Book Summary
In Warren Buffett’s Ground Rules, Jeremy C. Miller works through the 33 letters Warren Buffett sent to his partners in Buffett Partnership Ltd. between 1956 and 1970, with Buffett’s permission, and turns them into a set of operating principles for investing. Published by HarperBusiness on April 26, 2016, the 352-page book is Miller’s synthesis and commentary, not Buffett’s own writing — a distinction that matters, because the voice explaining the letters is Miller’s even when the ideas are Buffett’s.
Buffett started the partnership in 1956, at 26, with about $105,000 gathered from family and friends. By the time he wound it down in 1969 and 1970, it held about $100 million. The letters show how he got there: he promised no guaranteed return, measured results against the Dow Jones Industrial Average, insisted that performance be judged over three to five years rather than a single quarter, and set a 6% annual hurdle for partners who took monthly withdrawals. Over the partnership’s life it compounded at about 29.5% a year, against about 7.4% for the Dow — a gap that explains why these letters still get read.
Miller organizes the material around Buffett’s own categories and habits: ‘generals,’ or undervalued securities bought below their worth; ‘workouts,’ or arbitrage-like situations with a defined catalyst; and ‘controls,’ businesses bought outright. Woven through all of it is compounding — Buffett’s conviction that a good return, left alone and reinvested at a good rate, does the heavy work. Readers who want Buffett’s thinking in its earliest, most practical form will find Warren Buffett’s Ground Rules a shorter and more direct route than his later Berkshire letters.
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Who is Jeremy C. Miller?
Miller is an investment analyst with J.P. Morgan Asset Management, with more than 15 years in financial services spanning equity sales and research at major banks. That background shows in the book: he reads the letters as a practitioner, not a biographer, pausing to explain what a workout is, why a hurdle rate changes behavior, and how Buffett’s categories map onto decisions a working investor actually faces.
He is not a household name in the way Buffett is, and he does not pretend to be. His credibility here comes from proximity to the material and from restraint — he lets the letters carry the argument, adds context where a modern reader needs it, and stays out of the way when Buffett’s own words are clear enough. For a book built on someone else’s writing, that discipline is the main qualification, and Miller mostly sustains it.
Lessons From Warren Buffett’s Ground Rules
Judge yourself over years, not quarters. Buffett measured the partnership against the Dow and asked to be judged over three to five years, because a single year says more about luck and market mood than skill. Miller shows how that longer window kept Buffett from chasing hot stocks after a bad stretch or growing careless after a good one.
Promise nothing and say plainly what can go wrong. The first ground rule was that no rate of return was guaranteed, and Buffett repeated the point because partners who expect a smooth ride panic at the first dip. Honesty up front, Miller argues, is what let Buffett hold unpopular positions long enough for them to work.
Diversify by the kind of idea, not by the number of holdings. Generals, workouts, and controls earn money in different ways and fail for different reasons, so a mix of the three is steadier than a long list of similar cheap stocks. It is a contrarian kind of diversification: spread across return drivers, not across tickers.
Let compounding do the heavy work. The 6% hurdle for withdrawing partners was not just arithmetic; it was a reminder that every dollar taken out is a dollar that stops compounding. Buffett’s almost religious faith in compounding runs through Warren Buffett’s Ground Rules, and Miller keeps returning to it as the habit that turns sound judgment into wealth over decades.
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Criticisms of the Book
The letters were written to sophisticated partners in the 1950s and 1960s, and some passages show their age. Examples assume a market of small, overlooked companies and a tax and regulatory world that no longer exists, and Miller does not always bridge that gap — a reader new to investing can finish a chapter understanding Buffett’s logic without knowing how to apply it today. The book also stays inside the partnership years, so anyone hoping for Buffett’s later thinking on Berkshire, insurance float, or large acquisitions will need to look elsewhere.
There is also a sameness to the structure: each ground rule gets its own careful treatment, and after several chapters the pattern — letter excerpt, Miller’s explanation, restated principle — starts to feel repetitive. That is a fair trade for clarity, but at 352 pages Warren Buffett’s Ground Rules could have been tighter. Readers who want stock picks or a step-by-step system will be disappointed twice over: Buffett offered neither, and Miller does not invent them.
Who is This Book For?
This is a book for readers who already care about Buffett and want his early thinking rather than a biography. If you have read The Intelligent Investor and want to see how Buffett actually applied value ideas when he was running other people’s money, this is the natural next step, and The Warren Buffett Way pairs well with it as a companion on his later approach.
It is less suited to a brand-new investor looking for a first book, or to anyone who wants current market commentary. The letters reward patience and some comfort with business language, and the payoff is a way of thinking about risk, measurement, and time — not a list of names to buy. If that sounds like your kind of reading, the partnership letters are worth your evening.
Final Thoughts
What lasts about Warren Buffett’s Ground Rules is not any single rule but the temperament behind them: a young manager telling his partners, in writing, that he would be judged slowly, that he would not promise what he could not deliver, and that he would rather be roughly right over years than precisely right for a quarter. Miller’s contribution is to make that temperament legible without dressing it up, and the letters themselves remain remarkably fresh for documents written before most of today’s investors were born.
Paired with Buffettology for the mechanics and The Essays of Warren Buffett for the mature Berkshire view, this is the early chapter of the Buffett education. It will not tell you what to buy tomorrow, and it does not try to. It tells you how one of the best investors who ever lived thought about the job when he was just starting — and that is reason enough to read it.
