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The dividends aren't stolen. A company with 1m shares outstanding buys back 100k of them. Now there are 900k shares outstanding. All long term shareholders who support the company own an extra 10% of the firm with nothing out of pocket. Imagine steady buybacks at reasonable prices over a long period of time... this has an incredible effect.

Warren Buffett bought a couple percent of American Express, and now owns 22% of the company despite not buying a share in decades. It really becomes apparent over time. American Express just carefully repurchased shares over the years and Buffett's stake became greater and greater.



> All long term shareholders who support the company own an extra 10% of the firm with nothing out of pocket.

They own an extra 11%. Not 10%.

1/100 versus 1/90


I hate how fractions work this way. We need to call up the math people and ask them to change it.


Can you tell them to get rid of compounding interest while they are at it?


Sure. I’ll add it to the list.

I’m not sure if this is basically the same or just related to the first item, but I’m also going to make them also fix the bug where taking away 1/4 then adding 1/3 returns you to the same amount.




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