Warren Buffett’s Top Plays: #24 The Washington Post

In 1973, Warren Buffett’s Berkshire Hathaway purchased a 9% stake in The Washington Post for $10.6m, representing 9% of Buffett’s net worth at the time. The Post was earning $9.7m in 1972 with a market cap of $110m and a P/E ratio of 11. Berkshire’s shares in the Post peaked at $1.7b in 2005 but declined due to the rise of the internet and were sold for $740m in 2014. Buffett was interested in the newspaper business because in the 1970s, dominant newspapers in cities were like monopolies with strong pricing power. The Post was also cheap, having fallen from a valuation of $180m to $110m, and Buffett saw it as a good investment opportunity despite the irrational market. He noted that the beta and volatility of a stock is not always a good indicator of its risk.