Now, share repurchase is another thing that happens. That instead of issuing new shares to raise money, the company can repurchase shares outstanding. Go out on the market like you, and the company buys back its own shares. That's the reverse of delusion because the number of shares goes down. And if you didn't tender your shares, if you didn't pay, if you didn't sell your shares at the time of the share repurchase, you own the same number of shares. That means that your share repurchase pushes up the amount that you own of the company. So share repurchase in a sense is like paying a dividend. It's an alternative way of paying a dividend. So let's think of it hypothetically. Imagine that the company is about to pay its dividend. It's been paying $2 a quarter regularly per share and they're about to pay it. And then someone says, why don't we send out a different letter this time? Instead of saying this is a dividend, let's send a letter that says this $2 is repurchasing 1% of your shares. Of course, everyone gets the same letter. So if you get this in the mail, you would say what's this? I got my $2 dividend check and I also get a letter saying this is share repurchase. Now, you might be confused, what does this mean? Well, I tell you one thing it means, it's not taxed because well not taxed the same but forget about taxes for the minute. What does it mean whether I get a letter saying this is a share repurchase or this is a dividend? It's $2, and the share repurchase if it's everyone equal doesn't affect the fraction of the company that I own, so the letter is nonsense. It's just the same thing as paying a dividend. So they do a lot of share repurchases, especially recently. It's been a big thing in America since the financial crisis. Now, some people say that's because the stock market was during the financial crisis. The stock market was low, and so companies were buying back their shares at a low price, that's what was said. But now prices are way back up again and companies are still repurchasing their shares. So what's going on here? There's a lot of share repurchases lately. Why do they do this? It's been 2% of shares per year, which is comparable to the dividend rate, the rate of dividend. On the aggregate US stock market has been something like 2%. So how do they get that? Well the important thing is, it would seem the important thing is there's a tax break. If they do share repurchase instead of dividends, it's the same thing and technically, but you can fool the IRS. Suppose the company pays out a $2 dividend, and then I would get $2 in dividends, and then I would have to pay income taxes on those. It used to be you had to pay them at your marginal tax rate. Now it's 15%, or it's capped at 15% of the dividends paid. But if they do share repurchase, now if I would still have $2 more. If I didn't participate in selling my shares to the company, then my value of my shares goes up by something like $2. But I don't have to pay taxes on it because I don't have to pay taxes until I sell. So I can postpone them maybe indefinitely. Maybe I'll never pay taxes on them. So I like that, I like share repurchases. Now incidentally right now in the United States, the capital gains tax for small capital gains is capped at 15% also, but for higher amounts it's 20%. The real thing though that's different is that capital gains taxes, that's for long term capital gains. Capital gains taxes do not have to be paid until you sell the shares. So it allows you to postpone, maybe for the rest of your life, the tax on the amount paid up. So there's a tax incentive for share repurchase rather than dividends. I think that is a substantial part of the reason why companies are relying more on share repurchase. Those other issues though, these are behavioral finance, one thing is that people just don't get it. Most people have not taken financial markets and they don't understand what's going on. So, if you were to say, we're not paying dividends any more and we're going to do share repurchase instead. First of all, you get the IRS, if you do it every quarter, if you do a share repurchase every quarter and you make this big announcement, the IRS will then say, maybe this is a dividend even though you're calling it. You've got to be devious about it. You can't do it every quarter. But suppose you did that, the people would react immediately to the loss of dividend. I'm talking about grandma and grandpa who are retired and don't know anything about finance. That they got a letter saying we're canceling your dividend. They would panic. They'd say, well we have a rule that we only live off of interest and dividends. They would be upset. And some companies boast that they have always pay the dividend of, this is very effective for grandma and grandpa who often have a rule that I never dipped into the principle, I only live off income. And I need that to buy food every quarter, so I need those dividends. I mean you could tell them no you don't, you can sell your shares any time you need to sell some of your shares. And they're going up in value because of the repurchase, but they won't get it. There's also other thing about a price pop after repurchase that might encourage share repurchase.