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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 683.47+0.6%4:00 PM EST

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To: Jacob Snyder who wrote (27825)9/29/1999 8:57:00 AM
From: Terry Whitman  Read Replies (1) of 99985
 
>If a company buys back 1% of its stock every year, isn't it returning the same amount of money to stockholders as if it has a 1% dividend?<

JS- That is what Warren Buffet says. In fact, he says it is better, because you don't have to pay taxes on it.

I am not so certain. Cash paid is cash paid. Investment back into the company can magically disappear in a falling market. But Warren sure has a lot more experience (and wealth) than I do- so you can make up your own mind on it. <g>

In summary- You have to agree that the buybacks are better for the LT investor in a rising market. However, that may not be the case in a falling one.
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