I just saw Charlie Munger, the hidden partner at Berkshire Hathaway. He made a rare appearance just prior to retirement.
He said that he hopes that his company, brk, never pays a dividend in his lifetime. Why? It's unpatriotic. If you can't imagine new ways to invest what would otherwise be profits, it's time to install some new management. Look at any highly successful company. They have paltry or non-existent dividends. Why? Because research is so imporatant.
That my friends, is the crux of the matter. All of this talk about research, but show us the money. To do the best research, you need the best minds in the business. At this point, you have neither - not on top, not at the bottom. Maybe a few in between. Maybe you have married couples that could be scooped up cheap as a package deal. Yes, you have all of that. See, Warren and Charlie both would never ever do something they wouldn't do for their own families. Good mid western stock, both of them.
Thankfully I pulled out of my Lilly stock position back in the mid-$60 range and plowed everything into Berkshire. I will not be lulled into possible false hopes based on emerging markets. It is far too easy to copy every little thing we do. If and when China has a downturn - and it will happen within a decade thanks to overdosing on birth control pills - the government can and will impose austerity measures, which will suck the life out of all of the foreign companies doing business there.
My friends, do not place hopes on false idols. If you can't "do it here" what on earth makes you think you can "do it there" ? Going into a new culture that has been in one of the greatest bubbles in history? If there is one thing this company does well, it's training the competition. Good luck.
