๐๐ผ๐ ๐๐ผ ๐บ๐ฎ๐ธ๐ฒ ๐ฑ๐ฌ% ๐ฎ ๐๐ฒ๐ฎ๐ฟ ๐ฎ๐ฐ๐ฐ๐ผ๐ฟ๐ฑ๐ถ๐ป๐ด ๐๐ผ ๐ช๐ฎ๐ฟ๐ฟ๐ฒ๐ป ๐๐๐ณ๐ณ๐ฒ๐๐
- Ishfaaq Peerally
- Oct 9, 2023
- 1 min read
I recently took a deep dive into Warren Buffett's early partnership letters, a resource that's often overshadowed by his more famous Berkshire Hathaway letters $BRK.B Trust me, these early letters are a goldmine of wisdom, especially for those of us who are still building our investment careers. ๐
๐๐๐ ๐๐ค๐ช๐ง ๐พ๐๐ฉ๐๐๐ค๐ง๐๐๐จ ๐ค๐ ๐๐ฃ๐ซ๐๐จ๐ฉ๐ข๐๐ฃ๐ฉ๐จ
Buffett had a unique way of categorizing his investments into four distinct buckets:
1. Controls: Companies he could gain full control over.
2. Workouts: Special situations like mergers and acquisitions.
3. Private Owner Generals: Deep value investments evaluated as if buying the entire company.
4. Undervalued Generals: Stocks trading below their intrinsic value but not deep value.
๐๐ค๐ฌ ๐๐๐ ๐๐ ๐๐๐๐๐๐ซ๐ ๐๐ฃ๐ฃ๐ช๐๐ก ๐ง๐๐ฉ๐ช๐ง๐ฃ๐จ ๐ค๐ ๐ฏ๐ฎ%?
Often the workouts and controls diminished the returns but with the generals he could achieve well over 50%.
The secret lies in a 1968 letter:
https://youtu.be/4R1hAbL1gMI?si=N5Jql7E3nnkTqDs2
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