[jacobkranz]

I’m the short-term, yes. The assumption is that the company cannot invest the cash into its operations at a larger rate of return than an individual investor could therefore the company (whose sole purpose is to enrich the shareholders) should return the cash.

In a way, the company has an earnings yield of EPS/stock price (or inverse PE). If the company cannot invest the money in its operations that makes a larger return that the earnings yield then the stock is actually a better investment. The huge issue is that when markets crash is when technically a company should be buying back tons of its stock but rarely do companies ever do this and instead elect to hoard cash when buybacks are best & spend money on buybacks when it’s the worst ROI (when the market is hot & earnings yield is minimal).