Ghost of Igloi wrote:
“Instead of investing in new property, plant, equipment, innovation, and employee training for the long-term benefit of their shareholders, employees, and the communities in which they operate, companies instead are taking advantage of ultra-low funding costs to buy back expensive stock. In a desire to prop up stock prices to enhance their compensation and satisfy short term investors, corporate executives have and continue to make poor capital allocation choices.
If the goal was to increase shareholder value via a temporarily higher share price, then corporations succeeded, albeit temporarily. The goal always should be to increase long-term shareholder value via stronger growth; a goal corporations have largely ignored. After ten years of poor decision making, many companies are left with inflated stock prices but dim prospects for future growth to fund their obese debt structures.”
—Michael Lebowitz via RealInvestmentAdvice.com. 7/31/2019
Very good news! Thanks for posting that.