Comments on: Lehman Stock Buybacks Equalled Profits http://www.nakedcapitalism.com/2008/06/lehman-stock-buybacks-equalled-profits.html Sun, 22 Nov 2009 13:46:25 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/06/lehman-stock-buybacks-equalled-profits.html#comment-9525 Anonymous Sat, 14 Jun 2008 04:26:00 +0000 http://www.nakedcapitalism.com/2008/06/lehman-stock-buybacks-equalled-profits/#comment-9525 Are there any studies out there that can prove the effectiveness of buybacks? It seems to me that most of these companies tend to buy back stock at the top or close to the top and when their stock is out of favor, they don't have the funds and end the programs. Are there any studies out there that can prove the effectiveness of buybacks? It seems to me that most of these companies tend to buy back stock at the top or close to the top and when their stock is out of favor, they don’t have the funds and end the programs.

]]> By: RK http://www.nakedcapitalism.com/2008/06/lehman-stock-buybacks-equalled-profits.html#comment-9494 RK Fri, 13 Jun 2008 12:11:00 +0000 http://www.nakedcapitalism.com/2008/06/lehman-stock-buybacks-equalled-profits/#comment-9494 The 2007 IB bonuses about equalled the Q4 thru<br/>Q1 2008 capital raising, from SWF's and others. It was<br/>argued 6 months ago that they "borrowed their bonuses". I see no reason to disagree. The 2007 IB bonuses about equalled the Q4 thru
Q1 2008 capital raising, from SWF’s and others. It was
argued 6 months ago that they “borrowed their bonuses”. I see no reason to disagree.

]]> By: David Merkel http://www.nakedcapitalism.com/2008/06/lehman-stock-buybacks-equalled-profits.html#comment-9487 David Merkel Fri, 13 Jun 2008 06:52:00 +0000 http://www.nakedcapitalism.com/2008/06/lehman-stock-buybacks-equalled-profits/#comment-9487 Much as I regard Cramer as a friend, one place where we disagreed the most was over buybacks. As in my last post here over Lehman, he regarded buybacks as a sign of confidence, in order to beat the shorts.<br/><br/>My view is that investment banks are like long-tail property-casualty insurers -- you can't really tell what the true profitability is each quarter. No one can. The best you can hope for is that the management is conservative, and releases profits slowly. Culturally, that is a tall order for Wall Street.<br/><br/>Regular buybacks are appropriate for companies with smooth earnings. Companies with lumpy earnings must satisfy themselves with occasional buybacks, when their stock is out-of-favor. Much as I regard Cramer as a friend, one place where we disagreed the most was over buybacks. As in my last post here over Lehman, he regarded buybacks as a sign of confidence, in order to beat the shorts.

My view is that investment banks are like long-tail property-casualty insurers — you can’t really tell what the true profitability is each quarter. No one can. The best you can hope for is that the management is conservative, and releases profits slowly. Culturally, that is a tall order for Wall Street.

Regular buybacks are appropriate for companies with smooth earnings. Companies with lumpy earnings must satisfy themselves with occasional buybacks, when their stock is out-of-favor.

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