Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

1 July 2025

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

7 Comments
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.

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.

 

Leave a Comment:
Firstlinks is sponsored by:
banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

7 examples of how the new super tax will be calculated

You've no doubt heard about Division 296. These case studies show what people at various levels above the $3 million threshold might need to pay the ATO, with examples ranging from under $500 to more than $35,000.

The revolt against Baby Boomer wealth

The $3m super tax could be put down to the Government needing money and the wealthy being easy targets. It’s deeper than that though and this looks at the factors behind the policy and why more taxes on the wealthy are coming.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Latest Updates

Planning

Will young Australians be better off than their parents?

For much of Australia’s history, each new generation has been better off than the last: better jobs and incomes as well as improved living standards. A new report assesses whether this time may be different.

Superannuation

The rubbery numbers behind super tax concessions

In selling the super tax, Labor has repeated Treasury claims of there being $50 billion in super tax concessions annually, mostly flowing to high-income earners. This figure is vastly overstated.

Investment strategies

A steady road to getting rich

The latest lists of Australia’s wealthiest individuals show that while overall wealth has continued to rise, gains by individuals haven't been uniform. Many might have been better off adopting a simpler investment strategy.

Economy

Would a corporate tax cut boost productivity in Australia?

As inflation eases, the Albanese government is switching its focus to lifting Australia’s sluggish productivity. Can corporate tax cuts reboot growth - or are we chasing a theory that doesn’t quite work here?

Are V-shaped market recoveries becoming more frequent?

April’s sharp rebound may feel familiar, but are V-shaped recoveries really more common in the post-COVID world? A look at market history suggests otherwise and hints that a common bias might be skewing perceptions.

Investment strategies

Asset allocation in a world of riskier developed markets

Old distinctions between developed and emerging market bonds no longer hold true. At a time where true diversification matters more than ever, this has big ramifications for the way that portfolios should be constructed.

Investment strategies

Top 5 investment reads

As the July school holiday break nears, here are some investment classics to put onto your reading list. The books offer lessons in investment strategy, financial disasters, and mergers and acquisitions.

Sponsors

Alliances

Site Map

About Firstlinks

© 2025 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.