Buffett Touts Benefits Of Stock Buybacks

Billionaire Warren Buffett said critics of stock buybacks are “either an economic illiterate or a silver-tongued demagogue” or both, and all investors benefit from them as long as they are made at the right prices, Josh Funk reported for the Associated Press (AP).

Photo Insert: In 2022, Berkshire Hathaway repurchased 1.2% of its outstanding shares, a move Buffett told shareholders "directly increased your interest in our unique collection of businesses."

Buffett used part of his annual letter to Berkshire Hathaway shareholders Saturday to tout the benefits of repurchases that fiery Wall Street critics like Sens. Elizabeth Warren and Bernie Sanders and many other Democrats love to criticize.

The federal government even added a 1% tax on buybacks this year after they ballooned to roughly $1 trillion in 2022.

In 2022, Berkshire Hathaway repurchased 1.2% of its outstanding shares, a move Buffett told shareholders "directly increased your interest in our unique collection of businesses."

Buffett noted buybacks at AmEx and Apple— Berkshire's largest position at the end of last year — increased the company's ownership in each firm, Myles Udland reported for Investopedia.

"The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up," Buffett wrote.

"Every small bit helps if repurchases are made at value-accretive prices." In recent months, as ever, share repurchases have remained a hot-button political issue, with a new 1% tax on share buybacks taking effect in January and President Joe Biden floating a 4% tax on this activity in his State of the Union address earlier this year, Yahoo Finance also reported.

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