SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Young and Older Folk Portfolio
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
Recommended by:
Markbn
To: chowder who wrote (991)6/19/2022 10:18:15 AM
From: dylan murphy1 Recommendation   of 21897
 
I've always thought one of the keys to Buffett's success was that he never paid his shareholders a dividend. If memory serves he paid a dividend in one quarter once in the mid '60's and then never again. As you say he would buy companies with good cash flows that if they were public would pay their shareholders a dividend. Companies like banks, food, and insurance. Once he got control of them he used that money to pay the debt he took on pay for the company. Once paid for that money would flow to the bottom line to buy more companies. It was a cycle he could repeat over and over.

It worked so well he now has billions of dollars to invest and few places to put it. Like an index fund he buys stocks to take advantage of capital gains and dividends. The money continues to pile up and he still refuses to pay his shareholders a dividend. I've read he received over 5 billion in dividends in 2021. I do understand his reasons for not paying and they are sound and has worked great.

Are the shareholders happy? I'm sure they are. The stock returns have been among the best around for years. But a shareholder is also a owner of a small part of the business. You can have stock worth a million dollars but can't really take advantage of that without selling. And once you sell you own less of the company and have to pay tax on the capital gain. A small dividend would allow you to see a return on your ownership and retain your investment.

I don't own the stock so I am just on the outside looking in. Seems a special dividend every few years would be a nice reward for long term shareholders.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News