Warren Buffett's 1964 annual letter, one of his richest. The partnership gained 27.8% against the Dow's 18.7%, but Buffett spends much of the letter on ideas: why nearly all professional money managers fail to beat an unmanaged index, and his now-famous definition of true conservatism — \"intelligent hypotheses, correct facts and sound reasoning,\" not crowd agreement. He expands his method to four categories, adding \"generals — relatively undervalued,\" and lays out his long-term goal of beating the Dow by about ten points a year. He also delivers a memorable case for maximizing after-tax gains rather than dodging taxes, skewering the era's \"swap funds\" along the way.
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