Booming Buybacks Aren’t Likely to Wane Despite Market Volatility

Repurchases of blockbuster stock amounts during two recent pullbacks signal firms didn’t see market declines as worrying

Companies spend billions repurchasing shares because less stock outstanding helps make their profits appear stronger by boosting per-share earnings—a gauge investors typically use to justify a company’s stock price. Some investors counter that buybacks don’t actually add to a company’s net profit, and the capital could be used on other things.

Apple Inc., Oracle Corp. and Cisco Systems Inc. were the biggest buyers of their own stock in 2018, repurchasing a total of $126 billion of shares, according to S&P Dow Jones Indices. In April, the iPhone maker said it would add $75 billion to its buyback program.

“We’re in the fortunate position of generating more cash than we need to run our business and invest confidently in our future,” Apple Chief Executive Tim Cook said during the company’s earnings call last month.

Some analysts say companies’ willingness to buy back shares has been among the factors driving the latest stages of the 10-year bull market. And companies repurchasing shares during a downturn could help buoy markets.

.. “It takes capital from companies that are buying back their own equity and then moves that capital back to an investor so it can be redeployed into a company that’s growing,” said Scott Colyer, chief executive and chief investment officer at Advisors Asset Management. “Companies tend to amp up their buybacks when their stock price drops, which provides some support in the marketplace.”
.. Some analysts are concerned that technology companies accounted for too big a slice of the buyback pie. Last year, the top 20 companies repurchasing stock in the S&P 500—many of which were tech firms—accounted for 42% of all buybacks, compared with a 32% share in 2017, data from S&P Dow Jones Indices showed.

“The presumption is that 2020 will be a good year for buybacks, but that’s based on expectations that the economy remains strong and we don’t have a trade war,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. “Even though next year is supposed to be a great year for earnings and cash flow, we’re not there yet.”

Washington presents one potential hurdle for companies repurchasing stock. Democratic presidential candidates have signaled that they want to restrict how much stock U.S. companies can buy back, arguing that buybacks enrich shareholders at the expense of workers.

Make Home & End keys behave like Windows on Mac OS X

I’ve been using Mac OS X daily since 2001 when I purchased my Titanium PowerBook and I still can’t get used the home and end key behavior.

If, like me, you want Home to send you to the start of the line and not to the top of the document then create a file called DefaultKeyBinding.dict in your ~/Library/KeyBindings folder (might need to create that folder too) with the following contents:

{
  "\UF729"  = moveToBeginningOfParagraph:; // home
  "\UF72B"  = moveToEndOfParagraph:; // end
  "$\UF729" = moveToBeginningOfParagraphAndModifySelection:; // shift-home
  "$\UF72B" = moveToEndOfParagraphAndModifySelection:; // shift-end
  "^\UF729" = moveToBeginningOfDocument:; // ctrl-home
  "^\UF72B" = moveToEndOfDocument:; // ctrl-end
  "^$\UF729" = moveToBeginningOfDocumentAndModifySelection:; // ctrl-shift-home
  "^$\UF72B" = moveToEndOfDocumentAndModifySelection:; // ctrl-shift-end
}

This remapping does the following in most Mac apps including Chrome (some apps do their own key handling):

  • Home and End will go to start and end of line
  • ShiftHome and ShiftEnd will select to start and end of line
  • CtrlHome and CtrlEnd will go to start and end of document
  • ShiftCtrlHome and ShiftCtrlEnd will select to start and end of document

Note that you will need to reboot after creating this file for it to take effect.

If you have a PC keyboard with LED back-lighting and would like the scroll-lock, num-lock or caps-lock LEDs on when using your Mac check out my free SetLEDs for Mac

Why My Chinese Dad Switched From an iPhone to a Huawei

And what that tells us about the fate of Apple in China.

.. That meant I was almost certainly a secondary or even tertiary receiver of the phone — China’s gift-giving culture is all about regifting — but back then, the Apple brand carried enough cachet that my father’s friend still saw it as good enough to give a close friend’s daughter, if not quite prized enough to present to a business partner.
.. the news just confirmed what we already knew: China’s domestic brands have made huge strides in the years since 2012, creating new features and products that take into account what Chinese users want, for a small fraction of the price. Apple, meanwhile, has mostly failed to localize or reinvent itself, on the assumption that global cachet would be enough.

The homegrown groundswell began with a little-known brand called Xiaomi, which burst onto the scene in the early 2010s as one of the first brands in China to have its own operating system, and offered high-speed processing on the cheap. At first it appeared to cater to a completely different market than Apple. Selling entirely online, Xiaomi offered both a low-end model — the Redmi for as low as 699 yuan (then under $150) — and a higher-end model that was still far cheaper than the cheapest iPhone (less than 2,000 yuan, then under $350).

But with time, the useful features on Xiaomi products, as well as those of its competitors like Huawei and OPPO, combined with the price, began to outweigh the increasingly limited glamour of the iPhone. I myself transitioned to a high-end Xiaomi from an iPhone in early 2014 after a young professional friend of mine, who worked in marketing in Shanghai, raved about the Xiaomi Mi Note, which is one of the big-screen models, or “phablets,” that have long been popular in China and East Asia, where many prefer the bigger screens — Huawei’s latest measures a whopping 7.2 inches — ideal for taking selfies and watching TV dramas. (Apple released its Plus series in late 2014 with larger handsets, which did send its sales shooting up in China — but also added $100 to an already expensive price tag.)

Apple also long resisted the rise of another important local feature: the dual SIM card system, a component that may sound boring but for Chinese people has become essential. In China, where many young people have never owned laptops, phones have become all-in-one devices — part television, part computer, part phone. Transitioning between two SIM cards on all other cell brands is a seamless process: one card for streaming and downloading at cheaper rates, the other one for making calls. Growing international tourism has also raised demand for phones that can accommodate a second, foreign SIM — and yet for years, Apple didn’t budge. The company finally gave in to the dual SIM card in the form of special models for China and Hong Kong last fall.

It’s telling that the main example of Apple localizing its products to China in the last few years was a special model gold-colored iPhone. First introduced in 2013, it was a clear play for the Chinese market, and was, admittedly, a huge hit on the mainland. Many joked that the gold iPhone was targeted at the tuhao, a recent term that roughly translates as “tasteless nouveau riche” and that mockingly refers to the wealthy who feel the need to show off. The color was even given the name tuhao jin, or tuhao gold.

But the allure of gold-colored plating — a feature focused not on user experience but aesthetics — goes only so far, it seems. And it may not be enough at this point to keep even the tuhao loyal. Huawei, China’s largest smartphone maker by market share, recently overtook Apple to move to second place globally. Its popularity among the wealthy and business class at home has shot up in recent years; its prices have been steadily rising as it shifts focus toward higher-end products. Many upper-middle-class Chinese who once owned iPhones have since switched to Huawei — including my dad.