It's important to distinguish between the types of investments Buffet makes and those the average investor makes. Buffet buys large shares that either give him

It's important to distinguish between the types of investments Buffet makes and those the average investor makes. Buffet buys large shares that either give him a say in how the company runs its business, or sometimes just buys the business outright. This is important because as a large/sole shareholder you have a huge say in how the company is run. In such a case, money that would otherwise be paid out in dividends can be reinvested in the company in a way which you can influence or control. If merely you buy $1000 of ACME Corp. stock you won't have that kind of influence, so knowing that the company is withholding dividends and reinvesting it is not nearly as sweet of a deal. And if you view the company's reinvestment plan as a net negative for the company and its stock, it would be better to simply have the dividend. Basically, some investors are mostly interested in using equities as a source of cash flow, and some are mostly interested in using them as a way to grow a pile of money into a bigger pile.