It is interesting to compare Mr. Buffett's thoughts in these letters and his later thoughts in his letter to Katherine Graham (1975) on pensions. And then, to see how Brk is laid out today. As you said, he was trying to advise a variety of people in the BPL letters but it appears from the letter to Graham that for long term investors, stocks of good business's were the way to go. That and a healthy dose of cash (or cash like holdings) were the preferred layout. When the Washington Post was sold a few years ago, the pension fund was overfunded. Significantly over funded.
I think that the experience of the 1970s made him very skeptical of bonds in later years. He was clearly skeptical of the prospects of reducing inflation in the 1980s as I'll write more about in the next part of the series. And of course more recently, the bond holdings at Berkshire have been very minimal relative to the size of the investment portfolio, with maturities kept very short.
It is interesting to compare Mr. Buffett's thoughts in these letters and his later thoughts in his letter to Katherine Graham (1975) on pensions. And then, to see how Brk is laid out today. As you said, he was trying to advise a variety of people in the BPL letters but it appears from the letter to Graham that for long term investors, stocks of good business's were the way to go. That and a healthy dose of cash (or cash like holdings) were the preferred layout. When the Washington Post was sold a few years ago, the pension fund was overfunded. Significantly over funded.
I think that the experience of the 1970s made him very skeptical of bonds in later years. He was clearly skeptical of the prospects of reducing inflation in the 1980s as I'll write more about in the next part of the series. And of course more recently, the bond holdings at Berkshire have been very minimal relative to the size of the investment portfolio, with maturities kept very short.