Two responses to Laurent. 1. Fluctuations in stock prices are much more extreme than any rational evaluation of future profits. Generally, when a stock increases by say 2% in a day, there is rarely some basis for expecting the present value of future profits to go up by a comparable amount.
2. I did not mean to imply that "speculators are bad," but rather that stock buybacks are probably not good for the economy. You brought up the equivalence with dividends & I merely questioned the equivalence. 3. Admittedly, I may be misinformed. On Behalf Of Laurent GUERBY Theoretically current stock prices are to reflect estimates of future profits so there should be a strong connection between the two. But shooting down share buybacks on "speculator are bad" ground is just misinformed. ------ Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901 michaelperelman.wordpress.com _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
