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after sold in his IRA,

https://mail.yahoo.com/d/folders/1/messages/10192

Not sure what you meant to post but it wasn't an article.

does this work?



https://rationalwalk.com/just-hold-the-goddamn-sto...

Yup, we’ve all been there! Nice that RW did not suffer from commitment bias.

I’ve found over the years it has become a lot easier to sit & “do nothing” after selling many winners, then painfully watching the stock price and I.V. of many of those cos. accelerate for many years!

Reminds me of Graham:

“The investor’s chief problem, and even his worst enemy, is likely to be himself.”

does this work?

Yes, thanks.

Public delf-flagellation is good for the soul! RW's seems genuine though, not like Buffett's and Munger's half-hearted self-criticisms.

I don't understand why he has no appetite to invest in index funds, if he thinks Berkshire is great because it is a mini index. That is inconsistent.

Other than that, he hit the nail on the head. You can sell an slightly overvalued stock, but what next?

" Public delf-flagellation is good for the soul! RW's seems genuine though, not like Buffett's and Munger's half-hearted self-criticisms."

good morning, all, I have a few minor injuries, so I'm not going to the park to play today, hence I have extra time. Some of us have been posting on these boards for over 20 years. We have lost many fine sharp posters over the years mostly due to rude, obnoxious, "cult" like responses from the usual suspects. Several are still posting here, I ignore them, others, just leave, tho many still read certain posters but no longer post. I have certainly taken my share of incoming over the years for independent thinking outside the box, but a kid from the Brooklyn projects may have thicker skin and patience for street chatting bullshit from lightweights, lol.

For example. In 2008 as part of my, FSFE posts, Foundation Sales Forever Effect posts, I made the case for why brk should declare a very small div to INCREAE DEMAND for brkb. I suggested like a .25 - .50 cent div with a slight annual increase. I never suggested that brk should be a high yielder, just that a small div and a 50/1 stock split would increase DEMAND for brk which back then often traded near BV. Buffett was a willing seller at BV or a slight premium back then via the foundations. Many institutions and retail investors WILL NOT or CAN NOT buy a stock with no div. My point was that IF the small div increased DEMAND for brkb common, and the stock traded up to 1.3 xs BV as a result, wouldn't the taxable event from the small div be more than covered by the higher price Mr Market would be willing to pay for brkb? BUFFETT was the biggest seller of his life's work back then, WHY give away billions of dollars' worth of HIS stock at BV or slightly above BV in the public market? So, I argued that brkb should acquire the, right of first refusal, on ALL Foundation sales, going forward. As long as it's disclosed, it's legal. Of course I got jumped, again. Do FB, APPLE, MSFT etc pay a div today? Have many high-priced stocks done a split the past 10 years? Does my thinking in 2008 seem so crazy, today?

Anyway, since I'm a Vegas kid the past 50 years, and I've done my share of gambling I'm laying 3 to 1 that the responses will be, IF IF you need income just sell 5 % of your shares annually, I'm serious, I have no doubt, the thinking hasn't changed much in 17 years in brkville. Stay healthy all, not much else really matters.

RW, good morning, I know the div issue is something you have given much thought to the past 20 years. For old times' sake, give some thought to sharing your current thoughts on the small div debate right here. You can ignore all the ignorant responses regardless of your opinion. Now that so many great tech companies offer a very small div yield, Imo, to help increase demand from institutions that will only buy div paying stocks, do you think a small div in 2008 would have increased demand for brkb over and above the tax consequences for partners in a taxable account? Should brkb declare a div by year end? We both know the consequences of questioning Buffet on these boards, lol, so if you prefer to answer privately, I hear ya. Thanks, and be well. hc

Does my thinking in 2008 seem so crazy, today?

No, it seems arguably reasonable. I have always wondered why WB is so resistant to a split. It got so bad that he was forced to create the B shares. He didn't do it for the small stockholders, he did it because he was effectively forced to.

BRK was high back when I first thought of investing in it. $2000 a share when the IRA contribution limit was $2000. I just couldn't see investing my entire contribution in just one stock. (I didn't care that it was just one share.)

Paying a nominal dividend of $0.25 - $0.50 would not hurt anything. Would not hurt anybody. Whoever trades the $685,000 A shares is not going to do anything different. Nor, really, are people who trade the B shares going to do anything different.
Heck, just have the dividend only on the B shares and not the A shares.

What it will do is open up BRK to more small investors.

I doubt that WB will change. I strongly suspect that it will change after he is out of the picture.


On the balance sheet, Total Cash Per Share: $192,762.58 (I think this is for the A shares. Yahoo gives the same numbers for A & B).

BRK-A Shares Outstanding: 553.23k
BRK-A Shares Outstanding: 1.33B
BRK Cash And Cash Equivalents: $42B

Does paying a dividend add to the admin expenses for a company? I believe it does in both hard costs and soft costs (distraction from primary mission). However, I've never peeked behind the curtain on any formal analysis to see these charges, ledger entries or worked with anyone who has.

" Paying a nominal dividend of $0.25 - $0.50 would not hurt anything. Would not hurt anybody. Whoever trades the $685,000 A shares is not going to do anything different. Nor, really, are people who trade the B shares going to do anything different.
Heck, just have the dividend only on the B shares and not the A shares."

hi, you can't have a div on the Bs and not the As. But again, either Meta, Goog, Apple, Msft, etc are all wrong, OR, Buffett is being stubborn and he's wrong. I doubt the major shareholders in those tech stocks need the div to pay the rent on their double wide trailers, the small div increases demand for their shares. The higher stock price more than covers the tax consequences of the small div, especially if you are selling billions a year of your shares like Buffett. I bet Buffett and Gates have had this discussion many times since MSFT paid that one-time div years ago. I shouldn't have sold msft ,long ago , huge error.

" Does paying a dividend add to the admin expenses for a company? I believe it does in both hard costs and soft costs (distraction from primary mission). However, I've never peeked behind the curtain on any formal analysis to see these charges, ledger entries or worked with anyone who has."

Yes, there are costs to pay a div. brk could pay a div and raise the div 2,3-5 percent a year. The administrative costs are pocket change to brk as they are for msft, goog, apple, Meta, etc. IF, we had a true Independant BODs, brk would have authorized a buyback at , material discounts to IV in 2008, as well as initiated a very small div, to increase demand for the common. Sadly, Buffett's foundations realized substantially less than they should have from his generosity, because the stock traded near BV for WAYYYYYYYYYYYYYY to long.

<<No, it seems arguably reasonable. I have always wondered why WB is so resistant to a split>>

That question has been asked more than once in the Annual Meetings. Here’s what it is,
1) It costs frictional money to do a split; you know, SEC etc. Don’t shoot the messenger 😳
2)It was split in 2009 during the BNSF deal. Just enough to afford every single BNSF shareholder to participate in the deal should they choose to. Such a deal could happen but then, I’m looking at the cash pile. And Omaha has tattoos surrounding issuing stock.

Although not explicitly stated, Buffett also would like to educate his shareholders that a stock split does nothing to change the value of the company. There’s a very large urban myth about this, cheerfully promoted by the croupier community.

As always, Munger had the last word on this, “Don’t hold your breath waiting for a split”. Hmmm I don’t.

I don't understand why he has no appetite to invest in index funds, if he thinks Berkshire is great because it is a mini index. That is inconsistent.
Other than that, he hit the nail on the head. You can sell an slightly overvalued stock, but what next?

It does seem rather bizarre that a gentleman that spends so much time writing about investments can't even be bothered to look beyond the S&P 500. Low-cost indices based on market cap size, geography, and sector are plentiful. Jim's had a few popular posts on here on the merits of QQQE, for example.

I know a handful of companies very well, but none of them appear to offer better return prospects than Berkshire offers, even at a rich valuation. In fact, most are clearly inferior. I could choose to invest in an index fund, but the overall market is hardly a bargain. At current levels, the market seems to be even more expensive than when I wrote an article on the subject early this year. In addition, at Berkshire we have management that is totally aligned with shareholders, without outrageous compensation plans, compensation consultants, and the like.

US small and midcap indexes, for example, are trading a tad below their average PE ratios of the past 25 years. I recently added iShares Core S&P Small-Cap ETF (IJR) at approx 16x earnings. Small and midcap stocks have grown EPS at approx. 8% annualized for the past 25 years.

https://yardeni.com/charts/largecaps-vs-smidcaps/

https://www.ishares.com/us/products/239774/ishares...

Mr. Munger's advice to "hold the damn stock" was directed at his heirs who presumably are not passionate investors but rather ordinary folks who don't get excited by reading 10-Ks all day. This would likely NOT be the same advice he'd give to "enterprising investors" who enjoy spending large proportions of their time thinking about investments. (or [until recently] selling paid subscriptions for investing-related content!)

I think the lesson here is simple: RW was rather foolish for selling BRK shares without having another destination for that capital in mind. Opportunity cost 101.

While I agree buying and holding is often a good idea, people tend to remember the good stocks and ignore the ones that B&H would have cost you a ton of money. GE? Probably Intel. And a lot of supposedly strong brands that no longer exist.

Buffett doesn't care what the tech companies do to pump their stocks.

Over 40+ years Berkshire owners have become far wealthier thanks to Buffett's policy of retaining $1 dollars and investing on our behalf rather than distributing that cash-- and subjecting us to mandatory 30% or so state plus federal annual tax bills. Deferring that bill and investing a 30% higher balance on our behalf is a large source of our present wealth.

I consider myself a pretty good investor--but the idea of subjecting me to a contest where Buffett gets a 30% head start? I don't want that. That's the game we play taking distributed cash from a legendary INVESTOR not a social media CEO. I don't get the comparison at all.

Instead, I choose when I want a dividend., I deferred that personally for 20+ years--now I get to do it when it makes most sense to do so, via stock sales as BUFFETT recommends. In lumpy fashion on MY terms.

I've read your comments over the years, and you always seem to think you know more about this company than Buffett does. Do you see how this policy obviously HAS generated substantially more wealth creation? Does that matter? Or should Buffett follow the lead of Mark Zuckerberg?

" I think the lesson here is simple: RW was rather foolish for selling BRK shares without having another destination for that capital in mind. Opportunity cost 101."

Was Buffett rather foolish for selling apple and BAC without another destination for the proceeds, after tax? Real world 101.

" I've read your comments over the years, and you always seem to think you know more about this company than Buffett does. Do you see how this policy obviously HAS generated substantially more wealth creation? Does that matter? Or should Buffett follow the lead of Mark Zuckerberg?"


BINGO YOU WIN, 3 to 1, how much did you bet? LMFAOOOOOOOOOO!! Thanks man. Were you around when ignorant Bill Gates paid that special cash div to msft partners, I think it was 3 $$ a share? Initiated its annual div? Thank you.

" Buffett doesn't care what the tech companies do to pump their stocks."

Are you rather new to brkville? When Buffett finally authorized a buyback with a 1.1 xs BV limit, did he do that to goose the stock above 1.1 xs BV, OR, did he rally intend to actually buyback stock? When he raised the limit to 1.2 xs BV, was that done to goose the stock, again, or was that done with the intention of actually buying back the stock? Some of didn't just take a greyhound bus to Wall Street partner. WHY does Buffett refuse to DISCLOSE the investment results for T and T? Thank you.

It's pretty challenging conversing with someone who thinks Buffett is in the stock goosing business. And those who do not agree with you are "new to brkville". Curious take, especially since I've owned the stock since even before you even made money-- at casinos. And are now claiming Buffett's buyback offers have been stock pumping schemes. Truly bizarre.

But those were impressive rants.

“ I've read your comments over the years, and you always seem to think you know more about this company than Buffett does. ”

I think he posts here to elicit a reaction.

Over 40+ years Berkshire owners have become far wealthier thanks to Buffett's policy of retaining $1 dollars and investing on our behalf rather than distributing that cash-- and subjecting us to mandatory 30% or so state plus federal annual tax bills. Deferring that bill and investing a 30% higher balance on our behalf is a large source of our present wealth.


Question about capital gains - My understanding is that, in the USA, companies pay regular corporate tax rates on capital gains. That would mean that, after deductions, companies pay 21% federal tax on realized capital gains, plus whatever state corporate tax rates are in effect. For a company headquartered in Nebraska, that would be another 5.84% on income over $100,000/year. Since losses can be brought forward (I think it is 5 years), previous losses (for instance, on the airlines investments or Occidental in 2020) can perhaps be used to reduce the taxable income on the big Apple gains this year (and the smaller Bank of America gains).

Is that correct? (Perplexity.AI thinks it is.)

DTB

Paying a nominal dividend of $0.25 - $0.50 would not hurt anything. Would not hurt anybody.

Of course it would hurt some people (and institutions)! For example, the Samuel and Ruth Gottesman who held shares for more than 6 decades, never sold them, and then gifted the whole thing (over $1B) to the Albert Einstein College of Medicine in NY. Let's say instead they received a "small" 1% dividend each year for the last 60 years, and had to pay about 1/3 of it in taxes ... EACH YEAR for over 60 years! That's early 20% cumulatively that would end up as taxes leaving less to be donated. So there's an example of someone being hurt.

But again, either Meta, Goog, Apple, Msft, etc are all wrong, OR, Buffett is being stubborn and he's wrong.

There's no "wrong" or "right" here, it's just a matter of taste and how one believes allocation of capital ought to be handled.

" It's pretty challenging conversing with someone who thinks Buffett is in the stock goosing business. And those who do not agree with you are "new to brkville". Curious take, especially since I've owned the stock since even before you even made money-- at casinos. And are now claiming Buffett's buyback offers have been stock pumping schemes. Truly bizarre.

But those were impressive rants."

How much stock did Buffett buyback while the 1.1 xs BV buyback limit was in place? Thank you.

<<But again, either Meta, Goog, Apple, Msft, etc are all wrong, OR, Buffett is being stubborn and he's wrong.>>>

And Buffett, an actual INVESTOR last I checked, can deploy the cash on our behalf in the best available INVESTMENTS as the cash becomes available. Or he can time the deployment of that cash for us when he sees fit. At a very attractive entry point….

As opposed to those tech CEOs and Boards who simply, and appropriately, distribute excess cash to owners. They’re in the social media, software, and communications businesses. Not the investnent business.

Quite different. To say the least.

Let's say instead they received a "small" 1% dividend each year

Did you read what I said? "a nominal dividend of $0.25 - $0.50"

Adjective: Nominal
2) Insignificantly small


1% dividend is not "nominal"
$0.50 dividend on a $2000 stock (the price in 1985) is insignificantly small.

$0.50 on today's BRK-B is 0.11%. That is still insignificantly small.

" And Buffett, an actual INVESTOR last I checked, can deploy the cash on our behalf in the best available INVESTMENTS as the cash becomes available. Or he can time the deployment of that cash for us when he sees fit. At a very attractive entry point…."

In the 2008 time period brkb could have been bought in the 75 $$ range and lower. Here we are today, and partners still aren't sure if it was obvious brk should have had an authorized buyback in place by 2008. Remarkable.

Did you read what I said? "a nominal dividend of $0.25 - $0.50"

Adjective: Nominal
2) Insignificantly small.

*********

A dividend that small would accomplish nothing. It wouldn't utilize enough cash to impact investment decisions. It would cost many shareholders unwanted taxes.

The best it might do would be make BRK eligible for some "dividend required" funds. But who would be interested in such a small dividend.

Frankly, I think you're arguing an idiotic point with a suggestion that small.

And Buffett, an actual INVESTOR last I checked, can deploy the cash on our behalf in the best available INVESTMENTS as the cash becomes available. Or he can time the deployment of that cash for us when he sees fit. At a very attractive entry point….

Sure. But we are (or at least, I am) not talking about a significant dividend. Just a very small dividend so that BRK is paying some dividend, and it's not a no-dividend stock.
Not to be returning cash to the investors.
There would still be about $42 Billion cash on hand, and $33B free cash flow.

Heck, it could start at $0.50 a year and increase it by $0.01 each year, and then BRK would then be a Dividend Champion stock.
If it had began in 1980 it would be up to $0.94 now. And it would be a Super Duper Dividend Aristocrat Champion stock now, having increase the annual dividend for 44 consecutive years.
I am laughing out of my chair at the thought.

$0.94 dividend on a $685,320.00 stock.

Just a thought experiment. Musings on a boring day. Not gonna happen as long as WB is around.

" 1% dividend is not "nominal"
$0.50 dividend on a $2000 stock (the price in 1985) is insignificantly small.

$0.50 on today's BRK-B is 0.11%. That is still insignificantly small."

Not much changes in brkville. I NEVER suggested a 1 % div 40 years ago. After the 2006 donation letter I suggested moves that could be made to help adsorb the billions of dollars of net selling by the foundations, for decades. No reasonable person would deny that the 50/1 split provided the liquidity required to be eligible to be added to several indexes. This isn't really debatable or complicated.

$0.50 on today's BRK-B is 0.11%. That is still insignificantly small.

What exactly would be the point of a tiny insignificant dividend like that?

If you recall, this whole conversation started because the level of cash has become so high, and apparently Berkshire hasn't found a good place for that cash for a relatively long while (even before the Apple and BofA sales the cash level was quite high). And over the years, many have suggested that if "they don't know what to do with the cash, they should distribute it to the shareholders". But what good is distributing only ~$1B (0.11% of market cap) to the shareholders? After that is done, the "too much cash problem" goes from $300B to $299B. Big deal, it's the same problem. Not only that, but if free cash flow continues, and if BofA sales continue, the $299B becomes $319B next year, and then you distribute another "insignificantly small" dividend of ~$1B to bring it down to $318B. Woo hoo!

The history of dividends never really works that way. Dividends grow. Take Apple for example (that I own since 2008). They reinstated the dividend only 11 years ago at $.095 (split adjusted) and now it is already at $0.25. Or take UnitedHealth as another example (that I own since 2006), dividend back then was $0.03, now it's $8.40. The "insignificantly small" dividend, after decades have passed, suddenly becomes a huge dividend.

update, three old time posters still prefer to not take part on this board. I tried.

<<update, three old time posters still prefer to not take part on this board. I tried.<<

Try telling them you no longer contribute.

" Try telling them you no longer contribute."

yep, you proved their point. Priceless!

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