Tony Dwyer, United States, Davis discussed on


Tony dwyer where's the money gonna come from in order to make stocks move higher if there's no longer a central bank put it's gonna be in the corporate buybacks that's why it's so essential to have the credit markets open which is driven by the yield curve positive slope euchre because if you net out all other areas of equity investors it's basically flat so you take active versus passive it's basically flat for the whole cycle the only net adding addition to stocks is corporate buybacks get corporate five packs that doesn't that belie the theory that the money that's going to be repatriated to the united states because of tax reform is going to go into research development and more factories in fact what you just described as it's going to go back into the pockets of investors who typically you're going to end up saving the money not spending it it's going to go back into both it's not like a company just says okay we're gonna bring all our money back and just invested in stock they do the best thing not just for their shareholders but for their businesses so the history shows that yeah a lot of the money goes into buybacks and that's because that's what actually performs the best our friends in that davis did a great study that showed if you break down the s and p five hundred by five by quintiles the best performing quintiles are those that do the stock repurchase but that doesn't mean that's all they do i think that's a great you know tweet kind of thing but at the end of the day companies do the best thing to grow their share price and grow their businesses and that's why despite all the reasons i mean the reasons the cycled tom and pen that you could have been negative it could have been european debt crisis breakup up the euro could have been chinese real commodity crisis all of that has not mattered because there's enough growth in a quarter of the global economy in the us to drive earnings and those earnings are driving share prices tony which sector within technology which piece of technology offers the best risk reward ratio we don't break it down that much is you know tom are y you know i take software and services and i think just about all areas of technology do well when you have.

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