“The End Of The Road” – Debt-Funded Buyback Boosts Are Finite
by Tyler Durden
ZeroHedge.com
06/23/2015
The problem for investors is that inorganic measures to boost profitability, like cost-cutting, wage suppression, layoffs, and stock buybacks, are finite in nature. Eventually, these options are exhausted. There are only so many employees that can be terminated, wages can only be suppressed for so long, and there is a finite number of shares that can ultimately be repurchased from shareholders. The question that investors need to be asking is what happens when companies inevitabilty reach “the end of road.” Importantly, with the Fed determined to begin hiking interest rates, despite weak economic data, the end may be nearer than most are currently expecting.
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