@loveofourlord Yeah. To the shareholder, a buyback is the effective equivalent of issuing a dividend, but all shareholders reinvesting the dividend in shares by default.
The problem I have with buybacks as a shareholder is there generally isn't enough transparency around buybacks - companies will issue a general statement around buyback plans, but not exact details on when they're executed, so it's very hard to maintain the exact same level of ownership of a company when they do buybacks.
I like dividends because I can use them to easily diversify without the need for manual trades. For example, company issues dividend quarterly, I use dividend to invest directly in total market mutual fund; therefore, the company I own shares in builds me broad wealth. That way, if the company had a 7% dividend yield when I bought it, and the company suspends the dividend 20 years in and goes under 25 years later, I still profited in the end.
The problem I have with buybacks is a company can do a great job buying back for 50 years, only to go bankrupt when they fail to adapt to changing market conditions, wiping out 50 years of gains. In addition, much of the gains in the market come from new companies that disrupt the market(ie Amazon, Facebook, TSLA, etc). So diversification is important.
