Henry Singleton

Henry Singleton's capital allocation: issue stock high, buy back low

Andrew Wilkinson explains the Outsiders-era playbook of Henry Singleton: great CEOs win by allocating capital well, not just by innovating. Issue stock when the market is overvalued and sell; buy back stock and invest aggressively when the market is undervalued.

“his whole thing was when the market is overvalued and crazy, that's a great time to issue stock and to sell things. And when the market is undervalued, you want to buying, not only buying back your own company. So if you don't own your entire company, you want to go and buy back more stock and you want to be investing then. And so that approach is very simple. It doesn't sound like rocket science, but I think it's a really important thing for people to be thinking about right now.”

Steal thisTreat your own stock as a currency: issue it when overvalued to buy assets, and buy it back when the market undervalues you.