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The WSJ reports that U.S. companies have announced $200 billion in share buybacks over the last three months. That’s double the pace of last year. Management teams love buybacks because they boost share prices, which in turn make executive stock options more valuable.

The problem with buybacks is that they are discretionary. And corporate boards and management teams have terrible timing. Buybacks tend to be highest late in the business cycle. During recessions, when share prices are at their most attractive levels, buyback activity falls as companies look to conserve cash.

Buying back more of your stock at higher prices and less at lower prices probably isn’t the savviest capital allocation decision.

U.S. companies are buying back their shares at an aggressive pace, stirring questions in Washington and on Wall Street about the way that the new corporate tax cuts are being used.

Share buybacks announced by large U.S. companies have exceeded $200 billion in the past three months, more than double the prior year, according to a Wall Street Journal analysis of data for S&P 500 companies.

“Companies are feeling some pressure not to just spend their savings on buybacks,” said Joseph Amato, president and chief investment officer for equities at Neuberger Berman Group LLC. “But at a time when we’re already seeing double-digit earnings growth around the world, they can’t hurt.”

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