So money is getting concentrated in overvalued tech stocks because of buybacks at older companies that are now burdened with low-interest debt?
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This sounds... okay So long as the big 10 tech invest better
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Focusing in on just the second sentence. Are you saying buybacks drive up stocks because it distributes cash to the previous owners, who then invest the cash?
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Yes though it need not go back into stocks
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I’m wondering about the other side of the trade. What are people selling the retired stock buying instead?
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Buy other stocks, I’d have thought.
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Tech stocks it appears
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Almost all of it stays in public markets (so other stocks). Some slippage into real estate (esp. when mgmt sells into buyback).
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I expect a chunk of it ends up in housing in supply constrained desirable cities
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philanthropic causes
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