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I'm saying that, as a lay person myself, I am happy to be convinced by a persuasive argument made in good faith by a credible source. My friends and acquaintanc

I'm saying that, as a lay person myself, I am happy to be convinced by a persuasive argument made in good faith by a credible source. My friends and acquaintances who are knowledgeable in this field talking to me privately have less at stake professionally than someone writing an op-ed for public consumption. Now, I am happy to change my point of view when I am unable or haven't the time to learn a topic more on depth even if I don't fully understand the details or resolutions of apparent superficial paradoxes. But when even basic explanations from an author defy logical sense - not a lack of domain knowledge - it raises a red flag for me. I'm not going to suspend critical thinking to entertain the fallacy of authority. I only cite the counterarguments I cite because even in their simplicity they demonstrate gaps in the case the author is making. I am more than happy to have someone better versed give a better account for why buybacks are worse than, say, sitting on cash or dividends.

tboyd47 8y ago
Oops, I didn't mean to put you personally on the defensive there, I was honestly asking your thoughts. By the way, I managed to find a really good piece on Bloomberg that lays out both sides in a pretty objective way: https://www.bloomberg.com/view/articles/2018-05-08/apple-s-stock-buyback-isn-t-as-simple-as-warren-buffett-says https://www.bloomberg.com/view/articles/2018-05-08/apple-s-s... I'm no expert, but I feel like sitting on cash isn't as terrible a thing as people pretend. Cash encourages risk taking and innovation. The more cash you have, the bigger risks you can take. Nintendo keeps a lot of cash around and they're one of the most consistently innovative game companies. Sometimes their products flop (Wii U), but sometimes they're wild successes (Switch).
RandomInteger4 8y ago
Corporations are owned by people. People own stock. People direct the corporation to buyback stock to raise the price of the stock so that they can sell their personal holdings of said stock to enrich themselves. All the board members of said companies own said stock, thus none of them would disagree with the move, because it enriches all of them. It's like Congress agreeing to raise their own pay. Is it rational? Not really, but who among them, the people making the decision on government spending, would disagree with this move? Maybe one or two with principals, but not many. EDIT: Is it rational for the sake of the overall system I mean. It's obviously rational from the perspective of those increasing their own wealth.

tboyd47 8y ago

Oops, I didn't mean to put you personally on the defensive there, I was honestly asking your thoughts. By the way, I managed to find a really good piece on Bloomberg that lays out both sides in a pretty objective way: https://www.bloomberg.com/view/articles/2018-05-08/apple-s-stock-buyback-isn-t-as-simple-as-warren-buffett-says https://www.bloomberg.com/view/articles/2018-05-08/apple-s-s... I'm no expert, but I feel like sitting on cash isn't as terrible a thing as people pretend. Cash encourages risk taking and innovation. The more cash you have, the bigger risks you can take. Nintendo keeps a lot of cash around and they're one of the most consistently innovative game companies. Sometimes their products flop (Wii U), but sometimes they're wild successes (Switch).

RandomInteger4 8y ago

Corporations are owned by people. People own stock. People direct the corporation to buyback stock to raise the price of the stock so that they can sell their personal holdings of said stock to enrich themselves. All the board members of said companies own said stock, thus none of them would disagree with the move, because it enriches all of them. It's like Congress agreeing to raise their own pay. Is it rational? Not really, but who among them, the people making the decision on government spending, would disagree with this move? Maybe one or two with principals, but not many. EDIT: Is it rational for the sake of the overall system I mean. It's obviously rational from the perspective of those increasing their own wealth.