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Warren was so fed up with the new-era investing approach adopted by others in the market and the scarcity of bargains in 1967 that he penned a few sentences which came as a bombshell to his partners:
“When the game is no longer being played your way, it is only human to say the new approach is all wrong, bound to lead to trouble, etc. I have been scornful of such behavior by others in the past. I have also seen the penalties incurred by those who evaluate conditions as they were – not as they are. Essentially I am out of step with present conditions. On one point, however, I am clear. I will not abandon a previous approach whose logic I understand (although I find it difficult to apply) even though it may mean foregoing large and apparently easy, profits to embrace an approach which I don’t fully understand, have not practiced successfully and which, possibly, could lead to substantial permanent loss of capital.”(October 1967 letter to partners)
Personal motivation.
He realised that he did not want to keep working so hard. He was exhibiting obsessive behaviour. He would work all day and evening, neglecting his family. He had a deal with his wife that he would ease-back once he had made $8m-$10m
“Changed personal conditions make it advisable to reduce the speed of the treadmill. I have observed many cases of habit patterns in all activities of life, particularly business, continuing (and becoming accentuated as years pass) long after they ceased making sense……Elementary self-analysis tells me that I will not be capable of less than all-out effort to achieve a publicly proclaimed goal to people who have entrusted their capital to me. All-out effort makes progressively less sense.”
He wanted more out of life both in terms of pursuing things other than money and in the type of investing he was doing.
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