Dividends4Life: Buffett On Berkshire's Dividend Policy

Buffett On Berkshire's Dividend Policy

Posted by D4L | Tuesday, July 16, 2013 | | 0 comments »

I am a dividend growth investor, so I do not own shares in BRK. However, I have tried to learn as much as I can about how Buffett invests, because he loves to purchase shares of dividend-paying companies. He has expressed his enjoyment of dividends numerous times. And BRK's wholly owned companies, of course, forward dividends to headquarters like clockwork. Indeed, the managers of those companies earn bonuses based on the cash that they send to Omaha.

Many investors see a logical disconnect between BRK's failure to pay dividends and its own demand for dividends from the companies that it owns. I have never seen it that way. One point is about the companies that BRK invests in to make money. The other is about how BRK's own shareholders make money. There is no reason that they need to be the same. BRK's investment proposition to those who invest in it has always been perfectly clear: Capital gains only.

Source: Seeking Alpha

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