Amazon.com, Inc. (AMZN), The Washington Post Company (WPO): Warren Buffett’s Awful Two-Decade Investment

Indeed, over the ensuing 19-and-a-half years, the performance of the The Washington Post Company (NYSE:WPO)’s stock has been very disappointing. The following table shows the total return (i.e., including dividends) of the shares vs. that of the S&P 500 and Berkshire Hathaway shares between the end of 1993 and today:

Source: Author’s calculations based on data from Yahoo! Finance, CBOE, and S&P Dow Jones Indices.

It’s a good bet that any other investment Buffett made during that period would have been a better use of shareholder wealth than The Washington Post Company (NYSE:WPO) shares. At least, he didn’t throw good money after bad — he hasn’t added a single share to the position since at least 1977 (he even sold a few in 1985).

Is there any justification for hanging to a stock that has lagged the market over a span of two decades? Buffett has warned shareholders in the past that he will not sell businesses simply because they are underperforming. There is a logic to that attitude, as it is a competitive advantage as a buyer of family-owned/ closely held businesses. Although The Washington Post Company (NYSE:WPO) isn’t one of Berkshire’s operating companies, it appears that the depth and duration of the ties Buffett established with the Graham family led him to treat this common stock investment in the same manner.

The article Warren Buffett’s Awful Two-Decade Investment originally appeared on Fool.com and is written by Alex Dumortier.

Fool contributor Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Berkshire Hathaway.

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