BUFFETT PARTNERSHIP. LTD.610 KIEWIT PLAZAOMAHA, NEBRASKA 68131TELEPHONE 042-4110

May 29th, 1969

To My Partners:

About eighteen months ago I wrote to you regarding changed environmental and personal factors causing me to modify our future performance objectives.

The investing environment I discussed at that time (and on which I have commented in various other letters has generally become more negative and frustrating as time has passed. Maybe I am merely suffering from a lack of mental flexibility. (One observer commenting on security analysts over forty stated: “They know too many things that are no longer true.”)

However, it seems to me that: (1) opportunities for investment that are open to the analyst who stresses quantitative factors have virtually disappeared, after rather steadily drying up over the past twenty years; (2) our \$100 million of assets further eliminates a large portion of this seemingly barren investment world, since commitments of less than about \$3 million cannot have a real impact on our overall performance, and this virtually rules out companies with less than about \$100 million of common stock at market value; and (3) a swelling interest in investment performance has created an increasingly short-term oriented and (in my opinion) more speculative market.

The October 9th, 1967 letter stated that personal considerations were the most important factor among those causing me to modify our objectives. I expressed a desire to be relieved of the (self-imposed) necessity of focusing 100% on BPL. I have flunked this test completely during the last eighteen months. The letter said: I hope limited objectives will make for more limited effort. It hasn't worked out that way. As long as I am “on stage”, publishing a regular record and assuming responsibility for management of what amounts to virtually 100% of the net worth of many partners, I will never be able to put sustained effort into any non-BPL activity. If I am going to participate publicly. I can't help being competitive. I know I don't want to be totally occupied with out-pacing an investment rabbit all my life. The only way to slow down is to stop.

Therefore, before yearend. I intend to give all limited partners the required formal notice of my intention to retire. There are, of course, a number of tax and legal problems in connection with liquidating the Partnership, but overall, I am concerned with working out a plan that attains the following objectives:

1. The most important item is that I have an alternative regarding money management to suggest to the many partners who do not want to handle this themselves. Some partners of course, have alternatives of their own in which they have confidence and find quite acceptable. To the others, however, I will not hand over their money with a "good luck". I intend to suggest an alternative money manager to whom I will entrust funds of my relatives and others for whom I have lifetime financial responsibility. This manager has integrity and ability and will probably perform as well or better than I would in the future (although nowhere close to what he or I have achieved in the past). He will be available to any partner, so that no minimum size for accounts will cause any of you a problem. I intend, in the future, to keep in general touch with what he is doing, but only on an infrequent basis with any advice on my part largely limited to a negative type.

2. I want all partners to have the option of receiving cash and possibly readily marketable securities (there will probably be only one where this will apply) where I like both the prospects and price but which partners will be able to freely convert to cash if they wish.

3. However, I also want all partners to have the option of maintaining their proportional interests in our two controlled companies (Diversified Retailing Company Inc. and Berkshire Hathaway Inc.) and one other small "restricted" holding. Because these securities will be valued unilaterally by me at fair value, I feel it is essential that, if you wish, you can maintain your proportionate interest at such valuation.

However, these securities are not freely marketable (various SEC restrictions apply to “control” stock and non-registered stock) and they will probably be both non-transferable and non-income -producing for a considerable period of time. Therefore, I want you to be able to go either way in our liquidation - either stick with the restricted securities or take cash equivalent. I strongly like all of the people running our controlled businesses (joined now by the Illinois National Bank and Trust Company of Rockford, Illinois, a \$100 million plus, extremely well-run bank, purchased by Berkshire Hathaway earlier this year), and want the relationship to be life long. I certainly have no desire to sell a good controlled business run by people I like and admire, merely to obtain a fancy price. However, specific conditions may cause the sale of one operating unit at some point.

I believe we will have a liquidation program which will accomplish the above objectives. Our activities in this regard should cause no change in your tax planning for 1969.

One final objective, I would like very much to achieve (but which just isn't going to happen) is to go out with a bang. I hate to end with a poor year, but we are going to have one in 1969. My best guess is that at yearend, allowing for a substantial increase in value of controlled companies (against which all partners except me will have the option of taking cash), we will show a breakeven result for 1969 before any monthly payments to partners. This will be true even if the market should advance substantially between now and yearend, since we will not be in any important position which will expose us to much upside potential.

Our experience in workouts this year has been atrocious - during this period I have felt like the bird that inadvertently flew into the middle of a badminton game. We are not alone in such experience, but it came at a time when we were toward the upper limit of what has been our historical range of percentage commitment in this category.

Documenting one's boners is unpleasant business. I find "selective reporting" even more distasteful. Our poor experience this year is 100% my fault. It did not reflect bad luck, but rather an improper assessment of a very fast-developing governmental trend. Paradoxically, I have long believed the government should have been doing (in terms of the problem attacked – not necessarily the means utilized) what it finally did - in other words, on an overall basis, I believe the general goal of the activity which has cost us substantial money is socially desirable and have so preached for some time. Nevertheless, I didn't think it would happen. I never believe in mixing what I think should happen (socially) with what I think will happen in making decisions - in this case, we would be some millions better off if I had.

Quite frankly, in spite of any factors set forth on the earlier pages. I would continue to operate the Partnership in 1970, or even 1971, if I had some really first class ideas. Not because I want to, but simply because I would so much rather end with a good year than a poor one. However. I just don't see anything available that gives any reasonable hope of delivering such a good year and I have no desire to grope around, hoping to "get lucky" with other people's money. I am not attuned to this market environment and I don't want to spoil a decent record by trying to play a game I don't understand just so I can go out a hero.

Therefore, we will be liquidating holdings throughout the year, working toward a residual of the controlled companies, the one "investment letter" security, the one marketable security with favorable long-term prospects, and the miscellaneous "stubs", etc. of small total value which will take several years to clean up in the Workout category.

I have written this letter a little early in lieu of the mid-year letter. Once I made a decision, I wanted you to know. I also wanted to be available in Omaha for a period after you received this letter to clear up anything that may be confusing in it. In July, I expect to be in California.

Some of you are going to ask, "What do you plan to do?" I don't have an answer to that question. I do know that when I am 60, I should be attempting to achieve different personal goals than those which had priority at age 20. Therefore, unless I now divorce myself from the activity that has consumed virtually all of my time and energies during the first eighteen years of my adult life, I am unlikely to develop activities that will be appropriate to new circumstances in subsequent years.

We will have a letter out in the Fall, probably October, elaborating on the liquidation procedure, the investment advisor suggestion, etc…

Cordially,

Warren E. Buffett

WEB/glk

BUFFETT PARTNERSHIP. LTD.

610 KIEWIT PLAZA
OMAHA, NEBRASKA 68131
TELEPHONE 042-4110

1969年5月29日

致各位合伙人：

大约十八个月前，我曾致信各位，谈到环境因素和个人因素的变化，这促使我调整了我们未来的业绩目标。

当时我论述的投资环境（后来我在其他多封信中也谈过），随着时间推移，变得日益负面和令人沮丧。或许我只是患上了思维僵化症。（一位观察者在评论四十岁以上的证券分析师时说：“他们知道的太多事情已经不再正确了。”）

尽管如此，在我看来：（1）过去二十年里，强调定量因素的分析师所能利用的投资机会几乎是在持续枯竭，现在已基本消失；（2）我们1亿美元的资产规模，进一步排除了这个本就贫瘠的投资世界里很大一部分——因为低于约300万美元的投资额不可能对我们的整体业绩产生实质影响，而这几乎排斥了所有普通股市值低于约1亿美元的公司；（3）对投资业绩日益高涨的热情，催生了一个越来越短期导向、且（在我看来）越来越投机性的市场。

1967年10月9日的信中提到，个人因素是我调整目标的最重要原因。当时我表达了希望卸下（自我强加的）必须100%专注于BPL的负担。但在过去十八个月里，这个测验我完全没通过。那封信说：我希望有限的目标能带来有限的投入。结果并非如此。只要我还“在台上”，定期公布记录，并对许多合伙人几乎100%净资产的基金管理承担责任，我就永远无法将持续的努力投入任何BPL以外的活动。如果我还要公开参与，我就没法不保持竞争心态。我知道自己不想一辈子都忙着去追赶投资场上那只兔子。放慢脚步的唯一办法就是停下来。

因此，今年年底前，我打算向所有有限合伙人发出所需的正式通知，宣告我的退休意向。当然，清算合伙企业有一系列税务和法律问题，但总体而言，我关心的是制定一个能达到以下目标的方案：

1. 最重要的一点是，我要为那些不想自己打理资金的众多合伙人推荐一个替代的基金管理人。当然，有些合伙人自己有信赖且觉得不错的替代方案。但对于其他人，我不会把钱交给他们，只说一句“祝你好运”。我打算推荐一位替代的基金经理，我会把我和我终身负有财务责任的亲属的资金也托付给他。这位经理既正直又有能力，未来表现很可能不亚于我，甚至更好（尽管远不及他或我过去取得的成绩）。任何合伙人都可以找他，账户规模没有最低限制，不会给任何人造成麻烦。我打算今后大体上留意他的动向，但只是偶尔关注，我的建议也主要限于否定性的意见。

2. 我希望所有合伙人都有权选择收取现金，以及可能一些易于变现的证券（可能只有一只适用这种情况）——这些证券我看好其前景和价格，但合伙人如果愿意，也可以自由将它们换成现金。

3. 此外，我也希望所有合伙人有权保留在我们两家控股公司（Diversified Retailing Company Inc. 和 Berkshire Hathaway Inc.）以及另一只小型“受限”持股中的比例权益。由于这些证券将由我单方面按公允价值估值，我认为至关重要的是，如果你愿意，你可以按这个估值保留你的比例权益。

但是，这些证券并非自由流通（各种SEC规定适用于“控制权”股票和非注册股票），并且在相当长一段时间内可能既不可转让也不产生收入。因此，我希望你们在清算过程中能够任意选择——要么持有受限证券，要么领取等值现金。我非常喜欢我们控股企业的所有管理者（今年早些时候Berkshire Hathaway收购了伊利诺伊州罗克福德市的伊利诺伊国民银行与信托公司，这是一家管理极其出色、规模超过1亿美元的银行），我希望这种关系能维持终身。我当然毫无兴趣仅仅为了得到一个好价钱，就卖掉一家由我喜欢和钦佩的人经营的好企业。但特定情况可能会在某个时点导致出售某个运营单元。

我相信我们将制定一个清算方案，实现上述目标。我们在这方面的活动不应影响你1969年的税务规划。

最后一个我特别希望实现（但就是实现不了）的目标，是以一声巨响退场。我讨厌以糟糕的一年收尾，但1969年我们即将迎来一个糟糕的年份。我最好的猜测是：到年底，考虑到控股公司价值的大幅增长（我以外的所有合伙人都可以选择换成现金），1969年在扣除任何每月向合伙人支付的款项之前，我们的业绩将大致盈亏平衡。即使从现在到年底市场大幅上涨，情况也是如此，因为我们不会持有任何重要的、能带来很大上行潜力的头寸。

今年我们在套利类投资上的经历糟糕透顶——这段时间我感觉自己就像一只无意中飞进了羽毛球比赛场地的鸟。我们的遭遇并非孤例，但发生在这个时候，我们在这类投资上的比例恰好处于历史区间上限附近。

记录自己的蠢事可不是什么愉快的差事。我甚至觉得“选择性报告”更令人反感。今年糟糕的经历100%是我的错。这反映的不是运气不好，而是对一个发展极为迅速的政府趋势的错误判断。矛盾的是，我长期以来一直认为政府应该做它最终做了的事（就所针对的问题而言——不一定指采用的手段）——换句话说，总体而言，我认为那个让我们损失了大笔钱的活动，其总体目标是社会所期望的，而且我长期以来一直这样宣扬。尽管如此，我没想到它真的会发生。在做决策时，我从不相信要把我认为应该发生的事（从社会角度）和我认为将会发生的事混为一谈——这次，如果我把两者混在一起，我们就会多赚几百万美元。

坦率地说，尽管前面列出了种种因素，如果我有一些真正第一流的投资想法，我还是会在1970年甚至1971年继续经营合伙企业。不是因为我想干，而纯粹是因为我宁愿以好年份而非差年份收场。然而，我看不到任何能带来合理希望取得好业绩的机会，我也不想四处摸索，指望用别人的钱“碰运气”。我不适应这个市场环境，我不想仅仅为了能像个英雄一样退场，就去玩一个我不懂的游戏，从而毁掉一个体面的过往记录。

因此，我们将在全年逐步清算持仓，最终将剩下控股公司、一只“投资函”证券（注：私募发行受限证券）、一只具有有利长期前景的可交易证券，以及套利类投资中价值总额较小、需要几年才能清理完毕的各种零散残余。

这封信我提早写了，以替代年中信。一旦我做了决定，我希望你们能尽快知道。我也希望你们收到这封信后，我能有一段时间待在奥马哈，以便澄清信中可能让你们困惑的任何内容。七月份我打算去加利福尼亚。

你们当中有些人会问：“你打算做什么？”我对这个问题没有答案。但我知道，当我60岁时，我应该追求与20岁时不同的个人目标。因此，除非我现在就与自己成年后前十八年几乎耗尽所有时间和精力的活动彻底分手，否则我很难在后续岁月中发展出适合新环境的活动。

我们将在秋季，大概是十月份，再发出一封信，详细说明清算程序、投资顾问建议等。

此致

Warren E. Buffett

WEB/glk