Has Corporate America Heard This Man's Advice? It frustrates me endlessly. When the stock market and economy are both booming, publicly traded companies repurchase their shares like it is going out of style. Over the past three years, the companies that make up the S&P 500 Index spent more than $2 trillion buying back their own shares. Over that time period, corporations were buying back so much stock that they were the single largest source of demand for American stocks. Let me be clear - I do not have a problem with companies repurchasing their shares. In fact, when done intelligently, share repurchases are a powerful tool for creating value for shareholders. The problem is that corporate America does not repurchase shares intelligently. Quite the opposite... These companies are most aggressive with their buybacks at the worst possible times. Because they repurchase their stocks most aggressively when the economy and markets are booming, they make those repurchases when their stock prices are high. Instead of buying low, corporate America buys high. Then, when economic difficulty hits and share prices slump, these companies stop buying back shares. Sometimes the same companies that were repurchasing shares at high prices end up issuing shares at low prices after the market has tanked. Brutal... Goldman Sachs just released a report that indicates that share repurchases are expected to decline by 50% to $371 billion during 2020. Companies like McDonald's (NYSE: MCD), AT&T (NYSE: T), Nordstrom (NYSE: JWN) and all of the big banks have completely suspended their repurchase programs even though their share prices are down. The reason these companies have to stop repurchasing shares when their shares are actually great bargains is because they spent all their money repurchasing shares when stock prices were much more expensive. This isn't rocket science, folks... All that needs to happen is for companies to have a little patience when the economy is good and stock prices are high. They should let cash build and wait for a better opportunity. Share repurchases aren't meant to be the default option for companies to use excess cash on when they don't know what else to do with it. Share repurchases are meant to be done opportunistically when a share price actually represents good value. The corporate boards of these companies need to think like investors when spending cash on share repurchases. Buy when there is value, not just when cash is most available. We can teach them this buy handing them a copy of The Warren Buffett Way... Or we can just get my seatmate on that flight out of Winnipeg 20 years ago to explain it to them. Good investing, Jody P.S. Recently, Chief Income Strategist Marc Lichtenfeld gave away three of his favorite dividend payers in a special video... And now Chief Trends Strategist Matthew Carr from our sister e-letter Profit Trends is raising the ante. Tomorrow, we'll hear from Matthew on one of the sectors that excites him most today - and if you keep your eyes peeled, he'll even reveal details on one of Profit Trends' favorite stocks for free. | 
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