[Reading Buffett] 1983

No wonder Buffett liked to invest and receive dividends: “the effective Federal income tax rate on dividends is 6.9% versus 28% on capital gains”.

Buffett also discussed the “goodwill”, and amortization as an expense. He thinks amortization costs doesn’t change the quality of the businesses being acquired, which is true.

He also seemed to be arguing that paying high p/b is good, as additional investments would result in more economic gains. This is true, as long as the business would continued to be valued at a similar p/b.

He also indicated the unwillingness to sell a business – “regardless of price,
we have no interest at all in selling any good businesses that Berkshire owns, and are very reluctant to sell sub-par businesses as long as we expect them to generate at least some cash and as long as we feel good about their managers and labor relations.”