STOCK BUYBACKS

I do not like stock buybacks, but  I have bought one of the ETF that specializes in them.  I think stock buybacks are a waste of money, but many companies that do them seem to do quite well  I think it is earning that count and not Price to earnings.  A recent article on CNBC, however, agrees that buying back stock is an iffy situation.

According to Goldman Sachs, stock buybacks will surge by 18 percent in 2015, exceeding $600 billion and accounting for nearly 30 percent of total cash spending.*
......................................................
Of the four exchange-traded funds that focus on companies that heavily buy back their shares, two have beaten the S&P 500 stock index in recent years, and two have trailed it. 
.....................................................
Companies that have executed the 25 biggest buybacks since the end of 2011 have risen 21 percent since, according to a CNBC.com analysis. (We assumed investors bought 100 shares of each company announcing a buyback at the closing price on the day of the announcement). That compares to 53 percent for the broader market. Of the 25 buyback stocks, just 11 have beaten the market since the repurchases were disclosed, and many have benefited from obvious macro trends.
...................................................
Buffett said in Berkshire Hathaway's 2012 shareholder letter. "But never forget: In repurchase decisions, price is all-important. Value is destroyed when purchases are made above intrinsic value." 

http://www.cnbc.com/2015/09/08/ybacks-are-killing-economic-growth.html

FIRST FIVE STOCK TRADING DAYS OF THE NEW YEAR

A part of the lore of the stock markets is that ass the first five trading days of the new year go, so will the year.  The first five trading days this year were down which signals a down year.*  In addition, the year of mid-term elections (such as 2014) is usually the weakest of the stock market years.  On the other hand, both janet Yellon (new Chairman of the Fed) and Ben Bernanke (outgoing chairman) forecast this will be a good year economically.  If so, I think it would be unusual for the stock markets to go down.

* Jose Ursua, a former colleague of mine at Goldman Sachs, has run these numbers all the way back to 1928. He finds that when stocks rallied during the first five days, there was a 75.4 percent chance of a rally for the year. For the period since 1950, the probability rises to 82.9 percent. Few rules in finance are as unambiguous as that. So when the first five days has been net positive for the Standard and Poor’s -- and I’m feeling bullish in any case -- I’m especially confident.

This year I’m still feeling pretty bullish, but the five-day rule is against me. U.S. stocks fell 0.5 percent -- nothing drastic, but down nonetheless. Over the whole period since 1928, a negative start implies a 47.8 percent chance of a negative year; since 1950, the figure’s about the same, 46.4 percent. In both cases, call it 50-50.

http://www.bloomberg.com/news/2014-01-14/what-five-days-of-trading-tell-us-about-2014.html