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| Subject: SEC Rule 10b-18 In 1982, the US Securities and Commission adopted Rule 10b-18,4 which provides that an issuer will not be deemed to have violated Sections 9(a)(2) and 10(b) of the Exchange Act, and Rule 10b-5 under the Exchange Act, solely by reason of the manner, timing, price, or volume of its repurchases, if the issuer repurchases its common stock in the market in accordance with the safe harbor conditions. Rule 10b-18’s safe harbor conditions are designed to minimize the market impact of the issuer’s repurchases, thereby allowing the market to establish a security’s price based on independent market forces without undue influence by the issuer. The practical effect of this rule was to encourage massive stock buybacks by corporations as a means of manipulating prices upwards in order to give value to executive stock options. Post Modern Security Analysis By John Schroy, on August 6th, 2009 |  2 comments  The target of classical security analysis is ‘intrinsic value’, a fuzzy concept defined as the value justified by the facts. Financial markets have become vastly more complex since the days of Graham & Dodd. Since the 1960’s, stock prices have generally exceeded ‘intrinsic value’. New techniques are needed now to handle the flood of free investment information. August 6th, 2009 | Print Article |  Email Article |  Topics: Benjamin Graham, Berkshire Hathaway, David Dodd, efficient market hypothesis, Eugene Fama, Fundamental Analysis, gold standard, Graham & Dodd, hedge funds, index funds, Indonesia, intrinsic value, Modern Portfolio Theory, OSINT, Post Modern Security Analysis, SEC Rule 10b-18, Standard Statistics, Warren Buffett | Category: New Economic Theory, featured | 2 comments |  Short urlPost Modern Security Analysis By John Schroy, on August 1st, 2009 | One comment  Security Analysis is the study of facts about negotiable instruments for the purpose of determining whether a particular instrument is appropriate for a specific investor at a particular time and the intrinsic value of the security compared to its market price, if any. The technique has evolved over time with the changing nature of information. In the 21st century, with a flood of open source information and increasingly complex, global markets, new approaches are necessary. August 1st, 2009 | Print Article | Email Article | Topics: Benjamin Graham, Bernard Madoff, Black and Scholes, common stock legend, David Dodd, efficient market hypothesis, ERISA, Eugene Fama, gold standard, Graham & Dodd, Harry Markowitz, John Burr Williams, Miller and Modigliani, Moody's, Paul Krugman, Post Modern Security Analysis, Richard Nixon, SEC Rule 10b-18, Standard & Poor's, The Economist, US SEC, W.D. Gann, Warren Buffett, William Sharpe | Category: New Economic Theory | One comment | Short urlNew research: By John Schroy, on July 15th, 2009 | Leave a comment  A new research study by M.A. Gumport, published on the Social Sciences Research Network, shows that stock buybacks are not as good for investors as often touted. The report suggests that when dividends are favored over capital gains, the interests of long-term investors are better served. This is added evidence that stock buybacks are undesirable corporate behavior, despite the favorable opinion of many on Wall Street. July 15th, 2009 | Print Article | Email Article | Topics: Corporate Governance, dividends, SEC Rule 10b-18, Stock Buybacks, US SEC, US taxation | Category: Stock Buybacks | Leave a comment | Short urlFeatured articles on inside pages
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