Thư Buffett Partnership năm 1968

July 11, 1968

July 11th, 1968

First Half Performance

During the first half of 1968, the Dow-Jones Industrial Average declined fractionally from 905 to 898. Ownership of the Dow would also have produced dividends of about $15 during the half, resulting in an overall gain of 0.9% for that Average. The Dow, once again, was an anemic competitor for most investment managers, although it was not surpassed by anything like the margins of 1967.

Our own performance was unusually good during the first half, with an overall gain of 16% excluding any change in valuation for controlled companies (which represented slightly over one-third of net assets at the beginning of the year). However, any release of adrenalin is unwarranted. Our marketable security investments are heavily concentrated in a few situations, making relative performance potentially more volatile than in widely diversified investment vehicles. Our long term performance goals are as stated in the revised "Ground Rules" and I will be quite happy if we achieve those limited objectives over a period of years. The following table summarizes performance to date on the usual basis:

        Year                Overall Results          Partnership Results        Limited Partners’
                            From Dow (1)                     (2)                   Results (3)
         1957                   -8.4%                      10.4%                      9.3%
         1958                   38.5%                      40.9%                     32.2%
         1959                   20.0%                      25.9%                     20.9%
         1960                   -6.2%                      22.8%                     18.6%
         1961                   22.4%                      45.9%                     35.9%
         1962                   -7.6%                      13.9%                     11.9%
         1963                   20.6%                      38.7%                     30.5%
         1964                   18.7%                      27.8%                     22.3%
         1965                   14.2%                      47.2%                     36.9%
         1966                  -15.6%                      20.4%                     16.8%
         1967                   19.0%                      35.9%                     28.4%
   First Half 1968               0.9%                      16.0%                     13.5%

 Cumulative Results              167.7%                    1880.0%                    1072.0%
Annual Compounded                 8.9%                      29.6%                      23.8%
       Rate

(1) Based on yearly changes in the value of the Dow plus dividends that would have been received through ownership of the Dow during that year. The table includes all complete years of partnership activity.

(2) For 1957-61 consists of combined results of all predecessor limited partnerships operating throughout the entire year after all expenses but before distributions to partners or allocations to the general partner.

(3) For 1957-61 computed on the basis of the preceding column of partnership results allowing for allocation to the general partner based upon the present partnership agreement, but before monthly withdrawals by limited partners.

Although we revise valuations of our controlled companies only at yearend, it presently appears that our share of their 1968 earnings will be something over $3 million. Those with primary responsibility for their operations, Ken Chace at Berkshire Hathaway, Louis Kohn at Hochschild Kohn, Jack Ringwalt at National Indemnity and Ben Rosner at Associated Cotton Shops, continue to meld effort and ability into results.

This year, Diversified Retailing Company (owner of Hochschild Kohn and Associated Cotton Shops) issued its first published annual report. This was occasioned by the public sale of debentures to approximately 1,000 investors last December. Thus, DRC is in the rather unusual position of being a public company from a creditors' viewpoint, but a private one (there are three stockholders -BPL owns 80%) for ownership purposes. I am enclosing the DRC report with this letter (except where duplicates go to one house hold) and plan to continue to send them along with future mid-year letters.

As I have mentioned before, we cannot make the same sort of money out of permanent ownership of controlled businesses that can be made from buying and reselling such businesses, or from skilled investment in marketable securities. Nevertheless, they offer a pleasant long term form of activity (when conducted in conjunction with high grade, able people) at satisfactory rates of return.

Investment Companies

On the following page is the form sheet on the usual investment companies:

    Year         Mass. Inv.       Investors     Lehman (2)       Tri-Cont          Dow          Limited
                 Trust (1)        Stock (1)                          (2)                        Partners
    1957          -11.4%           -12.4%         -11.4%           -2.4%           -8.4%         9.3%
    1958           42.7%            47.5%          40.8%           33.2%           38.5%         32.2%
    1959            9.0%            10.3%           8.1%            8.4%           20.0%         20.9%
    1960           -1.0%            -0.6%           2.5%            2.8%           -6.2%         18.6%
    1961           25.6%            24.9%          23.6%           22.5%           22.4%         35.9%
    1962           -9.8%           -13.4%         -14.4%          -10.0%           -7.6%         11.9%
    1963           20.0%            16.5%          23.7%           18.3%           20.6%         30.5%
    1964           15.9%            14.3%          13.6%           12.6%           18.7%         22.3%
    1965           10.2%             9.8%          19.0%           10.7%           14.2%         36.9%
    1966           -7.7%           -10.0%          -2.6%           -6.9%          -15.6%         16.8%
    1967           20.0%            22.8%          28.0%           25.4%           19.0%         28.4%
  First Half        5.1%             2.8%           4.4%            2.0%            0.9%         13.5%
    1968

 Cumulative        175.7%         154.5%          218.6%          186.7%         167.7%         1072.0%
  Results
  Annual            9.2%            8.5%           10.6%           9.6%           8.9%           23.8%
Compounded
   Rate

(1) Computed from changes in asset value plus any distributions to holders of record during year.

(2) From 1968 Moody's Bank & Finance Manual for 1957 -1967. Estimated for first half of 1968.

Due to a sluggish performance by the Dow in the last few years, the four big funds now have, on average, about a one-half point per annum advantage over the Dow for the full period.

The Present Environment

I make no effort to predict the course of general business or the stock market. Period. However, currently there are practices snowballing in the security markets and business world which, while devoid of short term predictive value, bother me as to possible long term consequences.

I know that some of you are not particularly interested (and shouldn't be) in what is taking place on the financial stage. For those who are, I am enclosing a reprint of an unusually clear and simple article which lays bare just what is occurring on a mushrooming scale. Spectacular amounts of money are being made by those participating (whether as originators, top employees. professional advisors, investment bankers, stock speculators, etc… ) in the chain-letter type stock-promotion vogue. The game is being played by the gullible, the self-hypnotized, and the cynical. To create the proper illusions, it frequently requires accounting distortions (one particularly progressive entrepreneur told me he believed in "bold, imaginative accounting"), tricks of capitalization and camouflage of the true nature of the operating businesses involved. The end product is popular, respectable and immensely profitable (I'll let the philosophers figure in which order those adjectives should be placed).

Quite candidly, our own performance has been substantially improved on an indirect basis because of the fall-out from such activities. To create an ever widening circle of chain letters requires increasing amounts of corporate raw material and this has caused many intrinsically cheap (and not so cheap) stocks to come to life. When we have been the owners of such stocks, we have reaped market rewards much more promptly than might otherwise have been the case. The appetite for such companies, however, tends to substantially diminish the number of fundamentally attractive investments which remain.

I believe the odds are good that, when the stock market and business history of this period is being written, the phenomenon described in Mr. May's article will be regarded as of major importance, and perhaps characterized as a mania. You should realize, however, that his "The Emperor Has No Clothes" approach is at odds (or dismissed with a “SO What?” or an "Enjoy, Enjoy”) with the views of most investment banking houses and currently successful investment managers. We live in an investment world, populated not by those who must be logically persuaded to believe, but by the hopeful, credulous and greedy, grasping for an excuse to believe.

Finally, for a magnificent account of the current financial scene, you should hurry out and get a copy of “The Money Game” by Adam Smith. It is loaded with insights and supreme wit. (Note: Despite my current “Support Your Local Postmaster” drive, I am not enclosing the book with this letter - it retails for $6.95.)

Taxes

Several unusual factors make the tax figure even more difficult than usual to estimate this year. We will undoubtedly have an above average amount of ordinary income. The picture on short term and long term capital gain is subject to unusually substantial variance. At the beginning of the year, I suggested that you use an 8% ordinary income factor (it won't come in this manner but this figure embodies an adjustment for long term capital gain) applied to your BPL capital account on an interim basis to compute quarterly tax estimates. If a figure different from 8% seems more appropriate for your September 15th quarterly estimate. I will let you know by September 5th. If no change is necessary, you will next hear from me on November 1st with the Commitment Letter for 1969.

Cordially,

January 22, 1969

January 22nd, 1969

Our Performance in 1968

Everyone makes mistakes.

At the beginning of 1968, I felt prospects for BPL performance looked poorer than at any time in our history. However, due in considerable measure to one simple but sound idea whose time had come (investment ideas, like women are often more exciting than punctual), we recorded an overall gain of $40,032,691.

Naturally, you all possess sufficient intellectual purity to dismiss the dollar result and demand an accounting of performance relative to the Dow-Jones Industrial Average. We established a new mark at plus 58.8% versus an overall plus 7.7 % for the Dow, including dividends which would have been received through ownership of the Average throughout the year. This result should be treated as a freak like picking up thirteen spades in a bridge game. You bid the slam, make it look modest, pocket the money and then get back to work on the part scores. We will also have our share of hands when we go set.

The following summarizes the year-by-year performance of the Dow, the Partnership before allocation (one quarter of the excess over 6%) to the General Partner and the results for limited partners:

        Year                Overall Results        Partnership Results         Limited Partners’
                            From Dow (1)                   (2)                    Results (3)
        1957                    -8.4%                    10.4%                       9.3%
        1958                    38.5%                    40.9%                      32.2%
        1959                    20.0%                    25.9%                      20.9%
        1960                    -6.2%                    22.8%                      18.6%
        1961                    22.4%                    45.9%                      35.9%
        1962                    -7.6%                    13.9%                      11.9%
        1963                    20.6%                    38.7%                      30.5%
        1964                    18.7%                    27.8%                      22.3%
        1965                    14.2%                    47.2%                      36.9%
        1966                   -15.6%                    20.4%                      16.8%
        1967                    19.0%                    35.9%                      28.4%
        1968                     7.7%                    58.8%                      45.6%

(1) Based on yearly changes in the value of the Dow plus dividends that would have been received through ownership of the Dow during that year. The table includes all complete years of Partnership activity.

(2) For 1957-61 consists of combined results of all predecessor limited partnerships operating throughout the entire year after all expenses, but before distributions to partners or allocations to the General Partner.

(3) For 1957-61 computed on the basis of the preceding column of Partnership results allowing for allocation to the General Partner based upon the present Partnership Agreement, but before monthly withdrawals by limited partners.

On a cumulative or compounded basis, the results are:

         Year              Overall Results From         Partnership Results        Limited Partners’
                                    Dow                                                 Results
       1957                        -8.4%                      10.4%                      9.3%
    1957 – 58                     26.9%                       55.6%                     44.5%
    1957 – 59                     52.3%                       95.9%                     74.7%
    1957 – 60                     42.9%                      140.6%                     107.2%
    1957 – 61                     74.9%                      251.0%                     181.6%
    1957 – 62                     61.6%                      299.8%                     215.1%
    1957 – 63                     95.1%                      454.5%                     311.2%
    1957 – 64                    131.3%                      608.7%                     402.9%
    1957 – 65                    164.1%                      943.2%                     588.5%
    1957 – 66                    122.9%                      1156.0%                    704.2%
    1957 – 67                    165.3%                      1606.9%                    932.6%
    1957 – 68                    185.7%                      2610.6%                   1403.5%
Annual Compounded                  9.1%                       31.6%                     25.3%
       Rate

Investment Companies

On the following page is the usual tabulation showing the results of what were the two largest mutual funds (they stood at the top in size from 1957 through 1966 - they are still number two and three) that follow a policy of being, typically, 95 -100% invested in common stocks, and the two largest diversified closed-end investment companies.

    Year          Mass. Inv.      Investors     Lehman (2)        Tri-Cont          Dow          Limited
                  Trust (1)       Stock (1)                           (2)                        Partners
    1957           -11.4%          -12.4%          -11.4%           -2.4%          -8.4%          9.3%
    1958            42.7%           47.5%           40.8%           33.2%          38.5%          32.2%
    1959             9.0%           10.3%            8.1%            8.4%          20.0%          20.9%
    1960            -1.0%           -0.6%            2.5%            2.8%          -6.2%          18.6%
    1961            25.6%           24.9%           23.6%           22.5%          22.4%          35.9%
    1962            -9.8%          -13.4%          -14.4%          -10.0%          -7.6%          11.9%
    1963            20.0%           16.5%           23.7%           18.3%          20.6%          30.5%
    1964            15.9%           14.3%           13.6%           12.6%          18.7%          22.3%
    1965            10.2%            9.8%           19.0%           10.7%          14.2%          36.9%
    1966            -7.7%          -10.0%           -2.6%           -6.9%         -15.6%          16.8%
    1967            20.0%           22.8%           28.0%           25.4%          19.0%          28.4%
    1968            10.3%            8.1%            6.7%            6.8%           7.7%          45.6%

 Cumulative        189.3%          167.7%          225.6%         200.2%          185.7%         1403.5%
  Results
  Annual            9.3%            8.6%           10.3%            9.6%           9.1%           25.3%
Compounded
   Rate

(1) Computed from changes in asset value plus any distributions to holders of record during year.

(2) From 1968 Moody's Bank & Finance Manual for 1957-1967. Estimated for 1968.

It is interesting that after twelve years these four funds (which presently aggregate well over $5 billion and account for over 10% of the investment company industry) have averaged only a fraction of one percentage point annually better than the Dow.

Some of the so-called “go-go” funds have recently been re-christened “no-go” funds. For example, Gerald Tsai's Manhattan Fund, perhaps the world's best-known aggressive investment vehicle, came in at minus 6.9% for 1968. Many smaller investment entities continued to substantially outperform the general market in 1968, but in nothing like the quantities of 1966 and 1967.

The investment management business, which I used to severely chastise in this section for excessive lethargy, has now swung in many quarters to acute hypertension. One investment manager, representing an organization (with an old established name you would recognize) handling mutual funds aggregating well over $1 billion, said upon launching a new advisory service in 1968:

“The complexities of national and international economics make money management a full-time job. A good money manager cannot maintain a study of securities on a week-by-week or even a day-by-day basis. Securities must be studied in a minute-by-minute program.”

Wow!

This sort of stuff makes me feel guilty when I go out for a Pepsi. When practiced by large and increasing numbers of highly motivated people with huge amounts of money on a limited quantity of suitable securities, the result becomes highly unpredictable. In some ways it is fascinating to watch and in other ways it is appalling.

Analysis of 1968 Results

All four main categories of our investment operation worked out well in 1968. Our total overall gain of $40,032,691 was divided as follows:

Category                                    Average Investment                        Overall Gain
Controls                                           $24,996,998                          $5,886,109
Generals – Private Owner                           $16,363,100                         $21,994,736
Generals – Relatively                                $8,766,878                         $4,271,825
Undervalued
Workouts                                             $18,980,602                         $7,317,128
Miscellaneous, primarily US                          $12,744,973                          $839,496
Treasury Bills
Total Income                                                                            $40,309,294
Less – General Expense,                                                                   $276,603
including Interest
Overall Gain                                                                            $40,032,691

A few caveats, as mentioned in my letter two years ago, are again in order (non-doctoral candidates may proceed to next section):

1. An explanation of the various categories listed above was made in the January 18, 1965 letter. If your memory needs refreshing and your favorite newsstand does not have the pocketbook edition. We'll be glad to give you a copy.

1. Phần giải thích về các nhóm khác nhau liệt kê ở trên đã được trình bày trong lá thư ngày 18 tháng 1 năm 1965. Nếu trí nhớ của các bạn cần được làm mới và sạp báo ưa thích của các bạn không có ấn bản bỏ túi, chúng tôi sẽ vui lòng gửi các bạn một bản.

2. The classifications are not iron clad. Nothing is changed retroactively, but the initial decision as to category is sometimes arbitrary. Sometimes later classification proves difficult; e.g. a workout that falls through but that I continue to hold for reasons unrelated or only partially related to the original decision (like stubbornness).

2. Việc phân loại không phải là bất di bất dịch. Không có gì bị thay đổi hồi tố, nhưng quyết định ban đầu về việc xếp nhóm đôi khi mang tính tùy ý. Đôi khi việc phân loại về sau tỏ ra khó khăn; ví dụ, một khoản đầu tư theo sự kiện (workout) bị đổ bể nhưng tôi vẫn tiếp tục nắm giữ vì những lý do không liên quan hoặc chỉ liên quan một phần đến quyết định ban đầu (như sự bướng bỉnh).

3. Percentage returns calculated on the average investment base by category would be significantly understated relative to Partnership percentage returns which are calculated on a beginning investment base. In the foregoing figures, a security purchased by us at 100 on January 1 which appreciated at an even rate to 200 on December 31 would have an average investment of 150 producing a 66-2/3% result contrasted to a 100% result by the customary approach. In other words, the foregoing figures use a monthly average of market values in calculating the average investment.

3. Tỷ suất sinh lời phần trăm tính trên cơ sở khoản đầu tư bình quân theo từng nhóm sẽ thấp hơn thực tế đáng kể khi so với tỷ suất sinh lời phần trăm của Quỹ hợp danh, vốn được tính trên cơ sở khoản đầu tư đầu kỳ. Trong các số liệu nêu trên, một chứng khoán mà chúng ta mua ở giá 100 vào ngày 1 tháng 1 và tăng giá đều đặn lên 200 vào ngày 31 tháng 12 sẽ có khoản đầu tư bình quân là 150, tạo ra kết quả 66-2/3%, so với kết quả 100% theo cách tính thông thường. Nói cách khác, các số liệu nêu trên sử dụng bình quân hằng tháng của giá trị thị trường để tính khoản đầu tư bình quân.

4. All results are based on a 100% ownership, non-leverage basis. Interest and other general expenses are deducted from total performance and not segregated by category. Expenses directly related to specific investment operations, such as dividends paid on short stock, are deducted by category. When securities are borrowed directly and sold short, the net investment (longs minus shorts) is shown for the applicable category's average investment.

4. Mọi kết quả đều được tính trên cơ sở sở hữu 100%, không dùng đòn bẩy (leverage). Tiền lãi vay và các chi phí chung khác được trừ khỏi tổng thành tích và không phân tách theo nhóm. Các chi phí liên quan trực tiếp đến những nghiệp vụ đầu tư cụ thể, chẳng hạn cổ tức phải trả cho cổ phiếu bán khống, được trừ theo nhóm. Khi chứng khoán được vay trực tiếp và bán khống (sold short), khoản đầu tư ròng (vị thế mua trừ vị thế bán khống) được thể hiện trong khoản đầu tư bình quân của nhóm tương ứng.

5. The foregoing table has only limited use. The results applicable to each category are dominated by one or two investments. They do not represent a collection of great quantities of stable data (mortality rates of all American males or something of the sort) from which conclusions can be drawn and projections made. Instead, they represent infrequent, non-homogeneous phenomena leading to very tentative suggestions regarding various courses of action and are so used by us.

5. Bảng nêu trên chỉ có công dụng hạn chế. Kết quả ứng với mỗi nhóm do một hoặc hai khoản đầu tư chi phối. Các kết quả này không đại diện cho một tập hợp lượng lớn dữ liệu ổn định (tỷ lệ tử vong của toàn bộ nam giới Mỹ hoặc thứ gì đó tương tự) mà từ đó có thể rút ra kết luận và đưa ra các dự phóng. Thay vào đó, chúng đại diện cho những hiện tượng không thường xuyên, không đồng nhất, dẫn tới những gợi ý rất dè dặt về các hướng hành động khác nhau, và chúng tôi sử dụng chúng đúng như vậy.

6. Finally, these calculations are not made with the same loving care we apply to counting the money and are subject to possible clerical or mathematical error since they are not entirely se1f-checking.

6. Cuối cùng, những phép tính này không được thực hiện với sự chăm chút yêu thương như chúng tôi dành cho việc đếm tiền, và có thể mắc lỗi văn thư hoặc lỗi tính toán vì chúng không hoàn toàn tự kiểm tra được.

Controls

Overall, the controlled companies turned in a decent performance during 1968. Diversified Retailing Company Inc. (80% owned) and Berkshire Hathaway Inc. (70% owned) had combined after-tax earnings of over $5 million.

Particularly outstanding performances were turned in by Associated Cotton Shops, a subsidiary of DRC run by Ben Rosner, and National Indemnity Company, a subsidiary of B-H run by Jack Ringwalt. Both of these companies earned about 20% on capital employed in their businesses. Among Fortune's “500” (the largest manufacturing entities in the country, starting with General Motors), only 37 companies achieved this figure in 1967, and our boys outshone such mildly better-known (but not better appreciated) companies as IBM, General Electric, General Motors, Procter & Gamble, DuPont, Control Data, Hewlett-Packard, etc...

I still sometimes get comments from partners like: "Say, Berkshire is up four points - that's great!" or "What's happening to us, Berkshire was down three last week?" Market price is irrelevant to us in the valuation of our controlling interests. We valued B-H at 25 at yearend 1967 when the market was about 20 and 31 at yearend 1968 when the market was about 37. We would have done the same thing if the markets had been 15 and 50 respectively. ("Price is what you pay. value is what you get"). We will prosper or suffer in controlled investments in relation to the operating performances of our businesses - we will not attempt to profit by playing various games in the securities markets.

Generals -Private Owner

Over the years this has been our best category, measured by average return, and has also maintained by far the best percentage of profitable transactions. This approach was the way I was taught the business, and it formerly accounted for a large proportion of all our investment ideas. Our total individual profits in this category during the twelve year BPL history are probably fifty times or more our total losses. The cash register really rang on one simple industry idea (implemented in several ways) in this area in 1968. We even received a substantial fee (included in Other Income in the audit) for some work in this field.

Our total investment in this category (which is where I feel by far the greatest certainty regarding consistently decent results) is presently under $2 million and I have nothing at all in the hopper to bolster this. What came through like the Johnstown flood in 1968 looks more like a leaky faucet in Altoona for 1969.

Generals - Relatively Undervalued

This category produced about two-thirds of the overall gain in 1966 and 1967 combined. I mentioned last year that the great two-year performance here had largely come from one idea. I also said, "We have nothing in this group remotely approaching the size or potential which formerly existed in this investment.” It gives me great pleasure to announce that this statement was absolutely correct. It gives me somewhat less pleasure to announce that it must be repeated this year.

Workouts

This category, which was a disaster in 1967, did well during 1968. Our relatively heavy concentration in just a few situations per year (some of the large arbitrage houses may become involved in fifty or more workouts per annum) gives more variation in yearly results than an across-the-board approach. I feel the average profitability will be as good with our policy and 1968 makes me feel better about that conclusion than 1967 did.

It should again be stated that our results in the Workout area (as well as in other categories) are somewhat understated compared to the more common method of determining results computed on an initial base figure and utilizing borrowed money (which is often a sensible part of the Workout business).

I can't emphasize too strongly that the quality and quantity of ideas is presently at an all time low - the product of the factors mentioned in my October 9th, 1967 letter, which have largely been intensified since then.

Sometimes I feel we should have a plaque in our office like the one at the headquarters of Texas Instruments in Dallas which reads: “We don't believe in miracles, we rely on them.” It is possible for an old, overweight ball player, whose legs and batting eye are gone, to tag a fast ball on the nose for a pinch-hit home run, but you don't change your line-up because of it.

We have a number of important negatives operating on our future and, while they shouldn't add up to futility, they certainly don't add up to more than an average of quite moderate profitability.

Memorabilia

As one of my older friends says, “Nostalgia just isn't what it used to be.” Let's take a stab at it, anyway.

Buffett Associates, Ltd., the initial predecessor partnership, was formed May 5, 1956 with seven limited partners (four family, three close friends), contributing $105,000, and the General Partner putting his money where his mouth was by investing $100. Two additional single-family limited partnerships were formed during 1956, so that on January 1, 1957 combined net assets were $303,726. During 1957, we had a gain of $31,615.97, leading to the 10.4% figure shown on page one. During 1968 I would guess that the New York Stock Exchange was open around 1,200 hours, giving us a gain of about $33,000 per hour (sort of makes you wish they had stayed with the 5-1/2 hour, 5 day week, doesn't it), or roughly the same as the full year gain in 1957.

On January 1, 1962 we consolidated the predecessor limited partnerships moved out of the bedroom and hired our first full-time employees. Net assets at that time were $7,178,500. From that point to our present net assets of $104,429,431 we have added one person to the payroll. Since 1963 (Assets $9,405,400) rent has gone from $3,947 to $5,823 (Ben Rosner would never have forgiven me if I had signed a percentage lease) travel from $3,206 to $3,603, and dues and subscriptions from $900 to $994. If one of Parkinson's Laws is operating, at least the situation hasn't gotten completely out of control.

In making our retrospective survey of our financial assets, our conclusion need not parallel that of Gypsy Rose Lee who opined, when reviewing her physical assets on her fifty-fifth birthday: “I have everything I had twenty years ago - it's just that it's all lower.”

Miscellaneous

Although the investment environment is difficult, the office environment is superb. With Donna, Gladys, Bill and John, we have an organization that functions speedily, efficiently and pleasantly. They are the best.

The office group, along with spouses (one apiece - I still haven't figured out how I should handle that plural) and children have over $27 million invested in BPL on January 1, 1969. Assorted sizes and shapes of aunts, uncles, parents, in-laws, brothers, sisters and cousins make the BPL membership list read like “Our Crowd” - which, so far as I am concerned, is exactly what it is.

Within a few days, you will receive:

1. A tax letter giving you all BPL information needed for your 1968 federal income tax return. This letter is the only item that counts for tax purposes.

1. Một thư về thuế cung cấp cho các bạn mọi thông tin về BPL cần thiết cho tờ khai thuế thu nhập liên bang năm 1968 của các bạn. Thư này là tài liệu duy nhất có giá trị cho mục đích thuế.

2. An audit from Peat Marwick. Mitchell & Co. (they have again done an excellent job) for 1968, setting forth the operations and financial position of BPL, as well as your own capital account.

2. Báo cáo kiểm toán năm 1968 của Peat, Marwick, Mitchell & Co. (họ một lần nữa đã làm việc xuất sắc), trình bày hoạt động và tình hình tài chính của BPL cũng như tài khoản vốn của riêng các bạn.

3. A letter signed by me setting forth the status of your BPL interest on January 1, 1969. This is identical with the figures developed in the audit.

3. Một lá thư do tôi ký, nêu tình trạng phần vốn góp của các bạn tại BPL vào ngày 1 tháng 1 năm 1969. Thư này trùng khớp với các số liệu được xác định trong báo cáo kiểm toán.

Let me know if anything in this letter or that occurs during the year needs clarifying. My next letter will be about July 10th, summarizing the first half of this year.

Cordially,