Joel Tillinghast on stock buybacks

Buybacks are most popular when companies are feeling flush, and those are often the moments when buybacks are least beneficial.  As the market was topping out in the third quarter of 2007, S&P 500 companies bought back $171 billion of stock.  A year and a half later, the S&P crashed to half its former value, and in the first quarter of 2009, only $31 billion of stock was repurchased.  This is disappointing not just because the timing of the buybacks was inopportune, but also because buybacks signal confidence in the company's value and outlook.  Cheer is most appreciated when despair is all around.  When I study some buybacks that turned out badly, I find that very few companies took the action because of a discount to intrinsic value.

~ Joel Tillinghast, Big Money Thinks Small, p. 117

Warren Buffett on the value of bear markets

The best chance to deploy capital is when things are going down.

~ Warren Buffett

Kevin Duffy on the role of financial markes

We’ve lost sight of the fact that the financial markets exist to efficiently allocate capital.  Mock and destroy that function and you’ve done the same to a functioning economy.  Interest rates are no longer set in the marketplace, but manipulated by central bankers.  Active investment managers seeking value have been replaced by index funds on auto-pilot.  The market’s most capable sleuths and skeptics – short sellers – have been exterminated.  Investors and speculators have become divorced from their key role as price discovery agents.  Price and value no longer matter.

~ Kevin Duffy, "Game Over," LewRockwell.com, February 1, 2021

Mike Green on how passive investing is distorting capital allocation

That is actually a very important role: taking money from bad companies and giving it to good companies is a critical role in the capitalist system, effectively allowing those who are efficient and intelligent allocators of capital, to give money to management teams that have good prospects in terms of generating future wealth.  What we've created now is a distortion that's a funhouse mirror effect, right?  Where we've presumed everyone is doing this for us where it is a fool's game to do it for ourselves.

~ Mike Green, "Why The Rise of Passive Investing Might Be Distorting The Market," Odd Lots podcast with Joe Weisenthal and Tracy Alloway, January 23, 2020