Berkshire Hathaway Shareholder Letters 1987
The 1987 letter is where Warren Buffett introduces the world to Mr. Market. Written months after the October crash, it lays out Ben Graham’s allegory of the manic-depressive partner who shows up every day naming a price — and the warning that he is there to serve you, not to guide you. Buffett adds the poker line that has followed it ever since: if you’ve been in the game thirty minutes and don’t know who the patsy is, you’re the patsy. He then turns his fire on “portfolio insurance,” the strategy that had $60 to $90 billion of equities poised on a hair trigger in mid-October, asking whether…
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