Dividends, stock buybacks, and equity purchases are not mutually exclusive events.

All 3 can be pursued.

Only 1 of those is available in all market conditions. Dividends.


I have plenty of low cost BRK share. I would guess more than many on this board, even after selling a third earlier this year. But a 1% or slightly more dividend still makes sense to me. Too much cash is sitting idle at low rates for me.

To simplify.

BRK has $40 BB of operating earnings.

Pay $10 BB in a dividend. Costco style. Small quarterly and large annual.
Buy $10 BB+ in equities, market conditions?. Could be $50 BB+?
Buy all the BRK stock you can, market conditions?. (Likely never more than $10 BB per year?)

It is plausible that we may never go below $200 BB in cash without a dividend in the next 10 years. This is a scenario that I do not desire.

Berkshire Hathaway FAQ

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