Washington Post

# Washington Post **The Washington Post** represents one of Buffett's most celebrated investments—a rare case where he invested in a single-newspaper newspaper business and achieved extraordinary returns over decades. ## The Investment Buffett began accumulating shares in The Washington Post in 1973, eventually acquiring approximately a 10% stake for about $11 million. At the time, this was his largest investment. The investment thesis was classic Buffett: - A monopoly newspaper in a single dominant city (Washington, D.C.) - Low capital requirements—newspapers generated cash with minimal reinvestment - Excellent management under Katharine Graham - Selling at a modest price relative to intrinsic value ## The Newspaper Moat In the 1970s, newspapers had extraordinary **economic moats**: - Regional monopolies with no competition - High reader loyalty and habit formation - Advertising revenue from businesses that had no alternatives - Near-zero marginal cost for additional readers The Washington Post was the dominant newspaper in the nation's capital—home to the federal government, powerful institutions, and an engaged readership. ## Berkshire's Returns When The Washington Post was sold in 2013 (to Jeff Bezos, founder of Amazon), Berkshire's stake was worth approximately $1.1 billion—roughly 100x the initial investment. This return was achieved through both capital appreciation and dividends over 40 years. ## The Media Industry Transformation The Washington Post investment also demonstrates how powerful moats can erode. By the 2000s, the internet had devastated newspaper economics: - Classified advertising migrated to online platforms (Craigslist) - Readers moved to digital sources - Advertising followed readers - Revenue declined faster than costs could be cut The lesson: even the widest moats are not permanent. Investors must continuously evaluate whether the competitive advantage remains intact. ## Why Buffett Sold The Washington Post's sale to Bezos in 2013 was opportunistic: the Graham family wanted to monetize their investment, and Bezos offered an attractive price. Buffett supported the sale. The subsequent decline in newspaper economics proved the timing was excellent. By selling when the moat was still partially intact, the Grahams preserved value that would have been destroyed in subsequent years.