"The portfolio actions I took in 1998 actually decreased our gain for the year. In particular, my decision to sell McDonald's was a very big mistake. Overall, you would have been better off last year if I had regularly snuck off to the movies during market hours."
"If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value."
"Just a few years later, McDonald's entered a prolonged period of outperformance; since 2003, McDonald's stock has ended the year in the red just twice-with many years growing by double-digit percentages. Today, the share price is just over $341, and if Buffett had held on, Berkshire's stake would be worth approximately $10.3 billion, not including dividends."
Warren Buffett, despite his billionaire status, maintained frugal habits including buying breakfast at McDonald's based on market performance. In 1996, Berkshire Hathaway held a 4.3% stake in McDonald's valued at $1.4 billion. Buffett sold this position less than two years later and publicly admitted in his 1998 shareholder letter that the decision was a significant mistake. McDonald's subsequently entered a period of strong performance, with the stock rarely ending years in the red since 2003. Had Buffett retained the stake, it would be worth approximately $10.3 billion today, excluding dividends. This experience illustrates the tension between Buffett's long-term investment philosophy and real-world execution challenges.
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