Warren Buffett Story [Part 39] Always Coca-Cola

In the previous article, we learned about Warren Buffett's investment story with Coca-Cola, one of his lifetime's best investments. Let's continue exploring the fascinating journey of Warren Buffett's investment story in this article.

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Buffett's Significant Investment

The fact that Buffett purchased a substantial amount of Coca-Cola shares wasn't revealed until March 1989 by Dow Jones News. What shocked investors was that Buffett had invested over $1 billion in Coca-Cola, representing approximately 7% of the company's shares. Even though HSBC held 12.4% of the shares, they did so in a trust form, indicating multiple shareholders behind it. Thus, it can be inferred that at that time, Buffett became the largest single shareholder of Coca-Cola.

Berkshire Hathaway's Bold Move

This wasn't just a big investment in Coca-Cola; it was the largest sum Warren Buffett had ever put into one company. To put it in perspective, when we looked at the overall value of Berkshire Hathaway (Buffett's company) at the time, this Coca-Cola investment made up a quarter of it. By the end of the year, Coca-Cola's value on its own accounted for more than a third of Berkshire Hathaway's total worth.

Now, let's talk about how remarkable this was. Warren Buffett is famous for spreading his investments across many different things. He usually doesn't put all his eggs in one basket. But in this case, he used Berkshire Hathaway's available money to invest in Coca-Cola. This made Wall Street bankers both amazed and a bit hesitant to do the same.

Warren Buffett Story: Roberto's Announcement

Roberto Goizueta, the Cuban-American businessman who served as the Chairman and CEO of The Coca-Cola Company from 1981 to 1997, decided to officially notify all employees of this great news to confirm that Warren Buffett had indeed invested in Coca-Cola. In this public announcement, he expressed a warm welcome, emphasizing that Berkshire Hathaway was an outstanding enterprise that invested exclusively in the world's best and most promising companies. According to Berkshire Hathaway's investment strategy, when a company was selected for significant investment, it was meant to be held for the long term. This gained recognition and approval from the entire financial and investment community.

Buffett's Unique Perspective

Imagine if one day Warren Buffett invested in your company. Would it mean that the world's greatest investor and his company had affirmed your company's current value and future potential? Roberto's letter to employees was filled with affirmation and gratitude toward Buffett and Berkshire Hathaway, especially since Coca-Cola's stock price plummeted during that period.

You must be curious about Buffett's reaction and evaluation of this investment. When the news became public, numerous mainstream media outlets rushed to interview Buffett, hoping to understand why he had put his full weight behind Coca-Cola. Buffett's response was intriguing: "When you want to marry the person you love, would you decide to marry them just because one aspect of them is exceptional? No, it's not just one aspect; it's everything about them. I can't single out just one point; it's everything about them that makes it worth entrusting our lives to."

The reporters found this response astonishing and continued to inquire, "So, Mr. Buffett, how long do you plan to hold Coca-Cola?" Buffett answered, "As I mentioned earlier, this is the feeling of marriage, so if you want me to answer, I would say I hope to hold it forever!" In other words, this investment in Coca-Cola by Buffett and Berkshire Hathaway was an extreme case of putting money where their mouth is. This was because it was a brand and company that Buffett genuinely loved and had a deep fondness for drinking Coca-Cola. So investing in Coca-Cola's stock was a natural choice for him.

Reporters and bankers were puzzled about why Buffett loved Coca-Cola so much. The next article will continue to share this story. Stay tuned for the next article, which promises to be just as exciting!

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Further Reading