Mar 18, 2023
Derek Moore is back with Mick Puck to discuss the Warren Buffett quote excoriating opponents to share buybacks. Why buybacks and dividends are more closely related than you think. Using Walmart to explain how the change in shares outstanding affect EPS. Where to see share repurchases and dividends on a company’s cash flow statement. Plus, our quick overview of the Silicon Valley Bank (SVB) debacle and what the FDIC’s list of troubled banks at the end of 2022 told as (if anything) about the 3 banks that failed the last 2 weeks.
SVB Silicon Valley bank example of duration risk in bonds (mortgage-backed securities)
How MBS mortgage-backed bonds see duration sensitivity to interest rates rise as rates rise
Where to find the FDIC quarterly report on banks including their watch list and amounts
Warren Buffett statement on how share buybacks are misunderstood.
Do companies always buy back shares when their stock is undervalued?
Where to find on cash flow statement share repurchases and issuance
Where to find on cash flow statement dividends paid out
Explaining the difference between a buyback yield and dividend yield
How much did Apple repurchase through buybacks last year vs dividends
Walmart as an example showing how reduction in outstanding shares effects earnings per share
Comparing capital gains on shares to dividends for normal investors and their preferences
How buybacks are more flexible for dividends
Do buybacks show confidence in one’s own shares for companies?
Positives and negatives for buybacks including stock based compensation and dilution
Finally, some recommendations on a movie and a TV show
Mentioned in this Episode:
FDIC watch list of troubled banks and quarterly bank profile graphs https://www.fdic.gov/analysis/quarterly-banking-profile/graph-book/2022dec/
Sequence of recessions and what comes first https://podcasts.apple.com/us/podcast/sequence-of-recessions-slowdowns-dividends-make/id1432836154?i=1000603802075
US Debt Bomb and Growing Interest Rates effects on US Federal Deficit and Budget https://podcasts.apple.com/us/podcast/us-debt-bomb-interest-rates-brewing-auto-loan-problem/id1432836154?i=1000602839094
Underperformance of International Stocks https://podcasts.apple.com/us/podcast/underperformance-of-international-stocks-valuations/id1432836154?i=1000601650028
Wharton Magazine article Beware of High Dividends https://magazine.wharton.upenn.edu/digital/beware-high-dividend-yield-stocks/
Reuters article showing Discount Window picked up towards the end of 2022 https://www.reuters.com/markets/us/fed-discount-window-borrowing-is-edging-up-is-it-problem-2022-12-09/
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek derek.moore@zegafinancial.com