Warren Buffett Partnership Letters

Referred to as the “Sage” or “Oracle” of Omaha for his wisdom, Warren Buffett is widely viewed as one of the most successful investors in history. Buffett’s Berkshire Hathaway conglomerate is one of America’s largest companies and has dozens of subsidiaries, including in railroads, insurance, and energy. Berkshire Hathaway posted $182 billion in 2013 revenue and $19.5 billion in net income.

Buffett moved to 3rd richest on Forbes’ 2015 list of the world’s richest, up from 4th richest in 2014, but he is still inking big deals with companies, Buffett’s Berkshire bought battery maker Duracell from Procter & Gamble in November 2014 for $4.7 billion.

Most people have heard of Warren Buffett and are aware that he heads up the massive business Berkshire Hathaway. However, his history in the investing world stretches much farther back than Berkshire. The first time he struck out on his own was at the age of 25 when he started his first fund called the Buffett Partnership. In fact, it was the Buffett Partnership that actually made him a millionaire.

History of the Buffett Partnership

Buffett started in the beginning with about $105,000 in capital from himself and his family and friends. His own investment in the fund was only $100, while the rest of the money came from his other six partners: his mother, sister, father-in-law, aunt, college roommate, brother-in-law, and lawyer.  Buffett handled all the decision making at the fund.

He got the idea to start the fund in 1956 after his friends and family asked for his insight into investing and the markets. Buffett didn’t charge any management fees. Different sources report different fee structures, with some saying he took 25% to 50% of any gains above 4% or 6%. He also absorbed 25% of the losses himself.

Buffett found success early with his fund, and managed returns close to 60% in 1968, compared to the Dow Jones’ 8% return. He was so successful that he had to turn away investors from his fund, even as he added more partnerships. In 1957, he was running three partnerships. The next year, he expanded to five partnerships, and then in 1959, he added a sixth one. In 1960, Buffett increased his number of partnerships to seven.

For more than 10 years of compounding, he achieved an annual return of 29.5% gross. Then in 1969, he announced that he was shutting down the partnership. In one letter to his investors, he explained that the results of the previous ten years had “absolutely no chance of being duplicated or even remotely approximated during the next decade.” He said the easy bargains he had been finding during those ten years were becoming fewer and farther between. In 1969, he said in another letter that he wouldn’t gamble with his investors’ money, so he decided to shutter the fund. However, he didn’t abandon the value investing approach that enabled such massive compounding for him over the years.

warren buffett letters to shareholders

Play the Long Game

Buffett says his best investment was buying Benjamin Graham’s book “The Intelligent Investor” in 1949. He later studied under Ben Graham, who became his mentor, before moving home to Nebraska to start the Buffett Partnership.

While studying under Ben Graham as his mentor, Buffett learned directly from the very first value investor. One of the lessons he learned was how to play the long game while investing, which basically just means not sacrificing long-term returns for short-term gains.

One of his earliest lessons on compounding interest came from reading “One Thousand Ways to Make $1,000.” He learned that compounding $1,000 at 10% for 25 years turns it into more than $10,800. Buffett bought his first stock when he was only 11 years old. He bought six shares of Cities Service preferred stock, including three for himself and three for his sister, at a market price of $38 each.

Buffett learned the value of playing a long game with that very first stock he bought. Although the stock fell to $27, it soon climbed to $40, and he and his sister sold at a profit. However, not long after they sold it, it climbed past $200 a share. If Buffett had just held onto the stock for a longer period, he would have made a lot more money. His advice now is to “only buy something that you’d be perfectly happy to hold if the market shut down for ten years.”

Be Different

Buffett has described himself as “85% Graham,” a reference to Ben Graham. He focuses on the fundamentals of each business he invests in and buys for the long haul. However, unlike Graham, Buffett takes a more qualitative approach to choose companies.

He advises people to be different than everyone else by being “fearful when others are greedy” and “greedy only when others are fearful.” Above all, Buffett’s first rule is to “never lose money,” and his second rule is not to forget the first rule.

When speaking to any investor about investing in the stock market or any companies, Buffett has said that “price is what you pay,” while “value is what you get.”

One goal that’s part of his strategy is to concentrate holdings. He said in one Berkshire letter that they “try to avoid buying a little of this or that when we are only lukewarm about the business or its price.” He also said that when they are convinced that a company is attractive, they “believe in buying worthwhile amounts” for their portfolio.

Warren Buffett on Volatility

No matter what investment you make in the markets, you are always going to run into volatility at some point. Buffett has provided advice for dealing with volatility in the markets many times throughout the years.

He once said that although the markets are usually rational, they “occasionally do crazy things.” According to Buffett, being able to take advantage of those crazy times in the market doesn’t require a great deal of intelligence or a degree in economics. All it requires is “an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals.” He also said it requires being willing to appear “unimaginative” for a long time or possibly even “foolish.”

In one of his letters, Buffett explained the differences between risk and volatility — and why it’s common for an investor to mix the two up. In his 2015 letter, Buffett said the prices of stocks will always be more volatile than a cash-equivalent asset. He added that in the long term, currency-denominated investments are much riskier than a widely diversified stock portfolio bought in the market over time.

For a long-term investor, volatile markets aren’t necessarily any riskier than a market that isn’t volatile. A portfolio that is bought and held with a long-term investment goal in mind will continue to make money, while a portfolio built with a short-term investment goal in mind is much more likely to lose money, especially during volatile periods.


While Buffett is known for generating incredible returns in the market, he doesn’t keep all of his capital for himself. Many charities have benefited from the returns he has managed in the market over the decades.

A generous philanthropist, he bested his own giving record in July 2014, giving away Berkshire shares worth $2.8 billion, primarily to the Bill and Melinda Gates Foundation but also to his children’s foundations, bringing his lifetime giving to nearly $23 billion. Then in 2020, he gave away another $2.9 billion shares of Berkshire Hathaway, beating his record yet again.

Buffett has said before that he will donate over 99% of the fortune he has built over his career as an investor. Most of that money will go to the Bill and Melinda Gates Foundation, another charity founded by his late wife, Susan Thompson Buffett, and his children’s charities.

annual letter of warren buffett

What are the Buffett Partnership letters?

The Buffett Partnership letters are compiled of each letter he wrote to each investor in his fund. Buffett still shares his wisdom in letter form today, but he was doing so decades before he ever acquired Berkshire Hathaway. Today his Berkshire letters are pretty much required reading for those in the investing world, but perhaps the ones he wrote for his partnerships during his beginning days of building capital in the market should be too.

Some might argue that the Partnership letters may even have been better than the Berkshire letters. However, both of them reveal quite a bit about Buffett’s insight and way of thinking about investments, stocks, the market, asset management, and investing strategy. Both sets of letters are a real asset for anyone who wants to learn more about Buffett’s investing approach and about building a portfolio in general.

Many people take in his letters with great interest, and it’s easy to see why. Buffett is one of the most quotable investment greats in history. You can learn a lot about his views on stocks and how to buy them at a great price by studying what he says about his portfolio in his letters.

Final Thoughts

Whether you have any interest in Buffett at all, you would learn a lot about business and life in general from checking out what he has to say. He has written extensively on the stock market, finding a company at an attractive market price, raking in returns, building a portfolio, and finding the best price for any investment.

Whenever Buffett makes any trades, everyone is always watching. They want to know what business he bought and at what price. Some make it their goal to read everything he has to say because he has so much to teach anyone who will listen. His return track record speaks for itself.

If you’re ready to learn from the best, start at the top of this list and just read straight through. Buffett’s advice is timeless, so it doesn’t even matter that much of what he wrote was written decades ago. Buffett has followed the same methods since he first started building a portfolio and entering the markets, so you can learn a great deal about his philosophy by reviewing everything he has ever written.

This page contains Warren Buffett’s Letters to Shareholders from the 1950s (including non-Berkshire entities) to the latest release from Berkshire Hathaway.

Here you can find a list of all Warren Buffett’s letters to investors. In addition, below are the letters Warren Buffett wrote to partners of the Buffett Partnership Ltd., which the Oracle of Omaha ran before taking over the day-to-day running of Berkshire Hathaway.

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Berkshire Hathaway. In early February 2015, it was the fourth most valuable public company in the U.S. with a market capitalization of $355 billion.

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Consolidated and Condensed Letters to Berkshire Hathaway Shareholders, 1977-2016


Washington Post letters

Warren Buffett's Partnership Letters

Warren Buffett's Shareholder Letters: Berkshire Hathaway Inc.

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