Interesting comments to this opinion as well. Berkshire Hathaway: Warren Buffett Step Away From The Keyboard (NYSE:BRK.A) | Seeking Alpha
This article is better than the shareholder letter. Warren has been lazy this year. He wrote the letter for his rich shareholders who are now nearing the end and are more interested in philanthropy.
I want to see how the stock trades before I share a few thoughts.
I was hoping someone would drill down on where the mark to market losses are. It’s early yet, I would rather not have to study the 10k etc.
Coca-Cola paid us $88 million in 1995, the year after we finished purchasing the stock. Every year since, Coke has increased its dividend. In 2011, we will almost certainly receive $376 million from Coke, up $24 million from last year. Within ten years, I would expect that $376 million to double. By the end of that period, I wouldn’t be surprised to see our share of
Coke’s annual earnings exceed 100% of what we paid for the investment. Time is the friend of the wonderful business.
In August 1994 – yes, 1994 – Berkshire completed its seven-year purchase of the 400
million shares of Coca-Cola we now own. The total cost was $1.3 billion – then a very meaningful sum at Berkshire.
The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend
had increased to $704 million. Growth occurred every year, just as certain as birthdays. All Charlie and I were required to do was cash Coke’s quarterly dividend checks. We expect that those checks are highly likely to grow.
All those who are against dividend by Berkshire, post WEB or anytime soon, when Berkshire institutes dividend, going to rave about it.
I will definitely not rave about it I might even rant about it. I want to be able to own something long-term that doesn’t force me to have current income at random times. I want to own something in which I choose when to take gains, and therefore I choose when to pay income tax on those gains.
I have seen enough to know, how confirmation bias works. These boards were so against AMZN and in particular there is a gentleman who called it is worth $10, AWS is a commodity seller, indulging in fraud, yada, yada, fast forward, Berkshire establishes a minor AMZN position, suddenly the tune changed.
So compared to that, folks seeing the virtues of Dividend is relatively easy. Personally, I am agnostic about dividend’s, however, I do invest in preferred’s, dividend paying stocks like REIT’s and use dividend harvesting combined with options.
I’m still upset that Apple restarted their dividend. And that was about 10 years ago. And I’ve owned Apple for decades. Dividends wreak havoc on tax planning (I’ll never forget the huge special dividend Microsoft paid out a few years ago, that really messed up lots of long-term holders of their stock!)
Exactly. The power to choose when you take the gains unlocks the ability to claim that income at the most tax advantageous times which is a huge plus. I really don’t understand the obsession/appeal a large portion of the investment community has with dividends.
Stock prices go up and down, managers don’t always invest the excess cash in prudent way. Dividends force organizations to think about their capital deployment, cash flow. Personally, in some accounts I aim for 10% return, and that is based on 2~3% from dividends, 2~3% from options and the rest from cap-ex gains. Here is a post on one of my REIT holdings where the stock has not done much, but with dividends I am able to have healthy CAGR
S&P vs KO vs BRK total return (with dividends) from 2010
KO is a good business but S&P500 and BRK were much better.
2010 is the perfect chart, prior to the authorized buyback. lets see 10 years starting in 2012, thanks.
Here is starting 2012. Not sure what you are expecting to see.
My point of posting this is: With ~500m to $750m of cash gushing into BRK every week, post Buffett, Abel should just dollar cost average in S&P. Fire T&T.
Thanks, so brkb and spy are a dead heat pre authorized buyback and post authorized buyback , despite the fact that most spy companies suffer from over compensation issues.
Why include ko in the charts? He considers spy the hurdle, obviously tandt didn’t come close, for the ten year period, he doesn’t want to discuss it. It will come up at the annual and I suspect that for stocks like tsm he will claim they were, team, decisions, and he will take the blame. He didn’t sell ko for tax reasons, not a bad problem to have.
The question is - how and who decides which years to simply invest in S&P and which years to allocate the capital themselves? In the 50+ year history of BRK, there were some groups of years where S&P is better, but many more groups of years where their own allocation of capital is better.
This is pure speculation. We don’t know, what we don’t know.
Simple. Dollar cost average per month. No need to overthink.
The premise is that I don’t trust Abel, Ted and Todd to handle $ billions.