Frank - thanks for the comment. I think it's a little bit of both; we naturally gravitate towards these situations but there are a lot of businesses out there in general that are planning to repurchase a decent percentage of their float over the next year or so. Some of those decisions will turn out great and some may turn out very poorly if the business has a bad balance sheet, overpays for their stock, and/or is over-earning right now.
We are definitely attracted to businesses that are buying in a lot of stock as long as we're comfortable with both the price being paid and the predictability and underlying quality of the business.
Is it a quirk of the companies you follow or is everyone doing large amounts of stock buybacks? I'm seeing a lot of talk of "bear market rally" but if companies are buying back 5%+ of their float in the next year then it takes quite a bit of selling for the price to fall
Frank - thanks for the comment. I think it's a little bit of both; we naturally gravitate towards these situations but there are a lot of businesses out there in general that are planning to repurchase a decent percentage of their float over the next year or so. Some of those decisions will turn out great and some may turn out very poorly if the business has a bad balance sheet, overpays for their stock, and/or is over-earning right now.
We are definitely attracted to businesses that are buying in a lot of stock as long as we're comfortable with both the price being paid and the predictability and underlying quality of the business.
Is it a quirk of the companies you follow or is everyone doing large amounts of stock buybacks? I'm seeing a lot of talk of "bear market rally" but if companies are buying back 5%+ of their float in the next year then it takes quite a bit of selling for the price to fall