Subject: Re: Dividends from Coke
Grok tells me that the Coke position has provided a total annual return of 11.4%, over an average holding period of 34 years. In comparison, Berkshire’s return since 1991 has been 14.6%. So the return of the Coke investment, despite the impressive dividend return on the original price, has actually been a drag on Berkshire’s performance.

I'm trying to follow the logic, but I don't quite get it. I guess it's true, tautologically for any firm, that if you sort their individual investments by ROI, a large portion of them (not necessarily half on a dollar-weighted basis, but likely more than that given the skewness of returns) will be below the firm's average ROI. But surely that doesn't imply that every one of those investments was subpar in the sense of not being a good one. I mean, if you imagine a hypothetical superinvestor that only invests in stocks that outperform the overall market, I think it would be weird to say that half of his/her investments were a drag on that performance. But maybe I'm inferring something you didn't mean.

Also important to remember that total return assumes reinvestment of dividends (at too-high prices for many years in Coke's case). But Berkshire didn't reinvest those dividends in Coke shares, so the actual returns to Berkshire generated by those dividends could have been much better or worse than the return on Coke shares. Hard to even estimate what those would have been, other than just saying they were probably around Berkshire's return on incremental invested capital.