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Berkshire Hathaway Inc. Message Board

  • brian.bovey brian.bovey Sep 23, 2012 11:21 AM Flag

    Complaints about no dividend.

    About the dividend. We have a 17 or so trillion dollar deficit. Taxes will go up on everything and so will inflation.. These "dividends" will not matter soon enough. Theres not a company in the world other than Berkshire that I would rather invest my money in by having them reinvest the free cash flow having the share value increase. Be smart BUY BERKSHIRE HATHAWAY. Warren urges patience on shares and hes exactly right.. Berkshire shareholders will end up with the best hand.

    Sentiment: Strong Buy

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    • IMHO, complaints about the lack of a dividend are totally justified, but futile. This is a rich man's stock. Its only « raison d'être », reason for existence, is to accumulate wealth while avoiding paying taxes. Think for a moment, if BRK did pay a regular dividend every shareholder would get hit annually with a "taxes due" bill. And WHO is the largest shareholder? In spite of his rhetoric to the contrary, do you really believe HE wants to increases HIS taxes?

      If the lack of a dividend is an issue for you, then do what I did, sell. There are plenty of good companies out there that do pay a dividend and are just as worthy of your investment dollars as BRK is.

      • 1 Reply to jad1148
      • Jad, after the recent stock spit, anyone can afford to buy BRKB in small increments. Any shares held in tax deferred or tax free accounts incur no tax consequences if dividends are received. That said, I agree that Buffett will do everything he can to avoid paying imcome taxes (he has all but said so in prior years' annual reports). There is nothing wrong with that; if you are seeking a dividend, ask yourself why? Do you think you can invest the dividend better than Buffett? Do you not trust BRK to deply the cash for your benefit? Do you believe a dividend will increase shareholder demand for the stock - I do, and believe that is the only reason why a dividend should be paid. However, Buffett does not agree nor does he care, but if you take him at his word, if he is unable to invest BRK's cash for a 5 year period in a way that generates higher returns than the S&P 500 index, we will see a dividend. Once WEB is gone, we will most certainly see dividends from BRK. In the mean time, I would not buy it at its current price, but if it gets cheap, I'd buy more shares with or without a dividend. BRK is different from most stocks in that it exists to invest in *anything* that may be profitable for shareholders. It is not tied down to a single business or industry, which may or may not be ripe for investment by management - accordingly, most mature, profitable companies should pay dividends to shareholders. But as long as Buffett is still able to find investable assets somewhere, I don't mind him doing so, even if it costs shareholders a dividend.

    • One needs to have a long term outlook here. The S&P 500 has handily beaten BRKB in the past 2 years, and with its 2% yield, has had an impressive total return. So the big question is whether BRKB can resume its magic in the next few years, rewarding its patient investors.

      • 1 Reply to vensh
      • 2 years is anything BUT long-term. Want a long term view? Go back to 1996, which is as far back as you can go using BRK-B on the Yahoo charts. Compare it to the S&P which has gone up about 100%, while BRK has gone up about 325%.

        http://finance.yahoo.com/echarts?s=BRK-B+Interactive#symbol=brk-b;range=my;compare=%5Egspc;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

        Sentiment: Hold

    • Right on

 
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