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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: SteadyAim   😊 😞
Number: of 12539 
Subject: Re: From the letter
Date: 02/27/2023 8:44 AM
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"As for the S&P500, after about a third of profits are sent to index shareholders as dividends, more than 100% of the retained balance is used repurchasing shares ...
Share reduction of the index companies was a modest 0.7% per annum for the past decade. Said differently, companies spent roughly 60% of profits to purchase 2.7% of their market capitalization each year, yet only reduced the share count by 0.7% annually.

Is this right? Over what timeframe?

I knew buybacks offset issuance to some extent, but this is saying that divis are only 33-40% of profits, and all of the rest goes to buybacks (not investment??) and only ~25% of that represents share count reduction. So shareholders are only getting say 36%+16% = 52% of profits? Is it really this bad in the long term? It doesn't seem possible for US companies / markets to do so well if this is the case.
What am I missing?

SA
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