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URL:  http://boards.fool.com/if-warren-buffett-liked-dividends-and-the-tax-33044484.aspx

Subject:  Re: STOCK BUYBACK Date:  4/20/2018  6:38 PM
Author:  Goofyhoofy Number:  208434 of 208525

If Warren Buffett liked dividends (and the tax effect), BRK wouldn't have been
without a dividend for the last 40 years.


Warren Buffett doesn’t like dividends because he likes accumulating assets, and distributing money each quarter (or whatever) does the opposite. Most companies are narrowly focused, so “excess” cash doesn’t have a useful purpose. Buffett will buy anything from shoes to airplanes, from ketchup to newspapers, so he always has a place to put new money. If he’s shipping money out, there’s less “new money” to play with.

I have the greatest respected for him, but you give him a nobler purpose than reality. He’s a collector. Youj’ve seen the lady with 8,000 Hummel figurines in her garage? That’s Buffett, except for him it’s dollar bills.

Many people never manage to undeerstand this

There is no guarantee that a stock buyback will raise the stock price and put more money in your pocket. Indeed, recent research shows that the companies which have done the largest buybacks have also underperformed the market. With a dividend, at least, I get paid for my ownership in the corporation. And there are strategies (the 401k is only the most obvious and well known) where the dividend is not reduced by taxation - not right away, anyway.
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