A letter a day.
Letter 12# 1965 (Half yearly letter)
Key Learnings:
- The first point to note in this letter is if you are a fund manager, always communicate with your investors when you outperform the index and also when you don’t. Quoting Buffett here
“We actually achieved a wide margin during the upswing and then fell at a rate fully equal to the Dow during the market decline.
I don’t mention this because I am proud of such performance – on the contrary, I would prefer it if we had achieved our gain in the hypothesized manner. Rather, I mention it for two reasons: (1) you are always entitled to know when I am wrong as well as right; and, (2) it demonstrates that although we deal with probabilities and
expectations, the actual results can deviate substantially from such expectations, particularly on a short-term basis.”
- When a small minority interest is held in the company, earnings power and assets are important because they will dominate the price and when a controlling interest is held, we own a business rather than a stock hence a conservative business valuation is important.
| Subscribe To Our Free Newsletter |
