Buffett Partnership Letter 1969 Semi

Warren E. Buffett | May 29, 1969

Announcement: Partnership Liquidation

Buffett announced his intention to retire and liquidate the partnership before yearend.

Three Objectives for Liquidation

1. Recommend alternative money manager to partners who don't want to handle investments themselves (Bill Ruane)
2. Option to receive cash for marketable securities
3. Option to maintain proportional interests in controlled companies (DRC and B-H)

Why Now?

Three factors have changed:

1. Fewer quantitative bargains: Opportunities for analysts emphasizing quantitative factors have virtually disappeared
2. $100 million capital base: Eliminates most opportunities since commitments under $3 million can't impact overall performance
3. Hyper-reactive market: Swelling interest in investment performance has created increasingly speculative market

Personal Motivation

"I hope limited objectives will make for more limited effort. It hasn't worked out that way."

"The only way to slow down is to stop."

1969 Outlook

"We will show a breakeven result for 1969 before any monthly payments to partners."

Workouts were particularly bad—"the bird that inadvertently flew into the middle of a badminton game."

Source

Warren E. Buffett, May 29, 1969.