“Don’t be the commuter who rejoices after the price of gas increases, simply because his tank contains a day’s supply.”

What are stock buybacks and why are many companies so recently attracted to them?

When you purchase a stock, you become a silent partner of that company. All decision making abilities are transferred to the CEO and the group of management employed by the company. These individuals have control over the day-to-day operations and weigh in heavily where the cash goes.

A company buys back stock using cash to increase shareholders ownership of their pie while reducing the total outstanding shares.

So, what happens to the shares the company buys back? Continue reading

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Meet Mr. Market

On multiple occasions, the world of finance gets bloated with external information that turns out to be very irrelevant. These factors inflate the economic state of businesses, world economies, and the next “big new thing”.

This is not new, even more, it has been around for many business cycles, but investors, as well as employees, in the financial industries get caught up in this mirage. Fortunately for us, these incoherent movements create market fluctuations which assist us by opening opportunities when the market oppresses a sector or a specific company.

Let’s make this clear. We cannot Continue reading