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Whitney Tilson – I Don’t Want a Dividend from Berkshire Hathaway, Let Warren Invest the Money

February 27, 2012 | About:

For my money, Tilson provides the best recap of Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) you can get. He was on CNBC following Warren this morning and does a gracious job handling some silly questions.

- Blown away by the performance of Berkshire’s businesses

- Believes Berkshire is worth almost $180k per A share

- Can’t believe the stock price is down today

- Trading at 2.5 times the earnings of its operating businesses when you back out the investment portfolio

- Thinks it is trading at 65 cents on the dollar, believes the share repurchase program puts a floor under the share price

- There is no answer to what the catalyst will be to close this gap to intrinsic value

- Doesn’t want a dividend because he thinks Buffett is still at the top of his game and can do great things with the money

- Thinks Buffett thinks Berkshire is wildly undervalued

- $60 billion of cash and short term bonds, Buffett could buy back 20% of the outstanding shares

- Glad the successor has been picked but not named, would want to know if Buffett was leaving one year from today

- A healthy 81-year-old has another 12 years to live according to an actuarial table so Buffett will likely be running this company for 5 to 10 years

- Tilson is buying Berkshire today

- Tilson would be comfortable with 100% of his money in Berkshire for the next five years

About the author:


Rating: 3.6/5 (14 votes)


Ilovesummer - 4 years ago
Berkshire is a great company but I find it very ironic they hold lots of dividend paying companies but don't pay one themselves. The convertible preferred shares he bought all had a payment as well.

A dividend would attract a lot of pension fund or retiree money since these groups need income. 0 dividend = 0 income.
AlbertaSunwapta - 4 years ago
Buffett doesn't need them though. Moreover, he has repeatedly been able to outperform not only the average investor but the superior investor as well. Why would we want him to pay us a dividend?

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