In his 1993 letter to shareholders of Berkshire Hathaway, Warren Buffett provided an interesting historical aside about Coca-Cola’s long-term performance:
“Let me add a lesson from history: Coke went public in 1919 at $40 per share. By the end of 1920, the market, coldly re-evaluating Coke’s future prospects, had battered the stock down by more than 50%, to $19.50. At year-end 1993, that single share, with dividends reinvested, was worth more than $2.1 million. As Ben Graham said, ‘In the short-run, the market is a voting machine—reflecting a voter-registration test that requires only money, not intelligence or emotional stability—but in the long-run, the market is a weighing machine.”
For those of you who are curious, that share is now worth either slightly below $10 million or slightly above $10 million depending on the latest market fluctuations.
What I picked up from Buffett when I first came across this passage is … Read the rest of this article!