National Indemnity

Buffett provided partners with detailed information on BPL's two controlled companies — Diversified Retailing Company (DRC) and Berkshire Hathaway — and their principal operating businesses. Describes the sale of Hochschild Kohn, the Associated Retail Stores acquisition, the insurance operations (National Indemnity), and the Illinois National Bank.

The final full-year performance summary of the Buffett Partnership. BPL achieved a gain of approximately 6.7% for the year. Partners received a 64% cash distribution in January 1970, with the remaining assets distributed as DRC and B-H stock. This letter marks the formal conclusion of one of investment history's most remarkable records — 13 consecutive years of outperforming the Dow.

1968 was the best year in BPL history — 58.8% overall gain vs Dow's 7.7%. Buffett called this a 'freak' result like picking up thirteen spades in bridge. Despite record performance, he warned that the partnership would be dissolved at yearend 1969 and outlined the reasons for his continued pessimism about finding undervalued opportunities.

BPL gained 35.9% vs the Dow's 19.0% in 1967 — a record year. However, 95% of investment managers beat the Dow. Worst year ever in Workouts (0.89% return). Berkshire textile operations remain a drag; National Indemnity acquisition described as highly satisfactory. Moderated objectives from October letter discussed candidly.