Warren Buffett explains corporate buybacks: ‘So simple’

2020/05/25
 
この記事を書いている人 - WRITER -
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Berkshire Hathaway CEO Warren Buffett and Vice Chairman Greg Abel discuss the backlash against corporate buybacks and explain when a company should buy back its own stock.
#WarrenBuffett #Buffett #buybacks
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この記事を書いている人 - WRITER -
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  1. Avatar b ollmann says:

    Thank you Mr Buffett, for a great explanation.

  2. Avatar JA G says:

    Don’t think with the stock hitting its last LOW point during the virus months – that these guys aren’t buying back their stock.
    They know GILEAD’s COVID19 treatment was just approved by the FDA yesterday – so beginning Monday, I see a big head turn to reopening America.

    • Avatar Bubba Blackmon says:

      I like your optimism but I don’t think the Gilead treatment will do much to calm people’s fears. It has NO effect on whether you die or not. What it does is shorten the duration of the illness from 15 days to 11 days on average. If the virus is going to kill you , the drug will not save your life.

    • Avatar GIANT_AVOCADO says:

      Gileads treatment is not a miracle cure and not a vaccine and not enough to immediately restore public confidence to go out and shop in public. We have a lot of economic pain directly in front of us

    • Avatar JA G says:

      Bubba Blackmon – true.

    • Avatar JA G says:

      GIANT_AVOCADO – Not a cure, just a small treatment. Then again, I am EU where they opened their outdoor cafes – that’s where I am optimistic. I chose not to return to USA, with thoughts of it being too risky to fly. Best for me to stay in the small country of Lithuania where they only had 45 deaths of a population 3M.

    • Avatar Loanword Eggcorn says:

      @Bubba Blackmon Remdesivir reduced mortality rates from 11 percent to 8 percent. Problem is that the sample size was too small to be very statistically significant, but it did save lives in the most recent study. More information will come with further studies from the wider deployment.

      Remdesivir is not a cure, but multiple vaccines that should be a cure are being developed, tested and manufactured. Unfortunately they may take a year or more for widespread availability.

  3. Avatar Arty Erty says:

    So simple when the one that actually pays is the taxpayer.
    So simple indeed.

  4. Avatar SawChaser says:

    It’s immoral if companies who do buy backs price in a fed put instead of being responsible themselves (moral hazard).

    • Avatar GIANT_AVOCADO says:

      I don’t know that that is the main reason why some companies do buyback. I suspect some companies just can’t think of anything better to do with the money and foolishly are not reinvesting in the right business areas. They also foolishly believe the buyback improves the underlyibg fonancials, it does not, it hust boosts the stock price which is a form of return to shareholders as Buffet pointed out

    • Avatar artanpreka says:

      GIANT_AVOCADO I believe it provides a better return on investment for the stockholder. It is essentially a dividend (hoard of cash being distributed to shareholders one or another) however dividend income is treated as ordinary income for tax purposes. Buybacks cause the share price to appreciate rather than receiving cash dividends…therefore when a shareholder sells their shares at a higher price it is treated as a capital gain which is taxed a lower rate (if held longer than year). So it is a way to distribute cash to shareholders but with better tax benefits.

    • Avatar Marita Alisjahbana says:

      @artanpreka good and cear explanation
      Thanks.

  5. Avatar WulfCry says:

    thumb nail looks like Warren Buffet plays a saxophone.

    • Avatar Jermaine Kapono says:

      WulfCry lmfaooooooo

  6. Avatar Kehinde O says:

    “distributing cash to share holders” That usually means the business has literally no were else to innovate. AAPL has been performing buybacks on a massive scale since Tim Cook was in charge, I wonder why?

    • Avatar NanceAnn Lau says:

      Kehinde O *nowhere

    • Avatar iamDeej says:

      Precisely. It’s a giant signal that the capital allocators in the company (senior executives) should be replaced in favor of those who can find better use for that cash.

    • Avatar Loanword Eggcorn says:

      It’s a way to return value to shareholders instead of hoarding cash overseas. They’re doing buybacks along with paying a dividend, which they also didn’t do before, for the same reason.

    • Avatar Michael Power says:

      AAPL holding $200B and buying back their own stock is a correct move. They are also now paying a dividend. What they are not doing is buying stock with borrowed money. That is the whole under-mining of the corporate world today. Good for AAPL, bad for Boeing.

    • Avatar Daniel says:

      @iamDeejyou’re basically saying a company can grow infinitely with that logic. And you’re delusional if you think a company can grow infinitely. There is always going to come a time where growing becomes much harder than before. it’s a mathematical certainty.

  7. Avatar judson meraw says:

    So profit is actually money needed to regenerate.service investments?

  8. Avatar Éliphas Lévi says:

    Share buybacks can be a great thing, like Buffet says, when they are financed by cash or equivalents on the balance sheet. If they are financed by liabilities (through low interest loans), buybacks are a cheap way to make the stock go up and increase stock/option holders wealth. As we’ve seen, that is not sustainable.

    • Avatar Daniel says:

      In those cases buybacks are usually a reaction to options being used. If you want to stop what seems to be irrational buybacks, you need to stop options from diluting the shares outstanding in the first place

    • Avatar David Schaub says:

      Simple as that, well-said

    • Avatar modern times says:

      this is the bubble we’re in – buybacks made on cheap loans.

    • Avatar Mattias W says:

      Well. It is an investment for the company so there’s really nothing wrong with financing the buybacks with bonds. Imagine if they were to buy a small competitor and finance it with bonds. It is essentially the same concept but it affects the current shareholders differently

    • Avatar DM Grant says:

      Share buybacks are bullshit.

  9. Avatar judson meraw says:

    Maybe there is 2 ways, 1) actual investor, 2) profiteers. Anyway there seems to be a systemic undermining of the culture, the country, and the environment. Reset!

    • Avatar Johannes Stevens says:

      Which one are you?🤑

  10. Avatar vassinarain says:

    Problem is when CEOs use buybacks to increase stock prices just enough to unlock their shares (so they can sell them) all while their company is reporting losses. Easy way to cash out without improving the company, while using up cash that could’ve improved the company.

    • Avatar C Dun says:

      I bought back shares, but it wasn’t with money that came from government.

    • Avatar jz4461 says:

      EPS is just one measure that can determine compensation. Market penetration and ROE targets are financial benchmarks that don’t change with buybacks

    • Avatar gabriel aponte says:

      idontcare4490 lmao there is literally an entire chapter on this in the intelligent investor describing exactly about stock buy backs being irresponsible short term bumps ; source chapter 18 of the intelligent investor

    • Avatar Johannes Stevens says:

      @chelsea7xhf but what if it is a good business?

    • Avatar The Law says:

      @gabriel aponte
      It wasn’t about buybacks being irresponsible, it was about one of many schemes unscrupulous individuals use to take advantage of the market’s general lack of awareness. It’s one of the reason why he suggests reading the footnotes on a companies fillings, to look for something like this.

  11. Avatar M K says:

    BULLSHIT!!! He totally avoided the bailouts that are used for buybacks!!!!!!!!!!!!!!!!!!!!!!!!!!!

  12. Avatar Eddie weyhrauch says:

    What?????

  13. Avatar Marc Abramsky says:

    He is talking about a normal business buy-back transaction. Not the horseshit that goes on now. Yes, he is invested in this because he receives the capital when there is nothing being done in the company. This is what I was talking about before and people didn’t get it. He didn’t get rich investing in this garbage initially. He got rich investing in FREE America. His wealth increased exponentially as a result of cheap credit and buybacks. Look at his wealth growth since 2000. That didn’t come from companies doing anything, it came from banks giving the large corporations money. This is the ongoing assault on fair business. He said so himself, that some corporations were too big to fail. If you believe the crap that he is peddling at the moment you deserve to remain a debt slave to these oligarchs.

    • Avatar William says:

      Marc Abramsky wait what? What does you paragraph even mean? You don’t want to to learn you want Warren Buffett to tell you you’re right, and he’s not going to

    • Avatar -JRH- says:

      William Marc is right

    • Avatar Malcolm Neate says:

      I have to agree to some extent Marc. Something just seems really off with the spin being put on this. I can see what Buffett is saying but the other guy Greg chimes in with a touch of reality. I think people like Buffett, as with Trump, are always putting out artificial positivity to keep markets pumped. All seems like smoke and mirrors.

    • Avatar -JRH- says:

      Malcolm Neate he didn’t like the question about buybacks 😄

  14. Avatar Eddie weyhrauch says:

    Another way for corporations to steal tax payers money after being bailed out.

    • Avatar idontcare4490 says:

      Eddie weyhrauch give me one example where this happened or admit you’re a parrot for liberal news outlets.

  15. Avatar Jorge Gomez says:

    He’s full of BS.

    • Avatar idontcare4490 says:

      Jorge Gomez right… the oracle of Omaha who has $74 billion more dollars than you is full or BS. Get a life.

  16. Avatar iamDeej says:

    Ok, fine – buybacks are a way to take money out of company. Somewhat like dividends, in function.

    That’s still a problem. Should public companies be allowed to distribute cash to investors (whether dividends or buybacks)? I would say NO.

    Especially when public shareholders have no problems with liquidity. If the companies hold the cash rather than distributing, stock value goes up by the equivalent of that cash. If investors need some liquidity, then they can sell some portion of their stocks. Its very simple, the us stock markets offer more than enough liquidity for them. There’s no reason why the firm itself should be on the purchasing end of the transaction of their stocks.

    Its not about political correctness, its purely good system design.

    • Avatar Michael Power says:

      The problem was never stated. It is about using new debt to buyback stock. Not sure why a Board would hatch such a plan, but as a shareholder – I’m ok with it until the Fed buys that debt to salvage a company.

  17. Avatar Eddie weyhrauch says:

    I bet him and gates have stock invested in a vaccine.

    • Avatar Loanword Eggcorn says:

      Vaccines are a public good. Supporting them with private means is philanthropic.

      Translation: they are using their money to help people and save lives. You probably think that’s a bad thing. I don’t.

      P.S. You can buy stock in vaccine companies. Study it.

  18. Avatar Arnold Dalby says:

    buying back stock is a misallocation of capital that could be invested in 22nd century technology now in it’s infancy. If America doesn’t invest in the future it is finished. Look, America has fallen behind in military technology as Russia and China have in service hypersonic missiles that Putin said take 4mins 31 secs to wipe out America. Trump wouldn’t even have time to kiss his ass. Hahaha. Wake up America. Dumb and dumber if you ask me.

    • Avatar karma's a bitch says:

      Arnold Dalby you think trump is kissing Russia’s ass? Lmao.

  19. Avatar AANDYG2010 says:

    CEOs buying back stock to prop up the image of the poor underlying business. Can’t innovate or improve their way to a bonus so just manipulate EPS instead.

    • Avatar idontcare4490 says:

      AANDYG2010 give me one example where this happened or admit you’re a parrot for liberal news outlets.

  20. Avatar idontcare4490 says:

    I totally agree. People are so stupid.

  21. Avatar Milled Steel says:

    This is ridiculous, Uncle folksy is the poster boy for Wall Street fraud

  22. Avatar josh simpson says:

    That’s funny stock buy backs with 0$ in emergency funds.

    Its unconscionable to do so without emergency reserves and not the fucking government taxpayers to float your putrid market practices

  23. Avatar paul best says:

    IF Warren Buffett lived to be 200, he’d see all his wealth gone, penny less, bankrupt, broke. and homeless,

  24. Avatar bughouse26 says:

    It’s a bit disingenuous to paint all stock buybacks as “politically incorrect.” Few object when companies return their own capital to shareholders through share repurchases or dividend payments and remain otherwise financially sound. We object when companies leave themselves financially unsound and return taxpayer capital to shareholders instead.

  25. Avatar Ali Qazilbash says:

    🙋‍♂️

  26. Avatar muddyriverdogz says:

    Stock buy backs is FRAUD plain and simple !

    • Avatar Gene Sky says:

      Did you listen to a single word that was said?

  27. Avatar Gary Nitzberg says:

    Wow ! He totally missed the current complaint about buybacks. Corporations taking taxpayers money to buyback stock for the sole purpose of raising stock prices…

  28. Avatar Bob Evans says:

    i does seem like a conflict of interest to pay large % of execs (including board members) compensation in company stock, then allow those same people to make decision to buy back stock to artificially boost price. This is even more dramatic if the company carries a lot of debt, so they us leverage to buy back stock. This is even more dangerous.

    • Avatar Alessandro Vittoria says:

      Buybacks aren’t boosting prices artificially, when a company buys back shares, each share gets more rights to the profits (and equity) of a company, hence increasing their value

    • Avatar Fusion says:

      I think your argument would make more sense if it was about dividends.

  29. Avatar Esquire says:

    If they don’t pay dividends the shareholders pay no taxes. They buy back shares and there are less shares so each share is worth a higher percent of the company. Also, when buffet gives 3 billion in shares away to a charity he gets to write off the market price of those shares. If anyone would sell 3 billion the price would go down over the days or weeks the selling took place. This is also to avoid the taxes…he gets to write off 3 billion vs the lower amount the charity actually gets.

    • Avatar Ahamed says:

      The seller pays capital gain tax

  30. Avatar clark kent says:

    Corporate no matter just like single

  31. Avatar Deepak Goyal says:

    This is the explanation of the world’s best investor? Really? First time invested my time hearing his full meeting speech, not a single comment which makes you feel you are listening to worlds best investor. And he contradicts. Says doesn’t trim positions, yes you do. Did to Delta Airlines few weeks ago.
    BUY BACKS.
    1. A sign company thinks the current value of stock is lower than its worth or when they need stocks for example employee stocks.
    (His comment that company wants to give back cash to those who want to sell? Stocks are the most liquid. If i want to sell i dont need company to buy them, anyone will buy)
    2. How does it help? It’s the same company but noa has lesser shares in the market. It helps the stocks perceived value in the market so you can expect to see an upside.

  32. Avatar Garnet Rose says:

    When the American government gives corporations enormous tax breaks, the money needs to be invested into the workers NOT buy backs for greedy CEOs and stock holders

    • Avatar Gene Sky says:

      If you were to create a government tomorrow, what would you want?
      Healthy people, happy people, that are productive.
      The Government, rightfully!!!!, helps what helps itself. That’s anything that creates jobs, housing, preservation of health, face masks, or whatever it needs for the benefit of the population. There’s no conspiracy theories at play.
      Workers are getting relatively what they want in the form of a salary and benefits… Or they would not have taken the job in the first place.
      CEO’s get compensated generally on a performance based package. Bad performance = bad pay, and you’re out. And never hired again by other companies.
      Stock Holders and business owners are literally creating jobs. Berkshire literally owns businesses that create jobs.
      Not attacking or insulting.. just expanding the points a little bit. Happy to see your responses.

    • Avatar Pho 4ever says:

      @Gene Sky the answer is somewhere in between. The gap between CEOs and workers is not only obscene but historically unbalanced. Ok you can point to the Carnegies and standard oil but monopolies aren’t sustainable because everybody else get crushed and that’s when the pitchforks come out

  33. Avatar William says:

    The stupidity of the people in the comments section is astounding. They don’t want to learn they want people to tell them they’re right.

    • Avatar Karim Ferraz says:

      William you’re right

    • Avatar Christian Dela Pena says:

      Agreed

    • Avatar Tan JunJie says:

      Ok they are right lol

    • Avatar christopher mullen says:

      Seems like you might fall in that category too if you lean over too much. You can learn abit or two from these ‘stupidities’ too you know

  34. Avatar Jim Su says:

    Share buy backs are no issues if the company manage their balance sheet responsibility like WB, it becomes an issue when companies don’t keep even a 3 month rainy day cash on the side and do share buy backs to pump up stock prices, and then ask the gov for tax payers’ money to bail them out when things go wrong

    • Avatar Pho 4ever says:

      It’s a lot simpler than that. Share buybacks are a fine way to distribute PROFITS in a tax efficient manner. NOTICE how I highlighted profits. Borrowing money for share buybacks is a definition of insider trading

    • Avatar RADIOACTIVE says:

      Let them fail

    • Avatar Affluent Nerd says:

      Right, which is the vast majority of buybacks. Very few actually responsibly manage their balance sheet like Buffet. That’s what he fails to acknowledge here.

  35. Avatar FPC says:

    The problem is the stock based compensation structure for executives, which drives executives to use buybacks to deliver a quick bump in the stock price so they can then dump it. Reinvesting requires time for growth. Stock buy backs usually don’t.

  36. Avatar Brandon Reed says:

    Instead of restricting buybacks they could require the businesses to have a certain amount of reserves before buys are done.

    I wouldn’t be against the government requiring all businesses to have a certain percentage of reserves before they can engage in buy backs.

  37. Avatar Conrad says:

    Doesn’t it go beyond being “stupid” and move into “immoral” when a company buys back stock and then take stimulus money from the government?

    • Avatar -JRH- says:

      Conrad yes

    • Avatar The Law says:

      Idk the extent of that happening, but that is equally the fault of the elected representatives for allowing that. Basic economics dictates that allowing companies to continue instead of fail creates moral hazard and incentives this behavior, which is immoral imo. Many people, if incentivized, will do immoral things or questionable things.

    • Avatar -JRH- says:

      The Law Yes big business usually despise socialism but not this time around

  38. Avatar Telluwide says:

    Buffett paints a rosy picture on buybacks which simply isn’t the way the majority of corporations use buybacks these days. It’s a lazy way corporate boards and management cash in on low interest rates, tax breaks and bonus structures to pad their own pockets. They don’t use buybacks to reinvest in their companies for innovation or to add value….It’s financial hocus pocus because they lack vision for the future. They use buybacks because they can’t increase their shareholder’s value through innovation.

    • Avatar Nick Scuderi - RealLife Money says:

      Telluwide Was thinking same thing..

    • Avatar DM Grant says:

      Exactly. It’s an artificial way to raise the price of the stock and he knows it. His folksy ‘it’s so simple’ nonsense is ludicrous.

    • Avatar Lone Wolf says:

      Share buybacks creates value for shareholders if shares were bought at below market value rather thean 52 weeks high. For example, biotech company like Amgen, Gilead, celgene, and Biogen, and ABBvie bought $100 billion dollars of stock buybacks at the 52 weeks high. The airlines were doing the same thing, too.

    • Avatar Y0ureWelcomeWorld says:

      Lone Wolf If you’re implying that this is a smart move to inflate prices back to market value, then yes. But realistically, stock buyback doesn’t take into account actual company value. Lets assume in a perfect world a stock follows it’s worth to the tee. If that stock goes from 100 to 90 dollars, and a company buys back it’s shares inflating the price, the stock is valued at 100 but the company is only valued at 90 a share. The obvious problem is when the stock falls to actual value, it’s much more severe, inherently leading to a more volatile market as a whole.

  39. Avatar mikki p says:

    Buy backs were funded by cheap loans at artificially low rates to reward private owners… now those companies are leveraged and in trouble. Who’s gonna bail them out? taxpayers…

  40. Avatar iVince905 says:

    So the taxpayers shouldn’t bail out the airlines then. So simple.

  41. Avatar Sz27 Clz75m says:

    can’t believe he drinks Coke lol

    • Avatar confidential says:

      Show scientist are bullshit with sugar = diabetes . They play god but they are not the one who create sugarcane .

  42. Avatar Citizens, What is in your Heads? Zombie Sheep says:

    every time you call on greg his leg itches

  43. Avatar Aleksandr Vasilenko says:

    Companies that took out loans to buy back shares should be banned from stock buy backs and dividends for a decade.

    • Avatar RADIOACTIVE says:

      You mean for a century

  44. Avatar Chris C says:

    So theft from taxpayers to buy back stocks is just fine with Warren.

  45. Avatar Polyester Avalanche says:

    I believe most of the objection with buybacks is when the government hands a company a bailout check to save said company, then the company turns around and buys back lots of their stock at a huge discount. If that company’s value increases after the crisis is over, then what happened is that government money (aka taxpayer dollars) was used to reward the company for its poor disaster preparedness, and in the process made the company much richer.

    We recently saw Boeing decline the government’s bailout offer because one of the conditions was that the government would become a stakeholder in the company, and Boeing didn’t like that. Bravo Boeing!

    Someone please critique my comment for accuracy.

  46. Avatar Tenac 300 says:

    warren is a stingy man. He should be giving out $5 dividends per share

    • Avatar DM Grant says:

      But, it’s so simple!

  47. Avatar Dallas Taylor says:

    Did I hear it right that stocks will be given to charities and possibly bought back at a discount?

  48. Avatar Brad L says:

    Cute response. It’s been used as a tool to pump EPS using borrowed money funded by government bailouts. I’m afraid I don’t hold Mr Buffett in high esteem now. If a shareholder wants to take money out of a business all they need to do is sell some of their shares on the open market…!

  49. Avatar zimm888 says:

    Share buybacks should be illegal as it once was. It’s stock manipulation. Money should be invested into employee wages/benefits and back into the company itself such as R&D

  50. Avatar Gustavo Perez says:

    I disagree with the Oracle on this. If anyone want to get money out of a business that is publicly traded they just sell their shares. On a small business the partners can buy out the owner that wants out or they can declare dividends and allow the owners that don’t want to take money out to reinvest the dividends. The stock-buy-back schemes are driven by eps manipulation and stock option incentive programs.

  51. Avatar Solenya says:

    When you’re doing it with profits of the company is one thing. The more relevant end of the question is that companies did it with tax payer bailout money. THAT’S why that question was asked. NOBODY cares about the successful business that is doing butbacks out of their own money.

  52. Avatar James Dong says:

    5:50 “If the stock is selling below what the business is intrinsically worth, then I think they are making a big mistake to not buy back its shares”. Companies have much better idea on how much itself is worth than the public. Shares buybacks is a signal sent by the executives to the market that their company is underpriced. If that’s the case, I don’t think there is a problem to distribute wealth back to the investors if they can’t put their cash into good investments. The question is whether the executive of a company is responsible. Do they really believe its shares are underpriced? or are they just want to pump up the price so they can be richer at the expense of other shareholders and the debt holders

    • Avatar The Law says:

      That does exist, but the political fiasco on a good idea used for bad business is retarded. The amount of people who claim that companies are trying to Max profits for shareholders without understanding that “max profits” is not a tangible goal for a shareholder is obscene. A company can fire all their customer service representative would max profits at the expense of future value, but any owner would elect to boot the CEO who does this into the shadowrealm if they found out this happened.

  53. Avatar annuna says:

    Is this a warning sign that Buffett sold some of his stock? What will happen to Birkshire Hathaway in 10 years?

    • Avatar x10mark2 says:

      hes 89 years old. there comes a point when it makes sense to sell even your best stocks when the chance of realizing their future gain starts dropping

    • Avatar Johannes Stevens says:

      @x10mark2 I was thinking a long the same line, things looking bad for the aviation industry. His experience lead him to go against his own doctrine. Ruff times lays ahead. You should take a leaflet out of this chapter!😷✌

  54. Avatar Graham Davis says:

    Buybacks are theoretically a neutral idea to dividends. But tax policy makes them more attractive. In practice companys buy back at the top and hoard cash at the bottom.

    The only time a buyback works is if the company is growing in value, however, in that case would not the company be better off finding positive npv projects?

    It is popular to hate on Amzn for expending there capital return, but every company has an equal opportunity to do that rather repurchases at the top.

  55. Avatar Mystery Guest says:

    It’s so easy, it’s so easy to be honest. I don’t have an issue with buybacks unless they are doing so with my tax money that is supposed to help them get bailed out.

  56. Avatar Radnally says:

    Borrowing money to buy back shares…like most airlines.

  57. Avatar Spider says:

    It would be a bad thing for a company to buy back shares in such a moment of corona virus because the company can use this money for other purposes which can save it from loss making.

  58. Avatar Christianity Boxing Mafia says:

    Buffets going down, just like he should have in 08!! Unless he buys Gold of course 😁

  59. Avatar RADIOACTIVE says:

    Buybacks shouldn’t exist from first place

  60. Avatar Anna Comnena says:

    Leveraged buybacks should be banned. Exxon have hollowed themselves out quite nicely doing this.

    • Avatar Daveco321 says:

      Anna Comnena the reason the Great Depression happened was because people were investing money they borrowed from banks, interesting that when companies do it it’s fine.

  61. Avatar Affluent Nerd says:

    Sorry Buffet, you are dead wrong on this topic. Warren says it’s not immoral, it’s stupid. But IT REALLY IS IMMORAL when your own company represents 95% of the stock buying that has artificially inflated your stock’s price, and then because you haven’t left yourself any cushion what-so-ever for an “unexpected” (inevitable) downturn, you come running to the Federal government with your hand out for billions in bailouts at the taxpayers expense (everyone’s expense, not just shareholders)…and your board and C-suite exec’s PLANNED it that way. Abso-fucking-lutely that is COMPLETELY corrupt and immoral.

  62. Avatar dedan19 says:

    B-U-L-L-S-H-Y-T!!!!

  63. Avatar Dragounian says:

    I’m surprised Buffett completely misses the point here. The anger is not directed at buybacks in general, but at companies that have used every penny or even borrowed money for buybacks and now expect the taxpayer to bail them out. It’s privatizing the gains and socializing the risk. And yes, that is immoral.

  64. Avatar Art Anderson says:

    In the last decade, IBM spent $140 billion dollars on stock buybacks. Today the net worth of IBM is approximately $108 billion. Exactly who has benefited from this other than top management getting rich selling their stock options?

  65. Avatar Zora Shoes says:

    there is a self-referential problem about share buyback. Buffett’s job is to maximize the value of investment already made by ALL of its CURRENT shareholders. If he buys back the undervalued Berkshires stocks (relative to what Warren believes to be its intrinsic value), isn’t he in effect doing disservice to ‘SOME’ of its current shareholders? i.e . those who are willing to let go their shares.

  66. Avatar Zora Shoes says:

    Warren Buffett vs Nassim Nicholas Taleb . Who is laughing to the bank now? Who is more astute investor? Saying “none of the 17,000 people in the shareholder meeting last year foresaw pandemi disaster” is no excuse. Especially when you are involved in insurance biz and your best friend mr. gates happen to be virus expert . Keep flip floping your position on airline industries. Market will punish those who are unprepared. Its the name of the game. Oracle of Omaha is mere mortal after all.

    • Avatar Maxwell Schaphorst says:

      Warren Buffett’s been investing for something like 70 years now… your attitude is as if he’s never faced something like this and this event has wiped out what he’s built up. In the grand scheme of time, this will be a blip in the rear view mirror. The market does punish those who are unprepared, and Buffett was always mortal. Even with this drop, I’m sure his net worth is still orders of magnitude higher than Nassim Taleb.

  67. Avatar Jerry Ernst says:

    Buy-backs inflate stock price by limiting SS making the corporate shareholders stock prices go up without adding any real intrinsic value to the corp. It’s financial engineering of the worst kind. It’s even worst if it is done thru loans. It adds debt w/out any real productivity or worth. It a slight of hand trick which Warren is using to increase debt without any real growth. Warren is a charlatan . Remembering when said he didn’t take any bailout money in 2008/9, it was a lying. He got 19B$s.

  68. Avatar Jimmy Pone says:

    The only effect of the plug at the end is that I can’t stand zac guzman. Maybe im watching too much yahoo finance…

  69. Avatar galo marino says:

    Buffett drinks Coca-Cola, so buy KO shares !!!

  70. Avatar Aditya Menon says:

    Dont know about other stocks but WB has his hands on Cocacola for sure. If you know what I mean

  71. Avatar John Doe says:

    Very misleading. With dividends you have the option to reinvest or put in your pocket. No one is “forcing” you to take out money. Also, he’s trying to make it seem like buybacks are an investment in the company. They’re not. This guy is obviously a great investor but please don’t blindly support everything he says just because of that. Understand that he has his own motives.

  72. Avatar Mr. Haha 89 says:

    Berkshire could do buybacks because they have $130+ billion in cash and reserves. Delta, Boeing, and others were foolish.

  73. Avatar F3ND1MUS says:

    did you lose weight?! Looking Great!

  74. Avatar Matthew Fitzgerald says:

    FUNNY! HE SKATES THE ISSUE OF IDOIT COMPANIES WHO BORROWED MONEY FOR BUY BACKS. BOEING BORROWED 145 BILLION AND KNOW WANTS 150 BILLION BAIL OUT, SHAME ON WARREN

  75. Avatar Chaz1724 says:

    There’s nothing wrong with buybacks – if the company has already done everything possible to invest, including raising employee wages. That’s not happening.

  76. Avatar Kaname Fujiwara says:

    Wall Street has this tendency of taking what is generally a good idea and pump it so much that it balloons into a giant bubble of bad ideas. You can deal with an ant. A billion of them? A trillion? At some point it becomes too much. Greed dooms us all.

  77. Avatar Lou Sunshine says:

    @Warren Buffett, can you buy me one share of your class A share as a good will gesture? I have always wanted to own one share of your company…

  78. Avatar Jannet says:

    I can’t figure out how reverse stock works even though I’ve gone through it happening to me twice now had 100 shares next day I have 10 shares and they are now worth only 0.15 per share and my 100 shares were 1.00 a share, so 100 shares = $100.00 now 10×0.15 = 1.50 next time had 10 shares 0.89 share next day my 10 = 2 shares = 0.04 reverse shares should not be allowed they suck big time especially new investors who know nothing about reverse. I’ve lost so much of my money buying stocks and selling for fees per trade and all those people saying buy our news letters and will send you 5 best stocks to buy or you buy their letters and then if you want to really make millions pay 2000 and were only letting 100 people in their group, so many others in my one year in October 1919 to Oct 2020 I’ve been to hard knocks university and wouldn’t it make sense and help new investors find that one or 2 stocks so they can make money and I know I would keep them as the group I’d keep listening too and putting the money back in to then join their small groups. I’ve been disabled with spinal chord damage for 2 years now, was unable to work and too young to retire so I took my savings of 3 thousand and try becoming a day trader plus thought I’d keep my brain still working, well I have 400 hundred left and still can’t find that one that could help me to find that one that makes me feel someone who really wants to help me make my million like they did and that’s why they are doing the news letters so they say they want to give back to other’s but please pay 4000 or 2000 first and we will make more on our first option or after hours or shadow its a den of lions out here. Any advice would be so help full but please don’t ask me to join your news letters before you will share your advice.
    I should write a book on my first year in trading stocks at home

  79. Avatar worldwidehappiness says:

    When tax cuts (supposedly intended for investment at home) and bailout money are used for buybacks, it’s obviously dodgy. It’s just a straightforward transfer of money from nation to the rich.

  80. Avatar Jannet says:

    I’ve heard certain companies issue cheques so many times a year to people who sign up for them is this true alegaely if I pay someone or join their news letters they will set me up to receive these cheques. .? They say big companies do this for tax savings again is this true? If true can you add me to your next cheques your companies are sending? ❤❤❤❤ 🙇🙇🙇🙇 please ya all stay safe and God Bless 😊😷😷

  81. Avatar john butler says:

    Nice explanation on one part. But it pushes up the profits on the balance sheet which drives up the share price, which suits their options that are gifted to them

  82. Avatar M Al Nuaimi says:

    Buybacks should only happen when the price is depressed like it is now for most companies. Its a sign that management is doubling down on their company. Unfortunately, almost all buybacks happen at the peak of share price so what ends up happening is they pay too much to buy back shares

  83. Avatar Christopher Dennis says:

    I’ve heard it said Buffett dumped the airline stocks (so much for betting on America) because they ended their stock buyback policy.

  84. Avatar John O'brien says:

    Who cares. I can’t even buy forward let alone back.

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