Buffett Letter: 1961 semi-annual 2
- Buffett talks about him not losing as much as the index in the bad years and appearing average in good years. This time he gives a numerical target. He says that for every 1% drop in the Dow he should lose only 1/2%. That is an ambitious target. Roughly his fund should have 0.5 portfolio beta?
- He does perform fabulously well. DJIA is down 21.7% but his partnership is down only 7.5%.
- 6 month or even a year is too short a time frame to judge investor performance he says again.
- Buffett says that the Dow is no pushover. Whenever people will beat the Dow it will most likely be a poorer performance than a superior one he says. This is true today too seeing most active fund managers failing to beat the marquee index.
- Not much content in terms of investment knowledge in this letter. I think there should be only letter a year.