The "Freak" Year: How a Value Partnership Crushed the Dow with a 58.8% Gain Amid 1968's Speculative Mania

The "Freak" Year: How a Value Partnership Crushed the Dow with a 58.8% Gain Amid 1968's Speculative Mania

These sources are excerpts from two letters written by Warren E. Buffett to the limited partners of Buffett Partnership, Ltd. (BPL), summarizing the partnership’s investment performance during 1968. The July 11, 1968 letter reports an "unusually good" 16.0% gain for the first half of the year, significantly outperforming the Dow-Jones Industrial Average's 0.9% gain, though Buffett cautions against unwarranted excitement due to concentrated investments. The second letter, dated January 22, 1969, details the full year's spectacular success, achieving an overall gain of 58.8% against the Dow's 7.7%, attributing the extraordinary result to one "simple but sound idea" within the Generals–Private Owner category. Both communications include extensive tables comparing BPL’s historical results and annual compounded rates of return against the Dow and various major investment funds, highlighting BPL's consistent superiority. Buffett also expresses growing concern about the "chain-letter type stock-promotion vogue" prevalent in the market, noting that this mania creates both opportunities and challenges for finding fundamentally attractive investments.

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2014 Berkshire Hathaway 50th Anniversary Letter | Buffett Pours $6 Billion into Maintaining BNSF Railway

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2014 Berkshire Hathaway’s annual report highlights the company's financial performance over the past fifty years, detailing a compound annual gain in per-share book value of 19.4% alongside an overall...

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This episode consists of Berkshire Hathaway's 2013 Annual Report, featuring a detailed letter from Chairman Warren Buffett alongside comprehensive financial statements. The documents describe the comp...

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The 2012 Berkshire Hathaway Annual Report consists of the company’s extensive operations across diverse sectors including insurance, freight rail, energy, and manufacturing. In his annual letter, Warr...

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This episode consists of the 2009 Berkshire Hathaway Annual Report, featuring a detailed letter from Chairman Warren Buffett to shareholders alongside comprehensive financial disclosures. It outlines ...

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