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In 1969 Buffett finally got so fed up with the investment environment that he announced his retirement, aged 38.
At the end of May he sent out the letter that stunned his partners, many of whom had become millionaires as a result of Buffett’s investment skills. They wanted the Partnership to continue so that they could become even wealthier – and why not?
But Buffett had been contemplating both the disturbing mood that the share market had got itself into, and the personal cost of continuing to pour his whole being into share analysis to the exclusion of vital family life.
When he first mentioned his need to change direction, 18 months previously, he denied that he wanted to quit; but he did want to (a) ease-back so that he had more time for family and other interests, and (b) he wanted to put more effort into building-up controlled companies over a long time frame, working with people he liked, trusted and admired. He wanted the pleasure of building those relationships, even if that meant lowered expectations in terms of annual returns on capital.
For that 18 months the great majority of partners were of the view that Buffett should continue – even with the lowered return expectations he would likely still be an excellent manager of money.
But by May 1969 he just had to stop the partnership soon.
The market is no longer conducive
First he explained his frustration with the market:
“The investing environment I discussed at that time (and on which I have commented in various other letters) has generally become more negative and frustrating as time has passed.…it seems to me that:
(1) opportunities for investment that are open to the analyst who stresses quantitative factors have virtually disappeared, after rather steadily drying up over the past twenty years;
(2) our $100 million of assets………… To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
