Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Correct into Bitcoin Happy Thanks Halving - Earnings Season Buying Opps - 4th July 24
24 Hours Until Clown Rishi Sunak is Booted Out of Number 10 - UIK General Election 2024 - 4th July 24
Clown Rishi Delivers Tory Election Bloodbath, Labour 400+ Seat Landslide - 1st July 24
Bitcoin Happy Thanks Halving - Crypto's Exist Strategy - 30th June 24
Is a China-Taiwan Conflict Likely? Watch the Region's Stock Market Indexes - 30th June 24
Gold Mining Stocks Record Quarter - 30th June 24
Could Low PCE Inflation Take Gold to the Moon? - 30th June 24
UK General Election 2024 Result Forecast - 26th June 24
AI Stocks Portfolio Accumulate and Distribute - 26th June 24
Gold Stocks Reloading - 26th June 24
Gold Price Completely Unsurprising Reversal and Next Steps - 26th June 24
Inflation – How It Started And Where We Are Now - 26th June 24
Can Stock Market Bad Breadth Be Good? - 26th June 24
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Major Stock Market Reversal Signal from Waning Enthusiasm for Share Buybacks

Stock-Markets / Stock Markets 2016 Mar 19, 2016 - 06:26 PM GMT

By: EWI

Stock-Markets

"State of the Global Markets Report -- 2016 Edition" (excerpt)

Editor's note: The following article was adapted from the just-published State of the Global Markets Report--2016 Edition, one of our most anticipated annual reports for technically minded investors and analysts around the world. We are making the first 10,000 copies of this $99 report available 100% free. Click here to get your free copy now >>


In the May 2008 issue of The Elliott Wave Financial Forecast, three months before the infamous Lehman Brothers bankruptcy, we cited a sudden loss of enthusiasm for company buybacks as another component of a major market reversal.

We noted that for companies issuing buyback announcements "cheers invariably turn to jeers" as the stock market reverses from up to down.

Our evidence included the following headline from 2001: "Buybacks Hit a Wall of Fear."

The 2008 version from The Wall Street Journal read, "[From] Buyback Boom To Buyer's Remorse."

Well, here are some more recent headlines:

Stock Buyback Deals Can Be Stinkers (USA Today, Nov. 5, 2015)

The Stock Market Has a Buyback Problem (Fortune, Nov. 18, 2015)

Surge In Stock Buybacks Good or Evil? (The Wall Street Journal, Nov. 22, 2015)

As the following chart shows, through the first three quarters of 2015, buybacks were the strongest since the record year of 2007, when stocks made a major top.

Buybacks

Until recently, share repurchases were considered a positive development for companies. But a widely circulated report from Research Affiliates says buybacks offer "little overall benefit. 'Buybacks are simply a mirage.'" Fortune concludes, "Investors might soon regret the buyback binge."

They always do, and the outbreak of skepticism is a sure sign that the falling share prices that invariably compounds those regrets is very close.

Originally published Nov. 6, 2015.

To continue reading insights like this, we recommend you get the 50-page State of the Global Markets Report--2016 Edition 100% free. See below for details.


State of the Global Markets Report

Your FREE Report:
State of the Global Markets Report -- 2016 Edition

This 50-page, chart-filled report may be the most valuable publication you read this year.

It will help you avoid the dangerous pitfalls and spot the biggest opportunities in the year ahead. State of the Global Markets Report is one of the most anticipated annual reports for investors like you.

For a limited time, we are making the report available 100% free of charge. After that, it goes to $99 per download, where it will stay for the rest of the year.

Claim your free 50-page report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Waning Enthusiasm for Share Buybacks Signals Major Market Reversal. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in