INSIGHTS
FEB
4
COSTA’S CORNER
What is good for the goose is not necessarily good for the gander
No lyrics there just facts.
I was going to do a piece about oil and oil prices and so on but after having read Senators Shumer and Sanders Op-ed in the New York Times today I changed my mind.
The Senators want to propose legislation mandating that corporations fulfill some requirements before they use free cash flow to repurchase shares.
These requirements are using free cash flow to better employees pay and benefits and helping the communities in which they operate before spending any money on stock repurchases.
Anyone who knows me knows how I feel about stock buybacks. If you read the Senator’s op ed you will see it expressed eloquently and to the point.
I am a little torn by the whole thing because it does seem somewhat like something out of the socialist handbook. Tell businesses when and where to spend their money and make sure the collective whole is taken care of before the select few. Governments again getting involved in how businesses are run and who should benefit from the success of the business is not the American way.
However, I do think the Senator’s are right and something should be done about this wanton disregard for the employees of a company and honestly, the disregard for the future of these companies. The more they spend on repurchases and dividends, the less they spend on research and development. The less competitive companies become in the global economy and the deceleration of US dominance will pick up speed.
It just doesn’t sit well with me having Washington legislate the way companies do business. I would like to see companies take the initiative and change the discussion, so we don’t have to let politicians determine business practices.
Maybe that’s the point. Maybe the threat of some stringent regulations will change the behavior of corporations and find better uses for those profits. It may impact the market short-term because a lot of this Bull market was built on the backbone of corporate buybacks, but when companies are better citizens, investment money usually follows.
My gut tells me this will die a quiet death and bigger issues will prevail, but I do think putting the “buyback phenomenon” into focus for a bit is a good thing and having discussions about its worth surely will help change some corporations’ minds about capital usage. We can only hope.
I am not sure what was worse last night, The “Big Game” or that terrible halftime show. Let’s call it a tie and unless you were a Ram’s fan or a Patriot’s who really cared anyway? You were watching it for the commercials, and most did not disappoint.
The best one was Amazon’s Alexa commercial. The NFL’s 100th anniversary was a close second. Both are worth watching again.
I had the Patriots covering. Little solace, I had 9-0 in my box pool. Ugh
You can go research the NFL theory about the markets, I am sticking with what got me here.
50% Stocks
25% Fixed Income
25% Cash
No lyrics there just facts.
I was going to do a piece about oil and oil prices and so on but after having read Senators Shumer and Sanders Op-ed in the New York Times today I changed my mind.
The Senators want to propose legislation mandating that corporations fulfill some requirements before they use free cash flow to repurchase shares.
These requirements are using free cash flow to better employees pay and benefits and helping the communities in which they operate before spending any money on stock repurchases.
Anyone who knows me knows how I feel about stock buybacks. If you read the Senator’s op ed you will see it expressed eloquently and to the point.
I am a little torn by the whole thing because it does seem somewhat like something out of the socialist handbook. Tell businesses when and where to spend their money and make sure the collective whole is taken care of before the select few. Governments again getting involved in how businesses are run and who should benefit from the success of the business is not the American way.
However, I do think the Senator’s are right and something should be done about this wanton disregard for the employees of a company and honestly, the disregard for the future of these companies. The more they spend on repurchases and dividends, the less they spend on research and development. The less competitive companies become in the global economy and the deceleration of US dominance will pick up speed.
It just doesn’t sit well with me having Washington legislate the way companies do business. I would like to see companies take the initiative and change the discussion, so we don’t have to let politicians determine business practices.
Maybe that’s the point. Maybe the threat of some stringent regulations will change the behavior of corporations and find better uses for those profits. It may impact the market short-term because a lot of this Bull market was built on the backbone of corporate buybacks, but when companies are better citizens, investment money usually follows.
My gut tells me this will die a quiet death and bigger issues will prevail, but I do think putting the “buyback phenomenon” into focus for a bit is a good thing and having discussions about its worth surely will help change some corporations’ minds about capital usage. We can only hope.
I am not sure what was worse last night, The “Big Game” or that terrible halftime show. Let’s call it a tie and unless you were a Ram’s fan or a Patriot’s who really cared anyway? You were watching it for the commercials, and most did not disappoint.
The best one was Amazon’s Alexa commercial. The NFL’s 100th anniversary was a close second. Both are worth watching again.
I had the Patriots covering. Little solace, I had 9-0 in my box pool. Ugh
You can go research the NFL theory about the markets, I am sticking with what got me here.
50% Stocks
25% Fixed Income
25% Cash