Reading the Letter to Partners of Buffett Partnership 10 Jul 1963

In the first half of 1963, the Dow advanced from 652.10 to 706.88, plus 10% (including dividends received), where Buffett Partnership achieving plus 14%, different 4%.

Buffett further highlight his thinking of relative results of investment performance in his writing:

At plus 14% versus plus 10% for the Dow, this six months has been a less satisfactory period than the first half of 1962 when we were minus 7.5% versus minus 21.7% for the Dow.

The objective of the partnership:

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 (largest open end funds and close-end investment companies). We can and do say that if we don't achieve this goal over any reasonable period, excluding on extensive speculative boom, we will cease operation.

Also, related to investment decision-making:

Investment decisions should be made on the basis of the most probable compounding of after-tax net worth with minimum risk.