> Getting good returns from a 100 billion dollar investment is hard.

You don't play with 100B in the same way that you play with 100K.

There are few times when a really compelling buyout opportunity emerges. And it is at those times that you want the warchest. Until then, you need to keep the dry powder.

As an example, Buffett wouldn't be able to negotiate the really sweet deal with BofA last year (5B, paper profit ~ 2.8B at the onset) without the cash balance.

I don't think this hits their warchest at all. The # I heard on NPR this morning was about 2.5B/Quarter, but their profit is about 13B/quarter. Even with a 10B stock buyback plan, that's not quite a quarter of profits. Disregarding the buyback, they should still be adding to their warchest. I believe it's only when they announce a special, one-time type of dividend that it signals they don't think they will have anything to do with the money. For example, Ford basically did that a few years ago (although in retrospect 10B in electric research or something might have been wiser).

You're right. Apple has so much cash that the only thing that makes sense is to both pay out quarterly dividends AND buying back their stock. Even though AAPL is still considered a GROWTH stock.

NOTE:

Apple earned ~$13b profit last quarter and it's only going to grow. $15b x 4 quarters = $60b PROFIT PER YEAR.

They can easily afford $45b over the next 3 years considering they have more money than God.