Dutta Choudhury Partnership Limited
A partnership firm to manage partners' paid-up capital
A partnership firm to manage partners' paid-up capital
"Simplicity has a way of improving performance through enabling us to better understand what we are doing." ⸻ Buffett and Munger
Circle of competence
Durable competitive advantage
Management
Margin of safety
In no sense whatsoever, is any rate of return guaranteed to partners. Partners who withdraw are doing just that — withdrawing.
Any year in which we fail to achieve at least a plus 6% performance, managing pertners earn zero.
Whenever we talk of yearly gains or losses, we are talking about market values; that is, how we stand with assets valued at market at year-end against how we stood on the same basis at the beginning of results for tax purposes in a given year.
Whether the managing partners do a good job or a poor job is not to be measured by whether we are plus or minus for the year. It is instead to be measured against the general experience in securities as measured by the Nifty, leading investment companies and likewise. If our record is better than that of these yardsticks, we consider it a good year, whether we are plus or minus. If we do poorer, we deserve the tomatoes.
While managing partners much prefer a five-year test, we feel three years is an absolute minimum for judging performance. It is a certainty that we will have years when the partnership performance is poorer, perhaps substantially so, than the Nifty. If any three-year or longer period produces poor results, we all should start looking around for other places to have our money. An exception to the latter statement would be three years covering a speculative explosion in a bull market (such as '90-'92, '98-'00, '04-'08 and '17-'20).
The managing partners are not in the business of predicting general stock market or business fluctuations. If you think we can do this, or think it is essential to an investment program, you should not be in the partnership.
The managing partners cannot promise results to general partners. What we can and do promise is that: a) Our investments will be chosen on the basis of value, not popularity; b) That we will attempt to bring risk of permanent capital loss (not short-term quotational loss) to an absolute minimum by obtaining a wide margin of safety in each commitment and a diversity of commitments; and c) we will have most of our net liquid worth invested in DCPL.
dcplpartners@googlegroups.com
Not publicly available
New Town, Kolkata
Letters will be published here every first Saturday of Q1 and Q3, starting with Q3 2026.