Warren Buffett's Letters
To Berkshire Shareholders 1982

巴菲特致股東函
1982年版

BERKSHIRE HATHAWAY INC.
Berkshire海瑟崴股份有限公司

March 3, 1983
1983年3月3日

To the Shareholders of Berkshire Hathaway Inc.:

致Berkshire公司全體股東:

BERKSHIRE HATHAWAY INC.

Operating earnings of $31.5 million in 1982 amounted to only

9.8% of beginning equity capital (valuing securities at cost),

down from 15.2% in 1981 and far below our recent high of 19.4% in

1978. This decline largely resulted from:

今年的營業利益約為3,100萬美元,期初股東權益報酬率(持有股權投資以原始成本計)僅約9.8%,較去年1979年的15.2%下滑,亦遠低於1978年近年度的新高19.4%,主要的原因包括:

(1) a significant deterioration in insurance underwriting results;

(1)保險核保成績大幅惡化。

(2) a considerable expansion of equity capital without a corresponding growth in the businesses we operate directly; and

(2)在股本大幅擴張的同時,我們直接控制的被投資事業卻未同步成長。

(3) a continually-enlarging commitment of our resources to
investment in partially-owned, nonoperated businesses;
accounting rules dictate that a major part of our
pro-rata share of earnings from such businesses must be
excluded from Berkshire’s reported earnings.

(3)我們持續增加對不具控制權事業的投資,但我們依比例可分得的盈餘,依照會計原則卻不能認列在帳面上。

It was only a few years ago that we told you that the operating earnings/equity capital percentage, with proper allowance for a few other variables, was the most important yardstick of single-year managerial performance. While we still believe this to be the case with the vast majority of companies, we believe its utility in our own case has greatly diminished. You should be suspicious of such an assertion. Yardsticks seldom are discarded while yielding favorable readings. But when results deteriorate, most managers favor disposition of the yardstick rather than disposition of the manager.

就在幾年前,我曾經說過營業利益佔股東資本的比率(再加上一些調整)是衡量企業單一年度經營績效的最佳指標,雖然我們堅信這套標準仍適用於絕大部份的企業,但是我必須說明的是,這套標準對Berkshire來說,其適用性卻已大不如前,或許你會懷疑這樣的說法,認為當數字好看時很少有人會將標準捨棄,但是當結果變得很糟糕時,經理人通常傾向將衡量標準而非自己給換掉。

To managers faced with such deterioration, a more flexible measurement system often suggests itself: just shoot the arrow of business performance into a blank canvas and then carefully draw the bullseye around the implanted arrow. We generally believe in pre-set, long-lived and small bullseyes. However, because of the importance of item (3) above, further explained in the following section, we believe our abandonment of the operating earnings/equity capital bullseye to be warranted.

當成績惡化時,自然就會有另一套標準跑出來解釋原因,就像是射箭手先將箭射在空白的標靶上,然後再小心的將紅心畫在箭的週圍一樣,但基於前述原因(3)的重要性日益增加(詳如後述),我們確信移動紅心的舉動是具有正當理由的。

Non-Reported Ownership Earnings

未列入記錄的經營者盈餘

The appended financial statements reflect “accounting” earnings that generally include our proportionate share of earnings from any underlying business in which our ownership is at least 20%. Below the 20% ownership figure, however, only our share of dividends paid by the underlying business units is included in our accounting numbers; undistributed earnings of such less-than-20%-owned businesses are totally ignored.

後附財務報表所反映的帳面盈餘,通常已將我們持股超過20%的股權投資按持股比例認列其損益,然而低於20%股權投資的部份,卻只能認列實際收到的現金股利,至於未發放的盈餘則完全不列入計算。

There are a few exceptions to this rule; e.g., we own about 35% of GEICO Corporation but, because we have assigned our voting rights, the company is treated for accounting purposes as a less-than-20% holding. Thus, dividends received from GEICO in 1982 of $3.5 million after tax are the only item included in our “accounting”earnings. An additional $23 million that represents our share of GEICO’s undistributed operating earnings for 1982 is totally excluded from our reported operating earnings. If GEICO had earned less money in 1982 but had paid an additional $1 million in dividends, our reported earnings would have been larger despite the poorer business results. Conversely, if GEICO had earned an additional $100 million - and retained it all - our reported earnings would have been unchanged. Clearly “accounting” earnings can seriously misrepresent economic reality.

(當然也有少數例外,譬如我們持有35%的GEICO保險公司便因為我們已將投票權委託給別人,故在1982年僅能以成本法認列實際收到的現金股利350萬美元,至於剩下的2,300萬未分配的盈餘則完全不列入計算;而假設GEICO當年度賺的比原本的少但卻多發100萬,則Berkshire的帳面反而變得更好看,很明顯的會計原則有時會扭曲經濟現實)。

We prefer a concept of “economic” earnings that includes all undistributed earnings, regardless of ownership percentage. In our view, the value to all owners of the retained earnings of a business enterprise is determined by the effectiveness with which those earnings are used - and not by the size of one’s ownership percentage. If you have owned .01 of 1% of Berkshire during the past decade, you have benefited economically in full measure from your share of our retained earnings, no matter what your accounting system. Proportionately, you have done just as well as if you had owned the magic 20%. But if you have owned 100% of a great many capital-intensive businesses during the decade, retained earnings that were credited fully and with painstaking precision to you under standard accounting methods have resulted in minor or zero economic value. This is not a criticism of accounting procedures. We would not like to have the job of designing a better system. It’s simply to say that managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.

所以我們比較認同將所有未分配盈餘皆計入而不管持股比例的經濟盈餘概念,我們認為一家公司其所賺得的盈餘對股東的價值在於公司是否將其在運用於有效的用途之上,反而跟分配與否或是持股比例多寡無關,如果你擁有Berkshire萬分之一的股權,在過去十幾年來你一定擁有並實際感受到公司盈餘的成長,不管你採用的是何種會計原則。同樣的,你也可能100%擁有一家資本密集的公司,即使每年皆能完全認列公司的損益,卻可能絲毫感受不到實質經濟利益成長的喜悅。這不是在批評會計原則,事實上,我們也沒有能力再建立一套更好的制度,我們只是要告訴所有的經營階層與投資大眾,會計數字只是企業評價的起點而非終點。

In most corporations, less-than-20% ownership positions are unimportant (perhaps, in part, because they prevent maximization of cherished reported earnings) and the distinction between accounting and economic results we have just discussed matters little. But in our own case, such positions are of very large and growing importance. Their magnitude, we believe, is what makes our reported operating earnings figure of limited significance.

在大部份的公司,20%的股權可能不算重大(或許這可以防止它們帳面盈餘過度美化),而前面我們所提到的經濟與帳面利益的差異也不大,但我們的情況卻非如此,事實上他們的重要性與成長性,反而使得我們原來帳列的盈餘數字顯得微不足道。

In our 1981 annual report we predicted that our share of undistributed earnings from four of our major non-controlled holdings would aggregate over $35 million in 1982. With no change in our holdings of three of these companies - GEICO, General Foods and The Washington Post - and a considerable increase in our ownership of the fourth, R. J. Reynolds Industries, our share of undistributed 1982 operating earnings of this group came to well over $40 million. This number - not reflected at all in our earnings - is greater than our total reported earnings, which include only the $14 million in dividends received from these companies. And, of course, we have a number of smaller ownership interests that, in aggregate, had substantial additional undistributed earnings.

在1981年的年報中,我們曾預測四個主要不具控制權的股權投資,依持股比例可分得的未分配盈餘高達3,500萬美元,而今年在其中三個持股比例未變(包括GEICO、General Foods與Washington Post),另一家R.J.Reynolds大幅增加的情況下,可分得的未分配盈餘將超過4,000萬美金,這個數字完全未顯現在帳上,卻已超過Berkshire帳列盈餘數(其中包含前述四家公司所發放的1,400萬美元現金股利) ,這還不包括其他沒有算到的不具控制權的股權投資部份。

We attach real significance to the general magnitude of these numbers, but we don’t believe they should be carried to ten decimal places. Realization by Berkshire of such retained earnings through improved market valuations is subject to very substantial, but indeterminate, taxation. And while retained earnings over the years, and in the aggregate, have translated into at least equal market value for shareholders, the translation has been both extraordinarily uneven among companies and irregular and unpredictable in timing.

說明這些數字只是要強調它們的重要性,而不一定非要把它們算的非常精準,但事實上,而同時這些盈餘長期累積下來,將透過其本身股價不定期且不規則的反映出來,對股東來說,Berkshire反而要承擔一大筆不確定何時支付的所得稅。

However, this very unevenness and irregularity offers advantages to the value-oriented purchaser of fractional portions of businesses. This investor may select from almost the entire array of major American corporations, including many far superior to virtually any of the businesses that could be bought in their entirety in a negotiated deal. And fractional-interest purchases can be made in an auction market where prices are set by participants with behavior patterns that sometimes resemble those of an army of manic-depressive lemmings.

而這種特性卻提供價值型的投資人投資股票的大好機會,他們可以從各式各樣的美國企業中挑選價廉物美的公司股份,並從一群投資行為有如驚慌失措的旅鼠手中撿到便宜貨。

Within this gigantic auction arena, it is our job to select businesses with economic characteristics allowing each dollar of retained earnings to be translated eventually into at least a dollar of market value. Despite a lot of mistakes, we have so far achieved this goal. In doing so, we have been greatly assisted by Arthur Okun’s patron saint for economists - St. Offset. In some cases, that is, retained earnings attributable to our ownership position have had insignificant or even negative impact on market value, while in other major positions a dollar retained by an investee corporation has been translated into two or more dollars of market value. To date, our corporate over-achievers have more than offset the laggards. If we can continue this record, it will validate our efforts to maximize “economic” earnings, regardless of the impact upon “accounting” earnings.

在這個巨大的拍賣市場中,我們的工作就是去挑選那些能將所賺的錢再利用並產生大於原本經濟效益的公司,儘管曾經犯了不少錯誤,目前為止仍算達成目標,這期間我們獲得經濟學家Arthue Okun忠實信徒-聖Offset的大力協助,有時某些公司所保留的盈餘並未增加其經濟效益,但有時卻高達二、三倍,到目前為止,表現好的多過表現差的,若我們能繼續保持下去,不管對帳面盈餘有任何影響,將可使Berkshire經濟盈餘極大化。

Satisfactory as our partial-ownership approach has been, what really makes us dance is the purchase of 100% of good businesses at reasonable prices. We’ve accomplished this feat a few times (and expect to do so again), but it is an extraordinarily difficult job - far more difficult than the purchase at attractive prices of fractional interests.

雖然我們對於買進股份的方式感到滿意,但真正會令我們雀躍的還是能以合理的價格100%地買下一家優良企業,我們偶爾會締造如此佳績(也希望能夠再次做到),這實在是一件相當困難的工作,比以理想的價格買進股份要困難得許多。

As we look at the major acquisitions that others made during 1982, our reaction is not envy, but relief that we were non-participants. For in many of these acquisitions, managerial intellect wilted in competition with managerial adrenaline The thrill of the chase blinded the pursuers to the consequences of the catch. Pascal’s observation seems apt: “It has struck me that all men’s misfortunes spring from the single cause that they are unable to stay quietly in one room.”

當我們在觀察1982年發生的幾件大型購併案,我們的反應不是忌妒,反而是慶幸我們並非其中一員。因為在這些購併案中,管理當局的衝動戰勝其理智,追逐的刺激過程使得追求者變得盲目,Pascal的觀察非常恰當:「它使我想到所有的不幸皆歸究於大家無法安靜的待在一個房間內」。

(Your Chairman left the room once too often last year and almost starred in the Acquisition Follies of 1982. In retrospect, our major accomplishment of the year was that a very large purchase to which we had firmly committed was unable to be completed for reasons totally beyond our control. Had it come off, this transaction would have consumed extraordinary amounts of time and energy, all for a most uncertain payoff. If we were to introduce graphics to this report, illustrating favorable business developments of the past year, two blank pages depicting this blown deal would be the appropriate centerfold.)

(你們的董事長去年也曾數度離開那個房間,且差點成為那場鬧劇的主角),現在回想起來,去年我們最大的成就是試圖大幅購買那些我們先前已投入許多的公司的股份但由於某些無法控制的原因卻無法執行,倘若真的成功了,這宗交易必定會耗盡我們所有的時間與精神,但卻不一定會獲得回報。若我們將去年的報告作成圖表介紹本公司的發展,你將會發現有兩頁空白的跨頁插圖用來描述這宗告吹的交易。

Our partial-ownership approach can be continued soundly only as long as portions of attractive businesses can be acquired at attractive prices. We need a moderately-priced stock market to assist us in this endeavor. The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do. For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.

我們投資股份的作法惟有當我們能夠以合理的價格買到夠吸引人的企業才行得通,同時也需要溫和的股票市場作配合,然而市場就像老天爺一樣,往往會幫助那些自助的人,但與老天爺不一樣的地方是,祂不會原諒那些不知道自己在做什麼的人。對投資人來說,買進的價格太高將抵銷這家績優企業未來十年亮麗的發展所帶來的效應。

Should the stock market advance to considerably higher levels, our ability to utilize capital effectively in partial-ownership positions will be reduced or eliminated. This will happen periodically: just ten years ago, at the height of the two-tier market mania (with high-return-on-equity businesses bid to the sky by institutional investors), Berkshire’s insurance subsidiaries owned only $18 million in market value of equities, excluding their interest in Blue Chip Stamps. At that time, such equity holdings amounted to about 15% of our insurance company investments versus the present 80%. There were as many good businesses around in 1972 as in 1982, but the prices the stock market placed upon those businesses in 1972 looked absurd. While high stock prices in the future would make our performance look good temporarily, they would hurt our long-term business prospects rather than help them. We currently are seeing early traces of this problem.

所以當股票市場漲到一定的程度,將使我們有效地運用資金買進股份的能力大打折扣或甚至完全消失。這種情況會不斷發生,就像在10年前當股市到達狂熱的高檔時(由於高股東權益報酬股被機構投資人捧上天),Berkshire的保險子公司(不包括Blue Chip Stamps股權在內)僅僅持有1,800萬市值的股票,僅佔保險公司投資總額的15% (相較於現在的80%),在1972年的當時有跟現在一樣多的好公司,但跟現在比他們當時的股價實在有點離譜。雖然股價高漲對公司短期帳面表現有所助益,但就長期而言卻反而會影響企業的前景,而目前我們已觀察到一些蛛絲馬跡再度出現。

Long-Term Corporate Performance

企業長期表現

Our gain in net worth during 1982, valuing equities held by our insurance subsidiaries at market value (less capital gain taxes payable if unrealized gains were actually realized) amounted to $208 million. On a beginning net worth base of $519 million, the percentage gain was 40%.

1982年Berkshire淨值的成長,(保險子公司持有的股票以市價計,扣除未實現資本利得的潛在稅負)大約是2億800萬美金,相較於期初淨值5億1,900萬,約有40%的成長。

During the 18-year tenure of present management, book value has grown from $19.46 per share to $737.43 per share, or 22.0% compounded annually. You can be certain that this percentage will diminish in the future. Geometric progressions eventually forge their own anchors.

在現有經營階層接掌公司的18年內,帳面價值由原先的每股19.46美元成長到現在的每股737.43美元,約當22.0%年複合成長率,可以確定的這個比率在未來將減少,成長終將有其極限。

Berkshire’s economic goal remains to produce a long-term rate of return well above the return achieved by the average large American corporation. Our willingness to purchase either partial or total ownership positions in favorably-situated businesses, coupled with reasonable discipline about the prices we are willing to pay, should give us a good chance of achieving our goal.

Berkshire的經營目標是希望獲得高於一般美國企業的長期投資報酬率,我們願意以合理的價格購買全部或部份具競爭力的企業,相當有助於我們達成上述目標。

Again this year the gain in market valuation of partially-owned businesses outpaced the gain in underlying economic value of those businesses. For example, $79 million of our $208 million gain is attributable to an increased market price for GEICO. This company continues to do exceptionally well, and we are more impressed than ever by the strength of GEICO’s basic business idea and by the management skills of Jack Byrne. (Although not found in the catechism of the better business schools, “Let Jack Do It” works fine as a corporate creed for us.)

再一次的我們不具控制權的股份投資其市值成長高於其實質經濟利益的成長,舉例來說,在增加的2億800萬市值當中,有7,900萬是來自於由於GEICO的貢獻,這家公司持續表現優異,我們一再對該公司經營理念的實踐與經營階層的管理能力感到印象深刻(雖然不是名校出身,但讓Jack試看看的結果,證實我們的眼光並成為我們企業的信念)。

However, GEICO’s increase in market value during the past two years has been considerably greater than the gain in its intrinsic business value, impressive as the latter has been. We expected such a favorable variation at some point, as the perception of investors converged with business reality. And we look forward to substantial future gains in underlying business value accompanied by irregular, but eventually full, market recognition of such gains.

然而GEICO 在市值的成長卻遠超過本身實質價值的成長,雖然後者的表現一樣令人印象深刻,而當投資大眾逐漸認清現實狀況時,我們相信市值將會反映其真正價值,

Year-to-year variances, however, cannot consistently be in our favor. Even if our partially-owned businesses continue to perform well in an economic sense, there will be years when they perform poorly in the market. At such times our net worth could shrink significantly. We will not be distressed by such a shrinkage; if the businesses continue to look attractive and we have cash available, we simply will add to our holdings at even more favorable prices.

當然每年的差異變化不會永遠都對我們有利,就算我們持有部份股權的公司每年都表現很好,也不一定保證其在股市的表現就一定不錯,屆時Berkshire的淨值便會大幅縮減,但我們並不會因此感到沮喪,如果這家公司一直都是那麼吸引人而我們手頭上剛好又有現金,我們便會逢低再增加持股。

Sources of Reported Earnings

帳面盈餘報告

The table below shows the sources of Berkshire’s reported earnings. In 1981 and 1982 Berkshire owned about 60% of Blue Chip Stamps which, in turn, owned 80% of Wesco Financial Corporation. The table displays aggregate operating earnings of the various business entities, as well as Berkshire’s share of those earnings. All of the significant gains and losses attributable to unusual sales of assets by any of the business entities are aggregated with securities transactions in the line near the bottom of the table, and are not included in operating earnings.

下表係顯示Berkshire依照各個公司持股比例所列示帳面盈餘的主要來源,而各個公司資本利得損失並不包含在內而是彙總於下表最後「已實現出售證券利得」一欄,雖然本表列示的方式與一般公認會計原則不儘相同,不過最後的損益數字卻是一致的: 其中Berkshire擁有Blue Chips Stamps 60%的股權,而後者又擁有 Wesco 財務公司 80%的股權。

Net Earnings

Earnings Before Income Taxes After Tax

-------------------------------------- ------------------

Total Berkshire Share Berkshire Share

------------------ ------------------ ------------------

1982 1981 1982 1981 1982 1981

-------- -------- -------- -------- -------- --------

(000s omitted)

Operating Earnings:

Insurance Group:

Underwriting ............ $(21,558) $ 1,478 $(21,558) $ 1,478 $(11,345) $ 798

Net Investment Income ... 41,620 38,823 41,620 38,823 35,270 32,401

Berkshire-Waumbec Textiles (1,545) (2,669) (1,545) (2,669) (862) (1,493)

Associated Retail Stores .. 914 1,763 914 1,763 446 759

See’s Candies ............. 23,884 20,961 14,235 12,493 6,914 5,910

Buffalo Evening News ...... (1,215) (1,217) (724) (725) (226) (320)

Blue Chip Stamps - Parent 4,182 3,642 2,492 2,171 2,472 2,134

Wesco Financial - Parent .. 6,156 4,495 2,937 2,145 2,210 1,590

Mutual Savings and Loan ... (6) 1,605 (2) 766 1,524 1,536

Precision Steel ........... 1,035 3,453 493 1,648 265 841

Interest on Debt .......... (14,996) (14,656) (12,977) (12,649) (6,951) (6,671)

Other* .................... 2,631 2,985 1,857 1,992 1,780 1,936

-------- -------- -------- -------- -------- --------

Operating Earnings .......... 41,102 60,663 27,742 47,236 31,497 39,421

Sales of securities and

unusual sales of assets .. 36,651 37,801 21,875 33,150 14,877 23,183

-------- -------- -------- -------- -------- --------

Total Earnings - all entities $ 77,753 $ 98,464 $ 49,617 $ 80,386 $ 46,374 $ 62,604

======== ======== ======== ======== ======== ========

* Amortization of intangibles arising in accounting for purchases of businesses (i.e. See’s, Mutual and Buffalo Evening News) is reflected in the category designated as “Other”.

**1 包含購併企業商譽的攤銷(如See's Candies; Mutual; Buffalio Evening News等)

On pages 45-61 of this report we have reproduced the narrative reports of the principal executives of Blue Chip and Wesco, in which they describe 1982 operations. A copy of the full annual report of either company will be mailed to any Berkshire shareholder upon request to Mr. Robert H. Bird for Blue Chip Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040, or to Mrs. Jeanne Leach for Wesco Financial Corporation, 315 East Colorado Boulevard, Pasadena, California 91109.

本報告附有Blue Chip及Wesco兩家公司主要經營階層對其1982年公司經營所作的一番敘述。若有需要Berkshire的股東可向Mr. Robert(地址:加州洛杉磯5801 South Eastern Avenue)索取藍籌郵票的年報或向Mrs. Jeanne(地址:加州Pasadena 315 East Colorado Boulevard)索取Wesco的年報。

I believe you will find the Blue Chip chronicle of developments in the Buffalo newspaper situation particularly interesting. There are now only 14 cities in the United States with a daily newspaper whose weekday circulation exceeds that of the Buffalo News. But the real story has been the growth in Sunday circulation. Six years ago, prior to introduction of a Sunday edition of the News, the long-established Courier-Express, as the only Sunday newspaper published in Buffalo, had circulation of 272,000. The News now has Sunday circulation of 367,000, a 35% gain - even though the number of households within the primary circulation area has shown little change during the six years. We know of no city in the United States with a long history of seven-day newspaper publication in which the percentage of households purchasing the Sunday newspaper has grown at anything like this rate. To the contrary, in most cities household penetration figures have grown negligibly, or not at all. Our key managers in Buffalo - Henry Urban, Stan Lipsey, Murray Light, Clyde Pinson, Dave Perona and Dick Feather - deserve great credit for this unmatched expansion in Sunday readership.

其中我相信你會發現有關Blue Chip在Buffalo Evening News的情況特別有意思,目前全美大約有14個城市的日報業者每週發行量超過Buffalo ,但真正的關鍵卻在於星期天發行量的成長,6年前也就是在週日版尚未推出之前,原本在Buffalo 發行星期天報紙的 Courier-Express 約有27萬份的發行量,而如今即使該地區家庭戶數未見成長,單單Buffalo News在週日便有36萬份,約為35%的成長,就我們所知,這是在全美其它地區所未見的,一切都要歸功該報的管理階層為我們所做的努力。

As we indicated earlier, undistributed earnings in companies we do not control are now fully as important as the reported operating earnings detailed in the preceding table. The distributed portion of non-controlled earnings, of course, finds its way into that table primarily through the net investment income segment of Insurance Group earnings.

如同我們先前曾解釋過的,不具控制權的股份投資其未分配盈餘的重要性早已不下於前表所列公司帳面營業淨利。不具控制權的股份投資已分配的盈餘當然已反映在公司淨投資收益(Net Investment Income)項下。

We show below Berkshire’s proportional holdings in those non-controlled businesses for which only distributed earnings (dividends) are included in our earnings.

而下表所列係我們在不具控制權的股權投資依持股比例所應有之權益:

No. of Shares

or Share Equiv. Cost Market

--------------- ---------- ----------

(000s omitted)

460,650 (a) Affiliated Publications, Inc. ...... $ 3,516 $ 16,929

908,800 (c) Crum & Forster ..................... 47,144 48,962

2,101,244 (b) General Foods, Inc. ................ 66,277 83,680

7,200,000 (a) GEICO Corporation .................. 47,138 309,600

2,379,200 (a) Handy & Harman ..................... 27,318 46,692

711,180 (a) Interpublic Group of Companies, Inc. 4,531 34,314

282,500 (a) Media General ...................... 4,545 12,289

391,400 (a) Ogilvy & Mather Int’l. Inc. ........ 3,709 17,319

3,107,675 (b) R. J. Reynolds Industries .......... 142,343 158,715

1,531,391 (a) Time, Inc. ......................... 45,273 79,824

1,868,600 (a) The Washington Post Company ........ 10,628 103,240

---------- ----------

$402,422 $911,564

All Other Common Stockholdings ..... 21,611 34,058

---------- ----------

Total Common Stocks $424,033 $945,622

========== ==========

(a) All owned by Berkshire or its insurance subsidiaries.

(b) Blue Chip and/or Wesco own shares of these companies. All numbers represent Berkshire’s net interest in the larger gross holdings of the group.

(c) Temporary holding as cash substitute.

(a) 代表全部股權由Berkshire及其子公司所持有
(b) 代表由Berkshire子公司Blue Chip與Wesco 所持有,依Berkshire持股比例換算得來
(c) 代表暫時持有作為現金的替代品

In case you haven’t noticed, there is an important investment lesson to be derived from this table: nostalgia should be weighted heavily in stock selection. Our two largest unrealized gains are in Washington Post and GEICO, companies with which your Chairman formed his first commercial connections at the ages of 13 and 20, respectively After straying for roughly 25 years, we returned as investors in the mid-1970s. The table quantifies the rewards for even long-delayed corporate fidelity.

為免你未注意到,本表有個投資經驗可與大家分享,懷舊(Nostalgia)是我們在投資選股時必須特別加以重視的,在我們投資組合中,事實上具有最大未實現利益的兩家公司Washington Post與GEIGO,本人早在13歲與20歲時便與它們結緣,但磋跎了二十幾年,遲至1970年代我們才正式成為該公司的股東,但結果證明所謂:「遲到總比未到好。」

Our controlled and non-controlled businesses operate over such a wide spectrum that detailed commentary here would prove too lengthy. Much financial and operational information regarding the controlled businesses is included in Management’s Discussion on pages 34-39, and in the narrative reports on pages 45-61. However, our largest area of business activity has been, and almost certainly will continue to be, the property-casualty insurance area. So commentary on developments in that industry is appropriate.

由於我們具控制權與不具控制權的股權投資經營的行業實在是相當廣泛,若我一一詳細介紹將會使得報告變得冗長,然而這其中不管是現在或是將來最主要的事業經營將會是擺在產險與意外險領域之上,因此我們有必要對保險產業現狀予以詳加說明:


Insurance Industry Conditions

保險產業現況

We show below an updated table of the industry statistics we utilized in last year’s annual report. Its message is clear: underwriting results in 1983 will not be a sight for the squeamish.

下表所顯示的是去年我們就曾引用過,經過更新後的產業統計數字,其所傳達的訊息相當明顯,我們將不會對1983年的核保結果感到吃驚。


Yearly Change Yearly Change Combined Ratio

in Premiums in Premiums after Policy-

Written (%) Earned (%) holder Dividends

------------- ------------- ----------------

1972 ................ 10.2 10.9 96.2

1973 ................ 8.0 8.8 99.2

1974 ................ 6.2 6.9 105.4

1975 ................ 11.0 9.6 107.9

1976 ................ 21.9 19.4 102.4

1977 ................ 19.8 20.5 97.2

1978 ................ 12.8 14.3 97.5

1979 ................ 10.3 10.4 100.6

1980 ................ 6.0 7.8 103.1

1981 (Rev.) ......... 3.9 4.1 106.0

1982 (Est.) ......... 5.1 4.6 109.5

Source: Best’s Aggregates and Averages.

The Best’s data reflect the experience of practically the entire industry, including stock, mutual and reciprocal companies. The combined ratio represents total operating and loss costs as compared to revenue from premiums; a ratio below 100 indicates an underwriting profit, and one above 100 indicates a loss.

調查機構Best的數據正說明了目前整個產業,包含股市、共同基金以及相關公司,所面臨到的狀況,Combined Ratio係表示經營成本加上理賠損失除以保費收入的比率,若比率小於100%則表示有核保利益,反之則有核保損失。

For reasons outlined in last year’s report, as long as the annual gain in industry premiums written falls well below 10%, you can expect the underwriting picture in the next year to deteriorate. This will be true even at today’s lower general rate of inflation. With the number of policies increasing annually, medical inflation far exceeding general inflation, and concepts of insured liability broadening, it is highly unlikely that yearly increases in insured losses will fall much below 10%.

就如同去年我們所說的一樣,若承銷保費年增率低於10%,你就會發現隔年的核保結果惡化,即使像通膨率相對較低的今日也是如此,隨著保單日益成長,醫療費用上漲的速度遠高於一般物價,加上保險責任日益擴大的影響,核保損失將很難壓低到10%以下。

You should be further aware that the 1982 combined ratio of 109.5 represents a “best case” estimate. In a given year, it is possible for an insurer to show almost any profit number it wishes, particularly if it (1) writes “long-tail” business (coverage where current costs can be only estimated, because claim payments are long delayed), (2) has been adequately reserved in the past, or (3) is growing very rapidly. There are indications that several large insurers opted in 1982 for obscure accounting and reserving maneuvers that masked significant deterioration in their underlying businesses. In insurance, as elsewhere, the reaction of weak managements to weak operations is often weak accounting. (“It’s difficult for an empty sack to stand upright.”)

大家必須有所認知,1982年的Combined Ratio 109.5已是相當樂觀的估計,在從前保險公司幾乎可依自身喜好來調整年度獲利,只要(1)承銷長期保單(Long-tail)因為理賠成本多採用估計(2)以前年度已提存有適當準備或(3)業務成長快速。有跡象顯示有幾家大型保險公司傾向以模糊的會計與挪用準備的方式來掩飾其本業不佳的情況。保險業,跟其它行業一樣,不良的經營階層對不良的營運通常最直接的反應就是不良的帳務,俗語說:「你很難讓一個空沙包站得直挺挺的」。

The great majority of managements, however, try to play it straight. But even managements of integrity may subconsciously be less willing in poor profit years to fully recognize adverse loss trends. Industry statistics indicate some deterioration in loss reserving practices during 1982 and the true combined ratio is likely to be modestly worse than indicated by our table.

當然大部份的經營階層都儘力正正當當的照遊戲規則玩,但即使是正直的管理當局在面對獲利不佳的情況時,下意識多多少少也不會願意完全承認營運走下坡的窘境,產業統計資料指出在1982年對於提列損失準備方面有惡化跡象,所以實際的Combined Ratio恐怕會比表列數更差一點。

The conventional wisdom is that 1983 or 1984 will see the worst of underwriting experience and then, as in the past, the “cycle” will move, significantly and steadily, toward better results. We disagree because of a pronounced change in the competitive environment, hard to see for many years but now quite visible.

一般認為在1983或1984 年核保成績會到谷底,然後產業循環會如同過去經驗一般緩步穩定地向上,但由於一項明顯的改變(這種改變已許多年未見,而如今卻重現)使我們抱持不同的看法。

To understand the change, we need to look at some major factors that affect levels of corporate profitability generally. Businesses in industries with both substantial over-capacity and a “commodity” product (undifferentiated in any customer-important way by factors such as performance, appearance, service support, etc.) are prime candidates for profit troubles. These may be escaped, true, if prices or costs are administered in some manner and thereby insulated at least partially from normal market forces. This administration can be carried out (a) legally through government intervention (until recently, this category included pricing for truckers and deposit costs for financial institutions), (b) illegally through collusion, or (c) “extra-legally” through OPEC-style foreign cartelization (with tag-along benefits for domestic non-cartel operators).

要了解崮中差異,我們必須探究幾項影響企業獲利的重要因素,一般來說若企業處在產業面臨供給過剩且為一般商品化的產品時(在整體表現、外觀、售後服務等都無差異化),便極有可能發生獲利警訊,當然若價格或成本在某些情況下(例如透過政府立法干預、非法勾結或國際性聯合壟斷如OPEC)能獲得控制或可稍微免除自由市場的競爭壓力。

If, however, costs and prices are determined by full-bore competition, there is more than ample capacity, and the buyer cares little about whose product or distribution services he uses, industry economics are almost certain to be unexciting. They may well be disastrous.

而萬一成本與價格係由完全競爭市場來決定的話,產品供過於求,客戶又不在乎其所採用的產品或通路服務係由誰提供,則產業鐵定會面臨悲慘的下場。

Hence the constant struggle of every vendor to establish and emphasize special qualities of product or service. This works with candy bars (customers buy by brand name, not by asking for a “two-ounce candy bar”) but doesn’t work with sugar (how often do you hear, “I’ll have a cup of coffee with cream and C & H sugar, please”).

這也是為什麼所有的廠商皆努力強調並建立本身產品或服務的差異性,這種作法在糖果業或許有用(消費者會指明品牌)但砂糖業卻沒有用(難道你聽過有人會說:「我的咖啡要加奶精和某某牌的砂糖」)。

In many industries, differentiation simply can’t be made meaningful. A few producers in such industries may consistently do well if they have a cost advantage that is both wide and sustainable. By definition such exceptions are few, and, in many industries, are non-existent. For the great majority of companies selling “commodity” products, a depressing equation of business economics prevails: persistent over-capacity without administered prices (or costs) equals poor profitability.

在許多產業就是無法作到差異化,有些生產者或能因具成本優勢而表現傑出,然在實際上這種情況極少或甚至根本就不存在,所以對大部份銷售已完全商品化的公司來說,不可避免的結局便是,持續的產能過剩無法控制價格滑落導致獲利不佳。

Of course, over-capacity may eventually self-correct, either as capacity shrinks or demand expands. Unfortunately for the participants, such corrections often are long delayed. When they finally occur, the rebound to prosperity frequently produces a pervasive enthusiasm for expansion that, within a few years, again creates over-capacity and a new profitless environment. In other words, nothing fails like success.

當然產能過剩有時會因產能縮減或需求增加而自我修正,然而不幸的是這種修正的過程卻是緩慢且痛苦的,當產業好不容易面臨反彈時,卻又是一窩蜂全面擴張的開始,不到幾年又必須面對先前的窘況。也就是說,大家都成功的結果卻變成失敗的結局。

What finally determines levels of long-term profitability in such industries is the ratio of supply-tight to supply-ample years. Frequently that ratio is dismal. (It seems as if the most recent supply-tight period in our textile business - it occurred some years back - lasted the better part of a morning.)

而最後決定產業長期獲利情況的是供給吃緊與供給過剩年度的比率,通常這種比率很小,(以我們在紡織業的經驗來說,供給吃緊的情況要追溯到許多年以前,且大約僅維持不到一個早上的時間)。

In some industries, however, capacity-tight conditions can last a long time. Sometimes actual growth in demand will outrun forecasted growth for an extended period. In other cases, adding capacity requires very long lead times because complicated manufacturing facilities must be planned and built.

在某一些產業,供給吃緊的情況卻可以維持上好一段期間,有時實際需求的成長甚至超過當初所預期,而要增加產能因涉及複雜的規劃與建廠而須有相當的前置期。

But in the insurance business, to return to that subject, capacity can be instantly created by capital plus an underwriter’s willingness to sign his name. (Even capital is less important in a world in which state-sponsored guaranty funds protect many policyholders against insurer insolvency.) Under almost all conditions except that of fear for survival - produced, perhaps, by a stock market debacle or a truly major natural disaster - the insurance industry operates under the competitive sword of substantial overcapacity. Generally, also, despite heroic attempts to do otherwise, the industry sells a relatively undifferentiated commodity-type product. (Many insureds, including the managers of large businesses, do not even know the names of their insurers.) Insurance, therefore, would seem to be a textbook case of an industry usually faced with the deadly combination of excess capacity and a “commodity” product.

回歸正題談到保險業,只要業者增加點資本供給量就能馬上提高 (有些時候由於州政府立法保障保戶免於保險公司倒閉風險,甚至可不需要增加資本),在絕大多數的情況下,(除了發生股市大崩盤或自然界的天災巨變)保險業皆處於過度競爭的環境下經營,儘管也有業者勇於嘗試多做變化,但通常來說,業者所銷售的保單多屬於無差異化的一般商品(許多保戶包含大公司的經理人在內,甚至不知道自己所投保的是那一家保險公司),所以保險業在教科書當中一般被歸類為面臨供給過剩且產品一般商品化死胡同的艱困行業。


Why, then, was underwriting, despite the existence of cycles, generally profitable over many decades? (From 1950 through 1970, the industry combined ratio averaged 99.0. allowing all investment income plus 1% of premiums to flow through to profits.) The answer lies primarily in the historic methods of regulation and distribution. For much of this century, a large portion of the industry worked, in effect, within a legal quasi-administered pricing system fostered by insurance regulators. While price competition existed, it was not pervasive among the larger companies. The main competition was for agents, who were courted via various non-price-related strategies.

那麼為什麼保險業即使在面臨這種情況下,數十年來仍能有所獲利?(在1950年到1970年間產業平均的Combined Ratio為99.0,這使得公司獲利除投資收益外,還外加1%的核保利益),其答案在於傳統的規範與行銷方式,這個世紀以來整個產業係依照業者所掌控的近乎法定管制價格機制在運作,雖然競價行為確實存在,但這情況在大型保險業間卻不普遍,主要的競爭係在爭取經紀人方面,且多用各種與價格無關的方式去爭取。

For the giants of the industry, most rates were set through negotiations between industry “bureaus” (or through companies acting in accord with their recommendations) and state regulators. Dignified haggling occurred, but it was between company and regulator rather than between company and customer. When the dust settled, Giant A charged the same price as Giant B - and both companies and agents were prohibited by law from cutting such filed rates.

而大型業者的費率主要係透過產業公會與州政府管制當局協調(或依照公司所建議)來訂定,討價還價是難免的,但那是業者與政府間,而不是業者與客戶間的行為。當爭論結束,公司甲的價格可能與公司乙的完全一致,而法律也禁止業者或經紀人再殺價競爭。


The company-state negotiated prices included specific profit allowances and, when loss data indicated that current prices were unprofitable, both company managements and state regulators expected that they would act together to correct the situation. Thus, most of the pricing actions of the giants of the industry were “gentlemanly”, predictable, and profit-producing. Of prime importance - and in contrast to the way most of the business world operated - insurance companies could legally price their way to profitability even in the face of substantial over-capacity.

業者與州政府協議訂定的價格保障業者的獲利而當資料顯示現有價格不敷成本時,政府還會與業者協調共同努力改善損失的狀況,故產業大部份定價的舉動皆能確保公司有利可圖,最重要的是不同於一般商業社會運作的習慣,保險公司即使在超額供給的情況下,仍能合法地調整價格以確保公司的獲利。

That day is gone. Although parts of the old structure remain, far more than enough new capacity exists outside of that structure to force all parties, old and new, to respond. The new capacity uses various methods of distribution and is not reluctant to use price as a prime competitive weapon. Indeed, it relishes that use. In the process, customers have learned that insurance is no longer a one-price business. They won’t forget.

但好景不常,雖然舊有的制度仍在,但體制外的資金卻陸續投入市場,迫使所有的參與者,不論新舊皆被迫回應,新進者利用各種不同的行銷管道且毫不猶豫地使用價格作為競爭的工具,而確實他們也善用這項武器,在過程中消費者漸漸了解到保險不再是不二價的行業,而關於這點他們永遠記得。

Future profitability of the industry will be determined by current competitive characteristics, not past ones. Many managers have been slow to recognize this. It’s not only generals that prefer to fight the last war. Most business and investment analysis also comes from the rear-view mirror. It seems clear to us, however, that only one condition will allow the insurance industry to achieve significantly improved underwriting results. That is the same condition that will allow better results for the aluminum, copper, or corn producer - a major narrowing of the gap between demand and supply.

產業未來的獲利性取決於現今而非過去競爭的特性,但許多經理人很難體認到這一點,不是只有將軍才會戰到最後一兵一卒,大部份的企業與投資分析都是後知後覺,但我們卻看得很透澈,惟有一種情況才能改善保險業承保獲利的狀況,這和鋁、銅或玉米生產業者相同,那就是縮小供給與需求之間的差距。

Unfortunately, there can be no surge in demand for insurance policies comparable to one that might produce a market tightness in copper or aluminum. Rather, the supply of available insurance coverage must be curtailed. “Supply”, in this context, is mental rather than physical: plants or companies need not be shut; only the willingness of underwriters to sign their names need be curtailed.

而不幸的是,不像鋁、銅,保單的需求,保單的需求不會因市場緊峭而一下子就大幅增加,所以相對的,就必須從緊縮供給面來下手,而所謂的供給實際上是偏向心理面而非實質面的,不必關閉廠房或公司,只要業者克制一下簽下保單的衝動即可。

This contraction will not happen because of generally poor profit levels. Bad profits produce much hand-wringing and finger-pointing. But they do not lead major sources of insurance capacity to turn their backs on very large chunks of business, thereby sacrificing market share and industry significance.

而這種抑制絕不會是因為獲利不佳,因為不賺錢雖然會使業者猶豫再三,但他們卻不願冒著喪失市場佔有率與業界地位而放棄大筆的生意。

Instead, major capacity withdrawals require a shock factor such as a natural or financial “megadisaster”. One might occur tomorrow - or many years from now. The insurance business - even taking investment income into account - will not be particularly profitable in the meantime.

反而是需要自然的或金融上的大風暴才會使業者大幅縮手,而這種情況或許明天就會發生,也可能要等上好幾年,到時即使把投資收益列入考量,保險業也很難維持獲利的局面。

When supply ultimately contracts, large amounts of business will be available for the few with large capital capacity, a willingness to commit it, and an in-place distribution system. We would expect great opportunities for our insurance subsidiaries at such a time.

當供給真正的緊縮時,大筆的業務將會自動上門給倖存的大型業者,他們有能力也有通路能夠吃下所有生意,而我們的保險子公司早已準備好這一天的到來。

During 1982, our insurance underwriting deteriorated far more than did the industry’s. From a profit position well above average, we, slipped to a performance modestly below average. The biggest swing was in National Indemnity’s traditional coverages. Lines that have been highly profitable for us in the past are now priced at levels that guarantee underwriting losses. In 1983 we expect our insurance group to record an average performance in an industry in which average is very poor.

在1982年我們的保險部門承銷成績惡化的比同業還嚴重,從以往獲利優於同業,滑落至同業平均之下,主要的變化在於National Indemnity傳統的承保範圍,我們以往獲利頗佳的部份,價格下跌到保險公司鐵定賠錢的慘況,而展望明年,我們預期表現將與同業水準相當,不過所謂的水準將會很慘。

Two of our stars, Milt Thornton at Cypress and Floyd Taylor at Kansas Fire and Casualty, continued their outstanding records of producing an underwriting profit every year since joining us. Both Milt and Floyd simply are incapable of being average. They maintain a passionately proprietary attitude toward their operations and have developed a business culture centered upon unusual cost-consciousness and customer service. It shows on their scorecards.

我們兩位明星,Cypress的Milt Thornton 與Kansas的Floyd Taylor 表現持續看好,維持一貫的積極態度並建立在節省成本與客戶至上的企業文化上,這明白顯現在他們的成績單之上。

During 1982, parent company responsibility for most of our insurance operations was given to Mike Goldberg. Planning, recruitment, and monitoring all have shown significant improvement since Mike replaced me in this role.

在1982年母公司負責管理保險子公司的責任交給Mike Goldberg,自從Mike從我手中接棒後,不論在計劃、招募與監控等各方面皆有長足的進步。

GEICO continues to be managed with a zeal for efficiency and value to the customer that virtually guarantees unusual success. Jack Byrne and Bill Snyder are achieving the most elusive of human goals - keeping things simple and remembering what you set out to do. In Lou Simpson, additionally, GEICO has the best investment manager in the property-casualty business. We are happy with every aspect of this operation. GEICO is a magnificent illustration of the high-profit exception we described earlier in discussing commodity industries with over-capacity - a company with a wide and sustainable cost advantage. Our 35% interest in GEICO represents about $250 million of premium volume, an amount considerably greater than all of the direct volume we produce.

GEICO持續以追求效率與客戶服務的熱誠所管理,而這點也保證公司非凡的成功,Jack Byrne與 Bill Snyder成就人類最微妙的目標-讓事情單純化並牢記你所欲達成的目標,加上業界最優秀的投資經理人Lou Simpson,我們很滿意這種最佳組合,GEICO是前面我們所提及過度供給的大眾化商品高獲利特殊情況的最佳典範,它是一家具有既深且廣成本優勢的公司,我們在該公司35%的權益代表約二億五千萬的保費量,遠大於我們自行取得的業務數量。

Issuance of Equity

發行新股

Berkshire and Blue Chip are considering merger in 1983. If it takes place, it will involve an exchange of stock based upon an identical valuation method applied to both companies. The one other significant issuance of shares by Berkshire or its affiliated companies that occurred during present management’s tenure was in the 1978 merger of Berkshire with Diversified Retailing Company.

Berkshire與Blue Chip目前正考慮在1983年正式合併,若真的實現,將會以一致的評價模式進行股權的交換,Berkshire最近一次大量發行新股是在1978年購併Diversified Retailing時發生。

Our share issuances follow a simple basic rule: we will not issue shares unless we receive as much intrinsic business value as we give. Such a policy might seem axiomatic. Why, you might ask, would anyone issue dollar bills in exchange for fifty-cent pieces? Unfortunately, many corporate managers have been willing to do just that.

我們公司發行新股係遵循一項基本原則,那就是我們不輕易發行新股,除非我們所換得的企業實質價值與我們所付出的一樣多,這樣的原則看似理所當然,或許你會問那有人會笨到以一塊錢去交換五毛錢的呢? 但不幸的是,有許多企業的經理人恰恰願意如此作。

The first choice of these managers in making acquisitions may be to use cash or debt. But frequently the CEO’s cravings outpace cash and credit resources (certainly mine always have). Frequently, also, these cravings occur when his own stock is selling far below intrinsic business value. This state of affairs produces a moment of truth. At that point, as Yogi Berra has said, “You can observe a lot just by watching.” For shareholders then will find which objective the management truly prefers - expansion of domain or maintenance of owners’ wealth.

他們在購併企業時所面臨的第一項抉擇是該使用現金或舉債,但通常CEO的慾望超過現金與融資額度所能負擔(我個人也是如此),尤其是當自家公司的股價遠低於企業實質的價值時更是如此,但這樣的事實往往有如靈光乍現,然後就像Yogi Berra所說的:「光是用看的,你就能觀察到許多東西」對股東而言,屆時你將會發現公司經營階層在乎的,到底是擴張企業版圖或是維護股東權益了。

The need to choose between these objectives occurs for some simple reasons. Companies often sell in the stock market below their intrinsic business value. But when a company wishes to sell out completely, in a negotiated transaction, it inevitably wants to - and usually can - receive full business value in whatever kind of currency the value is to be delivered. If cash is to be used in payment, the seller’s calculation of value received couldn’t be easier. If stock of the buyer is to be the currency, the seller’s calculation is still relatively easy: just figure the market value in cash of what is to be received in stock.

之所以需要在兩者之間作選擇的理由其實很簡單,公司在股票市場上的價格通常低於其企業實質價值,但當股東會願意將整間公司以協議的方式出售,必定是想要且通常會取得相當於企業實質價值的回報,若收到的是現金,那麼計算賣方取得的報酬是再容易也不過了,而若以買方的股票作交換,則計算賣方取得的報酬還算簡單,只要計算所取得的股票之市值即可。


Meanwhile, the buyer wishing to use his own stock as currency for the purchase has no problems if the stock is selling in the market at full intrinsic value.

同時只要買方所用以交換的股票其市價接近企業實質價值也沒有太大的問題。

But suppose it is selling at only half intrinsic value. In that case, the buyer is faced with the unhappy prospect of using a substantially undervalued currency to make its purchase.

但問題是假設若其股票市價僅及企業實質價值的一半,這時買方將會面臨賤賣自家股票的不愉快場面。

Ironically, were the buyer to instead be a seller of its entire business, it too could negotiate for, and probably get, full intrinsic business value. But when the buyer makes a partial sale of itself - and that is what the issuance of shares to make an acquisition amounts to - it can customarily get no higher value set on its shares than the market chooses to grant it.

諷刺的是,假設當買方變成賣方時,他反而能透過談判換取相當於本身企業實質價值的代價,但當買方僅賣出公司部份股權以購併賣方,它將無法以高於市場給它的價格出售之。


The acquirer who nevertheless barges ahead ends up using an undervalued (market value) currency to pay for a fully valued (negotiated value) property. In effect, the acquirer must give up $2 of value to receive $1 of value. Under such circumstances, a marvelous business purchased at a fair sales price becomes a terrible buy. For gold valued as gold cannot be purchased intelligently through the utilization of gold - or even silver - valued as lead.

最後不論如何,往前衝的買方結果是以本身低估的股票換取價值合理的資產,等於是以一塊錢價值的股票換到僅值五毛錢的東西,在這種情況下,以合理的價格買下不錯的公司將會變成很不划算的買賣,就像是把金或銀以錫的價格換到金子一樣。

If, however, the thirst for size and action is strong enough, the acquirer’s manager will find ample rationalizations for such a value-destroying issuance of stock. Friendly investment bankers will reassure him as to the soundness of his actions. (Don’t ask the barber whether you need a haircut.)

當然若購併者對於規模的渴望配合上積極的行動自然能夠找到理由解釋這種摧毀公司價值的發行新股行動,親切的投資銀行家會再三保證其動作的合理性(不要問理髮師你是有應該理頭髮)。

A few favorite rationalizations employed by stock-issuing managements follow:

通常公司經營階層最常採用的理由有下列幾項:

(a) “The company we’re buying is going to be worth a lot

more in the future.” (Presumably so is the interest in

the old business that is being traded away; future

prospects are implicit in the business valuation

process. If 2X is issued for X, the imbalance still

exists when both parts double in business value.)

(a)我們現在要買下的這家公司未來潛力無窮,(假定他們要換走的原有公司股份可能也是如此,而未來的遠景以企業評價的角度而言是誨暗不明的,若以二倍的東西換取一倍的東西,即使未來兩者的企業價值皆倍增則此種差異將仍然存在)。


(b) “We have to grow.” (Who, it might be asked, is the “we”?

For present shareholders, the reality is that all

existing businesses shrink when shares are issued. Were

Berkshire to issue shares tomorrow for an acquisition,

Berkshire would own everything that it now owns plus the

new business, but your interest in such hard-to-match

businesses as See’s Candy Shops, National Indemnity,

etc. would automatically be reduced. If (1) your family

owns a 120-acre farm and (2) you invite a neighbor with

60 acres of comparable land to merge his farm into an

equal partnership - with you to be managing partner,

then (3) your managerial domain will have grown to 180

acres but you will have permanently shrunk by 25% your

family’s ownership interest in both acreage and crops.

Managers who want to expand their domain at the expense

of owners might better consider a career in government.)

(b)我們必須成長(有人或許會問:「所謂的我們是指誰?」對現有的股東而言,事實是現有的企業價值將因發行新股而遭到稀釋,假若明天Berkshire要發行新股以購併別人,Berkshire或許將擁有原有企業加上新購併的公司,但各位股東在那些無可取代的企業,諸如See’s Candy、National Indenmity等公司的權益將馬上減少。就像你家裏原有120畝的農場,結果你和擁有60畝農地的鄰居合併經營而權益各半,最後雖然你實際管理的面積增加為180畝,但你實際可分得的權益將永遠減少25%,那些想要犧牲老闆權益以擴張個人版圖的經營階層最好考慮到政府機關做事)


(c) “Our stock is undervalued and we’ve minimized its use in

this deal - but we need to give the selling shareholders

51% in stock and 49% in cash so that certain of those

shareholders can get the tax-free exchange they want.”

(This argument acknowledges that it is beneficial to the

acquirer to hold down the issuance of shares, and we like

that. But if it hurts the old owners to utilize shares

on a 100% basis, it very likely hurts on a 51% basis.

After all, a man is not charmed if a spaniel defaces his

lawn, just because it’s a spaniel and not a St. Bernard.

And the wishes of sellers can’t be the determinant of the

best interests of the buyer - what would happen if,

heaven forbid, the seller insisted that as a condition of

merger the CEO of the acquirer be replaced?)

(c)我們的股票受到低估,而在此項交易我們已儘量避免動用公司股份,但我們仍須給予賣方51%的股票與49%的現金,使得他們得以免稅(這種論點無異承認買方應儘量少發行新股,我們認同。但若用100%的股票會損及原有股東權益,那麼51%的股票也一樣,賣方的期望並不是決定買方最佳利益的考量因素,若賣方堅持被購併的條件包含換掉公司CEO,那結果不知會如何?

There are three ways to avoid destruction of value for old owners when shares are issued for acquisitions. One is to have a true business-value-for-business-value merger, such as the Berkshire-Blue Chip combination is intended to be. Such a merger attempts to be fair to shareholders of both parties, with each receiving just as much as it gives in terms of intrinsic business value. The Dart Industries-Kraft and Nabisco Standard Brands mergers appeared to be of this type, but they are the exceptions. It’s not that acquirers wish to avoid such deals; it’s just that they are very hard to do.

在公司購併交易中,有三種方法可以避免原有股東的股份價值遭到侵蝕,第一種是以合理的價格對合理的價格進行購併(就像是Berkshire與Blue Chip的合併案一樣,試著用對雙方都公平的方式進行,大家都收到與同時付出相同的企業實質價值,Kraft與Nabisco的合併案也是如此,但他們畢竟是少數例外,這並不是因為購併者故意要回避這類交易,而是實際執行上卻有其困難)。


The second route presents itself when the acquirer’s stock sells at or above its intrinsic business value. In that situation, the use of stock as currency actually may enhance the wealth of the acquiring company’s owners. Many mergers were accomplished on this basis in the 1965-69 period. The results were the converse of most of the activity since 1970: the shareholders of the acquired company received very inflated currency (frequently pumped up by dubious accounting and promotional techniques) and were the losers of wealth through such transactions.

第二種方法發生在購併方公司的股票市價高於其企業實質價值,在這種情況下發行股票反而會增進原有股東權益,在1965-69年間許多購併案便屬於這類,至於1970年後出現的購併案則剛好相反,被購併的公司股東收到的是膨脹不實的股份(通常藉由可疑的會計與哄托的手法),他們可謂是該項交易的真正輸家。

During recent years the second solution has been available to very few large companies. The exceptions have primarily been those companies in glamorous or promotional businesses to which the market temporarily attaches valuations at or above intrinsic business valuation.

近年來這類情況在大型的公司變得相當少見,除了某些號稱具有美麗遠景或懂得自我推銷的公司,因為市場一時失察而給予過高的評價。


The third solution is for the acquirer to go ahead with the acquisition, but then subsequently repurchase a quantity of shares equal to the number issued in the merger. In this manner, what originally was a stock-for-stock merger can be converted, effectively, into a cash-for-stock acquisition. Repurchases of this kind are damage-repair moves. Regular readers will correctly guess that we much prefer repurchases that directly enhance the wealth of owners instead of repurchases that merely repair previous damage. Scoring touchdowns is more exhilarating than recovering one’s fumbles. But, when a fumble has occurred, recovery is important and we heartily recommend damage-repair repurchases that turn a bad stock deal into a fair cash deal.

第三種方法是購併者照樣進行交易,接著再從市場買回因購併所發行的股份,如此一來,原本以股換股的交易便轉變為以現金換股的交易,買回股份本身是一種修補損害的動作,正常的讀者應該能正確的猜到我們寧願以買回自家股份的方式直接增進原有股東權益,而不只是修補原先的損害,得分的達陣會比彌補失誤更令人雀躍,但當失誤真的發生了,亡羊補牢還是很重要的,我們衷心建議大家應該以買回自家股份這類彌補錯誤動作,將一項不好的以股換股交易變為合理的現金換股交易。


The language utilized in mergers tends to confuse the issues and encourage irrational actions by managers. For example, “dilution” is usually carefully calculated on a pro forma basis for both book value and current earnings per share. Particular emphasis is given to the latter item. When that calculation is negative (dilutive) from the acquiring company’s standpoint, a justifying explanation will be made (internally, if not elsewhere) that the lines will cross favorably at some point in the future. (While deals often fail in practice, they never fail in projections - if the CEO is visibly panting over a prospective acquisition, subordinates and consultants will supply the requisite projections to rationalize any price.) Should the calculation produce numbers that are immediately positive - that is, anti-dilutive - for the acquirer, no comment is thought to be necessary.

購併所用的專業術語往往會讓事情更加混淆,同時鼓勵經理人作出不合理的舉動,舉例來說,「股權稀釋」通常須經過仔細試算對帳面價值與每股獲利能力的影響,其中後者尤其受到重視,若計算結果對購併者為負面(即獲利可能遭到稀釋),則馬上有人會提出合理解釋說明在未來一定能夠改善(實務上不一定可行,但計劃絕對不會有問題,若老闆很明顯的對於一項購併案保持高度興趣,那麼下面的部屬與顧問一定能量身訂作一套計劃來證明交易價格的合理性),更別提若是試算結果為正面(即不會稀釋獲利),肯定不會有人再有任何意見。


The attention given this form of dilution is overdone: current earnings per share (or even earnings per share of the next few years) are an important variable in most business valuations, but far from all powerful.

個人認為投資人對於股權稀釋與否的關心實在是有點過度,現在的每股盈餘(甚至是未來幾年的每股盈餘)固然是企業評價的重要因素,但卻絕非是惟一的因素。

There have been plenty of mergers, non-dilutive in this limited sense, that were instantly value destroying for the acquirer. And some mergers that have diluted current and near-term earnings per share have in fact been value-enhancing. What really counts is whether a merger is dilutive or anti-dilutive in terms of intrinsic business value (a judgment involving consideration of many variables). We believe calculation of dilution from this viewpoint to be all-important (and too seldom made).

有許多的合併案,即使獲利未遭稀釋,購併者本身的權益還是立即遭到損害,反觀有些案子,雖然現在或未來幾年的每股盈餘遭到稀釋,但原有股東的權益卻大大提高,個人認為真正重要的是,一件購併案其企業實質價值是否有遭到稀釋(而這需要考量許多項變數),我們堅信從這個角度去判斷是絕對必要的(雖然實務上很難做到)。

A second language problem relates to the equation of exchange. If Company A announces that it will issue shares to merge with Company B, the process is customarily described as “Company A to Acquire Company B”, or “B Sells to A”. Clearer thinking about the matter would result if a more awkward but more accurate description were used: “Part of A sold to acquire B”, or “Owners of B to receive part of A in exchange for their properties”. In a trade, what you are giving is just as important as what you are getting. This remains true even when the final tally on what is being given is delayed. Subsequent sales of common stock or convertible issues, either to complete the financing for a deal or to restore balance sheet strength, must be fully counted in evaluating the fundamental mathematics of the original acquisition. (If corporate pregnancy is going to be the consequence of corporate mating, the time to face that fact is before the moment of ecstasy.)

第二個問題牽涉到交換的比例,若甲公司宣布要發行股票以購併乙公司,通常大家都習慣把它解讀成甲要取得乙或乙要賣給甲,但真正了解背後真相的人,卻會貼切將之形容為甲賣掉部份股份以取得乙或乙股東得到部份甲的股份以換取乙全部的財產。在購併交易中,你給對方的東西,跟對方給你的東西同等重要,雖然可能要經過好一陣子才能知道你到底給對方多少東西。而後續補救的動作,不論是出售普通股或發行可轉債以取得交易所需資金或恢復原本財務實力,都必須仔細計算以評估原本這項購併案所產生的影響,(若企業懷胎是企業結合的必然結果,那麼在享樂之前便必須考慮可能產生的後果) 。


Managers and directors might sharpen their thinking by asking themselves if they would sell 100% of their business on the same basis they are being asked to sell part of it. And if it isn’t smart to sell all on such a basis, they should ask themselves why it is smart to sell a portion. A cumulation of small managerial stupidities will produce a major stupidity - not a major triumph. (Las Vegas has been built upon the wealth transfers that occur when people engage in seemingly-small disadvantageous capital transactions.)

管理階層必須仔細想清楚,他們在賣部份股權時,會不會像在賣掉100%股權一樣的認真思考,若賣掉全部股權的作法顯不恰當,那麼在同一基礎下,賣掉部份股權就合理嗎? 請謹記管理當局的小錯誤絕對會慢慢累積成為一項大錯誤而非大勝利(拉斯維加斯的成功就是建立在人們從事看似無傷大雅的資本交易損失所造成的財富移轉之上)。


The “giving versus getting” factor can most easily be calculated in the case of registered investment companies. Assume Investment Company X, selling at 50% of asset value, wishes to merge with Investment Company Y. Assume, also, that Company X therefore decides to issue shares equal in market value to 100% of Y’s asset value.

取捨之間的因素考量在投資公司間可以很容易的計算,假設投資公司甲其市價僅為其真正價值的一半,並打算購併投資公司乙,又假設投資公司甲決定發行相當市值的股份以換取投資公司乙全部的資產。


Such a share exchange would leave X trading $2 of its previous intrinsic value for $1 of Y’s intrinsic value. Protests would promptly come forth from both X’s shareholders and the SEC, which rules on the fairness of registered investment company mergers. Such a transaction simply would not be allowed.

在這種情況下,投資公司甲等於是以二塊錢的實質價值換取一塊錢的實質價值,我想此舉將馬上接到甲公司股東與證券主管機關的異議,強調投資公司合併的公平性,這樣的交易肯定不被允許。

In the case of manufacturing, service, financial companies, etc., values are not normally as precisely calculable as in the case of investment companies. But we have seen mergers in these industries that just as dramatically destroyed value for the owners of the acquiring company as was the case in the hypothetical illustration above. This destruction could not happen if management and directors would assess the fairness of any transaction by using the same yardstick in the measurement of both businesses.

然而對製造、服務、金融等公司而言,價值卻不像投資公司那麼容易計算,但我們卻常常見到某些購併案,像前面所提案例一樣明顯傷害原有股東的權益,而如果公司經營階層能注重公平性,願意用同樣的標準來評估兩家企業的話,這樣的傷害便絕對不會發生。

Finally, a word should be said about the “double whammy” effect upon owners of the acquiring company when value-diluting stock issuances occur. Under such circumstances, the first blow is the loss of intrinsic business value that occurs through the merger itself. The second is the downward revision in market valuation that, quite rationally, is given to that now-diluted business value. For current and prospective owners understandably will not pay as much for assets lodged in the hands of a management that has a record of wealth-destruction through unintelligent share issuances as they will pay for assets entrusted to a management with precisely equal operating talents, but a known distaste for anti-owner actions. Once management shows itself insensitive to the interests of owners, shareholders will suffer a long time from the price/value ratio afforded their stock (relative to other stocks), no matter what assurances management gives that the value-diluting action taken was a one-of-a-kind event.

最後,我們要對購併方原有股東因發行稀釋股份的禍不單行表示點意見,在這種情況下,第一項打擊是購併案本身所造成對實質價值的損害,第二項打擊則是購併案完成後對企業評價的向下修正,因為包括現有與未來可能的股東會對管理當局這種損害股東權益的行為感到失望,而寧願把錢交給真正重視股東權益的人手上,如此一來公司的本益比將向下修正,不管管理當局如何再三強調這種行為只是偶發性。


Those assurances are treated by the market much as one-bug-in-the-salad explanations are treated at restaurants. Such explanations, even when accompanied by a new waiter, do not eliminate a drop in the demand (and hence market value) for salads, both on the part of the offended customer and his neighbors pondering what to order. Other things being equal, the highest stock market prices relative to intrinsic business value are given to companies whose managers have demonstrated their unwillingness to issue shares at any time on terms unfavorable to the owners of the business.

就像是客人在餐廳的湯內發現一隻蟑螂,生意馬上受到影響,就算是你把廚師換了也一樣,同理可證最高的本/內含價值比將會給那些不輕易發行股份稀釋原有股東權益的經營階層。

At Berkshire, or any company whose policies we determine (including Blue Chip and Wesco), we will issue shares only if our owners receive in business value as much as we give. We will not equate activity with progress or corporate size with owner-wealth.

在Berkshire或是其它由我們作決策的公司,包括Blue Chip及Wesco在內,惟有當我們所換得的企業價值跟我們所付出的一樣多時,才考慮發行新股,我們絕不會將企業發展或企業規模與股東權益劃上等號。

Miscellaneous

其他事項

This annual report is read by a varied audience, and it is possible that some members of that audience may be helpful to us in our acquisition program.

由於會有許多不同的讀者看到這份報告,其中可能會有人對我們的購併計劃有所幫助,我們對具以下條件的公司有興趣:


We prefer:

(1) large purchases (at least $5 million of after-tax

earnings),

(1)鉅額交易(每年稅後盈餘至少有五百萬美元)


(2) demonstrated consistent earning power (future

projections are of little interest to us, nor are

“turn-around” situations),

(2)持續穩定獲利(我們對有遠景或具轉機的公司沒興趣)


(3) businesses earning good returns on equity while

employing little or no debt,

(3)高股東報酬率(並甚少舉債)


(4) management in place (we can’t supply it),

(4)具備管理階層(我們無法提供)


(5) simple businesses (if there’s lots of technology, we

won’t understand it),

(5)簡單的企業(若牽涉到太多高科技,我們弄不懂)


(6) an offering price (we don’t want to waste our time or

that of the seller by talking, even preliminarily,

about a transaction when price is unknown).

(6)合理的價格(在價格不確定前,我們不希望浪費自己與對方太多時間)


We will not engage in unfriendly transactions. We can promise complete confidentiality and a very fast answer as to possible interest - customarily within five minutes. Cash purchases are preferred, but we will consider the use of stock when it can be done on the basis described in the previous section.

我們不會進行敵意購併,並承諾完全保密並儘快答覆是否感興趣(通常不超過五分鐘) ,我們傾向採現金交易,但若符合先前所提狀況也會考慮發行股份。

* * * * *

Our shareholder-designated contributions program met with enthusiasm again this year; 95.8% of eligible shares participated. This response was particularly encouraging since only $1 per share was made available for designation, down from $2 in 1981. If the merger with Blue Chip takes place, a probable by-product will be the attainment of a consolidated tax position that will significantly enlarge our contribution base and give us a potential for designating bigger per-share amounts in the future.

今年的股東指定捐贈計劃再度得到熱烈迴響,雖然每股僅分配1美元較去年的2美元少,但仍有95.8%的有效票參與,若與Blue Chip的合併案成真,附代的好處是合併報稅將使我們可捐贈的總額大幅增加,每位股東可分配的金額未來也會跟著增加。

If you wish to participate in future programs, we strongly urge that you immediately make sure that your shares are registered in the actual owner’s name, not a “street” or nominee name. For new shareholders, a more complete description of the program is on pages 62-63.

若你也想參加的話,我們強烈建議你趕快把股份從經紀人那兒改登記於自己的名下。

* * * * *

In a characteristically rash move, we have expanded World Headquarters by 252 square feet (17%), coincidental with the signing of a new five-year lease at 1440 Kiewit Plaza. The five people who work here with me - Joan Atherton, Mike Goldberg, Gladys Kaiser, Verne McKenzie and Bill Scott - outproduce corporate groups many times their number. A compact organization lets all of us spend our time managing the business rather than managing each other.

在一時衝動之下,我們將企業總部的面積增加252平方呎(約17%),恰巧碰上重新簽訂五年的租約,和我一同工作雖然只有五個人-Joan Atherton、Mike Goldberg、Gladys Kaiser、Verne McKenzie與Bill Scott,但所管理的子公司家數卻是這個數字的好幾倍,精簡的組織使我們有更多的時間管理旗下公司而非互相管理。

Charlie Munger, my partner in management, will continue to operate from Los Angeles whether or not the Blue Chip merger occurs. Charlie and I are interchangeable in business decisions. Distance impedes us not at all: we’ve always found a telephone call to be more productive than a half-day committee meeting.

我的合夥人Charlie Munger將繼續留在洛杉磯,不管與Blue Chip的合併成功與否,Charlie 跟我在企業決策上是可以互相替代的,距離一點也不會阻礙我們,我們總是發現一通電話會比半天冗長的會議更有效率。

* * * * *

Two of our managerial stars retired this year: Phil Liesche at 65 from National Indemnity Company, and Ben Rosner at 79 from Associated Retail Stores. Both of these men made you, as shareholders of Berkshire, a good bit wealthier than you otherwise would have been. National Indemnity has been the most important operation in Berkshire’s growth. Phil and Jack Ringwalt, his predecessor, were the two prime movers in National Indemnity’s success. Ben Rosner sold Associated Retail Stores to Diversified Retailing Company for cash in 1967, promised to stay on only until the end of the year, and then hit business home runs for us for the next fifteen years.

今年我們有兩位明星經理人退休,分別是National Indemnity 65歲的Phil Liesche和Associated Retail 79歲的Ben Rosner,這兩個人都讓身為Berkshire股東的你更為富有,National Indemnity一直是支持Berkshire成長的重要力量。Phil和他的繼任者Ringwalt是該公司成功主要的推動者,而Ben Rosner 在1967年將Associated Retail以現金賣給Diversified Retailing後,原本僅承諾繼續待到當年度年底,結果在往後的十五年卻仍然持續表現傑出。

Both Ben and Phil ran their businesses for Berkshire with every bit of the care and drive that they would have exhibited had they personally owned 100% of these businesses. No rules were necessary to enforce or even encourage this attitude; it was embedded in the character of these men long before we came on the scene. Their good character became our good fortune. If we can continue to attract managers with the qualities of Ben and Phil, you need not worry about Berkshire’s future.

他們兩人皆為Berkshire盡心盡力管理公司就好像是他們100%擁有這家公司一樣,不須訂定額外的規則來強迫他們,這種態度早在Berkshire加入前便已深植在他們的人格特質中,他們好的個性成就我們更多的財富,如果我們能持續吸引到像Ben 和Phil這樣的人,你將可不必擔心Berkshire的未來。

Warren E. Buffett
Chairman of the Board

華倫.巴菲特
董事會主席
創作者介紹

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