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Bill Ackman has called Warren Buffett his "great professor (1)" of the investing business. Buffett's drink order, apparently, still came as a surprise.
On an episode of the Equity Mates Investing podcast (2) released Oct. 28, the billionaire founder and CEO of Pershing Square recalled hosting Buffett for dinner at his home "years ago." Knowing his guest's favorite drink, Ackman said he'd stocked up on Cherry Coke (NYSE:KO) — but he still offered Buffett still or sparkling water. Buffett declined and asked for a Coke.
"But I said, you know, 'Don't you drink water?'" Ackman recalled. "And he said, 'Bill, I haven't had water in 48 years.'"
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It's not the first time Ackman has taken aim at Buffett's favorite drink. At a 2015 symposium celebrating Buffett's 50 years at Berkshire (3), he singled out Berkshire's Coke stake.
"Coca-Cola has probably done more to create obesity and diabetes on a global basis than any other company in the world," Ackman said at the time. A Coca-Cola spokesman called the comments "irresponsible."
Is the 48-year claim literally true? Hard to say. Ackman didn't say when the dinner took place, and Buffett, 96, hasn't commented publicly. His soda habit, at least, is well documented : Buffett told CNBC in 2019 that he drinks "probably five 12-ounce Cokes a day." As it happens, 48 years is the same number Buffett used in his 1985 shareholder letter (4), when he converted to the new Cherry Coke after "48 years of allegiance to another soft drink."
Either way, the soda habit has been very good to Berkshire Hathaway (NYSE:BRK.B).
The $1.3 billion bet that kept its fizz
Berkshire started buying Coca-Cola stock in 1988, months after the Black Monday crash, and finished building its stake in the mid-1990s. Today it owns 400 million shares (5), or roughly 9% of the company, at a total cost of about $1.3 billion. At the stock's Oct. 30 close of $94.08, that stake is worth roughly $37.6 billion.
But the real payoff is the dividend. On Feb. 19, Coca-Cola raised its quarterly payout (6) to 53 cents a share, its 64th straight annual increase. That works out to $2.12 a share per year, or about $848 million for Berkshire annually. In other words, Berkshire now collects roughly 65% of its original investment back in cash every year just for holding on.
Buffett has marveled at the math himself. In his 2022 shareholder letter (7), he noted that Berkshire's Coke dividend was $75 million in 1994 and had grown to $704 million by 2022.
Coke stock is surging
Coca-Cola is usually seen as a steady, slow-moving stock. This year, it's been anything but. Shares closed at a record $95.34 (8) on Oct. 22 and are up about 37% in 2026.
On Oct. 27, the company reported third-quarter revenue (9) of $13.4 billion, up 7% from a year earlier, while comparable earnings per share rose 11% to 91 cents, ahead of the 88 cents analysts expected. Global unit case volume grew 5% and the company raised its full-year guidance.
There's a bit of irony in the numbers, too. Coca-Cola's water volume grew 8% worldwide in the quarter, so plenty of people are drinking the stuff even if its most famous shareholder isn't. (In North America, though, the company's water, sports, coffee and tea category declined.)
Why Buffett finally bought Coke after 52 years
Buffett's history with the brand goes back to childhood. In his 1989 shareholder letter (10), he wrote that he had his first Coke in 1935 or 1936. Soon after, he was buying six-packs for 25 cents at his family's grocery store and reselling the bottles around the neighborhood for a nickel apiece.
He also admitted he watched the company for 52 years without buying a single share, joking that it took until the summer of 1988 for his brain to catch up with his eyes. By then, he wrote, CEO Roberto Goizueta and Don Keough — Buffett's former across-the-street neighbor in Omaha — had refocused a company that drifted in the 1970s, and overseas sales were "virtually exploding."
Keough, Coke's president at the time (11), also had a hand in Buffett's soda switch. According to investment historian Glen Arnold's book "The Deals of Warren Buffett Volume 2," Keough read in a magazine in 1985 that his old neighbor was a fan of Pepsi-Cola Cherry. He wrote to offer Buffett samples of the still-in-development Cherry Coke, which he called "nectar of the gods."
Buffett handed the CEO job to Greg Abel at the start of 2026 and stepped down as chairman (12) on Sept. 18, with his son Howard taking over that role. But Berkshire's Coke shares don't appear to be going anywhere. In his first shareholder letter as CEO (13), Abel named Coca-Cola as one of four holdings Berkshire expects to "compound over decades" and said he anticipates "limited activity" in them.
That fits the philosophy Buffett laid out in his 1988 letter (14): "Our favorite holding period is forever."
Skip 6 decades of reading: Get Warren Buffett's best investing lessons in 1 free guide
What you can borrow from Buffett's playbook
Of course, you don't need a billion-dollar check to invest like Buffett. The basic idea — buy quality businesses you understand, reinvest the dividends and give compounding time to work — is open to anyone with a brokerage account.
It's also why long-term dividend investors watch yield on cost: the annual dividend divided by what you originally paid. Coke yields about 2.3% at today's price. On Berkshire's original cost, it's roughly 65%.
To be sure, Coke's run-up comes with a catch. After this year's rally, the stock trades at about 28 times its earnings over the past 12 months, meaning investors are paying roughly $28 for every $1 of profit. That suggests a lot of good news may already be priced in.
'The best thing to do,' according to the Oracle of Omaha
Buffett has also said most people don't need to pick individual stocks like Coke at all.
"In my view, for most people, the best thing to do is own the S&P 500 index fund," Buffett has famously said .
This approach gives investors exposure to 500 of America's largest companies across a wide range of industries, providing instant diversification without the need for constant monitoring or active trading.
If you're looking to get into this kind of investing, you can get started with Acorns , an app that automatically invests your spare change.
How it works is simple: Just sign up and link your debit or credit cards. Then, every time you buy something, Acorns rounds up the total to the nearest dollar. This turns a morning coffee for $3.25 into a 75-cent investment in your future.
From here, that money goes into a diversified portfolio of ETFs that you can tailor to your risk tolerance. Along with big names like the Vanguard S&P 500 ETF, Acorns also sets you up to invest in specific sectors of the economy through custom portfolios. This includes areas like heavy industry, energy, consumer staples and utilities.
Then, once you're comfortable with your round-ups, you can boost your savings with recurring monthly deposits into your favorite funds. And if you sign up today with a $5 recurring deposit, Acorns will add a $20 bonus to help you begin your investment journey.
Earn rental income without becoming a landlord
Coke isn't the only kind of income-producing asset Buffett likes. In 2022, Buffett stated (15) that if you offered him "1% of all the apartment houses in the country" for $25 billion, he would "write you a check."
Rental properties work a lot like a dividend stock: They can generate income month after month, alongside any long-term increase in the property's value. But being a landlord isn't exactly hands-off work — managing tenants, maintenance and repairs can quickly eat into your time (and returns).
Crowdfunding platforms like Arrived offer an easier way to get exposure to this income-generating asset class.
Backed by world-class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100 , all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.
The process is simple: Browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you'd like to purchase and then sit back as you start receiving any positive rental income distributions from your investment.
Get a second opinion before you buy
If you're not sure how a dividend stock like Coke fits your goals, or whether to buy one near a record high, it might be the right time to get in touch with a financial advisor through Advisor.com .
Advisor.com is an online platform that matches you with vetted financial advisors suited to your unique needs. They can help tailor a strategy to your particular financial situation, whether you're looking to protect your wealth, generate income or plan for long-term financial security.
Once you're matched with an advisor, you can book a free consultation with no obligation to hire.
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Article Sources
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Lex Fridman Podcast ( 1 ); Acast ( 2 ); Food Dive ( 3 ); Berkshire Hathaway ( 4 ), ( 7 ), ( 10 ), ( 13 ), ( 14 ); U.S. Securities and Exchange Commission ( 5 ); Business Wire ( 6 ); Investing.com ( 8 ); The Coca-Cola Company ( 9 ); The Boston Globe ( 11 ); WOWT ( 12 ); CNBC ( 15 )
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