Here are the (lightly edited) bits I found interesting in this week’s issue:

“Harold Bradley, a portfolio manager at American Century, in Kansas City, Mo. is a sworn enemy of the specialist system. He contends that an array of special interests profits at the expense of investors from even the most mundane Exchange-directed trades. Machine-based systems, on the other hand, are much more efficient, he says, because they ‘improve the traditional execution mechanism and eliminate the requirement’ of dealing with an intermediary … Bradley swears by the cost savings from ECNs; American Century’s trading costs are 75% below comparably sized firms … American Century processes more than 60% of its NYSE-listed orders away from the Exchange, routing 29% to an internal automated trading desk.” — Jack Willoughby [ed. Good for them!]

“The silver ETF gets rid of the two biggest concerns in the market — ‘How do I buy it?’ and ‘Where do I store it?’” — David Morgan, quoted by Allen Sykora [ed. it doesn’t address the concern ‘Why do I buy it?’ ;-) ]

“[When a company pays a dividend it’s] a rein on management’s capital-spending decisions. Dividends are very much a commitment on the part of management. If they don’t have dividend discipline, they tend to make capital investments that are not optimal. Paying a dividend to shareholders prevents them from making a marginal capital investment. In this day and age of stock options, you don’t want to have a company issuing options that are low-priced to its employees and then buying back stock at two and three times that price in the open market and then never paying a dividend to the shareholders. The only way shareholders have to cash out of their portfolios is to sell their stock. But if you return money to shareholders you give them real return and also provide discipline growth … There certainly isn’t any sign of weakness right now in the economy. We don’t consider ourselves economists, but the best economist in the world is Dr. Copper, and Dr. Copper has more than doubled to $3.48 a pound … The weakening dollar really makes a good argument for going international. It is pretty clear we can get good values in international stocks and we can get good participation in overseas’ economies, and that is a really good diversifier against a weakening dollar … We keep hearing gold is hitting 25-year highs, and that’s in 1980 dollars. Convert that into today’s dollars and $2,200 an ounce is the old high. Here at $673, gold is still cheap.” — Ben Fischer and Cliff Hoover, interviewed by Sandra Ward

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