Warren Buffett's billion-dollar Disney mistake reveals a critical investing lesson. In 1966, he purchased a 5% stake in Disney for $4 million when the entire company traded for just $80 million. Despite recognizing the company's exceptional value with its theme parks, films, and recurring revenue model, Buffett sold his stake a year later for $6 million, capturing a 50% profit. Today, that same position would be worth $8-10 billion. Buffett acknowledged the error stemmed from selling quality businesses prematurely rather than maintaining long-term positions. His key insight remains timeless: truly exceptional companies compound wealth over decades, and selling profitable positions in fundamentally sound businesses often proves more costly than holding through market cycles.
