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Technology Stocks : DSP Group: an incredible bargain? -- Ignore unavailable to you. Want to Upgrade?

To: Dieter R. Wasserbaech who wrote (935)	10/14/1998 7:22:00 PM
From: Jonathan Babb	Respond to of 1055

I liked the answer. The point of a stock buyback programs is to substitute for paying dividends, not support the stock price. If the market temporarily bubbles (like from March to July this year), I can see a company putting off buying back stock for a short period, but rushing in to buy stock in a market fall seems risky. What if the markets continue lower and credit becomes tight? I would want to hang onto my cash. I might even discontinue the buyback in a down market if there appeared to be a credit crunch in the future. I like to see companies paying out a percentage of their earnings in stock buyback programs in about the same ratio as you would expect them to payout a dividend in the past, before the tax advantage of capital gains. This percentage can vary depending on how much growth they want to fuel. Jon