Monthly Archives: December 2016

Comment on article in WSJ

    • Posted In Surging Buybacks Say Stock Boom Isn’t Over

    • I applaud the majority of the 7 comments above which see stock buybacks programs as seriously flawed.

      To see how bad stock buybacks compare to investments visit “The Net Profit Test”  ( and you will see a graph that compares the annualized returns from buybacks to investments.

      From the perspective of the Shareholder (vs the share seller), Buyback returns are simple interest vs compounding from investing.

      CEOs that buyback their company’s shares are admitting that they don’t know how to invest the cash profitably.  One would think that  would be their most important responsibility.

November Results for Screens: Undervalued outperform S&P by 6.5% and 2.3% more than our universe’s average

Our universe of stocks outperformed the S&P by 4.2% last month while the  Undervalued Screen gained 6.5% relative.  The Overvalued were equal to the universe’s return of 4.2% mainly due to the superior performance of the Energy stocks which numbered 15 out of 26 in the screen.

The Overvalued ended the month on a strong note gaining 2.4% in the last week.

Changes and Updates to November Screens

There were huge gains and losses for those stocks entering or leaving the screens from October  31st to November 30th.
Those leaving the Undervalued averaged close to +14%.  Those leaving the Overvalued were down 7%.
The 7 stocks entering the Overvalued screen increased an average of 29% in the month, an astonishingly high number.  At the beginning of the month, they were fairly valued with an average of -1.8% and a range of -12 to +11%.

(c) 2016 Robert L. Colby

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