In the eighth year of the partnership it beats the DOW again by 9%...The partnership returned 28%...The partnership has beaten the DOW every year...The four largest investment companies are Massachusetts Investment Trust, Investors Stock Fund, Lehman Corporation, and Tri-Continental...All four have underperformed the DOW since 1957 by about one percent...The reason is that large investment companies work in a bureaucratic environment and follow the herd in picking and choosing stocks...
Ninety percent of Warren's net worth is in the partnership...Warren states if you cannot handle a 30% drop in the markets and your portfolio, then you should not be in the stock market...
Ninety percent of Warren's net worth is in the partnership...Warren states if you cannot handle a 30% drop in the markets and your portfolio, then you should not be in the stock market...
This year Warren breaks down generals into two categories instead of one...The are generals- private owner basis and generals-relative undervalued...This new category general-private issues has been growing and producing good results....He still has the two other categories of workouts and controls...Warren discusses a 1963 purchase and says this purchase in the workout category has substantially helped 1964 returns...We can only assume it is the purchase of American Express Company...It had a one time fixable problem and Warren backed the truck up and makes a huge purchase...
In 1964 the work-out category lagged in the partnership versus the other categories in the portfolio...
What can we learn:
Warren continues to outperform the DOW...The partnership has never underperformed it since the partnership started...
Warren breaks down the category of generals...Now into private issue and relative undervalued securities...
Work-outs were the worst performers in the partnership portfolio...
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