Charles Strauzer, the Managing Director of CJS Securities, commented on my observations about stock buybacks. Mr. Strauzer's comments have been slightly abridged and edited for space considerations...

While you say it is price manipulation, I and many very smart money managers who have to stake their reputations every day in the market disagree. When a company issues shares without a direct beneficial use of the cash, it is dilutive to shareholders. Buying back stock is almost always accretive. A balanced approach to cash deployment is always preferred by institutional investors (making internal investments for growth, pay down debt, buy back stock, pay dividends and make acquisitions). There are occasions when market volatility makes buying back stock a better deal than acquisitions. For example, acquisitions in the printing space have historically sold in the 6-9X EBITDA range. [B]ut if a company's stock is trading at 5X it would be hard to make a case for acquisitions being accretive. It is not that there aren't compelling ideas to use the cash for; it is the valuation of those ideas relative to the company in question. If you could buy a company at 8X or 5X, which is the better deal?

In the current market, the best opportunities appear to be buybacks. That could change quickly if market sentiment shifts again and valuations rise. You make it sound like companies use 100% of their cash for buybacks and starve internal development or never pay dividends. That is just not the case. A special dividend is a one time return of capital, but a buyback has a lasting effect that benefits not only current shareholders but future ones as well. Rather than rail completely against buybacks, perhaps a call for balanced cash deployment would be better?