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keeping the momentum going. In 2008 we first started the debate why a 50 for 1 split of the Bs , an authorized buyback, and a 1 percent div would greatly increase demand for brk. It took years but eventually Buffett got tired of selling off his life's work at 1-1.3 xs BV and he gave us the stock split and the buyback. In view of how Meta aka FB traded Friday I wonder if Uncle Warren is rethinking a 1$$ a B share quarterly dividend? The taxable event would be more than paid for by the increase in demand for the common, the same argument I made in 2008. IF, IF, I knew Buffett was considering a div, I wouldn't be short the calls. Will Uncle Warren, shock the investing world, again ? Stay tuned, it often takes years but he does change his thinking on substantive issues. We shall see.

I wonder if Uncle Warren is rethinking a 1$$ a B share quarterly dividend? The taxable event would be more than paid for by the increase in demand for the common, the same argument I made in 2008.

I definitely question your confident assumption that it would be good for the stock price to introduce a dividend. Quite often--usually?--the introduction of a dividend is taken by the market (often very correctly) as an admission that the company in question can no longer find good ways to deploy capital, and has gone ex growth. It's headed to the cash cow department. The corporate equivalent of trading your sports car for a minivan.

Consider the case of Microsoft. The real total return in the first year after they announced their first dividend in 2003 was negative, starting off with a prompt 10% drop.
And the real total return was still negative 9.99 years after the announcement (!), even though the business continued to do very well throughout that period.
(the price went up a hair on the exact tenth anniversary, achieving a positive ten year real total return before taxes of +0.09%/year, and has been positive since)

Yes, it's likely that Berkshire will opt for a dividend at some point, though I doubt it will be any time soon. I think that the typical market multiples the year(s) after that will be lower than the typical multiple in the years leading up to that, not higher. They'll be treated as a utility.

Jim

“Yes, it's likely that Berkshire will opt for a dividend at some point, though I doubt it will be any time soon. I think that the typical market multiples the year(s) after that will be lower than the typical multiple in the years leading up to that, not higher. They'll be treated as a utility.”

I recall Warren at one of the meetings (forget which one) essentially said that when BRK pays a Dividend, it will be a loud warning sign and essentially an admission to all that they will no longer be able to compound that retained $1 into something more than a $1 of current value. It will be a sad time imo and I take him at his logic and word.

I’d truly be shocked to see a dividend policy before he leaves this world. I highly doubt he would start paying a dividend for any potential temporary market bump in the stock price or to generate more demand for the stock, unlike other CEOs. In general, Warren & Charlie have selected for the true loyal and informed long-term shareholders they have desired. Most owners have no interest in a dividend until absolutely necessary.

"I’d truly be shocked to see a dividend policy before he leaves this world. I highly doubt he would start paying a dividend for any potential temporary market bump in the stock price or to generate more demand for the stock, unlike other CEOs. "

This this and more this.

CEOs are supposed to manage the business, not the stock price.

Whenever I see a company executive trying to manage the stock price, I immediately know it is not a company for me to invest in. Executives who try and manage stock prices are nothing more than PR people and politicians. I want the executives working for me at the companies I own to be experts in managing companies, not PR people.

“CEOs are supposed to manage the business, not the stock price.” How soon many forget. From my notes, in Jan 2010 Buffett finally split the Bs to provide the liquidity required to be added to the indexes, brkb was 73ish at the time. By March 5 2010 Brk was added to the spy and had huge volume and moved up to 85 ish. 3/30/2010 we had sokolgate stock dropped back to 75 ish in four weeks. 9/26/2011 Buffett finally authorized the buyback. The 1.1 xs BV limit was designed to goose the stock above 1.1 xs BV, so that he wouldn’t be expected to actually buyback many shs. The limit was lifted to 1.2 xs BV for the same purpose, goose the stock above 1.2 xs BV where he was happy to sell off his life’s work, way to cheap. He finally changed the buyback hurdle to , material discount to IV , when he realized his error of not being an aggressive buyer from 2008 on. Those are the facts for those interested in history, whether we like the facts or not. Claiming Buffett would never, deliberately goose the stock is revised history. Splitting the stock in 2010 helped to close the bni deal, but the buyback should have been authorized at that time and I bet he might even admit it if asked. Fond memories indeed, for those of us who have been posting for over 20 years, a walk down memory lane. 🎈🎈

I forgot, the buyback limit was raised to 1.2 xs BV in 12 /2012, which goosed the stock from 87 ish to 89 ish. Brk options were listed in 6/09, but the Bs were 3000 ish and very illiquid. The 50/1 split made the options much more liquid, obviously.

Whenever I see a company executive trying to manage the stock price, I immediately know
it is not a company for me to invest in. Executives who try and manage stock prices are
nothing more than PR people and politicians.

How's that been working out for you, BA (Boeing)? Hope you haven't been considering enrolling
in yet another "crash course" in Company Mismanagement.

vez

"Claiming Buffett would never, deliberately goose the stock is revised history."

I am sorry you are incapable of understanding what Buffett says and does.

I would try and explain it, but if his own words don't convince you then absolutely nothing I could say would ever change your mind.

That fact you think Buffett tries to manage the stock price says a lot.

Good luck with life, you are really going to need it.

"How's that been working out for you, BA (Boeing)? Hope you haven't been considering enrolling
in yet another "crash course" in Company Mismanagement."

What do you mean?

I have never, never, ever advocated investing in Boeing (so it has worked out well for me so far).

I think Boeing is in an excellent place competitively (one of only a very small handful of defense contractors of airplanes), but I think they have messed up their great position badly. The fact that they cannot make money on large open ended government contracts says a lot.

I thought Boeing was a terrible, risky investment many years ago. Their hiring of the moron from GE only reinforced my view of their stock.

I literally would not invest in Boeing if it was the only stock available in the market. I am to the point where not only would I never invest in the company, I am seriously considering never getting on one of their planes. I am not there yet, but I am not far.

""That fact you think Buffett tries to manage the stock price says a lot.

Good luck with life, you are really going to need it."" Good morning, thanks for the laughs. I'm 74, I hope my remaining 30 years of life are not negatively impacted by the fact that I understand Buffett a bit better than you. Buffett set his own hurdles, when brkb was struggling to match or beat SPY, he few choices with respect to how to goose the stock, and increase demand for the common. A stock split, an authorized buyback, and or a small, dividend. When you have the time, I'm sure you are a very busy guy giving investment advice etc, share with us the long list of public companies who have authorized a buyback, with a limit that almost guaranteed no substantial amount of stock could or would be bought back, below the self imposed limit. Also, in 2006, brk should have requested the, right of first refusal, on all Gates Foundation sales, going forward. No back seat driving here, I said it in my, Foundation Sales Forever Effect posts, starting in 2007. I LOVE Buffett for many reasons, but lets not pray at the church of Brkville with revised history, even he ain't perfect. Thank you for generously sharing your time with us. Stay well.

another opinion on FB initiating the div and historical data. https://seekingalpha.com/article/4667479-meta-why-...

indeed, I recall those events well. As I also recall at the time, you were almost banished to the wilderness for being so bold on the old "Bored". :-))

Hbird.

Good morning Hbird, I did in fact get excommunicated from the Fools board back then, banned from posting for years. I also received , threats, from a few idiots privately for suggesting Buffett split the Bs, authorize a buybacks at, material discounts to IV, and acquire the, right of first refusal on all Gates Foundation sales. You are one of the several members of the Fools community who acknowledged the calls at that time, so thanks for that. Hopefully I won't get barred from this community for thinking outside the box and questioning Buffett's reasoning on many issues. Stay well old friend.

Wasn't the threats around 2007 when Harvey mentioned buybacks ?How times have changed .

Yeah, I fondly remember the old HC posts as well...

The ones where he would call Buffett the "old man", refer to shareholders as "kool-aid drinkers" and demand Berkshire pay Dividends, "because the dancing girls and ladies of the night will not accept intrinsic value!"

YCMTSU

Amirite Harv?

"because the dancing girls and ladies of the night will not accept intrinsic value!"

that was a funny line and true

From my notes, in Jan 2010 Buffett finally split the Bs to provide the liquidity required to be added to the indexes, brkb was 73ish at the time. By March 5 2010 Brk was added to the spy and had huge volume and moved up to 85 ish. 3/30/2010 we had sokolgate stock dropped back to 75 ish in four weeks. 9/26/2011 Buffett finally authorized the buyback. The 1.1 xs BV limit was designed to goose the stock above 1.1 xs BV, so that he wouldn’t be expected to actually buyback many shs. The limit was lifted to 1.2 xs BV for the same purpose, goose the stock above 1.2 xs BV where he was happy to sell off his life’s work, way to cheap. He finally changed the buyback hurdle to , material discount to IV , when he realized his error of not being an aggressive buyer from 2008 on. Those are the facts for those interested in history, whether we like the facts or not.


Those must be some interesting notes. These facts that you have jotted down in your notes include some things most people here would call 'facts' and a number of things that might be more accurately described as 'conjectures'.

The split of the Bs was explained at the time as a gesture to outgoing BNSF shareholders to allow them to convert to BRK.B shares at a similar price, without being paid cash on for the value of their holdings corresponding to less than one previous Berkshire B share. The fact that the B-share price moved up from $73 to $85 in the following few months (and back down to $70, by June, and finishing the year at $80, you might have added), could be attributed to any number of things, including changes in the general stock market (the S&P followed a similar pattern over 2010), or because of the BNSF acquisition, or Sokol's ouster, or because of a million other causes. I see nothing to support one particular explanation, which is that Buffett did the split to 'goose' the stock price (despite his claims of a different reason), nor anything to suggest that this tactic actually succeeded.

In 2011, Buffett did authorize the buyback, but once again, maybe not to 'goose the stock above 1.1xBV', but rather for the reason Buffett stated, which is that Berkshire shares under 1.1xBV actually represented a very good deal for ongoing Berkshire shareholders, better than anything else that he might have bought with the huge cash pile. Unfortunately for us, he was not able to buy many shares at this low price, and eventually increased the threshold to 1.2xBV, and as shares moved beyond that ratio, eventually to any price that he and Munger thought represented a good deal for shareholders, with a margin of safety. This sounds to me much more like Buffett chasing the price as it went uup, rather than Buffett pushing the price up. But everyone is free to interpret it as they wish (although this would not make their viewpoint a 'fact'.)

If there is one thing that Buffett has done consistently, throughout his career, it is to obstinately refuse to promote the purchase of Berkshire stock, with a few exceptions when the price seemed ridiculously low. It is ironic that the one person who exemplifies this shareholder-friendly behaviour nevertheless gets accused of goosing the stock. But it's a (mostly) free country, so Buffett can behave as impeccably as you like but some guy on the internet is always free to say the opposite.

dtb

"" Those must be some interesting notes. These facts that you have jotted down in your notes include some things most people here would call 'facts' and a number of things that might be more accurately described as 'conjectures'."" Hi, obviously I shared my , opinions, based on decades of following Buffett very closely. Can you share with us the list of other public companies that have authorized a buyback with a limit so restrictive it almost guaranteed no shares would actually be bought back ? Thank you.

LOLOL, wow, yes,, I recall the dancing girls wont accept IV as well :-)) brought it all back !!

"because the dancing girls and ladies of the night will not accept intrinsic value!" Fond memories intend!! Remember when brk experts tried to tell us we had to calculate our brk IV NET WORTH ? LMFAOOOO, I tried to explain to toddfinance, webrules, and other regulars , that the danSIN girls in Vegas don't accept IV net worth checks,lol. Oh man, the good old days. Recall toddfinance trying to explain that a pizza pie is a pie, whether you cut it into 8,16, or 64 slices it's the same pie, hence, a stock split was a stupid idea. I admit I miss todd, a good kid.

Thanks old friend, you are one of the few I recall from back then, and possibly the only one on this board who knows me. Sorry we lost touch waay back, but you were there when the accident happened. I lost touch with a lot of folks on "here" for quite some years, but all well and ready to move on with my next xhapter. I remember also waay back, when I forst noted my interest in chips.... we both took some licks. LOLOL I ofetn wonder where babyb went,.....

"" LOLOL, wow, yes, I recall the dancing girls wont accept IV as well :-)) brought it all back !!"" Hbird, do they accept IV net worth checks in France ? Who promoted that concept, todd, or someone else , I can't recall? The Fools board was a riot!

LOL, Todd was certainly a vocal proponent. Mark was always trying to understand it...hopefully they take some IV , though they prefer it in Euro's I believe at "ze craaazzee 'orsse".

"" Wasn't the threats around 2007 when Harvey mentioned buybacks ?How times have changed. "" I made hard copies of the emails figuring one day the Fools would be involved in a class action lawsuit, and I would have a file. I showed the emails to friends at the FBI , they opened a file, but once I got cancelled,long before getting cancelled was cool, obviously I didn't or couldn't post so the silly nonsense ended. To be fair, brother Jim warned me they were going to cancel me but it wasn't that important to me.

"" though they prefer it in Euro's I believe at "ze craaazzee 'orsse". Take photos so that the guys can do their due diligence, on a rainy day in Vegas ! Thanks.

Do you really not know why Buffett split the stock?

“”Do you really not know why Buffett split the stock?”” To repeat, does Buffett wish he authorized a buyback at the time the bni deal was agreed too? Does he wish he bought back at least the number of shares issued to complete that deal, during the following 12 month time period? Second question, can someone provide the list of public companies that authorized its first stock buyback, with such a restrictive buyback limit, it was near certain there would be very limited opportunities or no opportunities to actually buy back any stock? These are not trick questions, thank you.

"Good morning, thanks for the laughs. I'm 74...."

Indeed. The laughs were good.

You probably do not remember, but I have met you Harold.

“” Indeed. The laughs were good.

You probably do not remember, but I have met you Harold.“” Did we debate our IV net worths? Ucmtsu. Right Banksy? ☮️

"Hi, obviously I shared my , opinions, based on decades of following Buffett very closely."


Likewise, a biologist can track a bear by following its trail of dung, but it has no predictive value in determining its next source of fresh meat. "Following Buffett very closely" does not exempt you from the possibility of misreading his motivations/actions.


"Can you share with us the list of other public companies ...?"

My knee jerk thought was: Do your own homework. More charitably, if you are trying to challenge a post with a well intentioned question, offer your list (or the zero or non-zero skimpy number that makes your point). This will show readers you're engaged in substantive dissention and substantiating it, rather than the thrill of combat posting.


Finally, keep posting. I've read plenty of your posts which seemed valuable.

CmoreBmore

"" Finally, keep posting. I've read plenty of your posts which seemed valuable.

CmoreBmore"" Hi, I already proved the point. When brk first issued that press release most of us regulars agreed , brkb would rarely if ever sell below 1.1 xs BV again. That's a fact. It did trade below 1.1 xs BV a few xs but he had little interest in aggressively buying. I know of no other public company that ever filed a buyback press release with a restriction limit that almost guaranteed no significant shares would be bought back. Those are the facts, unless someone can prove a contrary opinion that has more credibility. Take care.

"Did we debate our IV net worths? Ucmtsu. Right Banksy?"

Nope. I saw a couple of acquaintances in Vegas. I went over to say "hi" to them, you were there talking to them and they introduced us.

I don't think they were very good friends of yours based off of what they said.

“Nope. I saw a couple of acquaintances in Vegas. I went over to say "hi" to them, you were there talking to them and they introduced us.” What year? Was my name really Harold that year? Thank you.

“”Indeed. The laughs were good.

You probably do not remember, but I have met you Harold.”” umm, typo or wrong gentleman? ☮️

"What year? "

2 or 3 years ago. A few months after the strip reopened from COVID.

"Was my name really Harold that year?"

No. Of course not. It was your nickname.

"Thank you."

You are welcome.

What happened to Todd? He posted a lot on the Yahoo Board.

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