Buffett realizes that in the short term, the stock market may not recognize the fundamental value of a business, but in the longer term it will confirm it. Ben Graham used to say "in the short run, the market is a voting machine, but in the long run it is a weighing machine".
Fisher taught Buffett that an investment is either better to hold than cash or it is not. It is instructive to note that Buffett is willing to hold onto investments provided that 1) the return on capital is sufficient 2) management is competent and 3) the stock market does not significantly overvalue the business.
Interestingly, Buffet has indicated that Berkshire does have four holdings that will never be sold. These permanent Berkshire holdings are the Washington Post, Geico, Capital Cities/ABC and Coca Cola. Buffett only indicated that these were permanent holdings many years after the initial investments were made.
(This chapter review will include four more sections. Each section will be devoted to reviewing the conditions that led to one of the initial Buffett investments in the Washington Post, Geico, Capital Cities/ABC and Coca Cola)