Subject: Re: brk, increasing demand for the common
vivalasvegas,

Don't you have 25ish shares of BRKA? Do you really want $175,000 in forced dividend income every year? That would be stacked on top of all of your other income and probably cause you to be in the 32% bracket or worse. 20% capital gains sounds better -- unless you think the stock would trade materially higher with a dividend. It might, I would love to hear you quantify it.

Have you ever computed your tax differential on the two scenarios over 10-20-30 years?

What do you think the average change in P/BV or IV would be if Berkshire instituted a 1% dividend forever more?

How much more volume do you think there would be with a 1% dividend and would it be a one time effect over a couple of years or do you think it would be sustainably higher forevermore?

How much more net demand for the stock would there be and how would that change the value that shares would change hands at and what other benefits would it have?

I am seriously interested on any quantifications that you can put on this.


For my tax planning for me and my kids (step-up) a dividend is very unwelcome but if you think the market would decide Berkshire's IV would go up materially with a dividend (I think it would either be a draw or be a negative) I would love to hear your logic.

I was sick when VRSN, GOOG and META started paying dividends because I purposely put them in my taxable brokerage account with BRK BECAUSE they did not pay a dividend and I thought they had a long enough road for growth that they wouldn't have to pay a divy for a long while. I am guessing with the AI capEx GOOG and META are seeing they probably regret starting a divy much like Warren did when BRK paid out its only dividend. But maybe not.


I would love to hear how you quantify the increases in volume, demand and forward return if BRK paid a divy. I am happy to change my thinking.

I do agree with you that I would have preferred BRK would have bought back a lot more shares below 1.3 x P/BV but it is very possible that if they did do that they might have never felt comfortable putting 10% of their resources in Apple which turned out to be a much better outcome. Maybe they only put 3% or 5% into it. Hard to step in the same stream twice and there have been some purchases that didn't work out so great either. I do think Greg will be much more agrressive in buying shares back below 1.3 x P/BV and will buy a steady stream below 1.4 and even buy some below 1.5 when cash is as high as it is right now.

Thanks for any quantifications that you have.