Warren Buffett Partnership Letter 1969 Summary and his Retirement

In 1969 Warren announces he is closing the partnership...The partnership returned 7% in 1969 while the DOW returned a minus 11%...The partnership was up 29.5% from 1956 through 1969...The partnership earned 20% more annually than the DOW...

Warren is now thirty nine years old...His holdings are worth approximately $25 million dollars...Warren announces his intention to close the partnership and retire...The partnership has been in existence for thirteen years...The stock market is flying high and Warren does not want to be investing when the market continues to make new highs...He tells the partners that there could be a loss of permanent capital in a stock market environment like the current one...He is out of step in this kind of market...

He personally talks about doing something different than the day to day investing money for the partnership...

The partners have three choices to put their money upon liquidation...Warren talks with Bill Ruane, a former classmate of Ben Graham...Bill Ruane was starting the Sequoia Fund and many partners can put their money in this new fund, with his recommendation...Partners can also take cash...A third alternative will be to take the stock of Berkshire Hathaway a publicly traded company and Diversified Retailing, which Warren became a director in 1965...The Buffett Partnership has had a controlling interest in both these stocks...

The old partnership will liquidate their financial holdings, except two...Diversified Retailing (a chain of women's retail stores) and Berkshire Hathaway (a textile company) will be retained by Warren...These companies will basically have three divisions...Textile, insurance, and banking are the three divisions...The insurance company of National Indemnity and Illinois National Bank & Trust Company were bought by Warren through Berkshire Hathaway a few years back...More stock of the Blue Chip Stamp Company would be bought by Warren and Charlie in 1969...They would then have a controlling interest in Blue Chip Stamps...

Warren Buffett Stocks...Besides Diversified Retailing and Berkshire Hathaway, Warren bought the Omaha Sun, a newspaper, as well as a string of weekly newspapers...Also, a printing company, named Blacker Printer was purchased, and a 70% interest in Gateway Underwriting...