i usually go for the voting shares unless there is a price discrepancy that makes the non-voting shares seem too cheap. but something occurred to me today:
as Seth Klarman put it in Margin of Safety:
Investments throw off cash flow for the benefit of the owners; speculations do not. The return to the owners of speculations depends exclusively on the vagaries of the resale market.
when the only difference between voting and non-voting shares is the right to vote, it seems to me the premium on voting shares is a speculation. it will never generate cash flow. the only reason it is or might be worth more is because people might be willing to pay for it. a textbook speculation.
i'm buying fractional ownership in companies. if i can get my share cheaper because it doesn't include the right to vote, that seems great. my dividends will represent a higher % return, i'll get the stock at a lower P/E. etc.
i'll certainly never own enough shares for my votes to matter. it's possible somebody whose votes will matter might be wiling to pay a premium, but buying just to hope for that is speculating, not an investment.
Submitted February 08, 2017 at 03:31PM by hmblmfkrwitabgassdik http://ift.tt/2kINR2o
