PT - JOURNAL ARTICLE AU - Clifford Asness AU - Todd Hazelkorn AU - Scott Richardson TI - Buyback Derangement Syndrome AID - 10.3905/jpm.2018.44.5.050 DP - 2018 Apr 30 TA - The Journal of Portfolio Management PG - 50--57 VI - 44 IP - 5 4099 - https://pm-research.com/content/44/5/50.short 4100 - https://pm-research.com/content/44/5/50.full AB - Over the last few years, a lot of press, pundit, and political attention has been paid to share repurchases, much of it critical. Most repurchase critics assert that share repurchases are at historical highs and that dollars spent repurchasing shares would otherwise be directed toward profitable investment. Some also credit recent stock market gains to the “sugar high” of share repurchases. The authors show that most of these criticisms are without merit (at least, merit that can be demonstrated), sometimes glaringly so. Aggregate share repurchase activity has not been at historical highs when measured properly, and when netted against debt issuance it is almost a non-event: It does not mechanically create earnings growth, does not stifle aggregate investment activity, and has not been the primary cause for recent stock market strength. These myths should be discarded.TOPIC: Security analysis and valuation