During the first half of 1964, the Dow advanced from 762.95 to 831.5, plus 10.9% (including dividends received), where Buffett Partnership results will differ only insignificantly from those of the Dow.
Regarding relative result of investment performance, Buffett commented:
I would feel much better reporting to you that the Dow had broken even, and we had been plus 5% or better still, that the Dow had been minus 10%, and we had broken even.
For partnership's performance beating the Dow, Buffett commented:
I have always pointed out however, that gaining an edge on the Dow is more difficult for us in advancing markets than in static or declining ones.
For important of investment performance measurement and objective evaluation, Buffett said:
All investment managements (including self-management) should be subjected to objective tests, and that the standards should be selected a priori rather than conveniently chose retrospectively. We feel it is essential that investors and investment managements establish standards of performance and, regularly and objectively study their own results just as carefully as they study their investments.
Did you chosen a good yardstick to measure your own investment performance? Yes, I did.
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