No attempt to guess the market's course
“While it would be very nice to be 100% in generals in advancing markets and 100% in work-outs in declining markets, I make no attempt to guess the course of the stock market in such a manner.”
Business
Top advisers struggle to match an index
“The results continue to show that the most highly paid and respected investment advice has difficulty matching the performance of an unmanaged index of blue-chip stocks.”
Partnership exists to beat average compounding
“Our partnership's fundamental reason for existence is to compound funds at a better-than-average rate with less exposure to long-term loss of capital than the above investment media.”
Sustained underperformance would close the partnership
“We can and do say that if we don't achieve [better-than-average compounding] over any reasonable period excluding an extensive speculative boom, we will cease operation.”
Net worth subtracts the tax on sale
“My net worth is the market value of holdings less the tax payable upon sale.”
After-tax compounding guides investment decisions
“Investment decisions should be made on the basis of the most probable compounding of after-tax net worth with minimum risk.”