I’m not sure of this argument, but I sense meaning going on at the margin.

My Econ professors had a saying. Something like “you know a correction will start when the last stalwart holdout is convinced he can make money in this market [meaning no one else is left willing to jump in].” Paraphrasing a decade old quote.

If earnings are low then so is the free cash flow too. In which case most of these companies are borrowing cash to pay out dividends which is not a good sign.

Similarly, buybacks are supposed to be value accretive. Paying for it using borrowed cash is not adding value. Additionally, buying back a stock which is trading well over its fundamental value is same as overpriced acquisition.

Arguably they're buying back stock now because they believe it's undervalued. The other prevailing narrative in the media today is that corporations are too powerful and are bleeding the American consumer & worker dry. Which is it? If they're actually bleeding the American consumer dry you'd have to be an idiot not to want a piece of the action, while if they're overvalued and about to collapse there's no reason to be afraid of them.

Apple having the largest buyback amount doesn't seem to tell us a ton by itself, given that they are among the top few most valuable companies in the world.

The headline is "Dividends and buybacks now larger than the total reported earnings of the S&P 500." For that conclusion, it's absolutely relevant that Apple et al are doing the buybacks and that their market cap dwarfs many of the companies on the S&P 500 (which has a threshold of $6B to enter, vs. close to $1T for Apple). Apple deciding that they're going to return some of the cash to shareholders they've been stockpiling for the last 5ish years would dwarf the entire earnings of most of the bottom 200 stocks in the S&P 500. That's not a report on weakness or danger in the market, it's a report of what a small number of companies are doing with a large cash hoard. It's sorta like reporting that "Residents of Medina, WA lost more money to divorce in 2019 than they made in total wages" without reporting that Jeff Bezos is a resident.

This is a great way to put it! Thank you. Would it be fair to say that this suggests the market isn't really expanding and has essentially become zero-sum (or technically I guess it could mean that expansion is free, but that seems unlikely)?

Nature usually abhors a steady-state: when you think you've reached one, it often means that there's a competitor that's too small for you to see but growing exponentially.

Also, now that so many of the unicorns like Uber and Lyft are going public, I wonder how much of the market is currently still private. Not to mention, many of the unicorns are horribly unprofitable and potential a net negative for the market.

With low interest rates, high corporate profits, and low growth, I'd expect to see a lot of debt added to balance sheets; it's a way to lever up the capital structure to the benefit of existing shareholders, as long as profits remain high and interest rates remain low. (And corporate bonds/loans are usually fixed interest, so the interest rates are locked in until they need to go back to the debt markets.)

Or you’ve already moved on, and the next CEO eats the difference. The incentives between those two vary wildly.

It’s only rational up to some level of indebtness (and often companies go too far). If you take on debt just because you can, how are you going to delever the balance sheet when earnings go down and interest rates go up?

[1] http://press.spglobal.com/2019-03-25-S-P-500-Q4-2018-Buyback...

Heavily indebted companies struggle to survive distress too.

That's simply not true. Next you'll be telling us it's illegal for a company to do anything that isn't about maximising shareholder value.

https://www.lawschool.cornell.edu/academics/clarke_business_...

"First, shareholders do not own business corporations, nor do they own the assets of the corporate entities... Shareholders own shares."

Somewhere back in the eighties, it became popular in the business community to say that the purpose of a company is to maximise shareholder value. That opinion and others like it have now so saturated society that people take it as received truth, but it's not. Likewise the idea that shareholders are owners.

Now, as in many things, laws do change over time and if enough people continue to believe this hard enough for long enough, there will eventually be enough case law that it ultimately become true. One day, it might be true, and law. That day has not yet come.

But I don't get the "shareholders do not own business corporations" bit. Would a sole owner "own" a business corporation? Do real estate owners "own" real estate or do they own "bundles of intangible rights"?

Well, why would they? At risk of horrifically simplifying things, I have a company, I decide I want some more money. I sell you the right to vote in some things that concern the company, and I sell you a share of any dividends that get paid out in the future. That's what you get. Do you now own the company? Do you own the company assets? I didn't sell that to you. I sold you the right to vote in some company meetings and decision making processes, and I sold you a piece of any future dividends that get paid out to you and others like you. Doesn't sound like "owning" something to me.

What does that mean? You don’t “own” the company, do you?

If the company is just me and a bag of tools, fixing people's cars on their driveway, do I own that company? What does it even mean for me to "own" it?

An opinion of mine the ownership of a company through stocks is secondary to stocks being a quasi-cash financial instrument like bonds.

If you scroll down to "Significance", you can read for yourself that it's by no means universally accepted ("that this interpretation has not represented the law in most states for some time").

Let's come forwards a little; as the U.S. Supreme Court recently stated, "modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so."

Where this is basically going is that the common belief - that there is some clear, absolute law that totally says the shareholders are the owners and the company is all about giving money to them - simply isn't true.

Here's some legal people on the subject; https://www.lawschool.cornell.edu/academics/clarke_business_...

Key phrases include "shareholders do not own business corporations, nor do they own the assets of the corporate entities".

Now, there are other opinions, but the very fact that this is an ongoing discussion suggests strongly that it is not as cut and dried as you claim.

Now, some companies sell shares that don't have voting rights (e.g. Google, Facebook). Those are a bit more nuanced. Though even in those cases, there are voting shares, they're just not traded in the public markets. So, the statement that the company is owned/controlled by its shareholders remains correct.