As the year draws to an end, I offer a few things to ponder: a new study ridicules the widely held belief that stock buybacks are a forerunner of higher equity prices; a publicity-shy super stock-picker in Hong Kong who gave me his top picks for next year, and one of Mayor Bloomberg’s longtime Wall Street buddies has offered an updated view on the mayor’s supposed presidential ambitions.

First to buybacks, which have been booming in recent years. There was a record $632 billion last year, and an even greater amount, $739 billion, so far this year.

In recent weeks, two technology bigwigs — Cisco Systems and Dell Computer — announced giant stock buyback programs. In response, their shares not unexpectedly jumped in price. This is because it’s widely assumed that buybacks will lead to a reduction in a company’s shares outstanding, in turn fattening per-share earnings.

If there’s one thing, though, that has turned out to be the case time and time again on Wall Street, it is that the supposedly obvious is all too often fiction. Buybacks appear to be a graphic case in point.

That, in fact, is the gist of a recently completed study by a couple of associate directors at Standard & Poor’s, Todd Rosenbluth and Stewart Glickman. It concluded that buybacks, though they may produce an immediate stock spurt after the initial announcement, are not universally positive beyond that as a significant stock spur.

The study zeroed in on an 18-month period — January 1, 2006, to June 30, 2007 —during which 423 S&P 500 companies announced more than $700 billion worth of buybacks for the acquisition of nearly 20 billion shares.

The chief news in the report is that 76% of the S&P companies buying back their shares would have generated a better return if they had put their money into an S&P 500 exchange-traded fund rather than repurchasing their own stock. The study also found that one-third of the companies announcing buybacks paid a premium for their shares, resulting in a paper loss for investors, and the announced buyback of 20 billion shares only produced an actual reduction of 4.4 billion shares, or 22%.

S&P’s conclusion is that shareholders need to question buybacks instead of automatically applauding them.

Liquidity tracker Charles Biderman, the CEO of TrimTabs Investment Research, also tosses in a cautionary note about buybacks, warning that investors have to be wary that announced buybacks actually reduce the number of a company’s shares. He notes, for example, that Microsoft was engaged in a buyback program a number of years ago, but because of the exercise of options and insider selling, there was no actual share reduction. In other words, he says, “buybacks very often are not all they’re supposedly cracked up to be. So don’t chase a stock simply because of a buyback.”

In other news, it should be noted that many money managers love talking about the stock market on TV or being quoted about it in print. Others, never. In the never category is a Hong Kong global money manager, a long-term source, and one of the sharpest stock-pickers I know. He has never been interviewed or quoted anywhere. “My clients don’t pay me to push my ideas publicly; I don’t need the ego trip,” he says.

Last year around this time, I asked him for his two favorite stocks for 2007. They were Garmin Ltd., America’s biggest player in global positioning technology, which guides you from one location to another, and search engine giant Google. They were great selections, as both went through the roof.

As a natural follow-up, I asked him for his top two picks for 2008. Interestingly, he again picked Garmin ($104.04). The other is Australian-based BH Billiton Ltd. ($71.07), the world’s largest diversified commodities company. Over the next 12 to 18 months, he sees potential 50% gains in each stock. Another big idea that could be important in 2008 is Mr. Bloomberg’s potential presidential run. About nine months ago, a well-known investment figure who is a Wall Street friend of the mayor’s, told me he thought a Bloomberg run for the White House was likely. Given the source, I figured Senator Clinton would confront another tough rival in her bid for the presidency. About five months ago, my Wall Street contact had some second thoughts, noting that the run had become very iffy. In a chat about a week ago, he shifted gears again, observing: “There is now a significant chance the mayor will seek the White House.” He thinks an announcement could come in February or March.

Meanwhile, the mayor has continued to brush aside all suggestions of such a run. The big London-based betting parlor, William Hill, agrees. About six months ago, it quoted the mayor as a 100 to 1 shot to win the presidency, and two months later raised the odds to 34 to 1. Now, it has eliminated him entirely from its list of presidential candidates. “We no longer take the mayor seriously as a presidential possibility,” a Hill spokesman said.

dandordan@aol.com