OT: Stock and Investment Talk
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Helpful, but still automatically taxed that year. I rather have the flexibility and control on when to recognize gains.
Short term capital gains are taxed at the same rate as your ordinary income.
Qualified dividends are taxed at 0, 15 20 percent.
You do a stock buyback when you feel your stock is undervalued and there is no immediate alternative investment that meets your criteria.
Agree with that but too often I’ve seen companies buying back stock when it’s overvalued or at or near peaks rather than at or near troughs so that’s why I’m not a big fan.
It was just an approval announcement. NVDA can buy back stock for the next 12 months as they see fit.
I’m aware of that but I still don’t trust managements in general when it comes to this kind of thing. So I’d rather have the money in my pocket if they intend to use capital in this fashion.
Just one man’s opinion, which I personally agree with as long as it adds value to shareholders and there don’t appear to be better alternatives for capital.
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www.cnbc.com
IIRC Buffett isn’t a big fan of giving out dividends but likes receiving them (like me lol)…as in one example like KO.
The buyback in itself isn’t my problem with them. It’s the execution of them that’s my problem and that’s really more a function of my faith, or lack there of, in managements in general than the buyback itself.
Btw I should add Buffett is sitting on hundreds of billions in cash…why no massive buyback. I’m guessing he’s more prudent with the capital and won’t use it unless it’s of value which is what you want as a shareholder.
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He's also probably getting around 5% parking it in T-Bills waiting for a bargain.
I’m good with that…the waiting for a bargain whether its your own stock or an acquisition is exactly the point I’m making. Look at the deals he got with GE and GS during the crash.
Many managements don’t wait for that bargain and just use the capital unnecessarily. If you’re going to do that give me back the money instead.
Still going with buybacks over taxable dividends. I want higher stock prices. AAPL have been masters with this. Dividends are fine in tax deferred or Roth accounts, but hell no in brokerage. Gotta agree with Buffett on this one.
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Yet the company will pay taxes on the T-Bill interest received while waiting to invest.
More buybacks equal less cash to pay for. Don't care what the company pays, only me as a shareholder.
Yes I agree with Buffet...he likes receiving them not giving them lol. He gets most of it from 5 stocks...KO, BAC, AXP, CVX, AAPL
From an article last year:
While Berkshire Hathaway (BRK.B) doesn't pay a dividend, more than half of the stocks in the holding company's roughly $310-billion equity portfolio do. And the best Warren Buffett dividend stocks produce substantial income for the Oracle of Omaha. In 2022, Berkshire Hathaway received $6.04 billion in dividend income, up from $5.06 billion in 2021 and $4.89 billion in 2020.
Dividend stocks can create impressive total returns (price plus dividends) for investors over the long term. "That's because regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and the modest yield you received on your initial investment can hit double digits one day," writes Dan Burrows, senior investing writer at Kiplinger.com, in his story highlighting Wall Street's best dividend stocks.
And that's certainly been the case with Berkshire Hathaway. Over the last three years, BRK.B has averaged an annual total return of 16.4%, compared to the S&P 500 Index's 10.6% total return.
The Best Warren Buffett Dividend Stocks
The best Warren Buffett dividend stocks are expected to produce impressive returns for the Berkshire Hathaway equity portfolio.
www.kiplinger.com
Let's not cherry pick timelines. BRK has lagged the S&P since the GFC and during this long bull market. It has also been pummeled by tech/growth that focus on buybacks over dividends.Yes I agree with Buffet...he likes receiving them not giving them lol. He gets most of it from 5 stocks...KO, BAC, AXP, CVX, AAPL
From an article last year:
While Berkshire Hathaway (BRK.B) doesn't pay a dividend, more than half of the stocks in the holding company's roughly $310-billion equity portfolio do. And the best Warren Buffett dividend stocks produce substantial income for the Oracle of Omaha. In 2022, Berkshire Hathaway received $6.04 billion in dividend income, up from $5.06 billion in 2021 and $4.89 billion in 2020.
Dividend stocks can create impressive total returns (price plus dividends) for investors over the long term. "That's because regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and the modest yield you received on your initial investment can hit double digits one day," writes Dan Burrows, senior investing writer at Kiplinger.com, in his story highlighting Wall Street's best dividend stocks.
And that's certainly been the case with Berkshire Hathaway. Over the last three years, BRK.B has averaged an annual total return of 16.4%, compared to the S&P 500 Index's 10.6% total return.
The Best Warren Buffett Dividend Stocks
The best Warren Buffett dividend stocks are expected to produce impressive returns for the Berkshire Hathaway equity portfolio.
Lets not cherry pick one sector vs the whole market...and that sector is really just a handful of companies that lift the sector and frankly the whole market itself.
Look how much play just yesterday just for one stock in NVDA. It's kind of crazy that so much weight is put on it.
His track record is over literal decades (like 5-6) not just years or a decade where tech has become the thing at the moment or where an artificially low rate environment has juiced things for a sustained period. He's done it through all sorts of economic and financial conditions.
See page 17 for yearly and aggregate BRK vs S&P performance
Yes I agree with Buffet...he likes receiving them not giving them lol. He gets most of it from 5 stocks...KO, BAC, AXP, CVX, AAPL
From an article last year:
While Berkshire Hathaway (BRK.B) doesn't pay a dividend, more than half of the stocks in the holding company's roughly $310-billion equity portfolio do. And the best Warren Buffett dividend stocks produce substantial income for the Oracle of Omaha. In 2022, Berkshire Hathaway received $6.04 billion in dividend income, up from $5.06 billion in 2021 and $4.89 billion in 2020.
Dividend stocks can create impressive total returns (price plus dividends) for investors over the long term. "That's because regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and the modest yield you received on your initial investment can hit double digits one day," writes Dan Burrows, senior investing writer at Kiplinger.com, in his story highlighting Wall Street's best dividend stocks.
And that's certainly been the case with Berkshire Hathaway. Over the last three years, BRK.B has averaged an annual total return of 16.4%, compared to the S&P 500 Index's 10.6% total return.
The Best Warren Buffett Dividend Stocks
The best Warren Buffett dividend stocks are expected to produce impressive returns for the Berkshire Hathaway equity portfolio.
PLUS At the corporate level there is a "dividends received deduction" of 50%. It used to be even higher.
And he did a lot better when information wasn't available to all and a determined investor could get a leg up on the masses. And this isn't me saying it, both Buffett and Charlie admitted to this many times.
Wow, didn't know that. So, this is apples and oranges (dividends to corporations vs individual investors).
What Is the Dividends Received Deduction (DRD) Tax Deduction?
The dividends received deduction (DRD) is a special tax deduction applicable to certain corporations in the U.S. that prevents triple taxation.
So many people forget about this critical investing fact. Same applies to the real estate moguls of the past. Access to info (or lack thereof) created great wealth for many titans.
Good discussion.
I would add that apple has proven itself great mgmt in terms of running its business but also in terms of buying its own stock
Jenson definitely knows how to run his business. Id be confident he’d do well buying back his stock
Neither company is or has been cheap(have to go back a decade or so to find a cheap apple), yet the stocks continue to increase in price. So even if mgmt decides to buy the stock while it’s “expensive” if it continues to aim higher then the buyback is proven prudent.
That said i do understand those that just want a dividend.
I would add that apple has proven itself great mgmt in terms of running its business but also in terms of buying its own stock
Jenson definitely knows how to run his business. Id be confident he’d do well buying back his stock
Neither company is or has been cheap(have to go back a decade or so to find a cheap apple), yet the stocks continue to increase in price. So even if mgmt decides to buy the stock while it’s “expensive” if it continues to aim higher then the buyback is proven prudent.
That said i do understand those that just want a dividend.
And in the case on nvda or apple or whoever it could be seen as mgmt having confidence in ihe business moving fwd.
If the management is sound and prudent, a buyback can be fine. That's not often the case imo. I think some of it has to do with ego too. The executives can think they're so good so of course buying back the stock at whatever price is good value when in actuality it isn't.
Also I'm often one who thinks about ulterior motives (like you saw with my Hindenberg and analyst related comments above) like buying back stock in order to issue stock options for themselves without dilution.
Outside of NVDA, my tech sector screen is pretty much green in early trading.
But look at the specific mgmt teams. Tim Cook and their team have proven themselves as excellent decision makers.
Jensan has as well. At least in terms of running his business. Id give him some leeway in terms of a buyback.
Despite that, however, he keeps liquidity up with treasury investments to fund new investments.
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