No. of Recommendations: 4
I think the discussion about dividends is not in alignment with Mr Vegas's reasoning. I don't think he is looking for steady cash flow. Commencing a dividend would likely boost the stock price. When Apple restarted their dividend the boost was far more than the tax consequences of the dividend. As Munger has said, look at the inverse question. What would happen to Apple stock price if it cut the dividend and held the money for future investment.
If you are an accumulator of BRK, it would not be to your benefit if a dividend was started. For a seller a dividend would help for two reasons. One, there would be more demand for stock. Secondly, there would be less supply as holders would not have to sell stock to get their dividend.
From perplexity
Specifically, when Apple announced the resumption of dividends in 2012, the stock price popped roughly around 5-7% on the announcement day, reflecting investor enthusiasm for the dividend introduction. This dividend resumption marked a significant shift from Apple’s previous policy of not paying dividends and using cash for other purposes such as buybacks and reinvestment.
Aussi
