Tuesday, July 14, 2015

Double Minting Income! (Musical Tribute)

July 13, 2015
U.S. companies expected to report worst sales fall in nearly six years

"As long as borrowing rates are less than the earnings yield of a company, there are going to be share buybacks and that has driven earnings growth," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

It does not end there. As long as margin loan rates are less than the expected earnings yield, there are going to be investors who borrow money to buy the stock.

In other words, as long as borrowing rates are less than the earnings yield of a company, then investors will borrow money to buy shares of the company that is borrowing money to buy its own shares.

Double the leverage, double the pleasure!

Investors have finally stumbled upon the perfect double minting perpetual income machine! What could possibly go wrong?


Troy said...


Marc Andreessen finally discovers that not all things inflate . . .

It's amazing how ill-educated we are about economics.

Then again I should take a micro class before opining on that I guess.

fudge_hend said...

Better buy an education now or be priced out forever.

Hey you punks, get off my lawn!

fudge_hend said...

Apparently if you put something inside html brackets without thinking about it, then it won't show up so my middle comment got deleted. stupid html.

In-between my two lines I had:

"My original comment was 'get an education' but I changed it to 'buy an education' as I've dealt with far too many stupid college graduates for me to say college degree is a direct indicator of education."

Stagflationary Mark said...

Troy and fudge_hend,

If we assume that 10% of our education comes from the education system and 90% comes from the television and its advertising then we're doing pretty f%^king awesome! Hahaha! ;)