‘Buybacks drive performance’ are among market myths BofA strategists are aiming to bust

seekingalpha06-29

Quantitative strategists at Bank of America have set out to bust a few market “myths,” saying there are some investment adages that sound smart, but it turns out that those narratives don't work. The...

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The...</p>\n\n<a href=\"https://seekingalpha.com/news/4120786-buybacks-drive-performance-are-among-market-myths-bofa-strategists-are-aiming-to-bust\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>‘Buybacks drive performance’ are among market myths BofA strategists are aiming to bust</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n‘Buybacks drive performance’ are among market myths BofA strategists are aiming to bust\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-29 21:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/4120786-buybacks-drive-performance-are-among-market-myths-bofa-strategists-are-aiming-to-bust><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Quantitative strategists at Bank of America have set out to bust a few market “myths,” saying there are some investment adages that sound smart, but it turns out that those narratives don't work.  The...</p>\n\n<a href=\"https://seekingalpha.com/news/4120786-buybacks-drive-performance-are-among-market-myths-bofa-strategists-are-aiming-to-bust\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IWM","symbol_name":"罗素2000指数ETF","start_time":0,"source_url":"https://seekingalpha.com/news/4120786-buybacks-drive-performance-are-among-market-myths-bofa-strategists-are-aiming-to-bust","article_id":"2447170613","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2074435669/image_2074435669.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2447170613","pubTimestamp":1719666000,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Quantitative strategists at Bank of America have set out to bust a few market “myths,” saying there are some investment adages that sound smart, but it turns out that those narratives don't work.  The","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IWM":"罗素2000指数ETF","VBK":"美国小盘成长股ETF-Vanguard","SRTY":"罗素2000指数三倍做空ETF-ProShares","BK4550":"红杉资本持仓","SH":"标普500反向ETF","BK4588":"碎股","IVV":"标普500指数ETF","TZA":"罗素2000指数三倍做空ETF","MDY":"标普中型股400指数ETF-SPDR","RSP":"平均加权指数ETF-Rydex S&P","BK4561":"索罗斯持仓","RWM":"罗素2000指数反向ETF","UWM":"罗素2000指数ETF两倍做多","BK4581":"高盛持仓","DFAS":"Dimensional U.S. Small Cap ETF","IWN":"罗素2000价值股指数ETF-iShares","BK4504":"桥水持仓","SSO":"两倍做多标普500ETF","IJH":"标普中型股400指数ETF-iShares","IWO":"罗素2000成长股指数ETF","VOO":"Vanguard标普500ETF","DIA":"道琼斯ETF","UPRO":"三倍做多标普500ETF","SPXU":"三倍做空标普500ETF",".SPX":"S&P 500 Index","OEF":"标普100指数ETF-iShares","QQQ":"纳指100ETF","SPY":"标普500ETF","SDS":"两倍做空标普500ETF","TWM":"罗素2000指数两倍做空ETF","BK4593":"纳斯达克ETF","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","OEX":"标普100","TNA":"罗素2000指数三倍做多ETF-Direxion","SCHM":"Schwab U.S. Mid-Cap ETF","BK4535":"淡马锡持仓","BK4559":"巴菲特持仓"},"translate_title":"“回购推动业绩”是美国银行策略师旨在打破的市场神话之一","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DFAS":1,"QQQ":1,"MDY":1,"RSP":1,"IWM":1,"SCHM":1,"IJH":1,"DIA":1,"SPY":1,"VBK":1,"VOO":0.7,"SRTY":0.6,"SSO":0.6,"IWO":0.6,"TNA":0.6,"SPXU":0.6,"SH":0.6,"SDS":0.6,"TWM":0.6,"TZA":0.6,"UPRO":0.6,"RWM":0.6,"UWM":0.6,"OEX":0.6,"ESmain":0.6,"MNQmain":0.6,"MRTYmain":0.6,"IVV":0.6,"IWN":0.6,".SPX":0.6,"OEF":0.6},"content_text":"Quantitative strategists at Bank of America have set out to bust a few market “myths,” saying there are some investment adages that sound smart, but it turns out that those narratives don't work.  The U.S. Quantitative Strategy team led by Savita Subramanian said amid a continued period of macro uncertainty and numerous economic and market crosscurrents that it has heard a number of myths related to market behavior. “Buybacks drive performance” are among the myths the BofA team tackled in its annual primer on techniques in quantitative analysis, published Friday.  Here’s a look at some of the myths listed by BofA:  False: buybacks drive performance  BofA expects a shift to dividends from stock buybacks, but such a move does not spell doom for the S&P 500 (SP500)(SPY)(IVV). “Actually, the relationship between S&P 500 buybacks and index performance since 1986 is a near-zero R-squared,” Subramanian said. It also found that BofA corporate client buybacks appear to have little effect on index performance. “What we can validate is that companies that repurchase shares at inexpensive valuations tend to outperform,” she said. Over the past 12 months through April, cheap buybacks outperformed expensive buybacks by 12.5 percentage points.  False: retail investors are a contrary indicator  There’s thinking that when retail investors are buying, that means it’s time to sell, and vice versa. But BofA’s equity client flows suggest returns following periods of retail inflows have been above average and returns post-retail selling have been below average, with a similar spread to hedge funds. BofA said its Low Institutional Ownership factor – which includes high retail ownership stocks – has more consistently outperformed during market drops.  False: flows into equities push multiples higher  “One might intuitively expect multiples to expand with inflows, and compress with outflows. In actuality, the correlation between equity flows and valuations is effectively zero,” Subramanian said. She said their work suggests other elements are keeping the S&P 500 (SP500) at its current “lofty snapshot multiples”, including the index's higher margin sector mix and lower earnings volatility than in the 2000s, 1990s, or 1980s. False: during periods of wage disinflation, labor-intensive companies outperform  “Investors shouldn’t own labor-intensive companies under almost any circumstances based on our analysis,” Subramanian said. Despite the Federal Reserve’s aim to cool wage inflation, companies with the highest ratio of number of employees per dollar of sales have been almost constant laggards relative to their labor-light counterparts, BofA found.  Investors who want to track moves in large-cap stock indexes can check out ETFs including (DIA), (RSP), (SSO) and (QQQ).  Mid-caps ETFs include: (IJH), (MDY), and (SCHM) and small-cap ETFs include: (IWM), (VBK), and (DFAS).","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2447170613"}