Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 211

Thornhill responds on dividends and Buffett

[Editor's Note: Peter Thornhill is a respected author and financial markets commentator, and a lecturer at the Centre for Continuing Education at Sydney University. He has been part of a lively conversation in our comments section as a result of Ashley Owen's article on dividends, and sent in the following additional comment which requires more space].

Much as I admire Warren Buffett I have never invested in Berkshire Hathaway (BRK).

I, perhaps shortsightedly, chose to invest in dividend-paying shares.

This happens to suit our circumstances as, at this time, income is paramount and I do not want the hassle of trying to time my exits from shareholdings trying to produce cash flow from capital.

I take some comfort from the chart below as, despite comments to the contrary, we don’t appear to have missed out on much. We still have the capital and the dividend growth has been awesome.

Thornhill

Thornhill

  •   19 July 2017
  • 7
  •      
  •   
7 Comments
Il Falco
July 19, 2017

Ha ha. Rather than cherry pick some specific stocks that you imply you bought in 1996, how about TSR comparison between BRK and some of the LICs you favour, which are the core of your portfolio? Sounds like a much more fair comparison :)

Ian A
July 19, 2017

Yes I agree. BRK is a huge heavily diversified conglomerate which is a akin to an entire portfolio in inself.

What sensible investor would have a portfolio that only consisted of CSL and COH. Hardly great risk management and I shudder at the thought of what the SANF would be like!

So for a fair comparison at least compare BRK against the equivalent of a diversified ASX portfolio such as a large LIC like AFI / ARG.

Peter Thornhill
July 19, 2017

Why pick amazon and Berkshire?
I thought I'd cherry pick.

Peter Thornhill
July 19, 2017

Being a sensible investor I don't and I hope you're not assuming that's all I own.
By the way, add CCP and EVT to the list as well as MLT, BKI, etc.

I thought as Amazon, a single stock, could be pitched up alongside BRK I might do the same.

Peter thornhill
July 20, 2017

Bought COH in 1995 at the float for $2.50.
I chose the dates to coincide with the chart in the original article. I'm not implying anything.

Il Falco
July 19, 2017

Actually, CSL and COH are curious examples.....what are the franking levels of those dividends?

CSL is interesting as they are constantly buying back stock. Management seems to understand that buy-back is more tax effective for most shareholders than unfranked dividends....in the Australian context, 50% more effective outside of super :) Of course you'd need the ability to sell a little stock...but of course if one has the wherewithal to pick winners such as these, I am sure they can sell a few tranches as well.

Peter Thornhill
July 19, 2017

Shrinking as they become global companies. But remember my earlier comments; imputation is the cream. Their dividend growth has been phenomenal.

 

Leave a Comment:

banner

Most viewed in recent weeks

3 ways to fix Australia’s affordability crisis

Our cost-of-living pressures go beyond the RBA: surging house prices, excessive migration, and expanding government programs, including the NDIS, are fuelling inflation, demanding bold, structural solutions.

Making sense of record high markets as the world catches fire

The post-World War Two economic system is unravelling, leading to huge shifts in currency, bond and commodity markets, yet stocks seem oblivious to the chaos. This looks to history as a guide for what’s next.

Is there a better way to reform the CGT discount?

The capital gains tax discount is under review, but debate should go beyond its size. Its original purpose, design flaws and distortions suggest Australia could adopt a better, more targeted approach.

How cutting the CGT discount could help rebalance housing market

A more rational taxation system that supports home ownership but discourages asset speculation could provide greater financial support to first home buyers.

Welcome to Firstlinks Edition 648 with weekend update

This is my last edition as Editor of Firstlinks. I’m moving onto a new role though the newsletter will remain in good hands until my permanent replacement is found.

  • 5 February 2026

It’s economic reality, not fear-based momentum, driving gold higher

Most commentary on gold's recent record highs focus on it being the product of fear or speculative momentum. That's ignoring the deeper structural drivers at play. 

Latest Updates

Superannuation

Super is catching up, but ageing is a triple-threat

An ageing Australia is shifting the superannuation system’s focus from accumulation to the lifecycle of retirement. While these pressures have been anticipated for decades, they are now converging at scale and driving widespread industry change.

Investment strategies

Corporate earnings show resilience against volatility but risks remain

Evidence for a strong reporting season had been piling up for months and validated an upgrade cycle already underway. However, risks remain from policy uncertainty.

Superannuation

Want your loved ones to inherit your super? You can’t afford to skip this one step

One in five Australians die before retirement and most have not set up their super properly so their loved ones can benefit from all their hard work and savings. 

SMSF strategies

Sixteen steps in a typical SMSF borrowing

Getting a mortgage is never an easy process but when an investment property is purchased in a SMSF the complexity increases significantly. Read this before taking the plunge. 

Planning

Do HNWI get better advice?

Good advisers lead to more diversification, lower turnover and less home bias. However, studies show the average adviser may not be adding much value to clients. 

Strategy

AFL Final Ten with wildcard edit 'unlevels' the field

When the new AFL season kicks off a wild-card will be added to the finals. Is this new formula fair and how does it impact the odds of winning the premiership.

Planning

Love them or hate them, it's worth understanding annuities

Investors have historically balked at exchanging a lump sum for a future steam of income. Breaking down the financial and emotional considerations of purchasing an annuity.        

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.