The 2024 letter: In investing, less is often more

Over the last 20+ years, Berkshire hasn’t traded any shares of Coca Cola and American Express1, two of its key holdings. And it’s been handsomely rewarded for this restraint in the form of excellent earnings and steadily increasing dividends.

Buffett also recounts how his sister Bertie, who at one point owned some mutual fund units and used to actively trade stocks, sold everything except the mutual fund units and Berkshire stock in 1980, and then didn’t carry out any new trades for the next 43 years. Needless to say, this made her very wealthy.

The point here is that once you’ve homed in on a great stock or fund that you have confidence in, you need to back off and let it grow, rather than getting tempted to sell it every time it’s in the red.

As Buffett puts it: