This episode is about Buffett Partnership, Ltd. (BPL) correspondence document the firm's performance and strategic changes throughout 1967. The first letter, from July, reports a strong first-half performance for BPL, significantly outpacing the Dow Jones Industrial Average, although it notes challenges within controlled companies like Berkshire Hathaway's textile business. The October letter, which Warren Buffett considered essential for partners to review before committing to 1968, announces a fundamental shift: a reduction in future investment goals from ten percentage points over the Dow to the lesser of 9% or a five-percentage-point advantage over the Dow. Buffett attributes this change to a difficult market environment, the rise of speculation, the increased size of BPL's capital, and his own desire for a less compulsive approach to superior returns. Finally, the January 1968 letter confirms BPL’s overall superior performance in 1967, achieving 35.9% compared to the Dow's 19.0%, but notes that this success was primarily driven by the "Generals - Relatively Undervalued" category, as both "Workout" and controlled companies underperformed, reinforcing the need for the newly moderated objectives.