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    Tillmen
    Tillmen
    Tillmen
    Ebook136 pages1 hour

    Tillmen

    By Rob Scott

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    About this ebook

    Are you worried about the Stock Market? You have good reason to be very worried about it. Speculative Fictional account of widespread corruption regarding Stock Buybacks, Stock Options and almost every company repurchasing shares.
    LanguageEnglish
    PublisherLulu.com
    Release dateFeb 23, 2017
    ISBN9781365780547
    Tillmen
    Author

    Rob Scott

    Speculative fiction, realistic fiction. Rob Scott writes in a style all his own, unique, quirky and usually "out there" in a manner that commands the reader to think. Speculative fiction means it could very well happen, if it were deemed appropriate for someone to try to implement the idea being presented.

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      Book preview

      Tillmen - Rob Scott

      Tillmen

      Tillmen

      Rob Scott

      If you like this book, please consider reading from this author’s Speculative Fiction collection:

      Paradise

      2010

      ISBN 978-1-257-91494-4

      The Mason

      2010

      ISBN 978-1-257-91606-1

      Incognito

      2011

      ISBN 978-1-257-91625-2

      Staven Adams

      2012

      ISBN 978-1-300-15830-1

      The Mounds

      2012

      ISBN 978-1-300-20329-2

      Cotton Hockey

      2016

      ISBN 978-1-329-96552-2

      Salt Life

      2016

      ISBN 978-1-365-35480-9

      Remnant

      2017

      ISBN 978-1-365-57086-5

      Table of Contents

      Chapter 1: The Rub

      Chapter 2: Embezzlement

      Chapter 3: Legal Stealing

      Chapter 4: Stock Repurchases

      Chapter 5: Stock Options

      Chapter 6: Executive Pay

      Chapter 7: The Big Idea

      Chapter 8: Hiring Talent

      Chapter 9: Compensation

      Chapter 10: The Big Ones

      Chapter 11:  Technology Sector

      Chapter 12: Financial Sector

      Chapter 13: Consumer and Retail Sectors

      Chapter 14: Biotechnology Sector

      Chapter 15: Show and Tell

      Chapter 16: Vector Fund

      Chapter 17: Take This Job

      Chapter 18: Paparazzi

      Chapter 19: To Whom Much Is Given …

      Chapter 20: Philanthropy

      Chapter 21: Pursuit of Profit

      To my beautiful wife, Stacey, the only person I know in the world who wants to understand these things

      Chapter 1: The Rub

      Okay, so it is legal stealing, so what.  What does that have anything to do with you? Tom Prichard said to Steve.  Tom is a financial analyst for Deutsche Bank USA in Houston, Texas.  He has been friends with Steve Bates since Junior High School. 

      "Because it is indicative of the whole stock market, it

      is all a scam!"

      But it is only seventy companies out of eight thousand, which is not a large enough sample to prove anything.  You do understand there are eight thousand publicly traded companies that make up the major indices and form the basis of the stock market don’t you?

      Tom, look, 937 companies or twelve percent of all ublicly traded companies between 2011 and 2016 spent almost all their available cash reserves to buy back stock.  Three trillion dollars were wasted!  These idiots at the helms of these companies spent it to look good to shareholders on paper that they were going to do something to reduce shares outstanding and make earnings per share increase.  But that is not what they did at all!

      Then what did they do Steve?

      They stole the three trillion dollars, blew it in the stock market and collected pennies per share purchased upon shares as stock option rewards. Said Steve.

      And you are absolutely sure of this?

      I can prove it.

      How is it that a lowly shipping clerk can prove this and no one else has ever questioned it throughout the history of high finance?  Henry Singleton is believed by most financial professionals to be the father of stock repurchases.  He built and ran Teledyne, a scientific and technical instruments company.  In the ‘bear’ market of the early 1970s, Teledyne stock fell from about $40 to less than $8; Singleton saw this as an opportunity to buy back Teledyne stock. In buybacks from October 1972 to February 1976, 22 million shares were repurchased at $14 to $40 – well above the market price. This raised the value of Teledyne stock, eventually increasing to near $175 at the end of the decade.  In this period, annual income increased by 89 percent and net income by 315 percent. Stockholders who had remained through the buyback achieved a phenomenal gain of about 3,000 percent.  Warren Buffett, is quoted as saying that ‘Henry Singleton of Teledyne has the best operating and capital deployment record in American business.’  And you think he was a quack?

      Stock buybacks is the very last thing you do when a company has excess money that it has nothing better to do with it!  Singleton is a fluke, and everybody following in his footsteps are misguided fools! yelled Steve.

      So Steve, what should these companies be doing in your investment portfolio professional opinion?

      The very first thing a company has a fiduciary obligation to fulfill is to grow and improve the financial receipts of organization, which entails for the most part research, development, marketing and sales.  If you are IBM spending $60 billion to retire 200 million shares with the anticipation that earnings per share will increase, you are absolutely a moron and should be relieved of your duties as an IBM executive.  Now what is really going on is 200 million stock options need to be cashed in by the IBM executives and the only way to release them is to do so under stock buyback market conditions and so options expiration and stock buyback timing is synchronized.

      And you can prove that how? asked Tom.

      It’s all published information, anyone can secure it from SEC filings.  I track all eight thousand publicly traded companies for buyback announcements, and then correlate them to stock option awards, and they magically reconcile themselves.

      So you are saying they are all doing it, maliciously, all basically stealing the shareholders’ cash and buying back the options they cash in on the market?

      Well maybe a couple are genuine but pretty much it is all a scam.  Of the seventy companies responsible for sixty percent of all $3 trillion buybacks over the past six years, only seven did so correctly where the end result was number of repurchased shares exactly met the money paid for each share and no additional shares like stock options were released.  They were Illinois Tool Works, Lockheed Martin, Lowe's, Northrop Grumman, PepsiCo, Pfizer, and Travelers Companies.  Everyone else suffered unconscionable results from their shenanigans.

      So when you look at more companies, does the genuine versus non-genuine equation still hold true at ten percent? asked Tom.

      Of the next group of companies – the ‘Medium Buyback Group of $10 billion to $1 billion in buybacks over the same six year period’ there are 352 in the group buying back $1 trillion and 44 of them are genuinely accomplishing identical results or good results.  The rest are again producing shenanigans.  And in the ‘Small Buyback Group’ of 515 in the group buying back less than $1 billion over same period, they resulted in 37 out of 515 or seven percent genuine.

      So Steve, instead of buying back stock, what would you be doing with the money at these companies?

      "So if I were Lockheed Martin or Northrop Grumman I would use the $33 billion dollars spent securing 125 million shares to

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