Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 2
A quick question, how much money has Berkshire received collecting dividends from Coke throughtout their entire ownership of the stock ? Thank you
No. of Recommendations: 5
quick question, how much money has Berkshire received collecting dividends from Coke throughout their entire ownership of the stock ?
Grok tells me that Berkshire bought the shares between 1988 and 1994 at an average (split-adjusted) price of $3.25, and they have generated dividends worth $10.2b, or $25.50 per Coke share.
This seems like a lot, doesn’t it? But is it a good return, compared to alternatives? One way of answering this is to compare the total return of the Coke investment (capital appreciation and income, before taxes) with Berkshire’s overall return.
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.
This was probably not always the case – I am guessing that it provided a great return up to 2000 or so. But the fact that the share price has practically not changed in 25 years, combined with Buffett’s favourite holding period (forever), has actually turned this brilliant investment into one that is now sub-par.
No. of Recommendations: 3
A quick question, how much money has Berkshire received collecting dividends from Coke throughtout their entire ownership of the stock ? Thank you
My trusty artificially intelligent assistant tells me the pre-tax figure is around $11.6 Billion and increasing at $816m per year at current dividend rate.
No. of Recommendations: 7
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.
No. of Recommendations: 1
Grok tells me...
I'm trying to follow the logic...
Shh, don't think too deeply about it, or you'll break the illusion of logic happening.
More seriously, I believe Buffett has stated his hold forever period on Coke stock was been a drag on the portfolio, so maybe Grok remembers reading that. I'm certain Buffett would rather have less Coke stock than the Berkshire shares he's missing from issuing them to buy General Re or, especially, Dexter Shoes.
