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What Are the Stock Buyback Benefits for Investors?

By , Associate Editor, Money Morning • @AlexMcGuire92 -

Retail investors can reap a number of stock buyback benefits.

But it's important to understand how buybacks work when determining if they're good for your portfolio.

Here's a breakdown of how a stock buyback benefits retail investors like you and me...

Company Stock Buybacks: Good or Bad?

By , Capital Wave Strategist, Money Morning • @WallStreet_II -

company buybacks

Company stock buybacks sound innocent enough: a stock buyback occurs when a company repurchases its own shares.

But the effect is insidious. Buybacks inflate paper profits without producing anything of tangible value -- which means earnings will be inflated and misleading to investors.

That's why Money Morning Capital Wave Strategist Shah Gilani accuses buybacks of being a large part of the "financial engineering" going on in U.S. markets right now.

In the following video, Gilani explains exactly how company stock buybacks work -- and how investors can make money in the buyback game:

Are Stock Buybacks Good for Investors?

By , Associate Editor, Money Morning • @JimBach22 -

are stock buybacks good for investors

Stock buybacks are hitting pre-recessionary levels, leaving observers wondering: Are stock buybacks good for investors?

Some companies may use it as a way to artificially inflate a stock price, although others may only be trying to deliver to shareholders the actual value of the company.

Here’s what you need to know for the next time you hear a stock buyback announcement…

Buyer Beware: How Stock Buybacks Create False Value

By , Associate Editor, Money Morning • @DavidGZeiler -

What are today's best investments?

Corporate stock buybacks are usually touted as good for investors - it's typically one of the top demands that activist investors make when targeting a company.

But while stock buybacks can benefit current shareholders, they tend to distort a company's earnings picture - which can mislead potential investors.

To continue reading, please click here...

It Looks Like the Market Is Saying "OMG"

By , Capital Wave Strategist, Money Morning • @WallStreet_II -

Today I want to talk about a few things I've been scratching my head over lately.

First, about those polls leading up to the presidential contest.

How come they were so wrong? How come the candidates were inches apart right up to the finish line, and then it's like a "tortoise and the hare" kind of ending?

Did Romney even finish? Is he finished? Is the Republican Party finished?

Maybe the problem is the questions they ask, the pollsters, that is, or the way they ask them. Maybe they ask questions like a lawyer leading a witness would.

You have to wonder who pays for those polls, too. Survey says: the Super PACs - or is that the stupid hacks? Don't you wish they'd post the questions they asked along with the "Survey Says" results?

And, how stupid are the markets, make that investors, you know who you are. The day of the election, the market was anticipating a Romney victory, after all the polls said it was more than possible, so we got a smart little rally.

Then reality set in. Four more years. And you think it's going to get better?

Here's something else to chew on. If you think the Republicans are going to roll over and play dead, now that they are dead, think again.

The only way to fight back when you're dead is to kill the other guy, so you're both dead. Then, of course, you say, I was dead first, I couldn't have killed the economy, I couldn't have driven us over the fiscal cliff, they did it!

It looks like the market is saying, OMG (that's Oh My God, for you non-texters), we're going over the cliff and there's no stopping us.

Trust me on this one, that cliff everyone's been talking about - it ain't the only cliff.

To continue reading, please click here...

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