Why Buffett ended the partnerships in 1969

Robert Karas is a Partner and Chief Investment Officer at Bank Gutmann in Vienna, Austria's oldest private bank, where he oversees investment strategies for ultra-high-net-worth clients. Robert is a seasoned investor on a lifelong journey known for his thoughtful investment philosophy and engaging market insights.

3:00 - Robert describes the 1960s "paperwork crisis" when Wall Street trading volumes exploded and people physically schlepped suitcases of stock certificates along Wall Street, requiring the establishment of the Depository Trust Company in 1973.

5:20 - Bogumil shares his vivid memory of holding physical account statements from decades ago, witnessing the literal doubling of family fortunes—"two turning into four, four turning into eight"—and how the tangible nature of old statements helped him grasp the true power of long-term compounding.

6:45 - Discussion of Buffett's revolutionary fee structure: zero management fees, profit sharing only above hurdles, and the forgotten detail—unlimited personal liability for losses. "Talking about aligned interests... we all talk about it, but normally we do not share in the downside directly."

14:30 - Robert explains why Buffett dissolved his partnerships in 1969: "He didn't want to manage other people's emotions anymore." The shift from managing external capital to managing Berkshire allowed him to focus purely on business building without quarterly redemption pressures.

25:00 - The power of Buffett's language: simple, clear, authentic communication that builds trust. Robert notes how Buffett writes letters "as if he's sitting in your living room explaining things to you."

38:15 - Discussion of Berkshire as more than just an investment—it becomes part of people's identities, something they want to pass to their children, transforming from a stock into a legacy vehicle.

56:30 - Bogumil's insight about Omaha during the annual meeting: "There's no other place on earth that for a few days, I have more friends per square mile than anywhere else."

59:00 - Final reflection on trust and doing the right thing even when nobody's watching—the essence of working with families and the true lesson from Buffett and Munger.

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