc)

    Beware of 4 common mistakes of a bad investor
    While investing can be prone to mistakes, it is often advised to keep a checklist of mistakes so that one can avoid them. This interesting article on Fool.com shares some common mistakes, which if ignored, can make one a really bad investor. (The Motley Fool)

    Are hedge funds past their days of glory?
    Hedge funds were built on the idea that a smarter guy with a better computer can make miracles possible by uncovering inefficiencies in the market. Hedge fund managers were more popular for buying their yachts before the financial crisis struck in 2008. Since then the glory of hedge fund managers has been fading faster than musicians do. Are the hedge funds well past their days of glory? (Bloomberg)

    Basics of stock buybacks
    Stock buybacks have their own benefits. Not only do they indicate management's faith in the company but buy backs are also EPS accretive. However, they are also used to artificially inflate prices. For instance, an announcement of buyback may result in increasing stock price but in the end buyback may not culminate. There are various other pitfalls attached to it. Read on to find out the true benefits and drawbacks of stock buy backs. It can help investors in gauging the true intention of this signaling mechanism which is used widely by managements. (Pro Right Line Corporation)

      Tanushree Banerjee (Research Analyst), is the editor of ValuePro, The India Letter, and Stock Select, Equitymaster's oldest recommendation service. She is also the editor of Equitymaster's most popular newsletter read by over 200,000 subscribers, The 5 Minute WrapUp. Tanushree started her career at Equitymaster covering the banking and financial sector stocks along with scrutinizing the RBI policies. And over the last decade, developed our research processes that have helped us pick out various multibaggers, across all sectors. A firm believer of "safety first" when it comes to investing, Tanushree closely follows the investing philosophies of Warren Buffett, Jeremy Grantham and Joel Greenblatt.

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    This article is for information purposes only. The link in this article will let the User leave www.equitymaster.com and proceed to the linked article. The User's use of each such site is subject to Terms of Use on www.equitymaster.com and other terms of use, if any, contained within each such site. Any data and charts if used, in the article have not been authenticated by Equitymaster and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views, if any in the linked article are not of Equitymaster. Equitymaster will not be responsible for any loss or liability incurred to any person as a consequence of his or any other person on his behalf taking any investment decisions based on this article. Please read the detailed Terms of Use of the web site.

     

     

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