The Ponzi Factor | Proof by Definition

  • Proof by Definition

  • $20,000 Open Challenge

  • Unofficial Rules and Guidelines

  • Summary

Proof by Definition

S.E.C. Definition: A Ponzi Scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Read More

Stock Buybacks | False Buybacks

Narration from Chapter 6, which is based on the research below.

  • Stock buybacks cannot be treated as returns to investors because public companies can rescind what they returned through dilution.

  • This paper defines False buybacks as situations when the shares outstanding for a company does not decrease around the year it announced stock buybacks.

  • The research looked at 2,055 public companies that announced or engaged in stock buybacks between 2009 -2016, and found 63% of the buybacks were false.

  • Most of the false buybacks were from companies that paid dividends, which opens new questions about the legitimacy of dividends.

If public companies are consistently buying back stocks, why are there so many public companies remaining public?

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