Buffett Partnership Letter December 1969 (2)

Warren E. Buffett | December 26, 1969

Initial Cash Distribution

January 5, 1970: approximately 64% of January 1, 1969 capital (less distributions already received).

Key Q&A

Why continue textile business?

"I don't want to liquidate a business employing 1100 people when the Management has worked hard to improve their relative industry position."

Should partners hold B-H or DRC stock?

"I can only say that I'm going to do so and I plan to buy more. I am very happy to have a material portion of my net worth invested in these companies on a long term basis."

Why no public registration for partner stock? B-H shares are 4-5x the floating supply. Public offering could create chaotic markets, with sophisticated partners having edge over others.

"By confining sales to private placements, those partners who wish to sell will realize more for their stock."

Can partners participate in future registered offerings?

"I think it is almost certain I will never sell stock via public offering but, should it ever happen, I will be glad to let any of you participate."

Tax Status

• Ordinary income: ~3.75% of Jan 1, 1969 capital
• No significant long-term capital gain/loss
• Short-term capital loss: ~8.5% of unrealized appreciation

Blue Chip Stamps

The 371,400 shares were not sold in 1969. Stock went from $24 to $16.50 after underwriting announcement. Buffett will continue holding for better disposal opportunity.

Source

Warren E. Buffett, December 26, 1969.