Hello Reginald,
Your, "if one cannot find such an investment, than it would be worthwhile to buy back stock at bargain prices, this should alert the investor that management CAN NOT grow the company while simultaneously growing corporate value, therefore must result to reducing the amount of shares outstanding to increase shareholder value. This does not bode well in the face of an industry that is growing like a weed. If IBM cannot increase proportionate market share while simultanesouly corporate value, then it is losing market share on an aggregate basis."
and
"This is my point exactly. If management is not willing to put money into its own business due to a lack of an acceptable return, then why should I do it as an investor? There are but so many shares to buy back."
YES Reggie!!! EXCELENT!!! RIGHT ON!!!.
Makes me feel that I'm not alone in the investment world.
Unfortunately for IBM, the situation is worse and aggravated by the fact that IBM's shares were bid up artificially by the recent popularity of the DOW index funds. Therefore, IBM has been buying their shares back not at "bargain prices" but rather at inflated prices above IBM's intrinsic value. If small investors should ever take their money out of DOW Index funds, the leverage will be on the downside and dramatically work against IBM. Therefore these DOW Index Fund managers must have loved IBM for its announcement on Monday, but how long can IBM prop up the DOW?
Thanks for this post, I would appreciate it if you posted it on the IBM and INTC threads.
Regards,
Jules |
