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Skeptics say buybacks show companies don't have anything better to do with their money, a bad sign for future profits. Stock bulls say it shows that the people who know their companies better than anyone else — corporate executives — think their stocks are a bargain, and so should you.
Whoever is right, buybacks are likely to continue because companies have plenty of firepower. Companies in the S&P 500 have $1 trillion of cash, according to S&P Dow Jones. The cash hoard has never been higher.