Rising markets make outperformance harder
“I have always pointed out, however, that gaining an edge on the Dow is more difficult for us in advancing markets than in static or declining ones.”
Investing
Warren Buffett's July 1964 letter to Buffett Partnership partners, one of the letters in Buffett Partnership Letters, 1957–1970.
Buying is most of the business
“[Satisfactory buying] is of particular satisfaction to me since I consider the buying end to be about 90% of this business.”
Patient buying pays off either way
“[Patiently buying these securities] should usually result in either appreciation of market prices from external factors or the acquisition by us of a controlling position in a business at a bargain price. Either alternative suits me.”
Paid managers struggle against the index
“[Cumulative results] continue to show that the most highly paid and respected investment management has difficulty matching the performance of an unmanaged index of blue chip stocks.”
No credit for the market's rise
“When the water (the market) rises, the duck rises; when it falls, back goes the duck. SPCA or no SPCA, I think the duck can only take the credit (or blame) for his own activities.”
Study your own results like investments
“We feel it is essential that investors and investment managements establish standards of performance and, regularly and objectively, study their own results just as carefully as they study their investments.”
Keeping the same yardstick
“We started out with a 36-inch yardstick and we'll keep it that way. If we don't measure up, we won't change yardsticks.”
Yardsticks would improve investment management
“In my opinion, the entire field of investment management, involving hundreds of billions of dollars, would be more satisfactorily conducted if everyone had a good yardstick for measurement of ability and sensibly applied it.”
Probabilities, not taxes, drive decisions
“We do not play any games to either accelerate or defer taxes. We make investment decisions based on our evaluation of the most profitable combination of probabilities.”