Life on the Buy Side

The Holy Grail of Investing Letters – Warren Buffett’s Partnership Letters

in Famous Investors

Warren Buffett’s annual letter to shareholders as the CEO of Berkshire Hathaway is required reading for those in the investing world. As the greatest investor of all time, you would be wise to pay attention when he has something to say. That said, though, what if I told you Buffett’s Berkshire Hathaway letters are not the best investor letters out there? Blasphemy! Crazy! Mike has lost it! Well, I may be nuts but there is a better set of investor letters out there:

Warren Buffett’s partnership letters.

Now you are thinking I’ve confirmed my crazy status by first saying that Buffett’s letters are not the best followed by proclaiming Buffett’s letters are the best. Well, you’d be right if it wasn’t for one subtle difference – I’m talking about the Buffett Partnership letters to investors, not Berkshire Hathaway’s letters. The Buffett Partnership is the first investment fund started by Buffett after his mentor, Ben Graham, retired and folded up his fund.

This is like Warren Buffett’s origin story. If you want to learn more about how someone got to where there are in life, go back to the beginning and figure out how they got there. In the case of Buffett, we have vital insight into that from his partnership letters.

Now follow me as we go back in time to the late 1950s where we visit a young, up-and-coming investor …

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Measure Everything – This is a Performance Business

in Recruiting

“What gets measured gets managed.” – Peter Drucker

Those famous words of management guru Peter Drucker are often cited in the business world like a proverb. He means that an activity gets a different kind of attention once it’s measured and tracked. This applies directly to the buy side. This is also often the rallying cry of the quantified self movement, where so-called life hackers track everything about their bodies. They track their food, they track their steps, they track their body measurements, and so on. I bet there are people out there that even track their bowel movements. That sounds like an app from the show Silicon Valley … and, as usual, I digress.

Today, Drucker’s words are manifest in the business world in the form of “S.M.A.R.T.” goals. I can’t remember what the S, A, R, and T stand for, but I do know the M stands for “Measurable.” In the investment management business on the buy side, I can’t impress upon you enough how important this is. This goes for those trying to get into the business and those already on the buy side trying to work their way up.

So, do you need to start tracking your poop? No, of course not, but I will tell you what you should be tracking.

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