Warren Buffett Story [Part 40] Love for Coca-Cola
In the previous article, we learned that Warren Buffett said he would hold Coca-Cola stocks forever, and it was one of the best investments in his life. In this article, let's continue to explore the fascinating journey of Buffett's investment story.
Childhood Love for Cherry Coke
Buffett is an absolute Cherry Coke enthusiast, and he has even said he can't go a moment without this soda. In 1984, Coca-Cola introduced Cherry Coke, and at that time, Charlie Munger immediately sent this new product to Buffett for a taste test. Buffett instantly fell in love with it, making it his favorite drink. Even at Berkshire Hathaway's annual shareholder meeting in 1985, Buffett announced that he would make Cherry Coke the "official drink" of Berkshire Hathaway. While most people might have a maximum of 2-3 cups of coffee daily, Buffett would consume 5 bottles of Cherry Coke daily. He would buy Cherry Coke in packs of 12 cans and order 50 cases at a time, filling up his home and office refrigerators. He was a super supporter, indeed.
Childhood Dreams and Investments
This level of fandom is evident in another of Buffett's investments. When Buffett was just a child at 8, he had his first taste of Dairy Queen ice cream, and he loved it so much that he couldn't resist. At that time, he was filled with dreams and told himself he would someday buy this company and become a shareholder. What's surprising is that he never forgot this dream from when he was 8. Fast forward to 1997, when Buffett had enough capital, he fulfilled his childhood dream by purchasing the company reasonably. In October 2010, he and Bill Gates even worked as "day employees" at a Dairy Queen ice cream store in Beijing, China, to celebrate the opening of the 6000th store worldwide. Buffett is an excellent example of combining his interests and hobbies with investments.
Early Introduction to Coca-Cola
Returning to the success of his Coca-Cola investment, Buffett went to dinner with Coca-Cola executives in Atlanta, not at a high-end restaurant, but at a common food joint near Coca-Cola's headquarters called "The Varsity," where they serve hot dogs and pizza. At that time, a reporter from a business magazine particularly liked to interview and record the favorite foods of top executives. When he recorded Buffett, he found that Buffett strongly preferred affordable food and would take out his Cherry Coke from a bag even when dining with Coca-Cola executives. This image surely brought a smile to the Coca-Cola executives' faces.
The Wisdom of Warren Buffett
But when did Buffett first become acquainted with Coca-Cola as a company? We must go back to 1936, when Buffett was just 6 years old. His grandfather ran his grocery store in Omaha, which gave young Buffett a unique advantage—he could buy wholesale from his grandfather and then sell the products elsewhere, like nearby neighborhoods or schools. Buffett's early business strategy was to buy 6-packs of Coca-Cola for 25 cents each and then sell them for 5 cents per bottle. So, with each box sold, young Buffett made 5 cents. This was Buffett's first entrepreneurial venture; at 6, he was already a small businessman.
Buffett would observe the people and things around him from a young age, especially those he loved. He would measure these people's current and future values and things over time. Every investor has studied Buffett's investment strategy for over a century, but few have been as successful as him. This is because Buffett not only had unique wisdom but, most importantly, never forgot his initial intentions and was full of patience. We see this in his investments in Coca-Cola and Dairy Queen ice cream. For most people, a drink is just a drink, ice is just ice, and they have nothing to do with investment returns. But for Buffett, this presented a significant business opportunity, and he had set this investment dream in his heart from a very young age. This is what makes Buffett truly special.
In the next article, we will continue to learn from Buffett why he invested heavily in Coca-Cola. This time, he officially explains it in his annual shareholder letter.
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