REPURCHASE REMORSE

Over the past year, net share buybacks by public firms totaled $961 billion. Unfortunately, while firms are in a good position to know when their shares are frothy, they don’t act like it. For example, share buybacks peaked at $175 billion in 2007Q3, the quarter the stock market peaked. In 2009Q2, when the market bottomed, so did buybacks at $25 billion. Maybe, despite less favorable tax consequences, issue more dividends.