NEW YORK ( TheStreet) -- I'm susceptible to conspiracy theories. Not the "we never put a man on the moon" type but different ones.For instance, I believe conventional Wall Street has an interest in making investing more complicated than it really is. Why else would you come up with product names such as FTSE RAFI US 1500 Small-Mid Portfolio ( PRFZ) unless you wanted to scare people into thinking they need advice in deciding whether or not to buy it. Let's not forget that, at the end of the day, successful investing relies upon some pretty basic economic theories like supply and demand. Shrinking supply and increasing demand drive prices up.
This fundamental theory is the beginning of the analysis that gives me confidence in the stocks listed below. For these companies, as well as others, the supply of outstanding shares is shrinking, and the demand, as I see it is increasing. First the supply. Specifically, today's low, low interest rates, which I believe will persist for the balance of the decade, make it feasible for companies to swap equity for very cheap debt. To whit, IBM ( IBM) used the proceeds from a 2010 bond offering, which pays a 1% yield, to repurchase stock. Incidentally, at the time, IBM stock paid a 2% yield, indicating that if 100% of the proceeds were ultimately used to purchase shares, IBM was able to lower its cost by 100 basis points on that layer of its capital -- a neat trick. This is not an isolated trend. In 2012, U.S. companies spent over $400 billion to buy back their own shares. In the first quarter of 2013, U.S. companies announced over $120 billion in new share buybacks.