Share Buybacks (1)

Share Buybacks & Why They Usually Fail


Every few months, the papers would highlight the amount of share buybacks by listed companies, deliberating their merits, pros and cons...


Why there is a stockmarket


We need to understand first why there is a stockmarket in the first place?

First, it is there to allow companies to raise cheap funds to fund their growth strategies.

Second, it is to allow for individuals and other entities to participate in the growth of these companies.

Other reasons are secondary in nature.

A company raises funds to facilitate corporate strategies, hopefully they will make money, preferably higher than the prevailing interest rate (if not, all funds should put money in the bank and close shop).