When Buffett muses he might buy back shares of Berkshire Hathaway, we have a revolution.
From the weekend’s New York Times:
Trump’s Tax Cuts in Hand, Companies Spend More on Themselves Than on Wages
President Trump promised that his tax cut would encourage companies to invest in factories, workers and wages, setting off a spending spree that would reinvigorate the American economy.
Companies have announced plans for some of those investments. But so far, companies are using much of the money for something with a more narrow benefit: buying their own shares.
Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companies’ stock. A company purchasing its own shares is a time-tested way to bolster its stock price.
…The tax overhaul is the cornerstone of Mr. Trump’s economic plan. It has been a big win for companies, offering lower corporate rates and a permanent break on overseas profits. Warren E. Buffett said in his annual letter to investors on Saturday that his company, Berkshire Hathaway, enjoyed a $29 billion gain thanks to the new tax law.
…In the fourth quarter, American companies’ investments in things like factories and business equipment grew by 6.8 percent. That was the fastest growth rate since 2014, but far from the giant surge in capital spending that was promised ahead of the tax overhaul.
But the buying back of shares is also at record levels.
Almost 100 American corporations have trumpeted such plans in the past month. American companies have announced more than $178 billion in planned buybacks – the largest amount unveiled in a single quarter, according to Birinyi Associates, a market research firm.
Such purchases reduce a company’s total number of outstanding shares, giving each remaining share a slightly bigger piece of the profit pie.
Cisco said this month that in response to the tax package, it would bring back to the United States $67 billion of overseas cash, using $25 billion to finance additional share repurchases. Alphabet, the parent company of Google, authorized up to $8.6 billion in stock purchases. PepsiCo announced a fresh $15 billion in planned buybacks. Chip gear maker Applied Materials disclosed plans for a $6 billion program to buy shares. Late last month, home improvement retailer Lowe’s unveiled plans for $5 billion in purchases.
Costco shines
Idiot me! I should have listened to my wife years ago and bought a hearing aid at Costco. Men are so stupid.
By now I would have fulfiled my inviolate investment rule of only “buying” free.
Logic:
My new hearing aids cost $2,699.99. If I had owned 500 Costco shares, that meant “free” hearing aids would have only cost $5.40 in per share appreciation. Heck, Costco shares have gone through the roof. $5.40 is a drop in the bucket — which I will soon be able to hear. (The drop falling into the bucket.)
My dentist says:
+ Brush and floss my teeth after every meal.
+ Change the brushhead on my electric Sonicare ever three months.
+ Use a water pik to get to those difficult places under my expensive implant bridges.
Tomorrow, I pick up my new Costo hearing aids. I’ll splurge on a container-load of Sonicare heads. My second Costco purchase, ever. Should I also buy a pair of $12.99 jeans?
Which laptop should I buy?
I get asked this question regularly. Here’s my “simple” analysis:
1. Apple Mac or Windows? Both work fine. Macs work better with graphics, images and video. Windows works better in the office. Depends on your own needs. Because his office gave him a Mac, my son likes his Mac. I like my Windows because I use software that only works on Windows. Switching from Windows to Mac or vice versa is hard. Not worth the effort, unless your company insists, or is buying you a free, pricey laptop.
2. Pointing stick or touchpad? I love the red button on my ThinkPads. Easier for me than a small, flat, slow trackpad. But many people like sliding the fingers around a trackpad. I don’t find sliding accurate or fast.
3. Speed and hard disk capacity. You should buy the fastest and largest. Don’t even try to skimp. This is your Stradivarius. You’ll use it more than any other gadget you own, including your iPhone or Android.
4. Battery capacity. In the old days I’d carry extra batteries for my laptop, especially on long plane trips. These days, laptop batteries last forever — certainly more than long enough for a New York to California six hour plane trip.
5. Screens are complex. These days you can get screens with oodles of pixels. They do wonders for movies, but can make documents and spreadsheets very hard to read — unless you do a lot of fiddling with type sizes. I prefer a big-screen 14″ laptop pumping out its contents to 21″ or 22″ external screens.. The bigger screen does a better job with all those pixels.
6. Keyboards are personal. Because I do a lot of typing, I prefer a decent keyboard. Lenovo has the best keyboards. Apple, HP and Dell are among the worst. They make chiclet keyboards. No travel. No feedback.
7. Windows 10 or Windows 7? I find Windows 10 impossible. To get a laptop today that will run Windows 7, you need to go to eBay. I’ve done that.
My favorite laptop is the older Lenovo ThinkPad X1 Carbon running Windows 7 on an old i7-6600U Intel chip. You can get faster X1 Carbons but, sadly, they only run Windows 10. My friend bought a Microsoft Surface with Windows 10 and Office 365. For $150 a year, he can visit his local New York City Microsoft store and ask as many questions as he wants. Cheap training and cheap trouble-shooting. He loves the service. Microsoft Surface machines are expensive. Very expensive.
On eBay, you can pick up a ThinkPad X260 or an X1 Carbon which run Windows 7. I have one of each. Both have the same red pointing sticks and the same fast i7-6600U Intel chip. Both can come with 16gigs of ram.
There are faster chips out there now. But they all deliberately don’t run Windows 7. Thank you Microsoft/Intel. It looks like this i7-6600U chip and my X260 and X1 Carbon will have to last me until Windows 12 or so, when Microsoft comes to its senses and fixes Windows 10.
My basic recommendation is try before you buy. Focus on the keyboard, the screen, and the weight.
Nice writeup on a big, cheap TV
This $650 TV should cost more than it does – and I’d recommend it to absolutely everyone
from Business Insider. Click here.
One talented lady
This story in the latest New Yorker is worth reading:
To read the article, click here.
Wonderful classic Jewish humor
Rodney Dangerfield: When I was born I was so ugly the doctor slapped my mother.
A car hit an elderly Jewish man. The paramedic asks, “Are you comfortable?” The man says, “I make a good living.”
I just got back from a pleasure trip. I took my mother-in-law to the airport.
I’ve been in love with the same woman for 49 years. If my wife finds out, she’ll kill me!
Someone stole all my credit cards, but I won’t be reporting it. The thief spends less than my wife did.
We always hold hands. If I let go, she shops.
My wife and I went to a hotel where we got a waterbed. My wife calls it the Dead Sea.
Harry Newton, who’s recently been told that the IRS has a warrant out for his arrest and his laptop will be locked if he doesn’t pay someone $5,000 in bitcoin. The IRS can’t find me and I have a backup for my laptop. But I did send some money to Nigeria…
So just out of curiosity, what has the New York Times done with all its new profits? Lots of new millionaire journalists out there?
I have been buying my Sonicare brushes and even extra wands on eBay for years…they work fine…one in fifteen may not last as long otherwise a very good buy…much cheaper than Costco even…I too shop Costco a lot but not as much I buy from Amazon.