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Buy-back Blackouts Could Be Trouble For The Stock Market

Last week’s chart highlighted the fact that over the last several years corporations have been the dominant buyers in the market. In a few weeks, the corporate buyback blackout period will commence. Corporations are restricted as to when they can purchase, and this restriction is based on when each corporation’s earnings are reported. This chart gives the percent of companies in a blackout period by date. The blackout period peaks toward the end of October and declines thereafter.  This will be a vulnerable time for the stock market, as the largest buyers will be sidelined until earnings are over. Stay cautious!

Buy-back Blackouts Could Be Trouble For The Stock Market
Buy-back Blackouts Could Be Trouble For The Stock Market

Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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