Monday, April 28, 2008

The King of Buy and Hold: Warren Buffet - Myth or Reality?

We all have been advised to invest for the longterm. Warren Buffet declared that he doesn't need an exit strategy because the selling is never if you pick the right stocks! I've traced Warren Buffet's major holdings over a period of 26 years from 1982 to 2007. This is what I found:

In his significant transactions, he bought and sold a total of 48 companies, only 13% of his holdings are older than 15 years and he is still holding it: The Washington Post, The Coca-Cola Company, Wells Fargo, American Express, Gillette ( P & G) and Geico. He has taken Geico private, the remaining 5 companies that are still publicly traded, made up about 61% of his 2007 marketable securities.

From Yahoo chart, it is seems that most of his buy and hold forever companies managed to outperform S & P 500 with exception of the Washington Post.

The next finding is going to rock you, 27% of them are less than 1 year old and 43% of them are between 2 - 5 years. If you add these two categories together, it is close to about 70%. Does that change the way you look at Buy and Hold?

Have a great week ahead.

1 comment:

AC said...

Which is why Turtle, I think for such a small amount of money you want to invest in this portfolio, a trading strategy is better.