Besides cheap money courtesy of the Federal Reserve, investors for some time have been told the market's run-up owes much to corporate buy backs. A good thing for investors.
Like the old saying what comes around sooner or later goes around, that might be the case now with those stimulating buy backs investors apparently have come to love. There is a story today
on ZeroHedge, "Goldman-finds-buybacks-no-longer-work-to-boost-stock-prices-two-reasons-why," worth a look.
Here's a couple of charts from the article that pretty much tell the tale, but read it for yourself.
Buying shares back at their highs, as noted, hardly seems like prudent business practices, especially when one recalls all those time businesses were hoarding cash because they could not, on the their terms, find prudent, meaningful investments.
A cynic might argue it's just another way to push up the value of their stock options. But since we don't know any real cynics, we just mention it in passing.
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