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SDS (Seductive Dividend Stocks)
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Sorry I hide my true identity but I'm a physicist/engineer, native contrarian and idea generator. I am an eclectic dividend investor with motto "In God We Trust, All Others Pay Cash" applied to companies I invest in. I like to read /and read a lot - did you look on my SA photo 8-)? / including... More
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  • Warren Buffett and dividends (Jan 18, 2012) 2 comments
    Jan 18, 2012 8:36 AM

    As far as I know Berkshire Hathaway /BRK.A/ paid dividends only once when Warren Buffett (NASDAQ:WB) left for a restroom during annual meeting. Many dividends opponents refer to WB anti-dividend policy in order to criticize dividend-oriented investing.

    WB is right about tax disadvantages of dividends and he was probably right with his dividend attitude about 30 years ago. But I think he is wrong during past 20 years. Let me explain why I think WB approach to dividends should be different now.

    In order to make difference in BRK.A performance WB needs to invest around $5 billion in a good company. So his investment universe is limited to big companies only. In order to make difference in Average Joe (AJ) performance probably AJ needs to park around $100 thousand in a good company. Even if AJ is not as good capital allocator as WB it is much easy for AJ to find a good investment between big and small companies than for WB.

    Therefore, I think WB should be more friendly to AJ and BRK.A should pay dividends, e.g. a fixed percent (at least 10%) of earnings.

    Disclosure: I do NOT own BRK.A and BRK.B because they do not pay dividends.

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  • SDS (Seductive Dividend Sto...
    , contributor
    Comments (4480) | Send Message
    Author’s reply » Warren Buffett likes to receive dividends - see but dislikes to pay them...
    14 Mar 2013, 10:32 PM Reply Like
  • High Yield Investor
    , contributor
    Comments (918) | Send Message
    SDS, funny thing, I guess that's what Warren Buffett and I have in common, we both like receiving dividends, but don't like paying them. I like taking my dividends and reinvesting them back into the business; generating more dividend income. I do not like spending them. Perspective makes all the difference!
    2 Oct, 10:46 AM Reply Like
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