diff --git a/bpl/1962a/1-in/bpl-1962a-letter.txt b/bpl/1962a/1-in/bpl-1962a-letter.txt new file mode 100644 index 0000000..ec6f146 --- /dev/null +++ b/bpl/1962a/1-in/bpl-1962a-letter.txt @@ -0,0 +1,205 @@ +BUFFETT PARTNERSHIP, LTD. + +810 KIEWIT PLAZA + +OMAHA 31, NEBRASKA + +July 6, 1962 + +A Reminder: + +In my letter of January 24, 1962 reporting on 1961, I inserted a section entitled. "And a Prediction." While I +have no desire to inflict cruel and unusual punishment upon my readers, nevertheless, a reprinting of that +section, in its entirety, may be worthwhile: + +And a Prediction + +Regular readers (I may be flattering myself) will feel I have left the tracks when I start talking about +predictions. This is one thing from which I have always shied away and I still do in the normal sense. + +I am certainly not going to predict what general business or the stock market are going to do in the next +year or two since I don't have the faintest idea. + +I think you can be quite sure that over the next ten years there are going to be a few years when the +general market is plus 20% or 25%, a few when it is minus on the same order, and a majority when it is +in between. I haven't any notion as to the sequence in which these will occur, nor do I think it is of any +great importance for the long-term investor. + +Over any long period of years, I think it likely that the Dow will probably produce something like 5% to +7% per year compounded from a combination of dividends and market value gain. Despite the +experience of recent years, anyone expecting substantially better than that from the general market +probably faces disappointment. + +Our job is to pile up yearly advantages over the performance of the Dow without worrying too much +about whether the absolute results in a given year are a plus or a minus. I would consider a year in +which we were down 15% and the Dow declined 25% to be much superior to a year when both the +partnership and the Dow advanced 20%. I have stressed this point in talking with partners and have +watched them nod their heads with varying degrees of enthusiasm. + +It is most important to me that you fully understand my reasoning in this regard and agree with me not +only in your cerebral regions, but also down in the pit of your stomach. + +For the reasons outlined in my method of operation, our best years relative to the Dow are likely to be in +declining or static markets. Therefore, the advantage we seek will probably come in sharply varying +amounts. There are bound to be years when we are surpassed by the Dow, but if over a long period we +can average ten percentage points per year better than it, I will feel the results have been satisfactory. + +Specifically, if the market should be down 35% or 40% in a year (and I feel this has a high probability +of occurring one year in the next ten--no one knows which one), we should be down only 15% or 20%. +If it is more or less unchanged during the year, we would hope to be up about ten percentage points. If it +is up 20% or more, we would struggle to be up as much. The consequence of performance such as this +over a period of years would mean that if the Dow produces a 5% to 7% per year over-all gain +compounded, I would hope our results might be 15% to 17% per year. + +The above expectations may sound somewhat rash, and there is no question but that they may appear +very much so when viewed from the vantage point of 1965 or 1970. It may turn out that I am +completely wrong. However, I feel the partners are certainly entitled to know what I am thinking in this +regard even though the nature of the business is such as to introduce a high probability of error in such +expectations. In anyone year, the variations may be quite substantial. This happened in 1961, but +fortunately the variation was on the pleasant side. They won't all be! + +The First Half of 1962: + +Between yearend 1961 and June 30, 1962 the Dow declined from 731.14 to 561.28. If one had owned the Dow +during this period, dividends of approximately $11.00 would have been received so that overall a loss of 21.7% +would have been the result of investing in the Dow. For the statistical minded, Appendix A gives the results of +the Dow by years since formation of the predecessor partnerships. + +As stated above, a declining Dow gives us our chance to shine and pile up the percentage advantages which, +coupled with only an average performance during advancing markets, will give us quite satisfactory long-term +results. Our target is an approximately 1/2% decline for each 1% decline in the Dow and if achieved, means we +have a considerably more conservative vehicle for investment in stocks than practically any alternative. + +As outlined in Appendix B, showing combined predecessor partnership results, during the first half of 1962 we +had one of the best periods in our history, achieving a minus 7.5% result before payments to partners, compared +to the minus 21.7% overall result on the Dow. This 14.2 percentage points advantage can be expected to widen +during the second half if the decline in the general market continues, but will probably narrow should the market +turn upward. Please keep in mind my continuing admonition that six-months' or even one-year's results are not +to be taken too seriously. Short periods of measurement exaggerate chance fluctuations in performance. While +circumstances contributed to an unusually good first half, there are bound to be periods when we do relatively +poorly. The figures for our performance involve no change in the valuation of our controlling interest in +Dempster Mill Manufacturing Company, although developments in recent months point toward a probable +higher realization. + +Investment Companies during the First Half + +Past letters have stressed our belief that the Dow is no pushover as a yardstick for investment performance. To +the extent that funds are invested in common stocks, whether the manner of investment be through investment +companies, investment counselors, bank trust departments, or do-it-yourself, our belief is that the overwhelming +majority will achieve results roughly comparable to the Dow. Our opinion is that the deviations from the Dow +are much more likely to be toward a poorer performance than a superior one. + +To illustrate this point, we have continually measured the Dow and limited partners' results against the two +largest open-end investment companies (mutual funds) following a program of common stock investment and +the two largest closed-end investment companies. The tabulation in Appendix C shows the five -years' results, +and you will note the figures are extraordinarily close to those of the Dow. These companies have total assets of +about $3.5 billion. + +In the interest of getting this letter out promptly, we are mailing it before results are available for the closed-end +companies. However, the two mutual funds both did poorer than the Dow, with Massachusetts Investors Trust +having a minus 23% overall performance, and Investors Stock Fund realizing a minus 25.4%. This is not +unusual as witness the lead article in the WALL STREET JOURNAL of June 13, 1962 headed "Funds vs. +Market.” Of the 17 large common stock funds studied, everyone had a record poorer than the Dow from the +peak on the Dow of 734, to the date of the article, although in some cases the margin of inferiority was minor. + +Particularly hard hit in the first half were the so-called “growth” funds which, almost without exception, were +down considerably more than the Dow. The three large "growth" (the quotation marks are more applicable now) +funds with the best record in the preceding few years, Fidelity Capital Fund, Putnam Growth Fund, and +Wellington Equity Fund averaged an overall minus 32.3% for the first half. It is only fair to point out that +because of their excellent records in 1959-61, their overall performance to date is still better than average, as it +may well be in the future. Ironically, however, this earlier superior performance had caused such a rush of new +investors to come to them that the poor performance this year was experienced by very many more holders than +enjoyed the excellent performance of earlier years. This experience tends to confirm my hypothesis that +investment performance must be judged over a period of time with such a period including both advancing and +declining markets. There will continue to be both; a point perhaps better understood now than six months ago. + +In outlining the results of investment companies, I do so not because we operate in a manner comparable to +them or because our investments are similar to theirs. It is done because such funds represent a public batting +average of professional, highly-paid investment management handling a very significant $20 billion of +securities. Such management, I believe, is typical of management handling even larger sums. As an alternative +to an interest in the partnership, I believe it reasonable to assume that many partners would have investments +managed similarly. + +Asset Values: + +The above calculations of results are before allocation to the General Partner and monthly payments to partners. +Of course, whenever the overall results for the year are not plus 6% on a market value basis (with deficiencies +carried forward) there is no allocation to the General Partner. Therefore, non-withdrawing partners have had a +decrease in their market value equity during the first six months of 7.5% and partners who have withdrawn at +the rate of 6% per annum have had a decrease in their market value equity during the first half of 10.5%. Should +our results for the year be less than plus 6% (and unless there should be a material advance in the Dow, this is +very probable) partners receiving monthly payments will have a decrease in their market value equity at +December 31, 1962. This means that monthly payments at 6% on this new market equity next year will be on a +proportionately reduced basis. For example, if our results were an overall minus 7% for the year, a partner +receiving monthly payments who had a market value interest of $100,000 on January 1, 1962 would have an +equity at December 31, 1962 of $87,000. This reduction would arise from the minus 7% result, or $7, 000 plus +monthly payments of $500 for an additional $6,000. Thus, with $87,000 of market equity on January 1, 1963, +monthly payments next year would be $435.00. + +None of the above, of course, has any applicability to advance payments received during 1962 which do not +participate in profits or losses, but earn a straight 6%. + +APPENDIX A + +DOW-JONES INDUSTRIAL AVERAGE + +[TABLE] +Year & Closing Dow & Change for Year & Dow Dividend Overall & Result from Dow & Percentage Result +1956 499.47 -- -- -- -- +1957 435.69 -63.78 21.61 -42.17 -8.4% +1958 583.65 147.96 20.00 167.96 38.5% +1959 679.36 95.71 20.74 116.45 20.0% +1960 615.89 63.47 21.36 42.11 -6.2% +1961 731.14 115.25 22.61 137.86 22.4% +6/30/62 561.28 169.86 11.00* -158.86 -21.7% +[/TABLE] + +*Estimated + +APPENDIX B +PARTNERSHIP PERFORMANCE + +[TABLE] +Year & Partnership Result (1) & Limited Partners’ Results (2) +1957 10.4% 9.3% +1958 40.9% 32.2% +1959 25.9% 20.9% +1960 22.8% 18.6% +1961 45.9% 35.9% +6/30/62 -7.5% -7.5% +[/TABLE] + +(1) For 1957-61 consists of combined results of all predecessor limited partnerships operating throughout entire +year after all expenses but before distributions to partners or allocations to the general partners. +(2) For 1957-61 computed on basis of preceding column of partnership results allowing for allocation to general +partner based upon present partnership agreement. + +APPENDIX C + +YEARLY RESULTS + +[TABLE] +Year & Mass. Inv. Trust (1) & Investors Stock (1) & Lehman (2) & Tri-Cont (2) +1957 -11.4% -12.4% -11.4% -2.4% +1958 42.7% 47.5% 40.8% 33.2% +1959 9.0% 10.3% 8.1% 8.4% +1960 -1.0% -0.6% 2.5% 2.8% +1961 25.6% 24.9% 23.6% 22.5% +6/30/92 23.0% -25.4% N.A. N.A. +[/TABLE] + +(1) Computed from changes in asset value plus any distributions to holders of record during year. +(2) From Moody's Bank & Finance Manual - 1962. + +CUMULATIVE RESULTS + +[TABLE] +Years & Mass Inv Trust & Investors Stock & Lehman & Tri-Cont & Dow & Limited Partners +1957 -11.4% -12.4% -11.4% -2.4% -8.4% 9.3% +1957-58 26.4% 29.2% 24.7% 30.0% 26.9% 44.5% +1957-59 37.8% 42.5% 34.8% 40.9% 52.3% 74.7% +1957-60 36.4% 41.6% 38.2% 44.8% 42.9% 107.2 +1957-61 71.4% 76.9% 70.8% 77.4% 74.9% 181.6 +1957-6/30/62 31.9% 32.0% N.A. N.A. 37.0% 160.5% +[/TABLE] + diff --git a/bpl/1962a/bpl-1962a.mp3 b/bpl/1962a/bpl-1962a.mp3 new file mode 100644 index 0000000..b744a42 Binary files /dev/null and b/bpl/1962a/bpl-1962a.mp3 differ diff --git a/bpl/1962a/inputs-bpl-1962a.txt b/bpl/1962a/inputs-bpl-1962a.txt new file mode 100644 index 0000000..1ba4062 --- /dev/null +++ b/bpl/1962a/inputs-bpl-1962a.txt @@ -0,0 +1,157 @@ +file 3-wavs/output-000.wav' +file 3-wavs/output-001.wav' +file 3-wavs/output-002.wav' +file 3-wavs/output-003.wav' +file 3-wavs/output-004.wav' +file 3-wavs/output-005.wav' +file 3-wavs/output-006.wav' +file 3-wavs/output-007.wav' +file 3-wavs/output-008.wav' +file 3-wavs/output-009.wav' +file 3-wavs/output-010.wav' +file 3-wavs/output-011.wav' +file 3-wavs/output-012.wav' +file 3-wavs/output-013.wav' +file 3-wavs/output-014.wav' +file 3-wavs/output-015.wav' +file 3-wavs/output-016.wav' +file 3-wavs/output-017.wav' +file 3-wavs/output-018.wav' +file 3-wavs/output-019.wav' +file 3-wavs/output-020.wav' 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a/process.sh b/process.sh index d42ceaf..54a0c31 100755 --- a/process.sh +++ b/process.sh @@ -18,10 +18,8 @@ check_and_exit() rm -f $series/$year/3-wavs/$series-$year.wav rm -f $series/$year/$series-$year.wav python3 ffmpeg_inputs.py $series/$year "$series-$year" -check_and_exit() # ffmpeg -f concat -safe 0 -i $series/$year/inputs-$series-$year.txt -c copy $series/$year/$series-$year.wav ffmpeg -i $series/$year/$series-$year.wav $series/$year/$series-$year.mp3 -check_and_exit() rm -f $series/$year/$series-$year.wav