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

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:

banner

Most viewed in recent weeks

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 605 with weekend update

Trump's tariffs and China's retaliatory strike have sent the Nasdaq into a bear market with the S&P 500 not far behind. What are the implications for the economy and markets, and what should investors do now? 

  • 3 April 2025

Pros and cons of Labor's home batteries scheme

Labor has announced a $2.3 billion Cheaper Home Batteries Program, aimed at slashing the cost of home batteries. The goal is to turbocharge battery uptake, though practical difficulties may prevent that happening.

Designing a life, with money to spare

Are you living your life by default or by design? It strikes me that many people are doing the former and living according to others’ expectations of them, leading to poor choices including with their finances.

World's largest asset manager wants to revolutionise your portfolio

Larry Fink is one of the smartest people in the finance industry. In his latest shareholder letter, the Blackrock CEO outlines his quest to become the biggest player in private assets and upend investor portfolios.

4 ways to take advantage of the market turmoil

Every crisis throws up opportunities. Here are ideas to capitalise on this one, including ‘overbalancing’ your portfolio in stocks, buying heavily discounted LICs, and cherry picking bombed out sectors like oil and gas.

Latest Updates

Investment strategies

An enlightened dividend path

While many chase high yields, true investment power lies in companies that steadily grow dividends. This strategy, rooted in patience and discipline, quietly compounds wealth and anchors investors through market turbulence.

Investment strategies

Don't let Trump derail your wealth creation plans

If you want to build wealth over the long-term, trying to guess the stock market's next move is generally a bad idea. In a month where this might be more tempting than ever, here is what you should focus on instead.

Economics

Pros and cons of Labor's home batteries scheme

Labor has announced a $2.3 billion Cheaper Home Batteries Program, aimed at slashing the cost of home batteries. The goal is to turbocharge battery uptake, though practical difficulties may prevent that happening.

Investment strategies

Will China's EV boom end in tears?

China's EV dominance is reshaping global auto markets - but with soaring tariffs, overcapacity, and rising scrutiny, the industry’s meteoric rise may face a turbulent road ahead. Can China maintain its lead - or will it stall?

Investment strategies

REITs: a haven in a Trumpian world?

Equity markets have been lashed by Trump's tariff policies, yet REITs have outperformed. Not only are they largely unaffected by tariffs, but they offer a unique combination of growth, sound fundamentals, and value.

Shares

Why Europe is back on the global investor map

European equities are surging ahead of the U.S this year, driven by strong earnings, undervaluation, and fiscal stimulus. With quality founder-led firms and a strengthening Euro, Europe may be the next global investment hotspot.

Chalmers' disingenuous budget claims

The Treasurer often touts a $207 billion improvement in Australia's financial position. A deeper look at the numbers reveals something less impressive, caused far more by commodity price surprises than policy.

Fixed interest

Duration: Friend or foe in a defensive allocation?

Duration is back. After years in the doghouse, shifting markets and higher yields are restoring its role as a reliable diversifier and income source - offering defensive strength in today’s uncertain environment.

Sponsors

Alliances

© 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.