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Strategies & Market Trends : MDA - Market Direction Analysis

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To: Jacob Snyder who wrote (27825)	9/29/1999 8:56:00 AM
From: pater tenebrarum	Read Replies (1) of 99985

Jacob, good point, and i will come back to it later...not enough time now. let me just say that my own view of the stock buyback craze is a lot less sanguine as most people's. the reason: U.S. listed companies have incurred massive debts in recent years to finance these buybacks. in fact, corporate debt stands now at a post-depression record that towers mightily over any other previously recorded peak (details to follow later - in the meantime take my word for it that this is NOT good). obviously it is nonsensical to incur debt for buybacks when interest rates are on the rise and stocks are at nosebleed valuations. it all looks great as long as the bull market continues, but i doubt very much if shareholders' long term interests are really well served by this practice. all it takes for the stock buyback geniuses to look like they have squandered capital is for the economy to slow down sharply and the stock market to enter a bear phase. of course that'll never happen in the new era...<GGG> regards, hb

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