The Truth About Buybacks

“We should not aim for a regulatory regime that eliminates all failure but one that reduces the chance of failure and the odds of contagion.”

– Jamie Dimon


S&P Global researches trends in share repurchases and analyzes performance of buyback portfolios compared to their benchmark indices, noting buyback portfolios have historically generated positive excess returns over their parent indices in the U.S. market over a long time horizon.

  • Since 1997, the total amount of buybacks has exceeded the cash dividends paid by U.S. firms.

  • From 1980 to 2018, the proportion of dividend-paying companies decreased from 78% to 43%, while the proportion of companies with share buybacks increased to 53% from 28%.

On future opportunities – “This is a movie I’ve never seen anything like it, so I’m going to be very careful not to dig myself in a hole when I don’t have a strong belief … because I think the opportunities will be amazing as this movie unfolds in the next year in macro and in equities.”

On the dollar – “I will say full disclosure, I missed the dollar, probably the biggest miss of my career in currency trade, I missed the last nine months run up in the dollar. I just couldn’t get myself to own Joe Biden & Jerome Powell.”

On Jerome Powell – “The Fed [Federal Reserve] has shown some mettle over the last year, but historically I would not say Jay Powell is a profile in courage.”

On the response to Silicon Valley Bank – “The response to Silicon Valley unnerved me a little because in four days … they basically wiped out the entire reduction in the balance sheet they had done for five or six months. So if I’m trying to look ahead and anticipate, I don’t have a lot of faith in these guys, should we get in a hard landing, that they’re going to hold the line and not do something maybe worse than Arthur Burns.”

On bonds – “I think one of the most important things to do is not to play when you don’t see a fat pitch. I don’t see a fat pitch in fixed-income.”

On keeping an open mind – “I try to have young people around me who are not afraid to speak their mind to me and argue with me. If somebody’s here too long and they agree with everything I say, they’re not here too much longer.”

On his process – “If I’ve got a thesis and it’s really bullish and it’s playing out and the stock’s not going anywhere, it makes me go back and check the thesis over and over.”

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