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" The S&P 500
SPX

+0.53%

’s yield keeps slipping, and that’s making life tough for income investors.

Recently around 1.2%, the index’s yield is headed toward its all-time low of 1.12%, based on data going back to 1936. It reached that trough at the height of the tech bubble in March 2000, according to S&P Dow Jones Indices.

Still, plenty of dividend-paying stocks remain. It’s a good time for those seeking dividend income to check their portfolios."

I wonder what brk can do to increase demand for brk? Can an old dog learn new tricks?

https://www.barrons.com/articles/yield-lacking-s-p...

“I wonder what brk can do to increase demand for brk? Can an old dog learn new tricks?”

Why would they want to increase demand for the stock?

I thought we wanted them to repurchase a bunch? We know what that’s going to take.

" “I wonder what brk can do to increase demand for brk? Can an old dog learn new tricks?”

Why would they want to increase demand for the stock?

I thought we wanted them to repurchase a bunch? We know what that’s going to take."


Since 2008 Buffett has been the largest seller of brkb annually, his life's work via the foundations. Since that year it has always made sense for Buffett to make reasonable decisions to increase demand for brkb common. Many of his partners have owned brk for 20,30, 50 years, most of us aren't billionaires. Do you expect Buffett to kill the stock so that brkb can buy back at prices and valuations he passed on for decades?

With spy currently yielding so little a small div to yield 1 percent or less makes sense. IF the div increased demand for brk common the small tax consequences would be more than made up for by the higher valuation of the common.

I don't expect most here to understand the logic, it has been that way for over 25 years. AFTER Buffett makes the move, they will praise it. That's my guess.

There may come a time when Berkshire pays a dividend, they’ve stated such:

“If we reach the point that we can't create extra value by retaining earnings, we will pay them out and let our shareholders deploy the funds.”

Do you expect Buffett to kill the stock so that brkb can buy back at prices and valuations he passed on for decades?

I expect Buffett to do what he can to keep Berkshire trading at a reasonable, if low, valuation as they stated in the Owner Principles:

“To the extent possible, we would like each Berkshire shareholder to record a gain or loss in market value during his period of ownership that is proportional to the gain or loss in per-share intrinsic value recorded by the company during that holding period. For this to come about, the relationship between the intrinsic value and the market price of a Berkshire share would need to remain constant, and by our preferences at 1-to-1. As that implies, we would rather see Berkshire's stock price at a fair level than a high level. Obviously, Charlie and I can't control Berkshire's price. But by our policies and communications, we can encourage informed, rational behavior by owners that, in turn, will tend to produce a stock price that is also rational. Our it's-as-bad-to-be- overvalued-as-to-be-undervalued approach may disappoint some shareholders. We believe, however, that it affords Berkshire the best prospect of attracting long-term investors who seek to profit from the progress of the company rather than from the investment mistakes of their partners.“

“ As that implies, we would rather see Berkshire's stock price at a fair level than a high level. Obviously, Charlie and I can't control Berkshire's price. But by our policies and communications, “ With all due respect I read that decades ago too. How long is it going to take to realize that Buffett had no idea how to value Brk long term or what others would be willing to pay for his vision? It still isn’t obvious he underestimated his value, long term?

Do you expect Buffett to kill the stock so that brkb can buy back at prices and valuations he passed on for decades?

Odd question. Of course not.

They have demonstrated they will buy back in quantity when it's a good value. $76 billion in the last six years. That's not nothing. It will get there again.

Wouldn't you be happy for them to buy back another $76 billion? $150 billion?

"They have demonstrated they will buy back in quantity when it's a good value. $76 billion in the last six years. That's not nothing. It will get there again."

Good morning, the point is the stock was a great value 15-20 years ago, he didn't swing. Do I want the stock to trade down to 1.25 xs BV again, no, and neither does Buffett. Buffett sells 4-5 billion brkb a year via the foundations, why would he want them to enjoy lower proceeds from his stock sales?

Buffett loves the low-cost index fund yet while Buffett was promoting and buying high-cost Ginny and high-cost Vicky, he forgot to buy LOW COST brkb. Obviously buying high-cost apple worked out great. Several high-cost hedge funds did well too but Buffett isn't a fan of high costs.


https://www.financecharts.com/stocks/BRK-B/value/p...

Look at the 15-year chart of brkb. Do I want him to aggressively buyback NOW, at 490 or 1.6 XS BV?

As you well know I'm not back seat driving I've been pounding that table for 20 years. What's shocking is WHO agreed with me 20 years ago, who?


BTW, nola I hope you didn't allow one of the children of brkville to run you off, like so many other valuable posters have been run off over the years.

See the humor bro, I've seen all the greatest comedians over the past 50 years in Vegas, many of the people here should be writing for Bill Maher or Larry David!!

Either way, I understand some people aren't cut out for the cult like insanity, happy holidays to you and yours.

Take a look at the spy yield chart. With the current yield at historic lows would it be fair to ask Buffett a simple question.

Dear Uncle, with your favorites long term hold currently yielding 1.1 % have you given much thought to brkb yielding a half to 1 % next year? Would that dividend increase demand for brkb common?

Old partners would like to hear your current thoughts on this issue.

Thank you, your biggest fan, hclasvegas.

Take a look at the spy yield chart. With the current yield at historic lows would it be fair to ask Buffett a simple question.

Dear Uncle, with your favorites long term hold currently yielding 1.1 % have you given much thought to brkb yielding a half to 1 % next year? Would that dividend increase demand for brkb common?



It would possibly increase demand for BRK-B. Because many people implicitly believe that dividends are free money.

This is evidenced in the CEF field. Two CEFs that have essentially identical holdings, but one pays a dividend and the other doesn't -- or one pays a high yield and the other a low yield. The high yielder sells for more than NAV while the low yielder sells for less than NAV. But when you look at the total return charts, the first has much lower total return. You could literally buy the low yielder and sell enough to match the high yielder's dividend and make more money.

Anyway, take a look at a 5 year chart of total return for SPY, SPYD (S&P 500 High Dividend ETF) and BRK-B, and SPHD (S&P 500 High Dividend Low Volatility ETF). https://testfol.io/?s=gA8qKQAfeIc

Or the 10 year. The high dividend payers are bad.
Taking (spending) the dividends, SPYD and SPHD grow $10,000 to $14,400. SPY grows to $32,400. BRK-B to $35,900.

Total return while withdrawing $400/yr (4% of the initial $10,000) SPY & BRK-B *still* soundly beat SPYD and SPHD. They are almost double at the end of the 10 years. https://testfol.io/?s=77Z8CfQviQW

That "free money" is rather expensive.

" It would possibly increase demand for BRK-B. Because many people implicitly believe that dividends are free money."

Who do you know with a net worth above 10k who believes a cash dividend is, free money?

"
Anyway, take a look at a 5 year chart of total return for SPY, SPYD (S&P 500 High Dividend ETF) and BRK-B, and SPHD (S&P 500 High Dividend Low Volatility"

Where did I suggest that brkb should be a high yielder?



" That "free money" is rather expensive."

There isn't one reader on this board who is that ignorant, Imo. A quarterly cash dividend is a taxable event in most accounts and isn't free money.


I think you missed the point.

Hey, everybody has a hobby-horse they like to ride.
Dividend focused investors is one of mine.

As far as "Who do you know with a net worth above 10k who believes a cash dividend is, free money?" , just google "dividend investing".

Or just about any investing site, such as seekingalpha.com.
"The Dividend Kings" board there is $699/yr, so nobody with NW below $10K will be paying that.

" As far as "Who do you know with a net worth above 10k who believes a cash dividend is, free money?" , just google "dividend investing"."

lol, if I google that topic I'll get 5000 emails from mutual funds, wealth managers, and honorable strippers pitching there, assets, and how to make use of their services. Those sites don't explain what a stock going, ex div means?

I'll take your word for it, and I continue to believe this is the perfect time for brk to authorize a .75% dividend, a bit below the current spy dividend. Let's go with a dollar quarterly dividend starting in q-1 2026.

Reminder, Uncle Warren has taken my sage advice several xs over the years, as always, I'm here for him if he wants to call, FREE!!

Dear Uncle, with your favorites long term hold currently yielding 1.1 % have you given much thought to brkb yielding a half to 1 % next year? Would that dividend increase demand for brkb common?

Are you sure declaring a dividend would make "number go up"?

I could just as easily see the market saying: hmmm, these guys really have no idea what to do with all that cash, they're even paying a dividend now! And re-rate Berkshire back to 1.25x book. Which would allow Berkshire to buy back a lot of stock (above book value, mind). Could end up with no excess cash and a 50% of operating earnings payout ratio. A low-growth, stodgy dividend payer. I don't think I want that.

" Are you sure declaring a dividend would make "number go up"?

I could just as easily see the market saying: hmmm, these guys really have no idea what to do with all that cash, they're even paying a dividend now! And re-rate Berkshire back to 1.25x book. Which would allow Berkshire to buy back a lot of stock (above book value, mind). Could end up with no excess cash and a 50% of operating earnings payout ratio. A low-growth, stodgy dividend payer. I don't think I want that."

Oh my. Ackman is on cnbc let's see what he has to say.

" " Are you sure declaring a dividend would make "number go up"?

I could just as easily see the market saying: hmmm, these guys really have no idea what to do with all that cash, they're even paying a dividend now! And re-rate Berkshire back to 1.25x book. Which would allow Berkshire to buy back a lot of stock (above book value, mind). Could end up with no excess cash and a 50% of operating earnings payout ratio. A low-growth, stodgy dividend payer. I don't think I want that."

" number go up "?

I have no idea what you mean? Am I certain a small quarterly div would increase demand for brkb common? yes.

To repeat, 5 of the 7 mag 7 pay a small div, case closed.

" number go up "?

I have no idea what you mean? Am I certain a small quarterly div would increase demand for brkb common? yes.

You're wanting the number - the share price of Berkshire - to go up. You want Buffett to manipulate the share price.

You will be continually disappointed, as you have been, if you think he ever would. He won't. He never, ever will.

"You're wanting the number - the share price of Berkshire - to go up. You want Buffett to manipulate the share price.

You will be continually disappointed, as you have been, if you think he ever would. He won't. He never, ever will."

The moment anyone (Buffett, Able, Ajit, Ted, or Todd) in control at Berkshire does anything to manipulate the price of a share of Berkshire stock will be the moment there is a mass exodus of shareholders to the exits.

People like hcl think it is a good idea to have management manipulate the stock because it will benefit them. That might be true for the short term, but they do not realize that it would be inviting disaster in the long term. Once shareholders tolerate management manipulating the share price for good reasons, it will then eventually be used for nefarious reasons and there isn't enough transparency in reported accounting for shareholders to notice the difference until it is too late.

hcl truly does not understand Berkshire culture and management.

"The moment anyone (Buffett, Able, Ajit, Ted, or Todd)"

Damn autocorrect.

Abel

the point is the stock was a great value 15-20 years ago, he didn't swing

We typically say that Berkshire will buy back stock when it is below a certain value. And that's generally true. But I would argue that there is an additional implicit condition that has to exist at the same time - that they believe there aren't OTHER more promising investments appearing on the near horizon!

Maybe 15-20 years ago, Buffett believed that even though Berkshire stock was a good value, he could find BETTER investments out there for the cash to be deployed into.

I'm sure I read somewhere that the number of listed companies that BRK could invest in that move the needle now it's so large is c200? (US only)

Id consider moving the needle nowadays to be a $10bn dollar position invested.

Am I certain a small quarterly div would increase demand for brkb common? yes.

Beware certainty.
Microsoft's multiples were crushed when they introduced a dividend.

Jim

the index’s yield is headed toward its all-time low of 1.12%, based on data going back to 1936.

Actually this is a golden age for those collecting dividends. Total real dividends on US stocks are *way* above the long run trend.

The yield percentage is just low because the prices are, for the moment, very high.

So it is a fantastic time to be a holder of a dividend portfolio...just not a good time to buy one.

Jim

" Maybe 15-20 years ago, Buffett believed that even though Berkshire stock was a good value, he could find BETTER investments out there for the cash to be deployed into."

Anyone holding a high percent of cash believes better opportunities are ahead. Isn't that market timing? How has that worked out to date?

Good morning Jim, “ The annual dividend was set at $0.16 per share, which amounted to $0.08 per share after a two-for-one stock split that occurred in February of the same year. The initial payment was made on March 7, 2003, to shareholders of record as of February 21, 2003. “ It worked out ok long term,no?

I'm sure I read somewhere that the number of listed companies that BRK could invest in that move the needle now it's so large is c200? (US only)

Id consider moving the needle nowadays to be a $10bn dollar position invested.

https://stockanalysis.com/list/sp-500-stocks/

111 S&P500 companies over $100 billion market cap.

(Berkshire at #10, $1.06T)

Anyone holding a high percent of cash believes better opportunities are ahead. Isn't that market timing? How has that worked out to date?

That's not really market timing, that's just market pricing. Little more than "don't buy stuff without a margin of safety", which doesn't seem like a bad idea, and isn't particularly difficult.

The only bit that is "timing adjacent" is the belief that a decent opportunity will come along soon enough that the wait will have been worthwhile. Historically that has been true, but the future could be slightly different. Someone could perhaps make the case that deep value investing doesn't work as well as it used to as the time between bouts of rational pricing are more widely spaced of late, making the annualized return boost lower from any given level of discount achieved at purchase time.

As for how well it has worked to date, well, about best investing result in all history?

Jim

“ As for how well it has worked to date, well, about best investing result in all history?

Jim“ Good morning bud, are you going back to the roaring 20s again? Let’s go back 10 , 15, and 20 years, that’s fair enough. When you fall in love you sure are loyal for life.

Let’s go back 10 , 15, and 20 years, that’s fair enough. When you fall in love you sure are loyal for life.

20 years, you say?
https://stockcharts.com/freecharts/perf.php?SPY,BR...

BRK.b +786%
SPY +722%

Just for fun, obviously. Will change. Start/endpoint effects and all that.
Over 15 years SPY is far better, 10 years a bit better.

25 years is the fun one:
https://stockcharts.com/freecharts/perf.php?SPY,BR...

SPY today feels a lot more like 2000 than 2010 or 2015. But Berkshire is also more richly valued and is just a different animal going forward.

Berkshire is still by far my biggest holding, but I have lightened up some.

" Berkshire is still by far my biggest holding, but I have lightened up some."

Me too but does that mean I think Buffett pitched a perfect game?

BTW, are your 20 years etc charts with divs reinvested? Thanks.

where is best place for cash now?

Me too but does that mean I think Buffett pitched a perfect game?

No one else here does, either. Buffett's errors of omission are easy to point out, with hindsight.

BTW, are your 20 years etc charts with divs reinvested? Thanks.
https://help.stockcharts.com/charts-and-tools/othe...

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The only bit that is "timing adjacent" is the belief that a decent opportunity will come along soon enough that the wait will have been worthwhile. Historically that has been true,

I still snicker at the guy who has (had. He stopped posting) a blog on seekingalpha, saying that you shouldn't buy AAPL at 105 but wait until it inevitably came down to 100.
That was before the 4-1 and 7-1 splits, so 100 is split-adjusted 3.57.

AAPL is currently 257. It never dropped down to pre-split 100 after he wrote that.

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