Warren Buffett's landmark 1965 annual letter. After a record year — up 47.2% versus the Dow's 14.2% — Buffett reveals the story behind Berkshire Hathaway, the struggling textile maker he began buying at $7.60 a share in 1962 and took control of in 1965. He lays out his case for concentration over diversification, introducing the rule that lets him put up to 40% of the partnership in a single conviction bet and mocking the \"Noah School of Investing\" of owning two of everything. He also warns that the partnership's growing size may finally start to weigh on returns, and closes the door to new partners.
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