Buffett Partnership Letter 1967 Annual
1967 annual - 35.9% gain vs 19.0% Dow, best performance relative to market in history
Buffett Partnership Letter 1967 Annual
Warren E. Buffett | January 24, 1968
1967 Performance
| Metric | Dow | Partnership | Limited Partners |
|---|---|---|---|
| 1967 | +19.0% | +35.9% | +28.4% |
Overall gain of $19,384,250. Realized taxable income of $27,376,667.
Why Such a Big Margin?
"Probably a greater percentage of participants in the securities markets did substantially better than the Dow last year than in virtually any year in history."
95% of investment companies outperformed the Dow in 1967.
Investment Categories Performance
| Category | Avg Investment | Gain | Return |
|---|---|---|---|
| Workouts | $17,246,879 | $153,273 | 0.89% |
| Controls | $20,192,776 | $2,894,571 | 14.3% |
| Generals - Private Owner | $5,141,710 | $1,297,215 | 25.2% |
| Generals - Relatively Undervalued | $19,487,996 | $14,096,593 | 72% |
Key Insight
"The really big money tends to be made by investors who are right on qualitative decisions but... the more sure money tends to be made on the obvious quantitative decisions."
Controls Update
Through DRC and Berkshire Hathaway, acquired two new enterprises in 1967:
- Associated Cotton Shops
- National Indemnity (and National Fire & Marine)
Both run by excellent managers: Ben Rosner and Jack Ringwalt.
Cumulative Record (1957-1967)
| Metric | Dow | Partnership | Limited Partners |
|---|---|---|---|
| Cumulative | 165.3% | 1606.9% | 932.6% |
| Annual Compounded | 9.3% | 29.4% | 23.6% |
Source
Warren E. Buffett, January 24, 1968.