Buffett Partnership Letters (1957-1970)
Warren Buffett's letters to investment partners from the Buffett Partnership years before Berkshire Hathaway.
Buffett Partnership Letters (1957-1970)
Before Berkshire Hathaway, Warren Buffett ran a successful investment partnership from 1956 to 1969. These letters document his early investment philosophy, which laid the foundation for his later success.
Overview
Buffett formed his first partnership in 1956 with seven family members and friends. By 1969, the partnership had grown to $100M+ and was returning 29.5% annually — far ahead of the Dow.
Key Letters
1957 Letter — The Foundation
The first partnership letter establishing core investment principles.
Topics covered:
- Work-outs vs. General Issues
- Partnership structure
- Investment philosophy
1962 Letter — The Classic
The 1962 letter is considered a masterpiece of investment writing.
Topics covered:
- The three categories: Generals, Work-outs, Controls
- Risk vs. volatility distinction
- Partnership terms explained
1964 Letter — The Memo
Buffett's famous memo on investment mistakes.
1969 Letter — The End
The final partnership letter announcing dissolution.
The Three Categories
Buffett classified all investments into three categories:
1. General Issues (Generals)
Undervalued securities, expected to converge to intrinsic value.
2. Work-outs
Investments dependent on corporate actions:
- Mergers and acquisitions
- Liquidations
- Tender offers
- reorganizations
3. Controls
Businesses where partnership acquired controlling interest.
Famous Quotes
"Investment is the process of analyzing to get a result. Speculation is the result without analysis."
"The risk of a stock going down permanently is far less than people think. The real risk is that you sell before it realizes its potential."
Related
- warren-buffett — The author
- letter-2008 — His later annual letters
- compounding — The power of partnership returns
- margin-of-safety — His core discipline