How Buybacks Have Warped the Stock Market & Boeing

Discussion in 'Markets & Economies' started by leo25, Jan 22, 2020.

  1. leo25

    leo25 Well-Known Member Silver Stacker

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    Thought this was a great talk regarding the absurdity of companies buying back stock instead of reinvesting in research and development. The part where he talks about Boeing is very good, that starts about 53min.

     
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  2. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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  3. Roswell Crash Survivor

    Roswell Crash Survivor Well-Known Member Silver Stacker

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    It really boils down to three words: Incentives and Self-Interest

    Incentives relating to remuneration of senior executives, via preferred stock and/or stock options. Some of their contracts also stipulate hefty bonuses for executives relating to stock performance.

    These incentives encourage a focus on 'gaming' short-term stock performance at the cost of future value-creating prospects.
     
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