The Warren Buffett Rule That Might Be Hurting You Today

“Our favorite holding period is forever.”

Warren Buffett’s most quoted investing mantra.

And for decades, it made sense—when durable moats lasted generations and industries evolved slowly.

But that quote wasn’t built for a market that moves at AI speed.

⚠️ The Fallacy of “Forever” in 2025

1. Innovation cycles are collapsing.
AI, software, and cloud-native disruptors accelerate creative destruction. A “quality compounder” today can be obsolete in two product cycles.

2. Some moats aren’t moats anymore.
Network effects erode. Switching costs shrink. Loyalty fades. A stock can look safe while its competitive edge silently dies.

3. “Forever” becomes a lazy thesis.
Instead of re-validating positions, investors cling to slogans. But slogans don’t stop drawdowns.

📉 Case in Point: Teladoc

• Market darling in 2020.

• “Forever” hold in the remote healthcare boom.

• Now: stock is down over 80% from its highs.

• Moat? Questionable. Execution? Slipping. Competitive threat? Sky-high.

And yet—many investors still hold it. Not because the story’s intact.
Because Buffett said so.

🧠 A Sharper Framework for Long-Term Thinking

Instead of “forever,” use the 3-Point Exit Clarity Filter:

1. Moat Check – Is the business still winning against real competition?

2. Execution Check – Are margins, ROIC, and growth improving or eroding?

3. Insider Check – Are the people who know the most still buying?

If 2 out of 3 flash red—it’s not disloyal to sell. It’s smart.

🧭 The Takeaway

Buffett’s rules still matter. But they need context.

Blind loyalty to “forever” is just passive denial in a fast market.

– StocksTrades.AI Newsletter

Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.