What Warren Buffett thinks of buybacks

In the latest Berkshire Hathaway shareholder letter released at the end of February, investing sage Warren Buffett outlined his thoughts on share buybacks.

Partly due to a lack of feasible investment alternatives, companies in the US have been buying back their shares on a massive scale, boosting earnings per share numbers and driving share prices higher.

Critics say buybacks are just a form of financial engineering and no fundamental improvements have taken place. But Mr Buffett says it depends on the value the buybacks are made at. Here, we reproduce an excerpt from his letter.