Nov 22nd, 2007 by Martin Lee
Berkshire Annual Letter 2001 (Part 1)
When Warren Buffett first setup his investment partnership on May, 1956, he gave his other founding partners a short paper called “The Ground Rules“.
One of the ground rules stated that their performance would be measured relative to the general market performance, rather than on an absolute level.
A consistent out-performance of an index over time will ultimately prove to be rewarding for long-term investors.
Another of the ground rules was that Warren Buffett cannot promise results to partners. Having said that, he can promise that the economic results of investors will parallel his during the period of their ownership. He does not take cash compensation, restricted stock or options grants that would give him an unfair edge.
In addition, 99% of Warren Buffett’s entire wealth is in Berkshire. He has never sold a share, and will not do so in the future either.
He is digusted by some people who urge investors to buy shares while they were dumping theirs at the same time. These people are treating shareholders as patsies, not partners.