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Posts by anantksundaram

If you could not understand the fact that P = EPS*(P/E), which in turn is what I was referring to, I really don't know what to say.... except 'Oh boy.'
No, it has not 'gone into nothing'. It's being put to productive use by lots of investors to potentially create lots of value.
Good luck with the expectation that such a scenario will come to pass. And, that if it does, the price will be as you say. Sounds like the expectation of a free lunch to me....
You and I are interpreting those two sentences very differently. The first sentence says that the number of shares they buy back can be essentially anything. Even zero. The second sentence says that the average purchase price may exceed the price at a given point in time -- for example, if they'd bought the shares on average for $95, and the stock happens to be trading at $90, they're doing a CYA. The only issue is whether they think at least $95 (and perhaps more) is a...
The 'emperor' with no clothes is still 10x better than some folks -- hmmm... who am I thinking of... -- with a head-to-toe parka.
On the topic of Apple commercials, what's up with the embarrassingly crappy -- including one that's outright sexist -- ads from ATT and Verizon for the iPhone. Even if not produced by Apple, doesn't the company they have some sort of oversight over how its products are pitched?
Of course the EPS will rise in an arithmetic sense. The mistake you're making is in assuming that the P/E remains the same as before. That is a function of the market's assessment of Apple's growth prospects and its future levels of riskiness, and of the price at which Apple repurchases the shares. Unless the repurchase clearly signals to the market that Apple is significantly undervalued, in the sense that something fundamental has changed about the market's perception of...
Overpaying for a crappy asset is a waste of shareholder value. What does 'strategic' mean?
We cannot jump to that conclusion. 'Buyback program' does not mean 'buyback at any price program.' There is a market valuation at which repurchases will destroy value for shareholders.
It's not always the case that repurchases are better than dividends, but it's often the case. 1) Repurchases do not have the de facto permanence of dividends: once put in place, withdrawal -- or even lowering -- of dividends sends a terrible signal to the market. Stock price consequences can be devastating. Companies think long and hard before initiating dividends. Repurchases -- even announced repurchase programs -- can be easily reversed. 2) Dividends necessarily involve...
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