Was Warren Buffett’s Coca-Cola Investment a Mistake?

• Coca-Cola (KO) has generated 7,830% full returns since Buffett’s 1988-89 entry, outperforming PepsiCo (PEP) which delivered 6,485% implicit the aforesaid period, with Berkshire present holding 400 cardinal Coca-Cola shares (9.3% of the company) generating implicit $200 cardinal successful yearly dividends.

• Buffett’s 1988 pivot from Pepsi to Coca-Cola proved superior crossed aggregate clip horizons owed to Coke’s presumption arsenic a Dividend King with uninterrupted century-spanning payouts and superior compounding power.

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Warren Buffett agelong favored PepsiCo (NASDAQ:PEP) successful Berkshire Hathaway’s (NYSE:BRK-A)(NYSE:BRK-B) portfolio, viewing the snack-and-beverage powerhouse arsenic a reliable compounder. That changed dramatically successful 1988, erstwhile Buffett sold down his Pepsi involvement and pivoted aggressively into Coca-Cola (NYSE:KO).

Today Berkshire owns 400 cardinal Coca-Cola shares -- astir 9.3% of the company. The presumption present accounts for 9.8% of Berkshire’s equity portfolio, ranking it arsenic Buffett’s third-largest holding aft helium trimmed his positions successful stocks similar Apple (NASDAQ:AAPL) and Bank of America (NYSE:BAC). Each twelvemonth those shares present much than $200 cardinal successful dividend checks consecutive to Omaha. Yet, would Buffett person been amended disconnected staying with Pepsi alternatively of switching to Coke?

PepsiCo officially went nationalist connected June 8, 1965, astatine a split-adjusted terms of astir $0.75. Through past Friday, March 20, 2026, Pepsi has delivered full returns (price appreciation positive dividends reinvested) of astir 39,953%. A hypothetical $10,000 invested astatine the IPO would person grown to much than $4 cardinal today.

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Coca-Cola, already nationalist but trading astatine a split-adjusted terms of astir $0.09 successful June 1965, produced adjacent stronger results implicit the identical span. Reliable semipermanent total-return information amusement a $10,000 concern successful Coke astatine that clip would beryllium worthy astir $13.9 cardinal today.

The borderline comes from Coke's presumption arsenic a existent Dividend King with uninterrupted payouts and raises stretching backmost implicit a period -- decades of reinvestment that compounded faster than Pepsi's earlier post-merger phase.

Of course, Buffett did not bargain Coca-Cola successful the 1960s. His celebrated accumulation began successful 1988-89, close aft helium exited Pepsi. From that nonstop introduction point, Coke inactive outperforms its rival. Total-return information since 1988 amusement Coca-Cola up 7,830% versus PepsiCo’s 6,485%. A $10,000 involvement placed erstwhile Buffett switched would present beryllium worthy astir $883,000 successful Coke versus astir $749,000 successful Pepsi. In some the ultra-long 1965 skyline and Buffett’s existent 1988 acquisition window, Coca-Cola has been the superior holding.