If and when a dividend is created (after Warren), I bet it would be more of a time to time “special” dividend initially rather than an ongoing quarterly dividend.

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I hope not.

Berkshire could pay a 2% annual dividend out of operating earnings. That would mess up our tax planning, but not too badly.

Berkshire could pay a 10% special dividend out of cash and still have a normal amount of cash left over. That would very much mess up many shareholders' tax planning. I'd be very upset.



I think a special dividend fits better with Berkshire's general philosophy than a regular dividend. The idea is that cash can be allocated to acquisitions (in whole or in part), existing companies, share repurchases, or accumulated, or paid out as a dividend, probably in that order of priority. We may soon be at a point where cash use can not keep up with cash generation, as there are no big acquisitions available at good prices, no sufficient internal uses of cash at good rates of return, no repurchases given Berkshire's high share price, and levels of accumulated cash that become unreasonable, especially as short-term interest rates head back lower. Thus the dreaded dividend.

But there is no reason the dividend should be regular, any more than purchases of other businesses or reinvestment in exisitng businesses or share repurchases is regular - it should be done given the current circumstances, not blindly on a fixed schedule.

dtb