BUFFETT PARTNERSHIP. LTD.610 KIEWIT PLAZAOMAHA, NEBRASKA 68131TELEPHONE 042-4110
January 22nd, 1969
Our Performance in 1968
Everyone makes mistakes.
At the beginning of 1968, I felt prospects for BPL performance looked poorer than at any time in our history. However, due in considerable measure to one simple but sound idea whose time had come (investment ideas, like women are often more exciting than punctual), we recorded an overall gain of \$40,032,691.
Naturally, you all possess sufficient intellectual purity to dismiss the dollar result and demand an accounting of performance relative to the Dow-Jones Industrial Average. We established a new mark at plus 58.8% versus an overall plus 7.7 % for the Dow, including dividends which would have been received through ownership of the Average throughout the year. This result should be treated as a freak like picking up thirteen spades in a bridge game. You bid the slam, make it look modest, pocket the money and then get back to work on the part scores. We will also have our share of hands when we go set.
The following summarizes the year-by-year performance of the Dow, the Partnership before allocation (one quarter of the excess over 6%) to the General Partner and the results for limited partners:
| Year | Overall Results From Dow (1) | Partnership Results (2) | Limited Partners’ Results (3) |
| 1957 | -8.4% | 10.4% | 9.3% |
| 1958 | 38.5% | 40.9% | 32.2% |
| 1959 | 20.0% | 25.9% | 20.9% |
| 1960 | -6.2% | 22.8% | 18.6% |
| 1961 | 22.4% | 45.9% | 35.9% |
| 1962 | -7.6% | 13.9% | 11.9% |
| 1963 | 20.6% | 38.7% | 30.5% |
| 1964 | 18.7% | 27.8% | 22.3% |
| 1965 | 14.2% | 47.2% | 36.9% |
| 1966 | -15.6% | 20.4% | 16.8% |
| 1967 | 19.0% | 35.9% | 28.4% |
| 1968 | 7.7% | 58.8% | 45.6% |
(1) Based on yearly changes in the value of the Dow plus dividends that would have been received through ownership of the Dow during that year. The table includes all complete years of Partnership activity.
(2) For 1957-61 consists of combined results of all predecessor limited partnerships operating throughout the entire year after all expenses, but before distributions to partners or allocations to the General Partner.
(3) For 1957-61 computed on the basis of the preceding column of Partnership results allowing for allocation to the General Partner based upon the present Partnership Agreement, but before monthly withdrawals by limited partners.
On a cumulative or compounded basis, the results are:
| Year | Overall Results From Dow | Partnership Results | Limited Partners' Results |
| 1957 | -8.4% | 10.4% | 9.3% |
| 1957 – 58 | 26.9% | 55.6% | 44.5% |
| 1957 – 59 | 52.3% | 95.9% | 74.7% |
| 1957 – 60 | 42.9% | 140.6% | 107.2% |
| 1957 – 61 | 74.9% | 251.0% | 181.6% |
| 1957 – 62 | 61.6% | 299.8% | 215.1% |
| 1957 – 63 | 95.1% | 454.5% | 311.2% |
| 1957 – 64 | 131.3% | 608.7% | 402.9% |
| 1957 – 65 | 164.1% | 943.2% | 588.5% |
| 1957 – 66 | 122.9% | 1156.0% | 704.2% |
| 1957 – 67 | 165.3% | 1606.9% | 932.6% |
| 1957 – 68 | 185.7% | 2610.6% | 1403.5% |
| Annual Compounded Rate | 9.1% | 31.6% | 25.3% |
Investment Companies
On the following page is the usual tabulation showing the results of what were the two largest mutual funds (they stood at the top in size from 1957 through 1966 - they are still number two and three) that follow a policy of being, typically, 95 -100% invested in common stocks, and the two largest diversified closed-end investment companies.
| Year | Mass. Inv. Trust (1) | Investors Stock (1) | Lehman (2) | Tri-Cont (2) | Dow | Limited Partners |
| 1957 | -11.4% | -12.4% | -11.4% | -2.4% | -8.4% | 9.3% |
| 1958 | 42.7% | 47.5% | 40.8% | 33.2% | 38.5% | 32.2% |
| 1959 | 9.0% | 10.3% | 8.1% | 8.4% | 20.0% | 20.9% |
| 1960 | -1.0% | -0.6% | 2.5% | 2.8% | -6.2% | 18.6% |
| 1961 | 25.6% | 24.9% | 23.6% | 22.5% | 22.4% | 35.9% |
| 1962 | -9.8% | -13.4% | -14.4% | -10.0% | -7.6% | 11.9% |
| 1963 | 20.0% | 16.5% | 23.7% | 18.3% | 20.6% | 30.5% |
| 1964 | 15.9% | 14.3% | 13.6% | 12.6% | 18.7% | 22.3% |
| 1965 | 10.2% | 9.8% | 19.0% | 10.7% | 14.2% | 36.9% |
| 1966 | -7.7% | -10.0% | -2.6% | -6.9% | -15.6% | 16.8% |
| 1967 | 20.0% | 22.8% | 28.0% | 25.4% | 19.0% | 28.4% |
| 1968 | 10.3% | 8.1% | 6.7% | 6.8% | 7.7% | 45.6% |
| Cumulative Results | 189.3% | 167.7% | 225.6% | 200.2% | 185.7% | 1403.5% |
| Annual Compounded Rate | 9.3% | 8.6% | 10.3% | 9.6% | 9.1% | 25.3% |
(1) Computed from changes in asset value plus any distributions to holders of record during year.
(2) From 1968 Moody's Bank & Finance Manual for 1957-1967. Estimated for 1968.
It is interesting that after twelve years these four funds (which presently aggregate well over \$5 billion and account for over 10% of the investment company industry) have averaged only a fraction of one percentage point annually better than the Dow.
Some of the so-called “go-go” funds have recently been re-christened “no-go” funds. For example, Gerald Tsai's Manhattan Fund, perhaps the world's best-known aggressive investment vehicle, came in at minus 6.9% for 1968. Many smaller investment entities continued to substantially outperform the general market in 1968, but in nothing like the quantities of 1966 and 1967.
The investment management business, which I used to severely chastise in this section for excessive lethargy, has now swung in many quarters to acute hypertension. One investment manager, representing an organization (with an old established name you would recognize) handling mutual funds aggregating well over \$1 billion, said upon launching a new advisory service in 1968:
“The complexities of national and international economics make money management a full-time job. A good money manager cannot maintain a study of securities on a week-by-week or even a day-by-day basis. Securities must be studied in a minute-by-minute program.”
Wow!
This sort of stuff makes me feel guilty when I go out for a Pepsi. When practiced by large and increasing numbers of highly motivated people with huge amounts of money on a limited quantity of suitable securities, the result becomes highly unpredictable. In some ways it is fascinating to watch and in other ways it is appalling.
Analysis of 1968 Results
All four main categories of our investment operation worked out well in 1968. Our total overall gain of \$40,032,691 was divided as follows:
| Category | Average Investment | Overall Gain |
| Controls | $24,996,998 | $5,886,109 |
| Generals – Private Owner | $16,363,100 | $21,994,736 |
| Generals – Relatively | $8,766,878 | $4,271,825 |
| Undervalued | ||
| Workouts | $18,980,602 | $7,317,128 |
| Miscellaneous, primarily US | $12,744,973 | $839,496 |
| Treasury Bills | ||
| Total Income | $40,309,294 | |
| Less – General Expense,including Interest | $276,603 | |
| Overall Gain | $40,032,691 |
A few caveats, as mentioned in my letter two years ago, are again in order (non-doctoral candidates may proceed to next section):
- An explanation of the various categories listed above was made in the January 18, 1965 letter. If your memory needs refreshing and your favorite newsstand does not have the pocketbook edition. We'll be glad to give you a copy.
- The classifications are not iron clad. Nothing is changed retroactively, but the initial decision as to
category is sometimes arbitrary. Sometimes later classification proves difficult; e.g. a workout that falls through but that I continue to hold for reasons unrelated or only partially related to the original decision (like stubbornness).
-
Percentage returns calculated on the average investment base by category would be significantly understated relative to Partnership percentage returns which are calculated on a beginning investment base. In the foregoing figures, a security purchased by us at 100 on January 1 which appreciated at an even rate to 200 on December 31 would have an average investment of 150 producing a 66-2/3% result contrasted to a 100% result by the customary approach. In other words, the foregoing figures use a monthly average of market values in calculating the average investment.
-
All results are based on a 100% ownership, non-leverage basis. Interest and other general expenses are deducted from total performance and not segregated by category. Expenses directly related to specific investment operations, such as dividends paid on short stock, are deducted by category. When securities are borrowed directly and sold short, the net investment (longs minus shorts) is shown for the applicable category's average investment.
-
The foregoing table has only limited use. The results applicable to each category are dominated by one or two investments. They do not represent a collection of great quantities of stable data (mortality rates of all American males or something of the sort) from which conclusions can be drawn and projections made. Instead, they represent infrequent, non-homogeneous phenomena leading to very tentative suggestions regarding various courses of action and are so used by us.
-
Finally, these calculations are not made with the same loving care we apply to counting the money and are subject to possible clerical or mathematical error since they are not entirely se1f-checking.
Controls
Overall, the controlled companies turned in a decent performance during 1968. Diversified Retailing Company Inc. (80% owned) and Berkshire Hathaway Inc. (70% owned) had combined after-tax earnings of over \$5 million.
Particularly outstanding performances were turned in by Associated Cotton Shops, a subsidiary of DRC run by Ben Rosner, and National Indemnity Company, a subsidiary of B-H run by Jack Ringwalt. Both of these companies earned about 20% on capital employed in their businesses. Among Fortune's “500” (the largest manufacturing entities in the country, starting with General Motors), only 37 companies achieved this figure in 1967, and our boys outshone such mildly better-known (but not better appreciated) companies as IBM, General Electric, General Motors, Procter & Gamble, DuPont, Control Data, Hewlett-Packard, etc...
I still sometimes get comments from partners like: "Say, Berkshire is up four points - that's great!" or "What's happening to us, Berkshire was down three last week?" Market price is irrelevant to us in the valuation of our controlling interests. We valued B-H at 25 at yearend 1967 when the market was about 20 and 31 at yearend 1968 when the market was about 37. We would have done the same thing if the markets had been 15 and 50 respectively. ("Price is what you pay. value is what you get"). We will prosper or suffer in controlled investments in relation to the operating performances of our businesses - we will not attempt to profit by playing various games in the securities markets.
Generals -Private Owner
Over the years this has been our best category, measured by average return, and has also maintained by far the best percentage of profitable transactions. This approach was the way I was taught the business, and it formerly accounted for a large proportion of all our investment ideas. Our total individual profits in this category during the twelve year BPL history are probably fifty times or more our total losses. The cash register really rang on one simple industry idea (implemented in several ways) in this area in 1968. We even received a substantial fee (included in Other Income in the audit) for some work in this field.
Our total investment in this category (which is where I feel by far the greatest certainty regarding consistently decent results) is presently under \$2 million and I have nothing at all in the hopper to bolster this. What came through like the Johnstown flood in 1968 looks more like a leaky faucet in Altoona for 1969.
Generals - Relatively Undervalued
This category produced about two-thirds of the overall gain in 1966 and 1967 combined. I mentioned last year that the great two-year performance here had largely come from one idea. I also said, "We have nothing in this group remotely approaching the size or potential which formerly existed in this investment.” It gives me great pleasure to announce that this statement was absolutely correct. It gives me somewhat less pleasure to announce that it must be repeated this year.
Workouts
This category, which was a disaster in 1967, did well during 1968. Our relatively heavy concentration in just a few situations per year (some of the large arbitrage houses may become involved in fifty or more workouts per annum) gives more variation in yearly results than an across-the-board approach. I feel the average profitability will be as good with our policy and 1968 makes me feel better about that conclusion than 1967 did.
It should again be stated that our results in the Workout area (as well as in other categories) are somewhat understated compared to the more common method of determining results computed on an initial base figure and utilizing borrowed money (which is often a sensible part of the Workout business).
******************************
I can't emphasize too strongly that the quality and quantity of ideas is presently at an all time low - the product of the factors mentioned in my October 9th, 1967 letter, which have largely been intensified since then.
Sometimes I feel we should have a plaque in our office like the one at the headquarters of Texas Instruments in Dallas which reads: “We don't believe in miracles, we rely on them.” It is possible for an old, overweight ball player, whose legs and batting eye are gone, to tag a fast ball on the nose for a pinch-hit home run, but you don't change your line-up because of it.
We have a number of important negatives operating on our future and, while they shouldn't add up to futility, they certainly don't add up to more than an average of quite moderate profitability.
Memorabilia
As one of my older friends says, “Nostalgia just isn't what it used to be.” Let's take a stab at it, anyway.
Buffett Associates, Ltd., the initial predecessor partnership, was formed May 5, 1956 with seven limited partners (four family, three close friends), contributing \$105,000, and the General Partner putting his money where his mouth was by investing \$100. Two additional single-family limited partnerships were formed during 1956, so that on January 1, 1957 combined net assets were \$303,726. During 1957, we had a gain of \$31,615.97, leading to the 10.4% figure shown on page one. During 1968 I would guess that the New York Stock Exchange was open around 1,200 hours, giving us a gain of about \$33,000 per hour (sort of makes you wish they had stayed with the 5-1/2 hour, 5 day week, doesn't it), or roughly the same as the full year gain in 1957.
On January 1, 1962 we consolidated the predecessor limited partnerships moved out of the bedroom and hired our first full-time employees. Net assets at that time were \$7,178,500. From that point to our present net assets of \$104,429,431 we have added one person to the payroll. Since 1963 (Assets \$9,405,400) rent has gone from \$3,947 to \$5,823 (Ben Rosner would never have forgiven me if I had signed a percentage lease) travel from \$3,206 to \$3,603, and dues and subscriptions from \$900 to \$994. If one of Parkinson's Laws is operating, at least the situation hasn't gotten completely out of control.
In making our retrospective survey of our financial assets, our conclusion need not parallel that of Gypsy Rose Lee who opined, when reviewing her physical assets on her fifty-fifth birthday: “I have everything I had twenty years ago - it's just that it's all lower.”
Miscellaneous
Although the investment environment is difficult, the office environment is superb. With Donna, Gladys, Bill and John, we have an organization that functions speedily, efficiently and pleasantly. They are the best.
The office group, along with spouses (one apiece - I still haven't figured out how I should handle that plural) and children have over \$27 million invested in BPL on January 1, 1969. Assorted sizes and shapes of aunts, uncles, parents, in-laws, brothers, sisters and cousins make the BPL membership list read like “Our Crowd” - which, so far as I am concerned, is exactly what it is.
Within a few days, you will receive:
- A tax letter giving you all BPL information needed for your 1968 federal income tax return. This letter is the only item that counts for tax purposes.
- An audit from Peat Marwick. Mitchell & Co. (they have again done an excellent job) for 1968, setting forth the operations and financial position of BPL, as well as your own capital account.
- A letter signed by me setting forth the status of your BPL interest on January 1, 1969. This is identical with the figures developed in the audit.
Let me know if anything in this letter or that occurs during the year needs clarifying. My next letter will be about July 10th, summarizing the first half of this year.
Cordially,
Warren E. Buffett
WEB/glk
巴菲特合伙有限公司
基维特广场610号
奥马哈，内布拉斯加州68131
电话 042-4110
1969年1月22日
我们1968年的业绩
人都会犯错。
1968年初，我觉得BPL的业绩前景比我们历史上任何时候都糟糕。然而，很大程度上要归功于一个简单但靠谱的投资思路恰逢其时（投资思路，就像女人一样，往往比准时更令人兴奋），我们实现了40,032,691美元的整体收益。
当然，各位都拥有足够的理智，不会只看美元数字，而是要求我们相对道指的表现给出交代。我们创下了新高：+58.8%，而道指全年总体收益（含持股期间可获得的分红）为+7.7%。这个结果应该被视为一种反常现象，就像在桥牌局里抓到了十三张黑桃。你叫了大满贯，把它打得毫不费力，把钱收进口袋，然后回到小牌局上去。我们也会有打宕的时候。
下表总结了道指、合伙企业在向普通合伙人分配（超出6%部分的四分之一）之前的业绩，以及有限合伙人的业绩：
| 年份 | 道指整体结果(1) | 合伙企业结果(2) | 有限合伙人结果(3) |
|---|---|---|---|
| 1957 | -8.4% | 10.4% | 9.3% |
| 1958 | 38.5% | 40.9% | 32.2% |
| 1959 | 20.0% | 25.9% | 20.9% |
| 1960 | -6.2% | 22.8% | 18.6% |
| 1961 | 22.4% | 45.9% | 35.9% |
| 1962 | -7.6% | 13.9% | 11.9% |
| 1963 | 20.6% | 38.7% | 30.5% |
| 1964 | 18.7% | 27.8% | 22.3% |
| 1965 | 14.2% | 47.2% | 36.9% |
| 1966 | -15.6% | 20.4% | 16.8% |
| 1967 | 19.0% | 35.9% | 28.4% |
| 1968 | 7.7% | 58.8% | 45.6% |
(1) 基于道指年度价值变动加上当年持有道指可获得的分红。该表包含合伙企业所有完整经营年份。
(2) 1957-1961年为所有前身有限合伙企业在整个年度内扣除所有费用后、但在向合伙人分配或向普通合伙人分配之前的合并结果。
(3) 1957-1961年根据前一列合伙企业结果计算，依据当前合伙协议向普通合伙人进行分配，但扣除有限合伙人每月提款之前。
按累计或复利计算，结果如下：
| 年份 | 道指整体结果 | 合伙企业结果 | 有限合伙人结果 |
|---|---|---|---|
| 1957 | -8.4% | 10.4% | 9.3% |
| 1957 – 58 | 26.9% | 55.6% | 44.5% |
| 1957 – 59 | 52.3% | 95.9% | 74.7% |
| 1957 – 60 | 42.9% | 140.6% | 107.2% |
| 1957 – 61 | 74.9% | 251.0% | 181.6% |
| 1957 – 62 | 61.6% | 299.8% | 215.1% |
| 1957 – 63 | 95.1% | 454.5% | 311.2% |
| 1957 – 64 | 131.3% | 608.7% | 402.9% |
| 1957 – 65 | 164.1% | 943.2% | 588.5% |
| 1957 – 66 | 122.9% | 1156.0% | 704.2% |
| 1957 – 67 | 165.3% | 1606.9% | 932.6% |
| 1957 – 68 | 185.7% | 2610.6% | 1403.5% |
| 年复利率 | 9.1% | 31.6% | 25.3% |
投资公司
下一页是常规表格，列出了两家最大的共同基金（它们从1957年到1966年规模位居前列——现在仍是第二和第三），这两家基金通常采取95%-100%投资于普通股的政策，以及两家最大的多元化封闭式投资公司。
| 年份 | Mass. Inv. Trust (1) | Investors Stock (1) | Lehman (2) | Tri-Cont (2) | 道指 | 有限合伙人 |
|---|---|---|---|---|---|---|
| 1957 | -11.4% | -12.4% | -11.4% | -2.4% | -8.4% | 9.3% |
| 1958 | 42.7% | 47.5% | 40.8% | 33.2% | 38.5% | 32.2% |
| 1959 | 9.0% | 10.3% | 8.1% | 8.4% | 20.0% | 20.9% |
| 1960 | -1.0% | -0.6% | 2.5% | 2.8% | -6.2% | 18.6% |
| 1961 | 25.6% | 24.9% | 23.6% | 22.5% | 22.4% | 35.9% |
| 1962 | -9.8% | -13.4% | -14.4% | -10.0% | -7.6% | 11.9% |
| 1963 | 20.0% | 16.5% | 23.7% | 18.3% | 20.6% | 30.5% |
| 1964 | 15.9% | 14.3% | 13.6% | 12.6% | 18.7% | 22.3% |
| 1965 | 10.2% | 9.8% | 19.0% | 10.7% | 14.2% | 36.9% |
| 1966 | -7.7% | -10.0% | -2.6% | -6.9% | -15.6% | 16.8% |
| 1967 | 20.0% | 22.8% | 28.0% | 25.4% | 19.0% | 28.4% |
| 1968 | 10.3% | 8.1% | 6.7% | 6.8% | 7.7% | 45.6% |
| 累计结果 | 189.3% | 167.7% | 225.6% | 200.2% | 185.7% | 1403.5% |
| 年复利率 | 9.3% | 8.6% | 10.3% | 9.6% | 9.1% | 25.3% |
(1) 根据资产价值变化加上当年对登记持有人的任何分配计算。
(2) 1957-1967年数据来自1968年穆迪银行与金融手册。1968年为估算值。
有趣的是，经过十二年，这四只基金（目前总规模远超50亿美元，占投资公司行业10%以上）平均每年仅比道指好不到一个百分点。
一些所谓的"快进"基金最近被重新命名为"不前"基金。例如，Gerald Tsai的曼哈顿基金——可能是世界上最著名的激进投资工具——1968年收益为-6.9%。许多小型投资实体在1968年继续大幅跑赢大盘，但数量远不及1966年和1967年。
投资管理行业——我曾经在本章节严厉指责其过度懒惰——现在在许多地方已经转向了极度高血压。一家管理着总规模超10亿美元共同基金的组织（其老牌名字你一听就知道）的一位投资经理，在1968年推出一项新的咨询服务时说道：
"国家和国际经济的复杂性使得资金管理成为一项全职工作。一个好的资金经理不能以每周、甚至每天为基础来研究证券。证券必须以每分钟为单位进行研究。"
哇哦！
这种东西让我出去喝瓶百事可乐都感到内疚。当大量且不断增加的高度积极的人带着巨额资金追逐有限数量的合适证券时，结果变得极不可预测。从某些方面看，这很迷人；从另一些方面看，又令人震惊。
1968年业绩分析
1968年，我们投资操作的四大类别都表现不错。我们40,032,691美元的整体总收益细分如下：
| 类别 | 平均投资额 | 整体收益 |
|---|---|---|
| 控制类 | $24,996,998 | $5,886,109 |
| 低估类–私人所有者 | $16,363,100 | $21,994,736 |
| 低估类–相对低估 | $8,766,878 | $4,271,825 |
| 套利类 | $18,980,602 | $7,317,128 |
| 其他，主要是美国国库券 | $12,744,973 | $839,496 |
| 总收入 | $40,309,294 | |
| 减：一般费用（含利息） | $276,603 | |
| 整体收益 | $40,032,691 |
如同两年前我在信中提到的那样，再次需要一些注意事项（非博士候选人可以跳到下一节）：
- 上述各类别的解释已在1965年1月18日的信中给出。如果您的记忆需要刷新，而您最喜欢的报摊没有口袋版，我们很乐意寄一份给您。
- 分类并非一成不变。我们不会追溯调整任何东西，但最初的分类决策有时是主观的。有时后续分类会变得困难；例如，一个套利机会失败，但我由于与最初决策无关或仅部分相关的原因（比如固执）而继续持有。
- 按类别平均投资基础计算的百分比收益率会显著低于按初始投资基础计算的合伙企业百分比收益率。在上面的数字中，一只股票我们1月1日以100买入，均匀上涨至12月31日的200，平均投资额为150，产生66-2/3%的结果，而常规方法的结果是100%。换句话说，上述数字使用市值的月度平均值来计算平均投资额。
- 所有结果均基于100%所有权、无杠杆基础。利息和其他一般费用从总业绩中扣除，不按类别区分。与特定投资操作直接相关的费用，如卖空股票支付的股息，按类别扣除。当直接借入并卖空证券时，净投资（多头减空头）显示在相应类别的平均投资中。
- 上表用途有限。每个类别的结果主要由一两只投资主导。它们不代表大量稳定数据（如全体美国男性的死亡率之类），无法从中得出结论和进行预测。相反，它们代表的是不频繁、非同质的现象，为各种行动方案提供非常初步的线索——我们也是这么用的。
- 最后，这些计算不像我们数钱那样精心，可能由于不完全自检而存在抄写或数学错误。
控制类
总体而言，控制类公司在1968年表现不错。多元化零售公司（持股80%）和伯克希尔·哈撒韦（持股70%）的合并税后利润超过500万美元。
特别突出的是DRC的子公司——由Ben Rosner管理的Associated Cotton Shops，以及B-H的子公司——由Jack Ringwalt管理的国民赔偿公司。这两家公司在其业务中投入资本的回报率约为20%。在《财富》"500强"（美国最大的制造业实体，从通用汽车开始）中，1967年只有37家公司达到这一水平，而我们的伙计们胜过了那些名气稍大（但并未更受赏识）的公司，如IBM、通用电气、通用汽车、宝洁、杜邦、Control Data、惠普等……
我有时仍然会收到合伙人的评论，比如："嘿，伯克希尔涨了四个点——太棒了！"或者"我们怎么了？伯克希尔上周跌了三个点？"在评估我们的控股权时，市场价格与我们无关。我们在1967年底将B-H估值为25，当时市场大约20；1968年底估值为31，当时市场大约37。如果市场分别是15和50，我们也会做同样的事。（"价格是你支付的，价值是你得到的。"）我们在控制类投资中的盈亏将取决于我们企业的经营表现——我们不会试图通过在证券市场上玩各种游戏来获利。
低估类–私人所有者
多年来，按平均回报衡量，这是我们的最佳类别，并且还保持了迄今为止最好的盈利交易比例。这是我学习这门生意的方式，过去它曾占我们所有投资思路的很大一部分。在BPL十二年的历史中，我们在这一类别的总个人利润可能是总亏损的五十倍或更多。1968年，一个简单的行业思路（以多种方式实施）真的让收银机响个不停。我们还为此领域的一些工作收取了可观的费用（包含在审计中的其他收入中）。
我们目前在这一类别（我认为这是获得持续良好业绩确定性最高的领域）的总投资不足200万美元，而且我没有任何东西在酝酿中。1968年曾像约翰斯敦洪水一样涌来的东西，到1969年看起来更像是阿尔图纳的一个漏水龙头。
低估类–相对低估
这个类别在1966年和1967年合计产生了大约三分之二的整体收益。我去年提到，这里两年的出色表现主要来自一个思路。我还说："我们在这一类别中没有任何东西接近这个投资以前拥有的规模或潜力。"我非常高兴地宣布，这个说法绝对正确。让我有点不那么高兴的是，今年必须重复这句话。
套利类
这个类别在1967年是一场灾难，但在1968年表现不错。我们每年相对集中地投资于少数几个机会（一些大型套利机构可能每年参与五十个或更多的套利机会），导致年度结果比全面撒网的方式波动更大。我认为我们的政策会带来同样好的平均盈利能力，而1968年比1967年让我对这个结论感觉更好。
应该再次说明，我们在套利类（以及其他类别）中的结果，与更常见的基于初始基数并利用借入资金（这通常是套利业务的合理部分）计算结果的方ment相比，有所低估。
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我不能过分强调，当前思路的质量和数量处于历史最低点——这是我1967年10月9日信中提到的因素的结果，自那以来这些因素在很大程度上加剧了。
有时我觉得我们应该在办公室里挂一块匾，就像达拉斯德州仪器总部的那块，上面写着："我们不相信奇迹，我们依赖奇迹。"一个年迈、超重的棒球手，腿脚和击球眼都不行了，也还可能恰好击中一个快球打出替补全垒打，但你不能因此改变你的打线。
我们的未来面临许多重要的负面因素，虽然它们不一定会导致毫无成效，但肯定意味着平均而言只能取得相当温和的盈利能力。
纪念品
正如我的一位老朋友所说："怀旧已经不是过去那个样子了。"不过，我们还是试试看。
最初的合伙前身Buffett Associates, Ltd.于1956年5月5日成立，有七位有限合伙人（四位家人，三位密友），出资105,000美元，普通合伙人通过投资100美元来证明其言行一致。1956年又成立了两个单一家庭有限合伙企业，因此到1957年1月1日，合并净资产为303,726美元。1957年，我们获得了31,615.97美元的收益，得出第一页显示的10.4%数字。1968年，我估计纽约证券交易所大约开市1,200小时，我们每小时赚约33,000美元（这让你希望他们保持每周五天、每天五个半小时的交易时间，不是吗？），大约相当于1957年全年的收益。
1962年1月1日，我们合并了前身有限合伙企业，从卧室搬了出来，雇用了第一批全职员工。当时净资产为7,178,500美元。从那时到现在净资产104,429,431美元，我们只增加了一名人手。自1963年（资产9,405,400美元）以来，租金从3,947美元增加到5,823美元（如果签了百分比租金合同，Ben Rosner永远不会原谅我），差旅费从3,206美元增加到3,603美元，会费和订阅费从900美元增加到994美元。如果帕金森定律有一条在起作用，至少情况还没有完全失控。
在回顾我们的金融资产时，我们的结论不必与Gypsy Rose Lee相提并论，她在五十五岁生日时审视自己的身体资产时评论道："我拥有二十年前拥有的一切——只是位置都更低了。"
其他
虽然投资环境困难，但办公室环境极好。有了Donna、Gladys、Bill和John，我们拥有一个快速、高效、愉快的团队。他们是最好的。
办公室团队，连同配偶（每人一个——我还没搞清楚该怎么处理那个复数）和子女，在1969年1月1日拥有超过2700万美元投资于BPL。各种规模和形状的叔伯姑舅、父母公婆、兄弟姐妹和表亲让BPL的成员名单读起来像"我们这群人"——就我而言，这正是它该有的样子。
几天之内，您将收到：
- 一封税务信，提供您1968年联邦所得税申报所需的所有BPL信息。这封信是唯一对纳税有意义的文件。
- 一份来自Peat Marwick, Mitchell & Co.（他们再次做了出色的工作）的1968年审计报告，说明BPL的经营和财务状况，以及您自己的资本账户。
- 一封由我签署的信，说明您1969年1月1日的BPL权益状况。这与审计中得出的数字一致。
如果我信中或年内有任何需要澄清的事情，请告诉我。我的下一封信将在7月10日左右，总结今年上半年的情况。
谨致问候，
Warren E. Buffett
WEB/glk