Is it hedge funds? Nope. They are selling.
How about retirement funds? Not this time. They are selling.
How about insurance forms? Nope. Sellers.
Insiders! They know a good thing when they see it! They do, indeed. They are net sellers.
Then it must be foreigners. Sorry. They are selling.
Then who? Corporations, mostly. They are using business profits to buy back shares.
Individuals also buy, but not as much as corporations.
We have not seen this much buying back of corporate shares in years. Specifically, not since since 2007. That was the #1 year for corporate buy-backs.
You may recall what happened in 2008.
But why do they do this? What value does this add to plant capacity? To marketing? To innovation? None.
But it runs up stocks in stock option deals. Who has such deals? Senior management.
Who make the decision to buy back shares? Senior management.
So, stocks go up, yet corporate capital is being depleted. Is that it? Yes.
But isn’t this like eating your seed corn? Yes. But whose seed corn is it? Not senior management’s. They will be replaced soon enough. Turnover is inevitable. The question is: Can they time their exit correctly?
I believe this is the phrase: “Take the money and run.”
Timing is everything when it comes to stock options and retirement.
There is always the old maid. Pass her on!