📖Warren Buffett
Long Holding Period
The ideal holding period for a great business is forever.
Our favorite holding period is forever. If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes.
🏠 Everyday Analogy
📖 Core Interpretation
Why is "Forever" the Optimal Holding Period? 1. Compound interest requires time. 2. Reduces transaction costs. 3. Avoids emotional decision-making. 4. Allows for participation in corporate growth.
💎 Key Insight：Frequent trading generates taxes, fees, and errors. If you've found a business with a durable moat, honest management, and strong economics, the smartest strategy is to hold indefinitely and let compounding work. Buffett has held Coca-Cola since 1988 and American Express since 1993. Time turns good investments into extraordinary ones.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ Why It Matters
The meaning of the "10-Year Principle": It does not require holding for a full decade, but rather prompts the question before investing: What will this company look like 10 years from now?
🎯 How to Practice
When should one sell? 1. Permanent deterioration in fundamentals. 2. Loss of management integrity. 3. Extreme overvaluation (rare). 4. Discovery of a better investment opportunity.
🎙️ Master's Voice
Our favorite holding period is forever.
Buffett bought Coca-Cola stock in 1988 and has never sold a share. He bought American Express in 1991 and still holds it. His Geico investment from 1951 eventually led to owning the entire company. These forever holdings have compounded over decades, creating enormous wealth.
⚔️ Practical Guide
✅ Decision Checklist
- Would I be happy owning this business for 20 years?
- Is the competitive advantage durable?
- Does management think long-term?
- Can this business compound value for decades?
📋 Action Steps
- Only buy businesses you'd want to own forever
- Ignore short-term price fluctuations
- Judge results over decades, not quarters
- Let winners run; sell only when fundamentals change
🚨 Warning Signs
- Planning to sell based on price targets
- Investing for the next quarter's performance
- Owning businesses with deteriorating moats
- Selling winners to buy more losers
⚠️ Common Pitfalls
Long-term holding means never selling – if the fundamentals deteriorate, one should decisively sell.
Any stock is suitable for long-term holding - only excellent companies are worth holding long-term.
📚 Case Studies
1
See's Candies Acquisition (1972)
Purchased in 1988, held for over 35 years.
✨ Outcome：Dividend growth exceeding 10x, stock price appreciation exceeding 10x.
2
Coca-Cola Investment (1988)
Purchased in 1972, held for over 50 years.
✨ Outcome：Cumulative cash contributions exceeding USD 2 billion
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →