Recent Share Buybacks Are Nothing Special to Behold

There’s an old urban legend that says the Dutch bought the island of Manhattan from the Lanapes for some beads and $24. Over the centuries, that $24 has remained constant, untouched by inflation and the possibility that the Lenapes could’ve taken that small sum of money and invested it wisely. As a point in fact, had the savage Lenape set up trust accounts and invested the $24 over 350 years, it’d be worth $64 billion–a decent sum of coin for the crime infested rat hole called Manhattan.

Fast forward to today and everyone is talking about how the level of share buybacks are indicative of a market top. I think there are lots of reasons why the market topped, none of which have anything to do with buybacks. Also, these morons aren’t factoring in massive earnings and revenues gains from the previous cycles.

Revenues and earnings are up huge since the last cycle top. The buybacks we’re seeing today are wasteful, idiotic, and completely devoid of rational thinking; but they’re nothing special when compared to previous cycles.