When the Financial Media Gets It Wrong

I normally work in my office with CNBC on mute in the background as I work my way through piles of annual reports. Ordinarily, I'm a huge fan of the programming and, as a segment catches my eye, I'll stop and watch. However, it’s sometimes not difficult to see why a lot of investors, and even journalists, just don't get it.

During an interview, one of the primary anchors actually said something along the lines of, "Why do you like share repurchases? They are artificial!" I’ve never understood Wall Street's moronic obsession with the source of growth in earnings per share. Under the right circumstances, you can hit the ball out of the park by investing in an ordinary business, trading at a low price-to-earning ratio, where the Board of Directors is repurchasing its own shares. For more information, read Share Repurchase Programs and Share Repurchases Plans Aren’t Enough.