Buy High, Sell Low

Corporate America loves buying its own stock — but apparently. only at the worst times, like when they are expensive or at the top of a bull market. When shares are cheap, or during a bear market, companies stop their usual buying.

Via Floyd Norris, we get the specifics:

“Standard & Poor’s reported this week that stock buybacks by companies in the S.& P. 500 fell to $24.2 billion in the second quarter of 2009. That was down 28 percent from the first quarter and was 72 percent below the figure for the same quarter of 2008. The amount was also the lowest for any quarter since S.& P. began tallying the figures in 1998. . .

At the peak of the buyback boom, in the third quarter of 2007, companies in the S.& P. 500 spent $171.9 billion repurchasing shares. The stock market peaked on Oct. 9 of that year, a few days after the quarter ended.

This year, the stock market hit bottom on March 9, and is up more than 50 percent since then. But buybacks continued to decline in the second quarter.”

Great timing . . .


click for larger graphic



Loving Your Stock Only When It’s High
NYT, September 18, 200

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