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The Importance of Capital Allocation Decisions in Buybacks
The buyback decision is part of the larger capital allocation decision on the part of management. Not everybody could be Apple where you leverage up the balance sheet a little bit and buy back stock. But they also had tremendous free cash flows, which companies like Bed Bath and Weond did not have. So when we write about buybacks, we sometimes call out companies that would be better served by paying down debt on the balance sheet rather than buying back stock.