[john_b]

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.