MEET THE ORACLE OF OMAHA
attractiveness and commercial possibilities of the product.”
He went on: “I continued to note these qualities for the next 52 years as Coke blanketed the world. During this period, however, I carefully avoided buying even a single share (of Coke).”
When he began purchasing those shares 30 years ago, in 1988, he did so in a huge way. In Roger Lowenstein’s 1995 masterpiece Buffett — The Making of an American Capitalist, the author explains that by the spring of 1989:
“... Berkshire has acquired $1.02 billion worth, or 7 per cent of the Coca-Cola Co., at an average price of $10.96 a share.”
Today, Buffett’s Berkshire owns 400 million shares of Coca-Cola or 9.4 per cent of the entire company. In Berkshire’s latest annual report dated Dec 31, 2017, the value of only its Coke stake was more than US$18.3 billion!
Berkshire’s entire portfolio of marketable securities at the end of last year was valued in excess of US$170 billion. Apart from those vast holdings of publicly traded shares, Berkshire sat atop a cash and near-cash (US Treasury Bills) pile of US$116 billion! Berkshire also owns all of, or major controlling stakes in, numerous companies within and outside the US.
IntheopeningparagraphofLowenstein’s Buffett, which I remind you was published in 1995, Lowenstein writes:
“In the annals of investing, Warren Buffett stands alone. Starting from scratch, simply by picking stocks and companies for investment, Buffett amassed one of the epochal fortunes of the twentieth century. Over a period of four decades — more than enough to iron out the effects of fortuitous rolls of the dice — Buffett outperformed the stock market, by a stunning margin and without taking undue risks or suffering a single losing year.”
But no one, not even Buffett, can go forever without suffering some annual market losses. I’ll touch on those in next week’s column.
For now, though, please note Buffett first nibbled at Berkshire Hathaway’s shares in 1962. He viewed the beaten down share price of what was then merely a failing textile company as just another stock investment to be milked for profits. But with the help of his friend, a stockbroker named Daniel Cowin, who found him several large blocks of shares for sale, Buffett through his earlier investment vehicle, Buffett Partnership, ended up being the largest shareholder of Berkshire in 1963!
(Join me here next Sunday for my account of how Warren Buffett turned Berkshire Hathaway into both an investment holding company and a global icon of commendable capitalism.)
© 2018 Rajen Devadason
Read his free articles at www.FreeCoolArticles.com; he may be connected with on LinkedIn at www.linkedin.com/in/rajendevadason, rajen@RajenDevadason.com and Twitter @RajenDevadason