Understanding Stock Buybacks - BTCM Podcast 4

Since the 2008 financial crisis stock buybacks have been at historically elevated levels. These levels have accelerated at an even greater pace since the Trump Tax cuts. In this episode we explain what stock buybacks are and the consequences of this poorly understood corporate policy.

Topics include:

• What stock buybacks are and how they work
• A short history on stock buybacks
• Decrease in stock ownership by households and individuals
• Majority of stocks owned by wealthiest Americans
• Executive compensation packages
• Margin and corporate debt to GDP at all time highs
• Unintended consequences of stock buyback policy

Links:

https://realinvestmentadvice.com/wp-content/uploads/2019/04/Stock-Buybacks-2019.png

https://www.investopedia.com/articles/02/041702.asp

https://finance.yahoo.com/news/7-reasons-stock-buybacks-illegal-172253787.html

https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx

https://finance.yahoo.com/news/the-richest-1-own-50-of-stocks-held-by-american-households-150758595.html

https://www.nytimes.com/2018/02/26/business/tax-cuts-share-buybacks-corporate.html?module=inline

https://www.nytimes.com/2019/02/25/business/stock-market-buybacks.html

https://fred.stlouisfed.org/series/BCNSDODNS

https://www.advisorperspectives.com/dshort/updates/2019/08/20/margin-debt-and-the-market-up-0-98-in-july