Buybacks at $46B a Month Dwarf Everything in U.S. Market (2015)

Re:Buybacks at $46B a Month Dwarf Everything in U.S. Market ... by phyalow on Monday April 04, 2016 @10:26AM (#11422081)

> The timing of dividend payments is irrelevant.

False. If I receive cash today I can reinvest it and start earning a return. If I receive cash in a month I have forgone one months reinvestment return.

> investors could simply short the stock and get a guaranteed profit, which is not possible in an efficient market.

False. Well if you are short a stock over ex dividend date then you need to pay the owner of the stock (whomever you borrowed from) 1) the dividend which he has forgone 2) a financing spread equal to a benchmark (e.g. FED Funds + 300 bp's) for the duration you are short.

No offense but you really haven't thought this through very hard.

Also markets are not efficient despite what you read in academia.

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Re:Buybacks at $46B a Month Dwarf Everything in U.S. Market ... by JDDunn9 on Monday April 04, 2016 @01:09PM (#11423517)

The net present value takes into account the difference between payment today and payment tomorrow.

The ex-dividend rate is an implementation flaw that makes the stock price discontinuous at the dividend date. If dividends were pro-rata it would not be.

I never said markets were perfectly efficient.

You didn't think through your answer very hard did you? ;)

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Re:Buybacks at $46B a Month Dwarf Everything in U.S. Market ... by phyalow on Tuesday April 05, 2016 @09:34AM (#11430199)

I think we are going to continue disagreeing. You seem to enjoy Finance so I would encourage you to learn more about it for your own benefit.

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