Why Buffett Holds "Forever"

Warren Buffett has often touted that his favorite holding period is "forever!"

While the early Buffett would opportunistically buy and sell stocks, often in bad but undervalued companies, he shifted mid-career to generally longer holding periods. Buffett began his financial career in 1951 but didn't utter his famous "forever" line until his 1988 letter to shareholders.

Why not sell? Because if the stocks Buffett buys have a significant degree of sustainable competitive advantage, chances are that their intrinsic value will be ahead of the stock price. If this is the case, then the recommendation will be to not sell, or, by extension, never sell.
— George Athanassakos

Coca-Cola is a good example. The "Oracle of Omaha" invested about $1.3 billion in the beverage maker in 1988 and 1989. Since then, he has never sold a single share.

That investment is now paying more than $750 million a year in dividends, and its value has ballooned to about $24 billion, or about 18 times what he paid for it.

For those wanting to dig deeper, Athanassakos’s Value Investing: From Theory to Practice is the advanced textbook. For everyone else, Ben Graham’s The Intelligent Investor remains the timeless classic.

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