Subject:
Morningstar Morningstar, Inc. (NASDAQ: MORN) is an independent investment research company based in Chicago, Illinois, USA. (Wikipedia Jan 2010)
Commonsense Economics:
By John Schroy, on May 16th, 2010 | 
Eventually, at some point, without an efficient market, common stocks become mere baseball cards.
Sooner or later, some Baby Boomer, pressed to pay his bills in retirement, will find that one can’t live off the dividends of common stock and that when everyone is trying to cash out their holdings at the same time, market prices plunge to levels that seemed inconceivable for generations. But it will simply be the cost of allowing an inefficient market to flourish for so long.
This article discusses the concept of inefficient markets and the practical consequences.
The Post Stock Buyback Era
By John Schroy, on April 19th, 2009 | 
The Crash of 2008 signaled a turning point in capital markets. The stock buyback era seemed to have ended. The Efficient Market Hypothesis was discredited. The inability of market experts and major institutions to place a fair value on thousands of securities indicated basic problems in security analysis and the handling of freely available information.
This article describes new challenges facing fundamental security analysts in the early 21st century, and the consequent opportunities.
Assessing the damage
By John Schroy, on April 14th, 2009 | 
The buyback era began in 1982 when the US Securities and Exchange Commission promulgated Rule 10b-18, granting “safe harbor” to corporations that wished to use equity repurchases to boost market prices in order to give value to executive option schemes. The total value of corporate buybacks since SEC Rule 10b-18, in 2008 dollars, is estimated at $5.77 trillion.
Buybacks have been funded not only from profits, but by raiding depreciation reserves and borrowing from banks.
Topics: 
Popular Articles