Item — HN Reader

So are Berkshire Hathaway shares not investments, because you need to sell them to end up with money? What about a savings account with compound interest, or an ETF with automatic dividend reinvestment - do they not count as investments either, because you have to do something with them to get money out?

Don't forget that investing in the stock market is still something of a gamble, because the return for everyone is not guaranteed to be greater than zero - a company can go bust leaving the shareholders with nothing.

1 comments

Berkshire Hathaway is something of an exception as the vast majority of successful company's pay dividends. Clearly, buying a single stock is risky. But if you buy a basket of stocks and those stocks pay dividends then the only way to lose money is for the socks to be worth significantly less money when you sell them thus making it a positive sum game.

PS: Berkshire Hathaway still returns money to shareholders via stock buybacks. Which preform similar functions the difference is simply related to taxes. They can and are likely to at some point issue dividends.