Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (22826)	8/18/2002 11:06:59 AM
From: smolejv@gmx.net	Read Replies (1) of 74559

Good afternoon Jay (it's same day same reading just a different time zone, but it's the same world) - what was a new dimension to me: "... dividend payout as a percentage of total earnings remained near 40% in the 1972-1998 period with some minor deviations. However, share repurchases went from 3% of total earnings in 1972 to 5% in 1980 before skyrocketing to over 50% in 1998. This change is nothing less than a complete revolution in corporate finance. In the pre-1980 period, more than 50% of earnings were retained to build corporations’ equity base. By 1998, less than 2% of earnings were retained to increase equity. Instead, these earnings were used to repurchase stock to counter the dilution caused by stock option grants to top management. In effect, common shareholders were left with a progressively smaller amount of equity and a rapidly increasing amount of debt..." You raise up your head And you ask, "Is this where it is?" And somebody points to you and says "It's his" And you say, "What's mine?" And somebody else says, "Where what is?" And you say, "Oh my God Am I here all alone?" Because something is happening here But you don't know what it is Do you, Mister Jones?

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