Berkshire Hathaway bought another 1.62 million shares of Burlington Northern Santa Fe (BNI) in the past few days, according to a recent filing with the Securities and Exchange Commission. If you recall, Buffett's company disclosed in April that it had bought 39.03 million shares of BNI, sending the stock some 10% higher.

Months later, BNI regressed back to its low-80s price, right around where Buffett was buying. As you can imagine, he bought more.

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Conventional wisdom on Wall Street says that you should definitely reinvest any dividends you get. Then again, look how well Wall Street's conventional wisdom has done for you over the years.

If you are blindly speculating in stocks or putting money into Wall Street's mutual funds, reinvesting your dividends may very well be the only thing that saves your portfolio. But, if you are buying wonderful businesses at a discount, reinvesting suddenly becomes silly. After all, Warren Buffett doesn't do it. He's pretty smart, right?

Continue Reading Should I Reinvest Dividends? WWWD? ››