Here is Warren Buffett’s pension fund management advice in a nutshell: Be patient, buy only a few things, ignore the stock market until it becomes irrationally optimistic, at which point sell.

Executive Summary

Treating portfolio management decisions like business acquisition decisions, Warren Buffett told Washington Post owner Katharine Graham in a recently published 1975 letter. Reuters columnist James Saft highlights some of the details of Buffett's advice.

A recently released 1975 letter from Buffett to Washington Post owner Katharine Graham on the subject offers new insight into how early Buffett was to grasp both the difficulties of pension fund management and the inability of Wall Street to provide adequate solutions.

Perhaps even more valuable is the way the letter throws light on Buffett’s approach to value investing. Buffett tries to act not like a typical fund manager but like a company owner thinking about buying another company. The crucial ingredients:

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