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URL:  http://boards.fool.com/the-polygraph-machine-30424900.aspx

Subject:  The Polygraph Machine Date:  12/11/2012  12:21 AM
Author:  kelbon Number:  40837 of 41995

I posted this on another board, but as the thread before last was on the subject of Berkshire Hathaway, I think it appropriate to post it here too.

I'm reading Tap Dancing to Work the new book on all things Warren Buffett. Unlike most books on Buffett, he's actively promoting this one and doing the chat show circuit as a double act with the author, Carol Loomis.

Tap Dancing to Work

April 29, 1985
An excerpt from an article by Carol Loomis

Snip:

The Exxon investment is new, built up only after the company started acquiring its shares in 1983. "A big reason I got in," Buffett says, "is that the company has recognized the value in its stock and been smart enough and pro-shareholder enough to repurchase it." On the other hand, Buffett has sold the stocks of certain companies because they would not make repurchases.

He is convinced, in fact, that the market discounts the prices of companies that should be making repurchases and don't, instead frittering their money away on acquisitions or other investments of far less value. The corollary, he says, is a markup in prices for companies that do repurchase shares, because investors identify the buybacks as a sign that management will be consistently incl