No. of Recommendations: 13
after more than 20 years of this attention seeking behaviour, otherwise intelligent posters engage with him
Hey, even an infinite number of typewriter-enabled monkeys occasionally comes up with something worth thinking about : )
In this case, for example, if Berkshire had just paid out (say) 5% of its cash as a dividend over the last while, would the market still assign it about the same P/B? I needed to estimate this to estimate the wealth drag from a periodic dividend.
Rationally P/B should be a very very slightly higher multiple of a 5% lower book value, as active assets deserve a higher multiple than cash does. I certainly don't buy into the religious belief that dividend payers get higher valuation multiples (much more likely the reverse), but nor do I believe that the market is predictably rational.
It's not something I had previously pondered, so I'm capable of appreciating the monkey noise. Sometimes.
Jim
