Hi Tim - my view on this would be that if the chaps at SOL are...

Hi Tim - my view on this would be that if the chaps at SOL are better investors than us shareholders, they should keep the dividend and keep on doing what they do with it. Also, tax deferred is tax saved, so even if your CGT rate and income tax rate are the same, there's no point incurring the tax liability until the day you plan on spending the money. If this is retirement savings, let inflation do its work for a few decades.

I don't tend to chase good yields when selecting stocks. On the whole, if a board can't find something productive to invest spare cash in, it suggests to me that the business has limited growth prospects.

A simplistic point of view with plenty of exceptions (businesses constrained by things other than capital, for example), but in the case of SOL, they exist to invest in stuff. SOL are not business managers/operators, they are investors. If they're so good at it, why are they giving us the money to play with? I guess the truthful answer to this is that lots of investors from the more conservative end of the spectrum (the sort you find on SOL's register, I suspect) like to receive a dividend, and treat it as a form of income. So it's more about shareholder preference than about keeping the capital hard at work.

I don't own SOL, but have shorted it (~$30 -> ~$20) recently. At present, I feel the valuation is fair, and reflects the sum of the parts. But that's the thing about SOL, the lion's share of what it owns, you can buy yourself (NHC, TPM, BKW, etc). And for most of the last year, you could buy any of those underlying assets more cheaply than you could buy SOL itself. That's not really the case now, but you're hardly getting a discount either.

If you're a really-long-term SOL holder, my advice would be to wait and watch carefully until the next time the BKW:SOL ratio falls below 0.63 (the point at which BKW's own assets become negative in value), sell out of SOL, and put your investment into BKW. You will end up with a GREATER number of SOL shares than you started with, plus a bunch of freebies. Maybe this won't happen again, who knows. Watch and wait...