When it comes to Chief Income Strategist Marc Lichtenfeld, nothing “salts his watermelon” quite like the subject of this week’s State of the Market…
We’re talking about misused and mistimed share buybacks.
For some context, a share buyback, otherwise known as a share repurchase, is when a company buys back its own outstanding shares from the open market.
This inflates the price of the remaining outstanding shares. So, in theory, share buybacks should be great news for investors… but this often isn’t the case.
To understand why, we need to get inside the minds of CEOs and other members of management – the people making buyback decisions that, in the greater scheme of things, inevitably cost shareholders money over the long run.
Are these bigwigs clued in on something we aren’t, playing what Marc calls “4D chess”? Scamming us, maybe? Or are CEOs simply dropping the ball?
The reality is too messy to encapsulate with just one answer.
That’s why Marc has dedicated this week’s episode of State of the Market to lifting the veil on share buybacks, clearing up misconceptions about management and highlighting the importance of dividends when it comes to your financial freedom.
All while exposing something more… sinister…