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Pastimes : Ask Mohan about the Market
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To: Cynic 2005 who wrote (13930)2/9/1998 5:45:00 PM
From: IceShark  Read Replies (1) of 18056
 
Mohan, Very good timing on AOL; and good luck. -g-

I'm wondering if any of the eggheads have done studies/phd theses on the upward effect on the market of companies shifting (excess) cash distributions from dividends to stock buybacks? It certainly makes sense for taxable investors by converting current ordinary income to deferred capital gains, to all tax status investors by pushing up stock price through increased demand (as long as the stock price isn't too looney to begin with), etc. Now we can add GM to the list of converts to the trend.

I don't think the market run is anywhere near over, much less in February, as my good friend Zeev is thinking. This cash shift description is becoming the new mantra in the main stream press and stock touts as to why the equity market (US) is the only real place to salt away your wealth. The investment community has to be admired in dreaming up plausible, no - persuasive - reasons why the high equity returns will continue. Asia is going gangbusters and will dramatically increase profits .... Asia is not much of our customer base and buying components from them just got dramatically cheaper and that is great for overall profits .... Asean investors need a secure place to salt away their excess wealth (USA) .... US companies will be buying back shares...

Regards, DWW
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