On the topic of sharebuybacks, I have all the letters, so I searched over the whole period for buyback/repurchases (similar to ourkid over last 10 years). Here's what I found:
From 1988-1992 they repurchased 34% of outstanding shares. Discussion of this buyback happened afterwards mostly.
Mentioned buybacks again in 1996/7, first mention of Singleton. Did not emphasize they would do it, just that they would consider it first.
In 1999-2000, they talked about repurchase similar to 1988-1992 period. Looks like they repurchased ~1,000,000 shares. Then had to issue shares to 2005 due to the well-known issues.
Repurchased 1,000,000 shares in 2008.
In 2010, they said "Please do not think we have forgotten about common stock buybacks. We have historically purchased significant amounts of our stock, but have recently chosen instead to buy some excellent companies which became available and that we think will create significant intrinsic value in the future."
Then in 2016 buybacks were mentioned and in 2017, there was a strong emphasis on buybacks that we all read.
So, outside of 1999/2000 it doesn't seem like they overpromised and underdelivered on share buybacks given what they said.
So, if I've understood you correctly, your money is on repurchases rather than acquisitions? I'm clearly on the other side as Prem always seems to find a target that he finds attractive.To buy back say $1b of shares, the normal course issuer bid hardly seems adequate. I guess we'll see whether there's a tender offer. Time will tell
SJ
Mostly, it seemed you were making a few assertions about how often FFH has talked about buybacks and whether they followed through, so I wanted to see if that was accurate or not. It seems to me they haven't talked a big game and not followed through before, as you suggested.
With respect, you've looked at the sharecount over the past 20 years, right? Do those numbers suggest to you that buybacks have truly been a goal, or do those numbers suggest to you that acquisitions have truly been a goal? So, yes Prem has talked about buybacks on several occasions and the sharecount keeps trending up.
With that observation, I take his comments about Teledyne with a hefty dose of salt. As I said, my money is on more acquisitions rather than buybacks. And, as I noted, this isn't necessarily a bad thing. If your own shares aren't the best use of your cash, then don't buy them. Allocate cash to the best opportunity available.
Finally, if the world does evolve as Prem has suggested, in the short term a good chunk of the $2.5b cash held in the holdco could be used for a buyback. I've thrown out the round number of a Bil, but it wouldn't be outrageous to bump that to $1.5 Bil which would still leave a respectable holdco cash balance. For that kind of magnitude there's a practical decision to be made about the vehicle. The normal course issuer bid is a boiler plate filing every year, but it could actually be used in this case. I just think a tender might work better for the potential volumes that I've posited. On the other hand, if it's just us$400m or something, the normal course issuer bid would probably work fine.
SJ