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Investment Analysis Clubs / The BMW Method


Subject:  Re: BRK Date:  11/28/2012  1:08 PM
Author:  Jim2B Number:  40822 of 42233

Perhaps one thing that holds this stock back, given the "graying of America", is the fact that Berkshire doesn't pay a dividend, and is unlikely to as long as Warren Buffett remains at the helm. He's not done with his masterwork, he wants to reinvest all the money the company makes himself!

In my opinion, earnings should be applied to the investment which provides the best return to investors.

That said and depending upon the market and the company, the best use could be capital investment, reinvest in the company (ala Berkshire), stock buyback, dividends, etc.

Investors should note how management intends to increase share holder value and determine whether this approach matches the investors opinion. If it doesn't, then the investor should look elsewhere.

That said, Buffet has a record which indicates he may know what he's talking about. OTOH, BRK may be approaching the size at which a stock buyback or dividend payment may provide better investor returns. I'm no Oracle of Omaha but I think we can go with Buffet's opinion unless/until he's proven wrong.
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