technoexplorer

technoexplorer t1_ja7fitr wrote

Reply to comment by AltcoinTraderNy in All these recent comparisons to historic charts and other data on recessions and crashes - something more puzzling sticks out to me… by TheyPromisedMePie888

Eh, why? Upper management gets paid with the buybacks or with dividends. Who cares about the workers? Heck, if the recession lasts 20 years then we bump into the 20 year rule, which states that anyone in a decision making capacity doesn't care about anything that impacts their company after 20 years because they will have retired by then. There's a chance that they will never need the cash to grow again.

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technoexplorer t1_ja7fadv wrote

Reply to comment by MillionsOfMushies in All these recent comparisons to historic charts and other data on recessions and crashes - something more puzzling sticks out to me… by TheyPromisedMePie888

Yes, company sold an entire division in order to retarget. Was it for economic reasons? Who knows really. Anyways, stock price jumps 5% and out comes a huge dividend of 40%. In December, too, iirc. Fortunately, no negative tax implications for me beyond the normal. Stock price drops of course afterwards and then I have to rebalance the risk in my portfolio.

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technoexplorer t1_ja5y9xh wrote

Reply to All these recent comparisons to historic charts and other data on recessions and crashes - something more puzzling sticks out to me… by TheyPromisedMePie888

Companies do not want to invest cash in current business activities because an expansion right now would not be good for the oncoming recession. Instead, they shrink their companies by using cash to take stock shares off the market and right-size the company. They could also do this with dividends but there are tax implications and it is generally better for current management to do buybacks (although I once got a 40% of market-value dividend under similar circumstances).

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