Buy and Hold? What does Warren Buffett Think?


Warren Buffett recently appeared live on CNBC's Squawk Box for a two-hour interview with Becky Quick.  During their conversation, they discussed a number of issues about the global economey and investing. You can read the complete transcript here.

I'd like to share with you my favorite part:

Last word, Warren, is a sort of free word association game that we've been playing lately. I say a word, you tell me what it makes me think of. And the question we get most frequently from people about you coming on is what should they be buying right now? So if I say buy, you say...

I say —I say hold —basically hold. I mean, the idea that the European news or slowdown in this or that or anything like that, that would not cause you to own a good farm and had a run by a good tenant, you wouldn't —you wouldn't sell it because somebody said here's a news item, you know, this is happening in Greece or something of the sort. If you owned an apartment house and you got to raise your rents a little, it's well located and you have a good manager, you wouldn't dream of selling it.

If you had a good business personally, the local McDonald's franchise, you know, you wouldn't —you wouldn't be thinking about buying or selling it every day. Now, when you own stocks, you own pieces of businesses, and they're wonderful businesses. So you can pick the best businesses in the world, and to buy or sell on current news is just crazy.

You're in a wonderful business, you've got people running it for you. You know you're going to do well over five or 10 years, and to think news events should cause you to try and dance in and out of something that's a wonderful game is a terrible mistake. So get into a bunch of wonderful businesses and stay with them.

But you said hold —I said buy and you changed it to hold. Does that mean don't sell or does that mean...

Well, I mean, if you haven't —if you haven't got them yet, you buy them consistently over time. So you sort of average over time. And I've been buying all my life. I bought my first stock, you know, when I was 11 years old and it was about three months after Pearl Harbor and Corregidor was falling and they had the Death March at Bataan, and all the news was terrible. It was a great time to buy stocks. And I should've held that stock forever, and I've been buying stocks ever since.

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1 comment

Aram Durphy

I know Buffett has said he would be a much richer man if he had never sold a stock, so I would be shocked if he said sell. Always appreciate his thoughts on long-term investing.

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