Hi all. As a fellow investor I've been doing my fair share of research into the market, and recently have stumbled upon collateralized loan obligations and have found how starkly similar they are to collateralized debt obligations, which caused the 2008 crash. Now I'm more of a novice but I've been seeing companies use their equity in heinous ways. Instead of investing into new opportunities to increase long term profit they're just doing share buybacks even when stocks are at all time highs and demand is up. They're essentially turning equity into debt to push up their value. And the bonds that are being taken to cover this are becoming more and more risky. Last year more than half the bonds taken by companies to cover buybacks were BBB, the riskiest possible. It may not happen for a few more years, but I feel that the warnings signs are here for a major collapse in the global economy.
Submitted November 17, 2018 at 11:05AM by RealStratBeckerYT https://ift.tt/2FtPkYC
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