Monday, October 10, 2016

Warren Buffet expects cash from his investments but do not give cash dividend to shareholders

Sometimes when I talk to my friends about investment, especially about my preference for cash dividend from share investments, they point out that Warren Buffet does not give out cash dividends to his shareholders.

That is true.

His reason is that he has better use of the money to grow the company for his shareholders.

However, he expects all his investments to produce cash dividend for him.

All of his companies have to forward the excess cash to the holding company.

Warren Buffet does not want them to make capital allocation decision.

He decides how to use the cash.

Me, too, expects all my investments to produce cash for me.  I want cash dividend. 

I want to make my own capital allocation.

That is why I invest for dividend income.

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