buybacks Markets

Ignore That Bear Market And Focus On These Buybacks

"Tall order".

Listen, SocGen's Andrew Lapthorne is not a fan of financial engineering, ok? In fact (and I hope I'm not mischaracterizing his views on this), I'd be willing to go out on a limb and say that when it comes to criticizing financial engineering gone wild in an era of easy money, Lapthorne is the most outspoken critic on the Street. He's been railing against the folly inherent in leveraging the balance sheet in the pursuit of ill-timed buybacks for as long as I can remember and this is perhaps my favorite quote from him on that front: As we have long pointed out, the reason for [the] increase in debt is largely down to financial engineering – aka share buybacks. Borrowing money to buy back your elevated shares is clearly nonsense. Yes, it's "clearly nonsense", but the problem with being perpetually mad at this particular brand of nonsense is that in a world where artificially suppressed borrowing costs are commingled with investor myopia and commensurate short-sightedness on the part of corporate management teams whose compensation is in some cases equity-linked, everyone involved prefers "nonsense" to balance sheet discipline. And because the same policies that pushed borrowi
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1 comment on “Ignore That Bear Market And Focus On These Buybacks

  1. Canuck says:

    “commingled”? Is that mixing in commies?

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