Here is the full text of Buffett's letter to shareholders in 1969:
Part 1
Our partnership life ended on a symmetrical note. I consider 1957 and 1969, our beginning and terminal years, to have been the two most difficult twelve - month calendar periods that we faced during our operating history. It was fortunate that our partnership symmetry went no further than this — an ending capital equal to our beginning capital, despite a classical aesthetic balance, might not have produced total fulfillment.
Therefore, before year - end, 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:
My best guess is that we will break even in 1969 before monthly payments to partners, taking into account the significant increase in the value of the controlled companies (all partners other than myself have the option to convert to cash). This result would not be changed even if the market advanced sharply from now until year - end, as we do not have any significant positions with significant 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 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.
Part 2
This letter is to supply you with some published information relating to our two controlled companies (and their four principal operating components), as well as to give you my general views regarding their operations. My comments are not designed to give you loads of detailed information prospectus - style, but only my general "slant" as I see the businesses at this time.
By the end of the year, Buffett Partnership Ltd. will hold 800,000 shares out of the 1,000,000 outstanding shares of Diversified Retailing Company, Inc. (DRC). First Manhattan Company and Wheeler, Munger & Company will each hold 100,000 shares. On December 1, DRC sold its entire interest in Hochschild, Kohn & Company (H - K) to Supermarkets General Corp. for $5,045,205 in cash, plus two non - interest - bearing notes: one for $2 million due February 1, 1970, and the other for $4.54 million due February 1, 1971. The present value of these notes is approximately $6 million, so DRC received about $11 million from the sale.
My next letter will be in late December, summarizing the questions and answers regarding DRC and B - H, and also supplying a final estimate on the January 5th cash distribution.
Various questions have been asked pursuant to the last letter:
- If we are not getting a good return on the textile business of Berkshire Hathaway Inc., why do we continue to operate it?
Pretty much for the reasons outlined in my letter. I don't want to liquidate a business employing 1,100 people when the management has worked hard to improve their relative industry position, with reasonable results, and as long as the business does not require substantial additional capital investment. I have no desire to trade severe human dislocations for a few percentage points additional return per annum. Obviously, if we faced material compulsory additional investment or sustained operating losses, the decision might have to be different, but I don't anticipate such alternatives. - How large is our investment in Sun Newspapers, etc., and do we intend to expand in the newspaper, radio and TV business?
The combined investment in Sun, Blacker Printing and Gateway Underwriters is a little over $1 per share of Berkshire Hathaway, and earns something less than 10 cents per share. We have no particular plans to expand in the communication field. - What does Gateway Underwriters do?
Gateway Underwriters serves primarily as a general agent for National Indemnity Company in the state of Missouri. - Are there good "second men" to take over from the men running the three excellent operating businesses?
In any company where the founder and chief driving force behind the enterprise is still active, it is very difficult to evaluate "second men". The only real way to see how someone is going to do when running a company is to let him run it. Some of our businesses have certainly been more "one - man shows" than the typical corporation. Subject to the foregoing caveat, I think that we do have some good “second men” coming along.
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巴菲特1968年致股东的信（中文版）
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