Collection: Charlie Munger - #55 'Share Buyback'



[Transcript]

AUDIENCE MEMBER 00:08

Last year we saw a record amount of share repurchases, and now we’re hearing rhetoric out of Washington D.C. specifically legislation to curb stock buybacks. What’s your take on stock buybacks and do you think politicians should be telling companies what to do? Thank you so much.


CHARLIE MUNGER 00:25

Well generally speaking I’m restrained in my enthusiasm for politicians telling corporations what they should do.


But I will say this. When it was a very good idea for companies to buy back their stock they didn’t do very much. And when the stocks got so high price that it’s frequently a bad idea, they’re doing a lot. Welcome to adult life. This is the way it is. But it’s questionable at the present levels whether a lot of it is smart.


Was Eddie Lambert smart to buy back so much Sears Roebuck? No. And there’s a lot of that kind of mistake that’s been made.


(Source: https://youtu.be/X1Oi3esiry8)

 

[YAPSS Takeaway]

"When it was a very good idea for companies to buy back their stock they didn’t do very much. And when the stocks got so high price that it’s frequently a bad idea, they’re doing a lot. Welcome to adult life. This is the way it is. But it’s questionable at the present levels whether a lot of it is smart." ~Charlie Munger