RE:RE:RE:RE:RE:RE:Where are your credentials stock coach? jimmyjeblonski wrote: 1. Umm, no, that is just the well-known effects of low interest rates. That is why low interest rates stimulate the economy , because it is in effect "the price of money".
Low interest rates enable companies to buy back shares. If their shares pay a 4% dividend yield and the cost of these shares to them is 1%, well guess what suddenly makes sense. In fact, you don't even need a formal dividend because all shares have an "earnings yield" based on their p/e.
It is not intended to be "a long term sustainable strategy"; it is just the effect of where we are in the rate cycle right now. It has always been thus. When rates increase, this behavior ends, when rates decline, the behavior begins again. Money is allocated where it most efficiently makes the most money.
2. Stock prices are not based on stock earnings? Why don't you graph historical P/E ratios or look at some Shiller research before making statements like that. Robert Shiller won a nobel prize for relating long run earnings to long run stock prices. Go ahead and graph S&P earnings versus share prices in the years 1980, 1990, 2000, 2010 and find out what you are talking about.
3. Corporate communism? You know what communism is right? Because you are using your terms incorrectly. Fraud? Share buybacks when interest rates are low is not illegal fraud. It is intelligent allocation of capital by CFOs who know how to properly allocate capital in order to make the corporate entity the maximum return. Welfare corporate communist state? Try to educate yourself on what you are saying because your conceptual framework and terminolgy are all over the map and making you look foolish.