|Warren Buffett, CEO of Berkshire Hathaway, which hasn't paid a dividend since 1962.|
NEW YORK ( TheStreet) -- Warren Buffett and his capitalist empire Berkshire Hathaway ( BRK.B) aren't as likely to start paying a dividend of 2% within the next two years as Barron's thinks, or so say readers of TheStreet. In case you missed this week's big Warren Buffett headline, which sent shares of Berkshire Hathaway higher by 3% on Monday, Barron's speculated, albeit without any named source for the information, that the cash hoard on top of which Warren Buffett and Berkshire Hathaway are sitting indicates a dividend payment is coming, even though Berkshire Hathaway hasn't paid a dividend since 1962. Barron's provided plenty of logical reasons for a break from the Warren Buffett and Berkshire Hathaway anti-dividend tradition:
A lot of cash, as noted A diminishing field of potential big acquisitions into which to plow his cash A Berkshire Hathaway that looks very different than it once did, with utilities and railroads in the mix The desire to take pressure off eventual Buffett successors to manage such a high cash level
In several Berkshire Hathaway annual letters, Warren Buffett has outlined his views on cash, most notably in the 1984 and 1999 editions of the most famed capitalist missive. Here's Buffett in his 1984 annual letter writing on dividends: "As long as prospective returns are above the rate required to produce a dollar of market value per dollar retained, we will continue to retain all earnings. Should our estimate of future returns fall below that point, we will distribute all unrestricted earnings that we believe cannot be effectively used. In making that judgment, we will look at both our historical record and our prospects. Because our year-to-year results are inherently volatile, we believe a five-year rolling average to be appropriate for judging the historical record." Here's Buffet in 1999 on the subject of cash management and share repurchases (some of his favorite public stock holdings are serial share repurchasers).