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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (16450)	8/9/2002 4:28:57 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 42834

SB, You understand the point that one action doesn't require the other, so, to my mind, that cannot be considered a cost of the options. i agree they aren't necessarily linked. however, when they are, there IS a cost. that is my point. to say there definitively is no dollar cost isn't true. sometimes there isn't. lots of times there is. to the tune of billions. real dollars. ibm comes to mind. When a company buys back stock at the market it is not suffering an economic loss or expense, but exchanging value for value. The shareholders see a neutral present effect with the cash loss being exactly offset by the anti-dilutive effects of buying back the shares. It is no more a cost than if it bought a dollar with ten dimes. What there is, is a change in the future exposure to stock price risk vs cash risk. Regards, Don