In his 1968 Buffett Partnership Letter, Warren Buffett explained why it is possible to become fiscally flabby through a steady diet of speculative bonbons. Here’s an excerpt from the letter:
Last year I said:
“A few mutual funds and some private investment operations have compiled records vastly superior to the Dow and, in some cases, substantially superior to Buffett Partnership, Ltd. Their investment techniques are usually very dissimilar to ours and not within my capabilities.”
In 1967 this condition intensified. Many investment organizations performed substantially better than BPL, with gains ranging to over 100%. Because of these spectacular results, money, talent and energy are converging in a maximum effort for the achievement of large and quick stock market profits.
It looks to me like greatly intensified speculation with concomitant risks -but many of the advocates insist otherwise.
My mentor, Ben Graham, used to say. “Speculation is neither illegal, immoral nor fattening (financially).” During the past year, it was possible to become fiscally flabby through a steady diet of speculative bonbons.
We continue to eat oatmeal but if indigestion should set in generally, it is unrealistic to expect that we won’t have some discomfort.
You can read the entire letter here:
Buffett Partnership Letter 1968
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