Warren Buffet's, Buffett Partnership for the ninth year in a row handily beat the DOW by a whopping 33%...The partnership made 47%...The large investment companies of Massachusetts Investment Trust, Investors Stock, Lehman Corporation, and Tri-Continental have not beat the DOW since 1957 all earning approximately 10% annually since 1957, while the DOW has made 11%...For the first time Warren mentions that size has and will be an issue in getting large annual returns...Warren says this, but continues to beat the DOW and S&P in the future substantially...The extra capital and larger size this year was a positive and allowed the partnership to make large purchases that assisted the return...The partners assets are $43.6 million and grew over $12 million in 1965...
The workout business has slowed down...The generals-private owners has done well in 1965...
It is announced that Warren is purchasing Berkshire Hathaway, a textile company...Warren works with Malcolm G. Chace early in 1965, to buy a large block of Berkshire Hathaway...Malcolm welcomes Warren and the partnership as a large shareholder... The partnership now has controlling interest in Berkshire...Malcolm would remain on the Berkshire Hathaway board until 1992...The company will be ran by Ken Chace (no relation to Malcolm), the textile company's top manager...Warren started purchasing the textile company in 1962, and is a value play, similar to Ben Graham's philosophy...
Warren is candid and announces he made the single biggest investment mistake, since the partnership started, but does not mention the stock by name...
Warren also talks about diversification and how he diversifies less than other investment companies...And how investing 40% in one security might happen, if he has the facts and information correct about the company...We must assume again, this is the large purchase of American Express which he purchased when they had a problem...He tells his readers he does not believe in Noah Ark investing of having two of everything...
Warren Buffett stocks: He does not mention anything specifically about American Express...
Five companies accounted for the bulk of 1965 returns...
Warren also announce he personally owns Mid Continent Tab Card, a local company...
What can we learn:
Warren beats the DOW handily and the ninth year in a row...
Warren easily beats the other large investment firms...
Warren again takes a big bet and defies conventional diversification...
Warren's portfolio is large, but he takes big bets and five companies make the bulk of his returns for 1965...
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