There are many reasons companies say they're buying back stock. But who makes the decision to do so? The directors and company executives, that's who. You know, the insiders that own the largest positions in the company. The ones with the most to gain from an appreciation in stock prices and higher dividends. The ones that when the market starts to turn over will be the cause of that turn because they've been quietly selling and taking profits because the money that's been rolling in from repatriated earnings and tax cuts is about to run out and stop driving up the price.
And if you're a professional money manager and constantly and painstakingly go through the filings of the companies you own, you'll be aware of the increase in insider selling and sell with them. But if you're the other 99% with 401Ks and IRAs you'll be stuck holding the bag when the biggest stock bubble in history crashes. I dread to think what the consequence will be with the margin calls that will result and how that will affect the small investors dumb enough to go long on margin.
After the crash much of the money that rolled in from repatriated earnings and tax cuts will be tucked safely away in the pockets of insiders and the ones that got out early, and it will stay there. The rest of it will be vaporized along with the hard earned money of small investors desperate for any return greater than offered by low interest rates. Will the Fed be there to pick up the pieces again?
Trading or investing without chart analysis is like going to a gunfight armed only with a knife.
