Icing on the Apple

 | Sep 13, 2011 | 6:29 PM EDT  | Comments
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aapl

This morning Morgan Stanley (MS), in a nice push to buy Apple's (AAPL) stock, mentioned that it might be initiating a buyback or a dividend. Frankly, I don't even care if Apple gives us anything other than stock appreciation. This stock has been one of the greatest wealth creators of our time. A dividend would be icing on the cake.

But a buyback? Forget about it. Don't bother. Save the money for a rainy day. That's right I would prefer nothing to a buyback because there might as well be something worth buying further down the road.

It's just a waste of money, particularly in a situation where a stock can be down huge off of a European bank rumor, and the company would have just bought a ton of stock back at a higher price.

The justifications for a buyback constantly hinge on the return of capital. But, you know, I think that we can't demonstrate anything that most buybacks have done except waste capital.

You know how adamant that I am about this point going forward? If Apple offers up a dividend I am thrilled. If they do a buyback? I will just like it less.

Yep, that's how silly and self-serving to management I now regard buybacks to be.

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