In 1963, the Dow achieved plus 20.7% (including dividends received), where Buffett Partnership achieved plus 38.7%, different 18%, an extraordinary result.
As usual, Buffett compares performance of the partnership to the Dow and 2 largest open-end funds and 2 largest close-end investment companies. Buffett partnership achieved 22.3% Annual Compounded Rates where the Dow is 10% and the 4 investment companies under-perform the Dow in the period of 1957 to 1963.
In the "Our Method of Operation" section, Buffett further elaborates more about the partnership's three investment categories such as "Generals", "Workouts" and "Controls" which first mentioned in letter of 24 Jan 1962. In my opinion, this piece of information and it's examples in appendix section is an outstanding investment materials, I urge you to go through it (Buffett Partnership Letter on 18 Jan 1964) yourself again and again.
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