Interesting chart via @DavidSchawel showing changes over time in corporate (S&P500 companies) distribution of earnings:
Liquidity moves markets!Follow the money. Find the profits!
In simple terms:
- Much discussed shares buybacks are still the rage: running at 31% of all cash distributions, second highest level after 34% in 2007. On a cumulated basis, and taking into the account already reduced free float in S&P 500 over the years, this is a massive level of buybacks.
- ‘Investment for growth’ – as defined – is at 51% – the lowest on record.
- Meaningful investment for growth (often opportunistic M&As) is at 38%, tied for the lowest with 2007 figure.
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