No. of Recommendations: 22
I expect Berkshire to establish about a 3% dividend when Warren passes. It would solve the excess cash flow problem while putting a floor on the stock price.
I personally think you will be wrong about that, for a good long time to come. I expect them to up the pace of buybacks instead, if it should ever be needed to "burn off" excess cash.
(it isn't currently, in that the cash and short-term fixed income pile is currently smaller, not larger, than historically typical as a fraction of the size of the firm)
No level of dividend is the right level for any but a tiny minority of shareholders. Always either too high or too low.
Buybacks work for everybody pretty equally by comparison: those who sell some stock (whatever amount suits them), and those who don't.
What's unusual is that Berkshire seems to recognize this.
Jim
