BERKSHIRE HATHAWAY INC.

波克夏海瑟崴股份有限公司

To the Shareholders of Berkshire Hathaway Inc.:

致所有股東:


Our gain in net worth during 1988 was $569 million, or

20.0%. Over the last 24 years (that is, since present management

took over), our per-share book value has grown from $19.46 to

$2,974.52, or at a rate of 23.0% compounded annually.


本公司1988年的淨值增加了五億六千九百萬美元,較去年增加了20.0%,而
過去24年以來(自從現有經營階層接手後),每股淨值從19元成長到現在的
2,974美元,年複合成長率約為23.0%。

We挙e emphasized in past reports that what counts, however,

is intrinsic business value - the figure, necessarily an

estimate, indicating what all of our constituent businesses are

worth. By our calculations, Berkshire旧 intrinsic business value

significantly exceeds its book value. Over the 24 years,

business value has grown somewhat faster than book value; in

1988, however, book value grew the faster, by a bit.


在過去的年報中我們一再強調真正重要的是企業的真實價值,它代表著我們旗下
企業組成份子到底值多少錢?這個數字絕對是個估計數,根據我們內部的估算,
目前Berkshire真實的價值已大幅超越其帳面價值,過去24年以來,企業價值
成長的速度一直要比帳面價值成長的幅度要高一點,但在1988年情況有點不
同,後者增加的幅度略高於前者。


Berkshire旧 past rates of gain in both book value and

business value were achieved under circumstances far different

from those that now exist. Anyone ignoring these differences

makes the same mistake that a baseball manager would were he to

judge the future prospects of a 42-year-old center fielder on the

basis of his lifetime batting average.


過去Berkshire真實與帳面價值成長的背景,與現在有很大的不同,若搞不清楚
其間的差異,就好像是一位棒球教練在判斷高齡42歲的中外野手未來潛力時,
以他一生的平均打擊率作為判斷依據。


Important negatives affecting our prospects today are: (1) a

less attractive stock market than generally existed over the past

24 years; (2) higher corporate tax rates on most forms of

investment income; (3) a far more richly-priced market for the

acquisition of businesses; and (4) industry conditions for

Capital Cities/ABC, Inc., GEICO Corporation, and The Washington

Post Company - Berkshire旧 three permanent investments,

constituting about one-half of our net worth - that range from

slightly to materially less favorable than those existing five to

ten years ago. All of these companies have superb management and

strong properties. But, at current prices, their upside

potential looks considerably less exciting to us today than it

did some years ago.


今日我們所面臨不利的因素主要有︰(1)目前的股票市場過熱,股價相對偏高(2)
企業投資利益的稅負過高(3)企業被購併的價格偏高(4) Berkshire主要三大投資
事業(約佔本公司淨值的一半)資本城/ABC、GEICO汽車保險與華盛頓郵報,
個別的產業狀況多多少少不若以往,雖然這些公司有傑出的管理與強勢的資產,
但以目前的股價來看,他們向上成長的潛力相對有限。


The major problem we face, however, is a growing capital

base. You挙e heard that from us before, but this problem, like

age, grows in significance each year. (And also, just as with

age, it旧 better to have this problem continue to grow rather

than to have it 昼olved.?


然而我們面對的主要問題還是不斷增加的資金規模,先前各位也聽過類似的說
明,不過這個問題就好像是一個人的身體健康與年紀的關係一樣,隨著時間的流
逝,問題也越嚴重,(當然在這種情況下,我們是希望這個問題越嚴重越好)


Four years ago I told you that we needed profits of $3.9

billion to achieve a 15% annual return over the decade then

ahead. Today, for the next decade, a 15% return demands profits

of $10.3 billion. That seems like a very big number to me and to

Charlie Munger, Berkshire旧 Vice Chairman and my partner. (Should

that number indeed prove too big, Charlie will find himself, in

future reports, retrospectively identified as the senior

partner.)


四年前我曾告訴各位若在未來十年,Berkshire想要每年維持15%的報酬,我們
總共約要有39億美元的獲利,時至今日,這個數字暴增到103億美元,對查
理與我來說,這實在是無法承擔之重,(當然若這個數字事後發現真的過大,大
家或許會在以後的報告中,查理可能會另外個別署名資深合夥人)


As a partial offset to the drag that our growing capital

base exerts upon returns, we have a very important advantage now

that we lacked 24 years ago. Then, all our capital was tied up

in a textile business with inescapably poor economic

characteristics. Today part of our capital is invested in some

really exceptional businesses.

雖然資金規模會影響到最後的投資報酬率,但同時我們也擁有另外一項以前沒有
的優勢,過去我們大部分的資金都被綁在沒有多大經濟效益的紡織事業之上,如
今部份的資金已轉移到一些相當不錯的事業。


去年我將他們取名叫做七個聖徒�水牛城日報、費區海默、寇比吸塵器、內布拉
斯加傢具量販店、史考特費茲製造集團、喜斯糖果及世界百科全書等,今年七聖
徒持續向前邁進,大家可以發現以歷史投資成本的角度來看,他們的投資報酬實
在是驚人,沒有依靠財務槓桿,平均股東權益報酬率高達67%。


Last year we dubbed these operations the Sainted Seven:

Buffalo News, Fechheimer, Kirby, Nebraska Furniture Mart, Scott

Fetzer Manufacturing Group, See旧, and World Book. In 1988 the

Saints came marching in. You can see just how extraordinary

their returns on capital were by examining the historical-cost

financial statements on page 45, which combine the figures of the

Sainted Seven with those of several smaller units. With no

benefit from financial leverage, this group earned about 67% on

average equity capital.

In most cases the remarkable performance of these units

arises partially from an exceptional business franchise; in all

cases an exceptional management is a vital factor. The

contribution Charlie and I make is to leave these managers alone.


雖然其中一部分的企業本身就是屬於強勢的企業,但優良的管理卻是絕對必要的
條件,查理跟我唯一可以做的就是讓他們放手去幹。


In my judgment, these businesses, in aggregate, will

continue to produce superb returns. We歓l need these: Without

this help Berkshire would not have a chance of achieving our 15%

goal. You can be sure that our operating managers will deliver;

the question mark in our future is whether Charlie and I can

effectively employ the funds that they generate.


根據我個人的判斷,這些企業總的來說,應該還會持續有好的表現,我們想要在
往後年度繼續維持15%報酬率的目標,絕對需要他們的支持,唯一的關鍵在於
查理跟我是否能夠有效地運用他們所貢獻出來源源不絕的資金。


In that respect, we took a step in the right direction early

in 1989 when we purchased an 80% interest in Borsheim旧, a

jewelry business in Omaha. This purchase, described later in

this letter, delivers exactly what we look for: an outstanding

business run by people we like, admire, and trust. It旧 a great

way to start the year.


在這點我們做出了一個正確的決定,那就是買下位於奧瑪哈Borsheim珠寶80%
的股權,這項購併案會在後面說明,與我們當初的預期相符,一家優秀的企業由
我們所欣賞且信任的人來經營,今年有一個好的開始。


Accounting Changes

會計原則變動


We have made a significant accounting change that was

mandated for 1988, and likely will have another to make in 1990.

When we move figures around from year to year, without any change

in economic reality, one of our always-thrilling discussions of

accounting is necessary.


1988年開始有一項重要的會計原則變動開始適用,展望1990年還會有一項變
動,當經濟現況沒有改變,但會計帳面卻必須將數字搬來搬去,我們一定會花一
番工夫討論一下影響層面。

首先我習慣性的提出拒絕聲明,雖然一般公認會計原則確有缺點,但我卻必須坦
承沒有能力重新訂出一套新的規則,雖然這套原則確有其先天性的限制,卻不必
就此廢除,CEO大可以也應該將一般公認會計原則當作是對股東與債權人儘告
知義務的開始而非結束;若他們只是提供陽春的財務報表,卻沒有附上經營分析
所必要的關鍵訊息,部門經理人會發現會被總經理修理的很慘,同樣的母公司的
總經理是不是也應該向他的老闆,也就是公司股東所有人,報告必要有用的資訊。


First, I歓l offer my customary disclaimer: Despite the

shortcomings of generally accepted accounting principles (GAAP),

I would hate to have the job of devising a better set of rules.

The limitations of the existing set, however, need not be

inhibiting: CEOs are free to treat GAAP statements as a beginning

rather than an end to their obligation to inform owners and

creditors - and indeed they should. After all, any manager of a

subsidiary company would find himself in hot water if he reported

barebones GAAP numbers that omitted key information needed by his

boss, the parent corporation旧 CEO. Why, then, should the CEO

himself withhold information vitally useful to his bosses - the

shareholder-owners of the corporation?

What needs to be reported is data - whether GAAP, non-GAAP,

or extra-GAAP - that helps financially-literate readers answer

three key questions: (1) Approximately how much is this company

worth? (2) What is the likelihood that it can meet its future

obligations? and (3) How good a job are its managers doing, given

the hand they have been dealt?


真正需要的是資料�不管是一般公認、非一般公認或是一般公認以外,可以幫助
財務報表使用者可以了解三個問題︰(1)這家公司大概價值多少?(2)它達到未來
目標的可能性有多大?(3)在現有條件下,經理人的工作表現如何?


In most cases, answers to one or more of these questions are

somewhere between difficult and impossible to glean from the

minimum GAAP presentation. The business world is simply too

complex for a single set of rules to effectively describe

economic reality for all enterprises, particularly those

operating in a wide variety of businesses, such as Berkshire.


大部分的情況下,簡單的財務數字並不能回答以上的問題,商業世界實在很難用
一套簡單的規則有效地來解釋企業的經濟實質狀況,尤其是像Berkshire這種由
許多各種不同產業組成集團。


Further complicating the problem is the fact that many

managements view GAAP not as a standard to be met, but as an

obstacle to overcome. Too often their accountants willingly

assist them. (浅ow much,?says the client, 滝s two plus two??

Replies the cooperative accountant, 巣hat number did you have in

mind?? Even honest and well-intentioned managements sometimes

stretch GAAP a bit in order to present figures they think will

more appropriately describe their performance. Both the

smoothing of earnings and the 臓ig bath?quarter are 聴hite lie?

techniques employed by otherwise upright managements.


更複雜的是許多管理階層不把一般公認會計原則當作是應該達到的標準,而是應
該要克服的阻礙,且大多數的會計師也心甘情願給予協助,當客戶問到二加二等
於幾?配合的會計師可能會回答︰「那要看你想要多少?」即使是誠實且正直


的管理階層有時也會超越一般公認會計原則,以使得報表數字更符合他們認為應
該有的表現,不管是讓損益平滑一點或是某季特別突出,都是還算正直的經營階
層經常運用的做帳技巧。


Then there are managers who actively use GAAP to deceive and

defraud. They know that many investors and creditors accept GAAP

results as gospel. So these charlatans interpret the rules

滝maginatively?and record business transactions in ways that

technically comply with GAAP but actually display an economic

illusion to the world.


另外還有一些不肖經理人專門利用一般公認會計原則來進行欺騙與貪污,他們很
清楚許多投資人與債權人把一般公認會計原則當作聖經朝拜,所以這些騙徒運用
豐富的想像力技巧性讓交易記錄符合一般公認會計原則,但卻與實際的經濟實質
背道而馳。


As long as investors - including supposedly sophisticated

institutions - place fancy valuations on reported 堕arnings?that

march steadily upward, you can be sure that some managers and

promoters will exploit GAAP to produce such numbers, no matter

what the truth may be. Over the years, Charlie and I have

observed many accounting-based frauds of staggering size. Few of

the perpetrators have been punished; many have not even been

censured. It has been far safer to steal large sums with a pen

than small sums with a gun.


只要投資人,包含看起來複雜的專業投資機構,迷信穩定向上攀升的盈餘數字,
我們可以百分之百確定還會有經理人與擁護者不顧現實,繼續濫用一般公認會計
原則來滿足投資人的需求,多年以來查理跟我看到許多會計詐騙案,鮮少有人因
此被懲罰,有的甚至都沒有被發現,用筆偷錢要比用槍搶劫要來的容易的多。


Under one major change mandated by GAAP for 1988, we have

been required to fully consolidate all our subsidiaries in our

balance sheet and earnings statement. In the past, Mutual

Savings and Loan, and Scott Fetzer Financial (a credit company

that primarily finances installment sales of World Book and Kirby

products) were consolidated on a 団ne-line?basis. That meant we

(1) showed our equity in their combined net worths as a single-

entry asset on Berkshire旧 consolidated balance sheet and (2)

included our equity in their combined annual earnings as a

single-line income entry in our consolidated statement of

earnings. Now the rules require that we consolidate each asset

and liability of these companies in our balance sheet and each

item of their income and expense in our earnings statement.


1988年一般公認會計原則有一個很重大的轉變,依新規定Berkshire必須將子
公司與關係企業的資產與損益完全併到母公司的財務報表之上,在過去互助儲貸
與史考特費茲金融(主要從事世界百科全書與寇比吸塵器分期付款的信用公
司),只須一次認列投資損益即可,意思是說(1)僅將被投資公司淨值按投資比例
以投資權益顯示在Berkshire的合併資產負債表之上(2)僅將被投資公司年度損
益按投資比例以投資利益顯示在Berkshire的合併損益表之上,但是現在我們必
須將被投資公司的資產與負債、營收與費用,放進合併的財務報表之上。


This change underscores the need for companies also to

report segmented data: The greater the number of economically

diverse business operations lumped together in conventional

financial statements, the less useful those presentations are and

the less able investors are to answer the three questions posed

earlier. Indeed, the only reason we ever prepare consolidated

figures at Berkshire is to meet outside requirements. On the

other hand, Charlie and I constantly study our segment data.


這項轉變低估了公司也要報告部門別資訊,企業形態越複雜的公司,其按傳統財
務報表所加總出來的數字越沒有意義,越沒有辦法讓投資人回答前面所提的三個
問題,事實上在Berkshire我們會準備合併數字的唯一原因就是要符合外部規
定,查理跟我看的則是另一套部門別的資訊。


Now that we are required to bundle more numbers in our GAAP

statements, we have decided to publish additional supplementary

information that we think will help you measure both business

value and managerial performance. (Berkshire旧 ability to

discharge its obligations to creditors - the third question we

listed - should be obvious, whatever statements you examine.) In

these supplementary presentations, we will not necessarily follow

GAAP procedures, or even corporate structure. Rather, we will

attempt to lump major business activities in ways that aid

analysis but do not swamp you with detail. Our goal is to give

you important information in a form that we would wish to get it

if our roles were reversed.


現在我們被要求在財務報表上將更多的數字混在一起,我們現在決定公佈更多的
補充資訊,有助於幫助各位來衡量企業價值與管理當局的表現,Berkshire將責
任轉移給債權人的能力�我們提到的第三個問題,應該很明確,不管是在看什麼
樣的報表,在這些補充資訊中,我們不一定會依照一般公認會計原則,甚至不會
以公司別來區分,相反地我們會試著將同性質的企業彙總有助於大家分析而不是
被一大堆資訊所掩沒,我們的目標是設身處地的為各位設想,給各位我們認為重
要的訊息。


On pages 41-47 we show separate combined balance sheets and

earnings statements for: (1) our subsidiaries engaged in finance-

type operations, which are Mutual Savings and Scott Fetzer

Financial; (2) our insurance operations, with their major

investment positions itemized; (3) our manufacturing, publishing

and retailing businesses, leaving aside certain non-operating

assets and purchase-price accounting adjustments; and (4) an all-

other category that includes the non-operating assets (primarily

marketable securities) held by the companies in (3) as well as

various assets and debts of the Wesco and Berkshire parent

companies.


下表我們依(1)金融事業,包含互助儲貸與史考特財務公司(2)保險事業,依投資
部位分門別類(3)製造、出版、零售事業,去除某些非營業資產與購買法會計調
整數(4)其他項目,包含前述非營業資產(主要是有價證券投資)及Wesco與
Berkshire母公司所持有的資產與負債


If you combine the earnings and the net worths of these four

segments, you will derive totals matching those shown on our GAAP

statements. However, we want to emphasize that our new

presentation does not fall within the purview of our auditors,

who in no way bless it. (In fact, they may be horrified; I don急

want to ask.)


如果將以上四類的盈餘與淨值加總,你將得到與一般公認會計原則一致的總數,
但是我們必須強調的是這種新的表示方法並未經過會計師看過,最好是不要,因
為他們要是看到這種報表,一定會被嚇個半死。


I referred earlier to a major change in GAAP that is

expected in 1990. This change relates to the calculation of

deferred taxes, and is both complicated and controversial - so

much so that its imposition, originally scheduled for 1989, was

postponed for a year.


先前我曾提到在1990年會有另一項會計原則的重大變動,主要與遞延所得稅有
關,這原則相當的複雜且極具爭議性,以致於原定計畫於1989年實施延後一年。


When implemented, the new rule will affect us in various

ways. Most important, we will be required to change the way we

calculate our liability for deferred taxes on the unrealized

appreciation of stocks held by our insurance companies.


當這項原則開始實施後,對我們有幾個方面,最重要的一點就是我們必須重新修
正旗下保險公司所持有的未實現股票資本利得,其計算遞延所得稅負債的方式,


Right now, our liability is layered. For the unrealized

appreciation that dates back to 1986 and earlier years, $1.2

billion, we have booked a 28% tax liability. For the unrealized

appreciation built up since, $600 million, the tax liability has

been booked at 34%. The difference reflects the increase in tax

rates that went into effect in 1987.


原先我們在這方面的負債分作好幾層,對於1986年以前帳列未實現利益,大約
在12億美元左右,係以28%的稅率估算,對於1986年之後的帳列未實現利益,
大約在6億美元左右,係以34%的稅率估算,1987年起調整稅率的差異反應稅
負的差異。


It now appears, however, that the new accounting rule will

require us to establish the entire liability at 34% in 1990,

taking the charge against our earnings. Assuming no change in

tax rates by 1990, this step will reduce our earnings in that

year (and thereby our reported net worth) by $71 million. The

proposed rule will also affect other items on our balance sheet,

but these changes will have only a minor impact on earnings and

net worth.


現在看起來,新的會計原則要求我們從1990年開始必須將所有未實現利益的預
估稅率訂在34%,經估算光是這一項做法就會使得我們的年度盈餘與淨值減少
七千多萬美元,還不包含其他大大小小的影響。


We have no strong views about the desirability of this

change in calculation of deferred taxes. We should point out,

however, that neither a 28% nor a 34% tax liability precisely

depicts economic reality at Berkshire since we have no plans to

sell the stocks in which we have the great bulk of our gains.


其實我們不認為這樣轉變有其必要性,因為對於Berkshire來說不管稅率是28%
或是34%,都不能反應我們公司的實質現況,因為我們從來不考慮出售我們具
有龐大未實現利益的股票。


To those of you who are uninterested in accounting, I

apologize for this dissertation. I realize that many of you do

not pore over our figures, but instead hold Berkshire primarily

because you know that: (1) Charlie and I have the bulk of our

money in Berkshire; (2) we intend to run things so that your

gains or losses are in direct proportion to ours; and (3) the

record has so far been satisfactory. There is nothing

necessarily wrong with this kind of 対aith?approach to

investing. Other shareholders, however, prefer an 贈nalysis?

approach and we want to supply the information they need. In our

own investing, we search for situations in which both approaches

give us the same answer.


對於那些對會計不感興趣的人,很抱歉耽誤各位的時間,我很清楚你們當中有很
多根本不會仔細去看數字,但卻仍持續支持我們,因為你們知道(1)查理跟我本
身的身家也都在裡面(2)我們絕對會與各位共享榮枯(3)到目前為止先前的記錄還
算令人滿意。事實上這種完全信任的投資方法並沒有什麼不好,但也有一些股東
比較喜歡深入分析的方式,因此我們也有必要提供足夠的資訊給他們,至於
Berkshire本身在做投資時,則是兩種方法並用,重點在於能不能得到滿意的答
案。


Sources of Reported Earnings

帳列盈餘的來源


In addition to supplying you with our new four-sector

accounting material, we will continue to list the major sources

of Berkshire旧 reported earnings just as we have in the past.


除了提供給各位最新四個部門的會計資料,我們一如往常還是會提列出
Berkshire帳列盈餘的主要來源


In the following table, amortization of Goodwill and other

major purchase-price accounting adjustments are not charged

against the specific businesses to which they apply but are

instead aggregated and shown separately. This procedure lets you

view the earnings of our businesses as they would have been

reported had we not purchased them. I挙e explained in past

reports why this form of presentation seems to us to be more

useful to investors and managers than the standard GAAP

presentation, which makes purchase-price adjustments on a

business-by-business basis. The total net earnings we show in

the table are, of course, identical to the GAAP total in our

audited financial statements.


在下表商譽的攤銷數與購買法會計調整數會從個別被投資公司分離出來,單獨加
總列示,之所以這樣做是為了讓旗下各事業的盈餘狀況,不因我們的投資而有所
影響,過去我一再地強調我們認為這樣的表達方式,較之一般公認會計原則,不
管是對投資者或是管理者來說,更有幫助,當然最後損益加總的數字仍然會與經
會計師查核的數字一致。


Further information about these businesses is given in the

Business Segment section on pages 32-34, and in the Management旧

Discussion section on pages 36-40. In these sections you also

will find our segment earnings reported on a GAAP basis. For

information on Wesco旧 businesses, I urge you to read Charlie

Munger旧 letter, which starts on page 52. It contains the best

description I have seen of the events that produced the present

savings-and-loan crisis. Also, take special note of Dave

Hillstrom旧 performance at Precision Steel Warehouse, a Wesco

subsidiary. Precision operates in an extremely competitive

industry, yet Dave consistently achieves good returns on invested

capital. Though data is lacking to prove the point, I think it

is likely that his performance, both in 1988 and years past,

would rank him number one among his peers.


年報中還有企業個別部門的資訊,有關Wesco公司的資訊,我強烈建議大家可
以看看查理孟格所寫的年報,裡頭包含我看過對儲貸機構危機事件寫得最貼切的
一篇文章,另外也可以順便看看Precision鋼鐵廠,這家Wesco的子公司所處
的產業競爭相當激烈,但經理人Dave仍然努力創造相當不錯的績效,雖然手頭
上缺乏資料來證明,但我相信他的表現絕對不比其他同儕遜色。


我們旗下各項營運事業所創造的盈餘,不管是依絕對值或是與同業相較,實在是
相當出色,對此我們衷心感謝這些辛苦的經理人,你我應該感到慶幸能與他們一
起共事。


The earnings achieved by our operating businesses are

superb, whether measured on an absolute basis or against those of

their competitors. For that we thank our operating managers: You

and I are fortunate to be associated with them.

At Berkshire, associations like these last a long time. We

do not remove superstars from our lineup merely because they have

attained a specified age - whether the traditional 65, or the 95

reached by Mrs. B on the eve of Hanukkah in 1988. Superb

managers are too scarce a resource to be discarded simply because

a cake gets crowded with candles. Moreover, our experience with

newly-minted MBAs has not been that great. Their academic

records always look terrific and the candidates always know just

what to say; but too often they are short on personal commitment

to the company and general business savvy. It旧 difficult to

teach a new dog old tricks.


在Berkshire,這樣的關係可以維持相當長久,我們不會因為這些傑出優秀的明
星經理人年紀到了一定程度就把他們給換掉,不管是65歲或是B太太在1988
年所打破的95歲上限,明星的經理人實在是可遇不可求的稀罕珍寶,他們就像
是插滿蠟燭的蛋糕,如何叫人捨得把他們丟棄,相較之下,我們對於新進的MBA
企管碩士的評價就沒有那麼高了,他們的學術經歷看起來總是很嚇人,講起話來
頭頭是道,但個人對於企業長期發展的投入卻相當有限,實在是很難去教菜狗那
套老伎倆。


Here旧 an update on our major non-insurance operations:

以下是我們非保險部門的最新營運狀況︰


o At Nebraska Furniture Mart, Mrs. B (Rose Blumkin) and her

cart roll on and on. She旧 been the boss for 51 years, having

started the business at 44 with $500. (Think what she would have

done with $1,000!) With Mrs. B, old age will always be ten years

away.


在內布拉斯加傢具店方面,B太太坐著她的輪椅持續運轉,自從44歲那年以500
塊美金開始創業當老闆,至今已有51個年頭,(要是當初是用1,000塊的話,
現在可能更不得了),對於B太太來說,就是再多十歲也不嫌老。


The Mart, long the largest home furnishings store in the

country, continues to grow. In the fall, the store opened a

detached 20,000 square foot Clearance Center, which expands our

ability to offer bargains in all price ranges.


這家全美最大的傢具量販店到現在還在持續成長,去年秋天,又新開了一家佔地
20,000平方英呎的清潔用品中心,讓我們的產品線不論是各種價格都應有盡有。


Recently Dillard旧, one of the most successful department

store operations in the country, entered the Omaha market. In

many of its stores, Dillard旧 runs a full furniture department,

undoubtedly doing well in this line. Shortly before opening in

Omaha, however, William Dillard, chairman of the company,

announced that his new store would not sell furniture. Said he,

referring to NFM: 巣e don急 want to compete with them. We think

they are about the best there is.?


最近Dillard一家在全美地區經營相當成功的百貨公司打算進軍奧瑪哈地區,在
它其他主要的分店都設有傢具部門,事實上他們在這方面也做的相當成功,不過
就在其奧瑪哈分店開幕的前夕,Dillard總裁William先生卻宣佈這家分店決定
不賣傢具,他特別提到NFM,表示你絕對不會想要與它競爭,我想它在當地已
經是最強的了。


At the Buffalo News we extol the value of advertising, and

our policies at NFM prove that we practice what we preach. Over

the past three years NFM has been the largest ROP advertiser in

the Omaha World-Herald. (ROP advertising is the kind printed in

the paper, as contrasted to the preprinted-insert kind.) In no

other major market, to my knowledge, is a home furnishings

operation the leading customer of the newspaper. At times, we

also run large ads in papers as far away as Des Moines, Sioux

City and Kansas City - always with good results. It truly does

pay to advertise, as long as you have something worthwhile to

offer.


水牛城報紙我們讚揚廣告的價值,而我們在NFM的政策則是證明我們所宣揚的
確實可行,過去三年來,NFM是奧瑪哈世界先鋒報的最大廣告客戶,(ROP是指
直接印在報紙而非夾報式的廣告),據我所知,除此之外沒有一家報紙的主要廣
告客戶是傢具商,同時我們也在堪薩斯等地區刊登廣告,所得到的反應也相當不
錯,廣告當然有其效果,只要你所要介紹的東西值得推薦。


Mrs. B旧 son, Louie, and his boys, Ron and Irv, complete the

winning Blumkin team. It旧 a joy to work with this family. All

its members have character that matches their extraordinary

abilities.


B太太的兒子路易,還有他幾個小孩組成了一支夢幻隊伍,跟他們一起共事實在
是一種享受,所有的成員品格與才能兼具。


o Last year I stated unequivocally that pre-tax margins at

The Buffalo News would fall in 1988. That forecast would have

proved correct at almost any other newspaper our size or larger.

But Stan Lipsey - bless him - has managed to make me look

foolish.


去年我曾明確地表示水牛城日報1988年的稅前盈餘一定會下滑,事實證明要不
是有Stan Lipsey,結果可能會如我所預測,與其他同規模的報紙同樣地沈淪,
很高興Stan讓我看起來很愚蠢。


Though we increased our prices a bit less than the industry

average last year, and though our newsprint costs and wage rates

rose in line with industry norms, Stan actually improved margins

a tad. No one in the newspaper business has a better managerial

record. He has achieved it, furthermore, while running a paper

that gives readers an extraordinary amount of news. We believe

that our 嘆ewshole?percentage - the portion of the paper devoted

to news - is bigger than that of any other dominant paper of our

size or larger. The percentage was 49.5% in 1988 versus 49.8% in

1987. We are committed to keeping it around 50%, whatever the

level or trend of profit margins.


雖然我們去年我們調漲的價格較同業水準略低,同時印刷與工資成本調整的幅度
與同業一致,但Stan還是硬生生讓毛利率又擴大一些,在新聞業沒有其他人可
以像他這樣有更好的經營績效,且同時還能夠讓讀者得到如此豐富的新聞,我們
相信我們自己的新聞比率,絕對是同樣規模或甚至更大報紙中最高的,1988年
49.5%,不管獲利狀況如此,我們一定會努力將這個比率維持在50%上下。


Charlie and I have loved the newspaper business since we

were youngsters, and we have had great fun with the News in the

12 years since we purchased it. We were fortunate to find Murray

Light, a top-flight editor, on the scene when we arrived and he

has made us proud of the paper ever since.


查理跟我在年輕的時候就很熱愛新聞事業,而買下水牛城報紙的12年來,讓我
們渡過許多快樂時光,我們很幸運能夠找到像Murray這樣傑出的總編輯,讓我
們一入主水牛城報紙後,便深深引以為傲。


o See旧 Candies sold a record 25.1 million pounds in 1988.

Prospects did not look good at the end of October, but excellent

Christmas volume, considerably better than the record set in

1987, turned the tide.


喜斯糖果在1988年總共銷售了2,510萬磅重的糖果,本來在十月前整個銷售
前景看起來不太樂觀,但拜耶誕節旺季特別旺所致,整個局勢跟著扭轉。


As we挙e told you before, See旧 business continues to become

more Christmas-concentrated. In 1988, the Company earned a

record 90% of its full-year profits in December: $29 million out

of $32.5 million before tax. (It旧 enough to make you believe in

Santa Claus.) December旧 deluge of business produces a modest

seasonal bulge in Berkshire旧 corporate earnings. Another small

bulge occurs in the first quarter, when most World Book annuals

are sold.


就像我們以前告訴各位的,喜斯的糖果旺季越來越向耶誕節集中,去年光是12
月的稅前獲利2,900萬就佔全年度3,250萬的90%,(如此你應該相信聖誕老
公公真的存在了吧),十二月的旺季使得Berkshire第四季的盈餘看起來相當不
錯,另外第一季則是因為世界百科全書年度出版所以也會有一波小高潮。


Charlie and I put Chuck Huggins in charge of See旧 about

five minutes after we bought the company. Upon reviewing his

record, you may wonder what took us so long.


查理跟我是在買下喜斯糖果五分鐘之後,決定為Chuck Huggins負責這家公司
的管理,在看過他這些年來的績效之後,你可能會懷疑為何我們要考慮那麼久!


o At Fechheimer, the Heldmans - Bob, George, Gary, Roger and

Fred - are the Cincinnati counterparts of the Blumkins. Neither

furniture retailing nor uniform manufacturing has inherently

attractive economics. In these businesses, only exceptional

managements can deliver high returns on invested capital. And

that旧 exactly what the five Heldmans do. (As Mets announcer

Ralph Kiner once said when comparing pitcher Steve Trout to his

father, Dizzy Trout, the famous Detroit Tigers pitcher: 荘here旧

a lot of heredity in that family.?


在費區海默,Heldmans家族就好像是B太太家族的辛辛那提版,不管是傢具
業或者是制服業都不會很有吸引力的行業,也只有好的管理才能讓股東們獲得好
的投資報酬,這正是Heldmans五位家族成員為Berkshire所作的貢獻,身為
職棒大都會隊的發言人,Ralph Kiner曾說比較該隊投手Steve Trout與他的父
親Dizzy Trout也是老虎隊名投手,你就會發現虎父無犬子。


Fechheimer made a fairly good-sized acquisition in 1988.

Charlie and I have such confidence in the business savvy of the

Heldman family that we okayed the deal without even looking at

it. There are very few managements anywhere - including those

running the top tier companies of the Fortune 500 - in which we

would exhibit similar confidence.


費區海默在1988年進行了一項規模頗大的購併案,查理跟我對於他們相當有信
心,所以我們連看都沒有看就同意了這項交易,很少有經營階層,即便是財星五
百大企業也好,能得到我們這樣的信任。


Because of both this acquisition and some internal growth,

sales at Fechheimer should be up significantly in 1989.

因為這項購併案與內部本身的成長,費區海默的營業額可望大幅成長。


o All of the operations managed by Ralph Schey - World Book,

Kirby, and The Scott Fetzer Manufacturing Group - performed

splendidly in 1988. Returns on the capital entrusted to Ralph

continue to be exceptional.


所有Ralph Schey所管理的事業,包含世界百科全書、寇比吸塵器與史考特費
茲製造集團,在1988年的表現皆相當出色,投資其上的資金也獲得相當不錯的
報酬。


Within the Scott Fetzer Manufacturing Group, particularly

fine progress was recorded at its largest unit, Campbell

Hausfeld. This company, the country旧 leading producer of small

and medium-sized air compressors, has more than doubled earnings

since 1986.


在史考特費茲製造集團當中,又以Campbell家用器具最突出,這家全美最大的
中小型壓縮機自從1986年來每年盈餘都呈倍數成長。


Unit sales at both Kirby and World Book were up

significantly in 1988, with export business particularly strong.

World Book became available in the Soviet Union in September,

when that country旧 largest American book store opened in Moscow.

Ours is the only general encyclopedia offered at the store.


寇比吸塵器與世界百科全書的1988年銷售數量都大幅成長,尤其在外銷部份更
是強勁,世界百科全書在九月配合莫斯科當地最大的一家美國百貨公司開幕,正
式在蘇聯推出,成為該店唯一展示的一套百科全書。


Ralph旧 personal productivity is amazing: In addition to

running 19 businesses in superb fashion, he is active at The

Cleveland Clinic, Ohio University, Case Western Reserve, and a

venture capital operation that has spawned sixteen Ohio-based

companies and resurrected many others. Both Ohio and Berkshire

are fortunate to have Ralph on their side.


Ralph個人的工作效率真是驚人,除了同時經營19項事業之外,他還投入相當
的時間在克里夫蘭醫院、Ohio大學等單位,另外還負責一個創投,創設了16
家位於Ohio的新公司,他可以稱的上是Ohio與Berkshire之寶。

Borsheim旧

波仙珠寶


It was in 1983 that Berkshire purchased an 80% interest in

The Nebraska Furniture Mart. Your Chairman blundered then by

neglecting to ask Mrs. B a question any schoolboy would have

thought of: 声re there any more at home like you??Last month I

corrected the error: We are now 80% partners with another branch

of the family.


Berkshire是在1983年買下內布拉斯加傢具店80%的股權,當時我忘了問B
太太一個連小學生都會想到的問題,你還有沒有其他兄弟姊妹,上個月我補救了
這個錯誤,現在我們又成為另一個家族分支80%的股東。


After Mrs. B came over from Russia in 1917, her parents and

five siblings followed. (Her two other siblings had preceded

her.) Among the sisters was Rebecca Friedman who, with her

husband, Louis, escaped in 1922 to the west through Latvia in a

journey as perilous as Mrs. B旧 earlier odyssey to the east

through Manchuria. When the family members reunited in Omaha

they had no tangible assets. However, they came equipped with an

extraordinary combination of brains, integrity, and enthusiasm

for work - and that旧 all they needed. They have since proved

themselves invincible.


當B太太1917年從蘇俄往東經滿州一路逃到美國之後,她的雙親與五位兄弟姊
妹也陸續來到美國,其中她有一個姊妹Rebecca在1922年跟著丈夫Friedman
冒著生命危險往西途經拉脫維亞,當家族在奧瑪哈重新團聚時大家一無所有且身
無分文,然而只要身具智慧、品格與熱情一切就已足夠,後來證明他們所向無敵。


In 1948 Mr. Friedman purchased Borsheim旧, a small Omaha

jewelry store. He was joined in the business by his son, Ike, in

1950 and, as the years went by, Ike旧 son, Alan, and his sons-in-

law, Marvin Cohn and Donald Yale, came in also.


1948年Friedman先生買下奧瑪哈地區一家叫波仙的小珠寶店,後來他的兒子
與女婿陸續加入。


You won急 be surprised to learn that this family brings to

the jewelry business precisely the same approach that the

Blumkins bring to the furniture business. The cornerstone for

both enterprises is Mrs. B旧 creed: 争ell cheap and tell the

truth.?Other fundamentals at both businesses are: (1) single

store operations featuring huge inventories that provide

customers with an enormous selection across all price ranges, (2)

daily attention to detail by top management, (3) rapid turnover,

(4) shrewd buying, and (5) incredibly low expenses. The

combination of the last three factors lets both stores offer

everyday prices that no one in the country comes close to

matching.


你應該不難預料,這個家族為當地珠寶業所帶來的影響與B太太的情況相近,兩
家店共同的特色就是東西實在又價美物廉,另外共通的特色還有(1)單店經營,
但貨品樣式價格種類齊全,滿足消費者各式需求(2)老闆每天專心經營(3)貨品週
轉快速(4)精明的採購(5)費用開銷難以想像地低。後面三項特點讓店內產品的售
價,全美其他地方都得比。


Most people, no matter how sophisticated they are in other

matters, feel like babes in the woods when purchasing jewelry.

They can judge neither quality nor price. For them only one rule

makes sense: If you don急 know jewelry, know the jeweler.


大部分的人們不管在其他行業多麼學有專精,但是遇到買珠寶首飾時,就像是迷
失在森林裡的小孩子一樣,不會判斷東西的品質好壞與價格高低,對這些人來
說,只要記住一條,不懂珠寶沒有關係,只要認識珠寶商就好。


I can assure you that those who put their trust in Ike

Friedman and his family will never be disappointed. The way in

which we purchased our interest in their business is the ultimate

testimonial. Borsheim旧 had no audited financial statements;

nevertheless, we didn急 take inventory, verify receivables or

audit the operation in any way. Ike simply told us what was so -

- and on that basis we drew up a one-page contract and wrote a

large check.


我敢保證大家只要放心交給Friedman家族,一定不會讓各位失望,我們購買波
仙股權的方式就是最好的證明,波仙沒有會計師查核報告,也沒有盤點存貨、驗
證應收帳款或是做任何方式的查核,他們只是簡單地告訴我們如何如何,於是雙
方就草擬的一頁簡單的合約,並由我們開出一大筆金額的支票。


Business at Borsheim旧 has mushroomed in recent years as the

reputation of the Friedman family has spread. Customers now come

to the store from all over the country. Among them have been

some friends of mine from both coasts who thanked me later for

getting them there.


隨著Friedman家族聲譽的遠播,近年來波仙珠寶的生意越做越大,客戶從美國
各地遠道而來,其中也包含我一些從東西兩岸來的朋友,他們也都很感謝我能帶
他們去參觀波仙。


Borsheim旧 new links to Berkshire will change nothing in the

way this business is run. All members of the Friedman family

will continue to operate just as they have before; Charlie and I

will stay on the sidelines where we belong. And when we say 贈ll

members,?the words have real meaning. Mr. and Mrs. Friedman, at

88 and 87, respectively, are in the store daily. The wives of

Ike, Alan, Marvin and Donald all pitch in at busy times, and a

fourth generation is beginning to learn the ropes.


波仙的營運模式並不會因為Berkshire的加入而有所改變,所有的家族成員仍將
持續在各自的崗位上奮鬥,查理跟我會站在旁邊默默支持,事實上所有的成員包
含高齡88歲與87歲的老先生與老太太,仍然每天到店裡工作,其他兒子媳婦
也是從早忙到晚,家族的第四代已正準備開始學習接班。


It is great fun to be in business with people you have long

admired. The Friedmans, like the Blumkins, have achieved success

because they have deserved success. Both families focus on

what旧 right for the customer and that, inevitably, works out

well for them, also. We couldn急 have better partners.


跟你所欣賞的人一起共事實在是一件很大的樂趣,Friedmans家族的成功就像
是B太太家族的成功一樣,實至名歸,兩個家族都堅持對客戶有益的事之上,同
時對他們自己也有很大的益處,這是我們最好的事業夥伴。


Insurance Operations

保險事業營運


Shown below is an updated version of our usual table

presenting key figures for the insurance industry:

下表是有關保險事業的幾項主要的數據更新


Statutory

Yearly Change Combined Ratio Yearly Change Inflation Rate

in Premiums After Policyholder in Incurred Measured by

Written (%) Dividends Losses (%) GNP Deflator (%)

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

1981 ..... 3.8 106.0 6.5 9.6

1982 ..... 3.7 109.6 8.4 6.4

1983 ..... 5.0 112.0 6.8 3.8

1984 ..... 8.5 118.0 16.9 3.7

1985 ..... 22.1 116.3 16.1 3.2

1986 ..... 22.2 108.0 13.5 2.7

1987 ..... 9.4 104.6 7.8 3.3

1988 (Est.) 3.9 105.4 4.2 3.6

Source: A.M. Best Co.

The combined ratio represents total insurance costs (losses

incurred plus expenses) compared to revenue from premiums: A

ratio below 100 indicates an underwriting profit, and one above

100 indicates a loss. When the investment income that an insurer

earns from holding on to policyholders?funds (鋳he float? is

taken into account, a combined ratio in the 107-111 range

typically produces an overall break-even result, exclusive of

earnings on the funds provided by shareholders.


綜合比率代表的是保險的總成本(損失加上費用)佔保費收入的比率,100以下代
表會有承銷利益,100以上代表會有承銷損失,若把持有保費收入浮存金(扣除
股東權益部份所產生的盈餘)所產生的投資收益列入考量,損益兩平的範圍大概
是在107-111之間。


For the reasons laid out in previous reports, we expect the

industry旧 incurred losses to grow by about 10% annually, even in

years when general inflation runs considerably lower. If premium

growth meanwhile materially lags that 10% rate, underwriting

losses will mount, though the industry旧 tendency to underreserve

when business turns bad may obscure their size for a time. As

the table shows, the industry旧 underwriting loss grew in 1988.

This trend is almost certain to continue - and probably will

accelerate - for at least two more years.


基於前幾次年報所說明的理由,即使是通貨膨脹在這幾年來相對溫和,我們預期
保險業每年損失增加的比率約在10%左右,若是保費收入成長沒有到達10%以
上,損失一定會增加,雖然保險公司在景氣不好時,會習慣性地將損失暫時隱藏
起來,如附表所示,1988年產業整體的損失確實增加,而這個趨勢應該會繼續
持續下去,甚至在未來兩年還會加速惡化。


The property-casualty insurance industry is not only

subnormally profitable, it is subnormally popular. (As Sam

Goldwyn philosophized: 戦n life, one must learn to take the

bitter with the sour.? One of the ironies of business is that

many relatively-unprofitable industries that are plagued by

inadequate prices habitually find themselves beat upon by irate

customers even while other, hugely profitable industries are

spared complaints, no matter how high their prices.


產險業的獲利情況不但是相當的低,而且也是不太受尊重的行業,(就像是山姆
高德溫曾說一個人要學會體驗人生的苦與樂,不過這行很諷刺的是,做的要死要
活的同時,還要被客戶糟蹋,不像有些賺翻了的行業,東西明明貴的要死,卻是
一個願打,一個願挨)


Take the breakfast cereal industry, whose return on invested

capital is more than double that of the auto insurance industry

(which is why companies like Kellogg and General Mills sell at

five times book value and most large insurers sell close to

book). The cereal companies regularly impose price increases,

few of them related to a significant jump in their costs. Yet

not a peep is heard from consumers. But when auto insurers raise

prices by amounts that do not even match cost increases,

customers are outraged. If you want to be loved, it旧 clearly

better to sell high-priced corn flakes than low-priced auto

insurance.


以早餐麥片為例,它的資產報酬率是汽車保險業的一倍(這也是為什麼家樂氏與
通用磨坊的股價淨值比是五倍,而保險業者的股價淨值比僅為一倍),麥片公司
常常在調整產品售價,即便其生產成本沒什麼變,但消費者卻連一個屁都不吭一
聲,但要是換做是保險業者,就算只是反映成本稍微調整一下價格,保戶馬上就
會生氣地跳起來,所以若你識相,最好是選擇去賣高價的玉米片,而不是低價的
汽車保險。


The antagonism that the public feels toward the industry can

have serious consequences: Proposition 103, a California

initiative passed last fall, threatens to push auto insurance

prices down sharply, even though costs have been soaring. The

price cut has been suspended while the courts review the

initiative, but the resentment that brought on the vote has not

been suspended: Even if the initiative is overturned, insurers

are likely to find it tough to operate profitably in California.

(Thank heavens the citizenry isn急 mad at bonbons: If Proposition

103 applied to candy as well as insurance, See旧 would be forced

to sell its product for $5.76 per pound. rather than the $7.60 we

charge - and would be losing money by the bucketful.)


一般大眾對於保險業的敵視會造成嚴重的後果,去年秋天加州通過的一項103
提案,雖然成本一再上漲,卻還威脅要將汽車保費價格大幅壓低,所幸法院後來
檢視這項提案予以擱置,但這次投票所帶來的衝擊未曾稍減,保險業者在加州已
很難再有營運獲利的空間,(感謝老天還好加州人沒有對巧克力糖果感到反感,
若是103提案也如保險般適用於糖果的話,喜斯可能被迫以每磅5.76元而不
是現在的每磅7.6元,果真如此,喜斯可能就要虧大錢了)


The immediate direct effects on Berkshire from the

initiative are minor, since we saw few opportunities for profit

in the rate structure that existed in California prior to the

vote. However, the forcing down of prices would seriously affect

GEICO, our 44%-owned investee, which gets about 10% of its

premium volume from California. Even more threatening to GEICO

is the possibility that similar pricing actions will be taken in

other states, through either initiatives or legislation.


對Berkshire來說,這項法案的短期影響不大,因為即使在這法案之前,加州現
行的費率結構也很難讓我找到有獲利的商機,然而這項壓低保費的做法卻會直接
影響到我們持有44%股權的GEICO,約有10%2的保費收入係來自加州,更具
威脅的是若其他州,不管是透過提案或是立法的方式,也跟進採取類似的行動,


If voters insist that auto insurance be priced below cost,

it eventually must be sold by government. Stockholders can

subsidize policyholders for a short period, but only taxpayers

can subsidize them over the long term. At most property-casualty

companies, socialized auto insurance would be no disaster for

shareholders. Because of the commodity characteristics of the

industry, most insurers earn mediocre returns and therefore have

little or no economic goodwill to lose if they are forced by

government to leave the auto insurance business. But GEICO,

because it is a low-cost producer able to earn high returns on

equity, has a huge amount of economic goodwill at risk. In turn,

so do we.


若民眾堅持汽車保險費的價格一定要低於成本,則最後可能要由政府直接來負
責,股東或可暫時支應保戶,但只有納稅人可以長久地給予支助,對大部分的產
物意外險業者來說,社會化的汽車保險對於其股東不會有太大影響,因為由於這
個產業是屬於大眾產品,保險業者所賺的投資報酬平平,所以若因此被政府強迫
退出市場,也不會有太大的商譽損失,但GEICO就不一樣了,由於它的成本低,
相對地可以獲得高報酬,所以可能會有很大的潛在商譽損失,而這當然會連帶影
響到我們。


At Berkshire, in 1988, our premium volume continued to fall,

and in 1989 we will experience a large decrease for a special

reason: The contract through which we receive 7% of the business

of Fireman旧 Fund expires on August 31. At that time, we will

return to Fireman旧 Fund the unearned premiums we hold that

relate to the contract. This transfer of funds will show up in

our 断remiums written?account as a negative $85 million or so

and will make our third-quarter figures look rather peculiar.

However, the termination of this contract will not have a

significant effect on profits.


在1988年Berkshire的保費收入持續減少,到了1989年我們預期保費收入還
會大幅下滑,一方面是因為消防人員退休基金即將於八月底到期,屆時依合約我
們必須將未到期的保費退還,估計總共退回的金額8,500萬美元,這將使得我
們第三季的數字看起來有點奇怪,當然這對於我們公司本身的獲利不會造成太大
的影響。


Berkshire旧 underwriting results continued to be excellent

in 1988. Our combined ratio (on a statutory basis and excluding

structured settlements and financial reinsurance) was 104.

Reserve development was favorable for the second year in a row,

after a string of years in which it was very unsatisfactory.

Details on both underwriting and reserve development appear on

pages 36-38.


Berkshire 1988年的承保表現依舊相當不錯,我們的綜合比率(依照法定基礎扣
除和解與財務再保)大約在104,損失準備提列在前幾年不佳後,連續兩年情況
還算良好)


Our insurance volume over the next few years is likely to

run very low, since business with a reasonable potential for

profit will almost certainly be scarce. So be it. At Berkshire,

we simply will not write policies at rates that carry the

expectation of economic loss. We encounter enough troubles when

we expect a gain.


我們的保費收入規模預計在未來幾年內都會維持在相當低的水平,因為有利可圖
的生意實在是少之又少,隨它去,在Berkshire我們不可能在知道明明會虧錢的
情況下,還去硬接生意,光是接看起來有賺頭的生意,就讓我們的麻煩夠多了。


Despite - or perhaps because of - low volume, our profit

picture during the next few years is apt to be considerably

brighter than the industry旧. We are sure to have an exceptional

amount of float compared to premium volume, and that augurs well

for profits. In 1989 and 1990 we expect our float/premiums

ratio to be at least three times that of the typical

property/casualty company. Mike Goldberg, with special help from

Ajit Jain, Dinos Iordanou, and the National Indemnity managerial

team, has positioned us well in that respect.


盡管(也或許正因為如此)我們的保單量少,可以預期的我們的獲利情況在未來幾
年內也會比同業來的出色,相較於保單量我們有高比例的浮存金,通常這代表著
獲利,在1989與1990這兩年內,我們的浮存金/保費收入比例至少會是同業
水準的三倍以上,Mike Goldberg在Ajit Jain等人的協助下,加上國家產險的
經營團隊使我們站在相當有利的位置。


At some point - we don急 know when - we will be deluged with

insurance business. The cause will probably be some major

physical or financial catastrophe. But we could also experience

an explosion in business, as we did in 1985, because large and

increasing underwriting losses at other companies coincide with

their recognition that they are far underreserved. in the

meantime, we will retain our talented professionals, protect our

capital, and try not to make major mistakes.


有一點我們不知道什麼時候,我們會被保險事業拖垮,有可能會是一些重大的天
然或是經濟上的意外,但我們也有可能會遇到像1985年一樣爆炸性的成長,因
為當其他同業因長期殺價搶單,一夕之間損失突然爆發,才發現損失提列準備遠
遠不足,在那種情況下,我們一定會穩固好我們的專業人員與資本並盡量避免犯
下重大的錯誤。


Marketable Securities

有價證券投資


In selecting marketable securities for our insurance

companies, we can choose among five major categories: (1) long-

term common stock investments, (2) medium-term fixed-income

securities, (3) long-term fixed-income securities, (4) short-term

cash equivalents, and (5) short-term arbitrage commitments.


在為我們的保險事業選擇有價證券投資之時,我們主要有五種選擇(1)長期股票
投資(2)長期固定收益債券(3)中期固定收益債券(4)短期約當現金(5)短期套利交


We have no particular bias when it comes to choosing from

these categories. We just continuously search among them for the

highest after-tax returns as measured by 単athematical

expectation,?limiting ourselves always to investment

alternatives we think we understand. Our criteria have nothing

to do with maximizing immediately reportable earnings; our goal,

rather, is to maximize eventual net worth.

對於這五種類型的交易,我們沒有特別的偏好,我們只是持續不斷地尋找最高的
稅後報酬預計的數學期望值,且僅限於我們認為了解熟悉的投資,我們無意讓與
短期的帳面盈餘好看,我們的目標是讓長期的淨值極大化。

o Below we list our common stock holdings having a value over

$100 million, not including arbitrage commitments, which will be

discussed later. A small portion of these investments belongs to

subsidiaries of which Berkshire owns less than 100%.


下表是我們超過一億美元以上的普通股投資,(不包含套利交易,這部份我們後
面會再談),一部份的投資係屬於Berkshire關係企業所持有

Shares Company Cost Market

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

(000s omitted)

3,000,000 Capital Cities/ABC, Inc. .............. $517,500 $1,086,750

14,172,500 The Coca-Cola Company ........... 592,540 632,448

2,400,000 Federal Home Loan Mortgage

Corporation Preferred* ............ 71,729 121,200

6,850,000 GEICO Corporation ..................... 45,713 849,400

1,727,765 The Washington Post Company ... 9,731 364,126

*Although nominally a preferred stock, this security is

financially equivalent to a common stock.

Our permanent holdings - Capital Cities/ABC, Inc., GEICO

Corporation, and The Washington Post Company - remain unchanged.

Also unchanged is our unqualified admiration of their

managements: Tom Murphy and Dan Burke at Cap Cities, Bill Snyder

and Lou Simpson at GEICO, and Kay Graham and Dick Simmons at The

Washington Post. Charlie and I appreciate enormously the talent

and integrity these managers bring to their businesses.


我們永久的持股-資本城/ABC、GEICO汽車保險與華盛頓郵報依舊不變,同樣
不變的是我們對於這些管理階層無條件的敬仰,不管是資本城/ABC的Tom
Murphy 與 Dan Burke、GEICO汽車保險的Bill Snyder 與Lou Simpson,
還有華盛頓郵報的Kay Graham與 Dick Simmons,查理跟我對於他們所展現
的才能與品格同感敬佩。


Their performance, which we have observed at close range,

contrasts vividly with that of many CEOs, which we have

fortunately observed from a safe distance. Sometimes these CEOs

clearly do not belong in their jobs; their positions,

nevertheless, are usually secure. The supreme irony of business

management is that it is far easier for an inadequate CEO to keep

his job than it is for an inadequate subordinate.


他們的表現,就我們最近距離的觀察,與許多公司的CEO截然不同,所幸我們
能與後者保持適當的距離,因為有時這些CEO實在是不適任,但卻總是能夠坐
穩其寶座,企業管理最諷刺的就是不適任的老闆要比不適任的部屬更容易保住其
位置。


If a secretary, say, is hired for a job that requires typing

ability of at least 80 words a minute and turns out to be capable

of only 50 words a minute, she will lose her job in no time.

There is a logical standard for this job; performance is easily

measured; and if you can急 make the grade, you虐e out.

Similarly, if new sales people fail to generate sufficient

business quickly enough, they will be let go. Excuses will not

be accepted as a substitute for orders.


假設一位秘書在應徵時被要求一分鐘要能夠打80個字,但錄取之後被發現一分
鐘只能打50個字,很快地她就可能會被炒魷魚,因為有一個相當客觀的標準在
那裡,其表現如何很容易可以衡量的出來;同樣的,一個新進的業務,若是不能
馬上創造足夠業績,可能立刻就要走路,為了維持紀律,很難允許有例外情形發
生。


However, a CEO who doesn急 perform is frequently carried

indefinitely. One reason is that performance standards for his

job seldom exist. When they do, they are often fuzzy or they may

be waived or explained away, even when the performance shortfalls

are major and repeated. At too many companies, the boss shoots

the arrow of managerial performance and then hastily paints the

bullseye around the spot where it lands.


但是一個CEO表現不好,卻可以無限期的撐下去,一個原因就是根本沒有一套
可以衡量其表現的標準存在,就算真的有,也是寫的很模糊,或是含混解釋過去,
即便是錯誤與過失一再發生也是如此,有太多的公司是等老闆射箭出去後,再到
牆上把準心描上去。


Another important, but seldom recognized, distinction

between the boss and the foot soldier is that the CEO has no

immediate superior whose performance is itself getting measured.

The sales manager who retains a bunch of lemons in his sales

force will soon be in hot water himself. It is in his immediate

self-interest to promptly weed out his hiring mistakes.

Otherwise, he himself may be weeded out. An office manager who

has hired inept secretaries faces the same imperative.


另外一個很重要但卻很少被提起老闆與員工之間的差別是老闆本身沒有一個直
接可以衡量判斷其表現的上司,業務經理不可能讓一顆老鼠屎一直留在他那一鍋
粥之內,他一定會很快地把它給挑出來,否則可能連他自己都會有問題,同樣的
一個老闆要是請到一位無能的秘書,也會有相同的動作。


But the CEO旧 boss is a Board of Directors that seldom

measures itself and is infrequently held to account for

substandard corporate performance. If the Board makes a mistake

in hiring, and perpetuates that mistake, so what? Even if the

company is taken over because of the mistake, the deal will

probably bestow substantial benefits on the outgoing Board

members. (The bigger they are, the softer they fall.)


但CEO的上司也就是董事會卻很少檢視其績效,並為企業表現不佳負責,就算
董事會選錯了人,而且這個錯誤還持續存在又怎樣?即使因為這樣使得公司被接
收,通常交易也會確保被逐出的董事會成員有豐厚的利益(且通常公司越大,甜
頭越多)


Finally, relations between the Board and the CEO are

expected to be congenial. At board meetings, criticism of the

CEO旧 performance is often viewed as the social equivalent of

belching. No such inhibitions restrain the office manager from

critically evaluating the substandard typist.


最後董事會與CEO之間的關係應該是要能夠意氣相投,在董事會議當中,對於
CEO表現的批評就好像是在社交場合中打嗝一樣不自然,但卻沒有一位經理人
會被禁止不准嚴格地審核打字員的績效。


These points should not be interpreted as a blanket

condemnation of CEOs or Boards of Directors: Most are able and

hard-working, and a number are truly outstanding. But the

management failings that Charlie and I have seen make us thankful

that we are linked with the managers of our three permanent

holdings. They love their businesses, they think like owners,

and they exude integrity and ability.


以上幾點不是要一杆子打翻一條船,大部分的CEO或是董事會都相當努力、能
幹,有一小部份更是特別的傑出,但查理跟我在看過很多失敗的例子之後,更加
對於我們能夠與前面三家公司優秀的經理人共事感到非常幸運,他們熱愛他們的
事業,想法跟老闆一致,且散發出才氣與品格。


o In 1988 we made major purchases of Federal Home Loan

Mortgage Pfd. (絶reddie Mac? and Coca Cola. We expect to hold

these securities for a long time. In fact, when we own portions

of outstanding businesses with outstanding managements, our

favorite holding period is forever. We are just the opposite of

those who hurry to sell and book profits when companies perform

well but who tenaciously hang on to businesses that disappoint.

Peter Lynch aptly likens such behavior to cutting the flowers and

watering the weeds. Our holdings of Freddie Mac are the maximum

allowed by law, and are extensively described by Charlie in his

letter. In our consolidated balance sheet these shares are

carried at cost rather than market, since they are owned by

Mutual Savings and Loan, a non-insurance subsidiary.


1988年我們做出兩項重大的決定,大筆買進聯邦家庭貸款抵押公司(Freddie
Mac)與可口可樂,我們打算要持有這些股票很長的一段期間,事實上當我們發
現我們持有兼具傑出企業與傑出經理人的股權時,我們最長的投資期間是永久,
我們跟那些急著想要賣出表現不錯的股票以實現獲利卻頑固地不肯出脫那些績
效差的股份的那群人完全相反。彼得林區生動地將這種行為解釋成砍除花朵來當
作野草的肥料,我們持有Freddie Mac的股份比例是法令規定的上限,這部份
查理在後面會詳加為各位說明,因為他們是屬於共同儲貸-我們一家非保險的子
公司所投資,所以在我們的合併資產負債表當中,這些持股將以成本而非市價列
示。


We continue to concentrate our investments in a very few

companies that we try to understand well. There are only a

handful of businesses about which we have strong long-term

convictions. Therefore, when we find such a business, we want to

participate in a meaningful way. We agree with Mae West: 荘oo

much of a good thing can be wonderful.?


我們持續將投資集中在少數我們能夠了解的公司之上,只有少部份是我們想要長
期投入的,因為當我們好不容易找到這樣的公司時,我們會想要達到一定的參與
程度,我們同意Mae West的看法,好東西當然是多多益善。


o We reduced our holdings of medium-term tax-exempt bonds by

about $100 million last year. All of the bonds sold were

acquired after August 7, 1986. When such bonds are held by

property-casualty insurance companies, 15% of the 鋳ax-exempt?

interest earned is subject to tax.


去年我們減少在中期免稅債券約一億美元的投資,所有賣出的債券都是在1986
年之後才取得的,當這些債券由產險公司所持有的時候,其中15%的利息收入
是要課稅的。


The $800 million position we still hold consists almost

entirely of bonds 帯randfathered?under the Tax Reform Act of

1986, which means they are entirely tax-exempt. Our sales

produced a small profit and our remaining bonds, which have an

average maturity of about six years, are worth modestly more than

carrying value.


剩下我們仍持有約8億美元的債券,都是屬於適用1986年租稅改革法案完全
免稅的祖父級債券,出售的債券將有些許的獲利,而繼續持有的債券平均到期日
大概是六年,其市價大概略高於帳面價值。


Last year we described our holdings of short-term and

intermediate-term bonds of Texaco, which was then in bankruptcy.

During 1988, we sold practically all of these bonds at a pre-tax

profit of about $22 million. This sale explains close to $100

million of the reduction in fixed-income securities on our

balance sheet.


去年我們曾提及我們所持有的已破產的Texaco短期與中期公司債券,1988年
我們已經將所有的部位處分,獲利約2,200萬美元,此舉將使得我們在固定收
益債券的投資部位減少1億美元。


We also told you last year about our holdings of another

security whose predominant characteristics are those of an

intermediate fixed-income issue: our $700 million position in

Salomon Inc 9% convertible preferred. This preferred has a

sinking fund that will retire it in equal annual installments

from 1995 to 1999. Berkshire carries this holding at cost. For

reasons discussed by Charlie on page 69, the estimated market

value of our holding has improved from moderately under cost at

the end of last year to moderately over cost at 1988 year end.


去年我們還提到了另外一個深具固定收益特色的投資:亦即所羅門公司9%可轉
換特別股,這種特別股特別要求公司提撥償債基金,自1995年到1999年間分
批贖回,Berkshire將這些投資以成本列示在帳上,基於查理所提的原因,現在
的估計市價以從前一年度略低於成本,轉變為1988年的略高於成本。


The close association we have had with John Gutfreund, CEO

of Salomon, during the past year has reinforced our admiration

for him. But we continue to have no great insights about the

near, intermediate or long-term economics of the investment

banking business: This is not an industry in which it is easy to

forecast future levels of profitability. We continue to believe

that our conversion privilege could well have important value

over the life of our preferred. However, the overwhelming

portion of the preferred旧 value resides in its fixed-income

characteristics, not its equity characteristics.


我們與所羅門CEO- John Gutfreund之間良好的關係,隨著幾年來的合作日益
增進,但我們還是無法判斷投資銀行業的前景,不管是短期、中期或是長期皆然,
這是一個難以預估未來獲利程度的產業,我們仍然相信我們所擁有的轉換權利會
在其有效期間內,對我們產生相當大的貢獻,然而這種特別股的價值主要還是來
自於其固定收益,而不是股權特性之上。


o We have not lost our aversion to long-term bonds. We will

become enthused about such securities only when we become

enthused about prospects for long-term stability in the

purchasing power of money. And that kind of stability isn急 in

the cards: Both society and elected officials simply have too

many higher-ranking priorities that conflict with purchasing-

power stability. The only long-term bonds we hold are those of

Washington Public Power Supply Systems (WPPSS). A few of our

WPPSS bonds have short maturities and many others, because of

their high coupons, are likely to be refunded and paid off in a

few years. Overall, our WPPSS holdings are carried on our

balance sheet at $247 million and have a market value of about

$352 million.


我們對於長期債券的規避依舊不變,唯有當我們對於貨幣的長期購買力有信心
時,我們才會對這類的債券有興趣,但這種穩定卻根本沒辦法預期,因為不管是
社會或是選出來的官員實在是有太多的優先事項是與購買力的穩定性相衝突
的。所以目前我們唯一持有的長期債券就是WPPSS華盛頓功用電力供應系統,
其中有些屬於短期,有一些則是分幾年贖回的高票息,目前資產負債表上帳列成
本為2.47億美元,目前市價約為3.52億美元。


We explained the reasons for our WPPSS purchases in the 1983

annual report, and are pleased to tell you that this commitment

has worked out about as expected. At the time of purchase, most

of our bonds were yielding around 17% after taxes and carried no

ratings, which had been suspended. Recently, the bonds were

rated AA- by Standard & Poor旧. They now sell at levels only

slightly below those enjoyed by top-grade credits.


我們在1983年年報中曾經解釋過購買WPPSS的理由,現在很高興跟大家報告結果完全符合我們當初的預期,在買進的時候,債券的評等被暫時取消,估計稅後的投資報酬率約為17%,最近它被史坦普評等機構評為AA-等級,目前的市價大概只有比最高等級債信的投資報酬好一點。


In the 1983 report, we compared the economics of our WPPSS

purchase to those involved in buying a business. As it turned

out, this purchase actually worked out better than did the

general run of business acquisitions made in 1983, assuming both

are measured on the basis of unleveraged, after tax returns

achieved through 1988.


在1983年的年報中,我們比較了投資WPPSS與一般企業的差異,結果顯示這
次的投資要比當時同期間所從事購併案還要好,假設兩者皆以為無財務槓桿的基
礎下進行。

Our WPPSS experience, though pleasant, does nothing to alter

our negative opinion about long-term bonds. It only makes us

hope that we run into some other large stigmatized issue, whose

troubles have caused it to be significantly misappraised by the

market.


不過我們在WPPSS的愉快經驗並未能改變我們對於長期債券的負面看法,除非
再讓我們碰到暫時僵住的大案子,因為短暫的問題使得其市價嚴重的被低估。


Arbitrage

套利


In past reports we have told you that our insurance

subsidiaries sometimes engage in arbitrage as an alternative to

holding short-term cash equivalents. We prefer, of course, to

make major long-term commitments, but we often have more cash

than good ideas. At such times, arbitrage sometimes promises

much greater returns than Treasury Bills and, equally important,

cools any temptation we may have to relax our standards for long-

term investments. (Charlie旧 sign off after we挙e talked about

an arbitrage commitment is usually: 繊kay, at least it will keep

you out of bars.?


在過去的報告中我曾經告訴各位保險子公司有時也會從事套利的操作,以作為短
期資金的替代,當然我們比較喜歡長期的投入,但可惜資金總是多過於點子,與
此同時,套利的報酬有時會多過於政府公債,同時很重要的一點是可以稍微緩和
我們對於尋找長期資金去處的壓力,(每次在我們談完套利投資之後,查理總是
會附帶一句,這樣也好,至少能讓你暫時遠離市場)


During 1988 we made unusually large profits from arbitrage,

measured both by absolute dollars and rate of return. Our pre-

tax gain was about $78 million on average invested funds of about

$147 million.


在1988年我們在套利部份斬獲不少,不論是金額或是投資報酬率,總計投入
1.47億美元的資金,賺取7,800萬美元的獲利。


This level of activity makes some detailed discussion of

arbitrage and our approach to it appropriate. Once, the word

applied only to the simultaneous purchase and sale of securities

or foreign exchange in two different markets. The goal was to

exploit tiny price differentials that might exist between, say,

Royal Dutch stock trading in guilders in Amsterdam, pounds in

London, and dollars in New York. Some people might call this

scalping; it won急 surprise you that practitioners opted for the

French term, arbitrage.


如此的成績使我們值得詳細的描述一下,所謂的套利是指在不同的市場同時買賣
相同的有價證券或是外匯,目的是為了擷取兩者之間微小的差距,例如阿姆斯特
丹的荷蘭幣、英國的英鎊或是紐約的美元,有些人將此行為稱之為剃頭皮,但通
常這一行的人慣用法國的字彙-套利。


Since World War I the definition of arbitrage - or 遅isk

arbitrage,?as it is now sometimes called - has expanded to

include the pursuit of profits from an announced corporate event

such as sale of the company, merger, recapitalization,

reorganization, liquidation, self-tender, etc. In most cases the

arbitrageur expects to profit regardless of the behavior of the

stock market. The major risk he usually faces instead is that

the announced event won急 happen.


自從第一次世界大戰之後,套利或者說風險套利的定義,已延伸包括從已公開的
企業購併、重整再造、清算等企業活動中獲利,大部分的情況下,套利者期望不
管股市變動如何皆能獲利,相對的他面臨的主要風險是宣佈的事件未如預期般發
生。


Some offbeat opportunities occasionally arise in the

arbitrage field. I participated in one of these when I was 24

and working in New York for Graham-Newman Corp. Rockwood & Co.,

a Brooklyn based chocolate products company of limited

profitability, had adopted LIFO inventory valuation in 1941

when cocoa was selling for 50 cents per pound. In 1954 a

temporary shortage of cocoa caused the price to soar to over

60 cents. Consequently Rockwood wished to unload its valuable

inventory - quickly, before the price dropped. But if the cocoa

had simply been sold off, the company would have owed close to

a 50% tax on the proceeds.


有些特別的套利機會也會偶爾出現,我記得在24歲時當時我在紐約的葛拉罕-
紐曼公司上班,Rockwood一家在布魯克林生產巧克力的公司,原則該公司自
1941年開始就採用後進先出制的存貨評價方式,那時可可亞每磅是50美分,
到了1954年可可亞因為暫時缺貨價格大漲至64美分,因此Rockwood想要
把帳上價值不菲的可可亞存貨在價格滑落之前變賣掉,但若是直接將這批貨賣
掉,所得的收益可能要支付50%左右的稅金,但1954的稅務法令及時公佈,
其中有一項不太為人知的規定,就是如果企業不是把這些存貨賣掉而是直接分配
給股東間接減少營運規模的話,就可以免稅,因此Rockwood決定停止其販賣
可可亞奶油的業務,並將1,300萬磅的可可亞豆子發還給股東,同時公司也願
意以可可亞豆子換買回部份股份,換算下來,每股可以換得80磅的豆子。


The 1954 Tax Code came to the rescue. It contained an

arcane provision that eliminated the tax otherwise due on LIFO

profits if inventory was distributed to shareholders as part of a

plan reducing the scope of a corporation旧 business. Rockwood

decided to terminate one of its businesses, the sale of cocoa

butter, and said 13 million pounds of its cocoa bean inventory

was attributable to that activity. Accordingly, the company

offered to repurchase its stock in exchange for the cocoa beans

it no longer needed, paying 80 pounds of beans for each share.

For several weeks I busily bought shares, sold beans, and

made periodic stops at Schroeder Trust to exchange stock

certificates for warehouse receipts. The profits were good and

my only expense was subway tokens.


有好幾個禮拜我整天忙著買進股票、換豆子,再把豆子拿去賣,並常常跑到
Schroeder信託公司拿著股票憑證換取倉庫保管單,獲利算下來還不錯,而唯一
的成本費用就是地鐵車票。


The architect of Rockwood旧 restructuring was an unknown,

but brilliant Chicagoan, Jay Pritzker, then 32. If you虐e

familiar with Jay旧 subsequent record, you won急 be surprised to

hear the action worked out rather well for Rockwood旧 continuing

shareholders also. From shortly before the tender until shortly

after it, Rockwood stock appreciated from 15 to 100, even though

the company was experiencing large operating losses. Sometimes

there is more to stock valuation than price-earnings ratios.


Rockwood改造計畫的規劃者是32歲沒有名氣但相當優秀的芝加哥人Jay
Pritzker,若你知道Jay後來的記錄,你應該就不會訝異這個動作對於公司股東
有多大的益處了,在這項提議推出不久之後,雖然公司營運呈現虧損,但
Rockwood的股價卻從15美元漲到100美元,有時股票的價格會遠遠超過合
理的本益比之外。


In recent years, most arbitrage operations have involved

takeovers, friendly and unfriendly. With acquisition fever

rampant, with anti-trust challenges almost non-existent, and with

bids often ratcheting upward, arbitrageurs have prospered

mightily. They have not needed special talents to do well; the

trick, a la Peter Sellers in the movie, has simply been 斉eing

There.?In Wall Street the old proverb has been reworded: 専ive a

man a fish and you feed him for a day. Teach him how to

arbitrage and you feed him forever.?(If, however, he studied at

the Ivan Boesky School of Arbitrage, it may be a state

institution that supplies his meals.)


近幾年來,大部分的套利操作都牽涉到購併案,不管是友善的或是敵意的皆然,
在購併案狂熱之時,幾乎感覺不到托拉斯法的存在,投標的競價履創天價,在當
時套利客大行其道,在這行不需要太多的才能,唯一的技巧就像是Peter Sellers
的電影那樣,只要軋一腳就行,華爾街有一句經過改編的俗話,給一個人一條魚,
你只能養活他一餐,教他如何套利,卻可以養活他一輩子,(當然要是他到學校
學習套利,可能就要靠州政府過活了)


To evaluate arbitrage situations you must answer four

questions: (1) How likely is it that the promised event will

indeed occur? (2) How long will your money be tied up? (3) What

chance is there that something still better will transpire - a

competing takeover bid, for example? and (4) What will happen if

the event does not take place because of anti-trust action,

financing glitches, etc.?


在評估套利活動時,你必須要能回答四個問題(1)已公佈的事件有多少可能性確
實會發生?(2)你的資金總計要投入多久?(3)有多少可能更好的結果會發生,例如
購併競價提高(4)因為反托拉斯或是財務意外狀況發生導致購併案觸礁的機率有
多高?


Arcata Corp., one of our more serendipitous arbitrage

experiences, illustrates the twists and turns of the business.

On September 28, 1981 the directors of Arcata agreed in principle

to sell the company to Kohlberg, Kravis, Roberts & Co. (KKR),

then and now a major leveraged-buy out firm. Arcata was in the

printing and forest products businesses and had one other thing

going for it: In 1978 the U.S. Government had taken title to

10,700 acres of Arcata timber, primarily old-growth redwood, to

expand Redwood National Park. The government had paid $97.9

million, in several installments, for this acreage, a sum Arcata

was contesting as grossly inadequate. The parties also disputed

the interest rate that should apply to the period between the

taking of the property and final payment for it. The enabling

legislation stipulated 6% simple interest; Arcata argued for a

much higher and compounded rate.


Arcata公司我們最曲折離奇的購併經驗,說明了企業的曲曲折折,1981年9
月28日該公司的董事同意將公司賣給KKR公司,一家在當時同時也是現在最
大的融資買斷公司,Arcata所從事的是印刷與森林產品,但其中值得注意的是
在1978年美國政府決定徵收該公司所有10,700公頃的紅木林,以擴增國家公
園的範圍,為此政府決定分期支付該公司總金額9,790萬美元的徵收款,但
Arcata公司卻認為金額太少,同時雙方也對適用的利率也爭議,Arcata極力爭
取更高的賠償金與適用的利率。


Buying a company with a highly-speculative, large-sized

claim in litigation creates a negotiating problem, whether the

claim is on behalf of or against the company. To solve this

problem, KKR offered $37.00 per Arcata share plus two-thirds of

any additional amounts paid by the government for the redwood

lands.


買下一家具有高度爭議的公司將會讓公司在談判過程中,會增加許多的難度,不
管訴訟案件是不利或是有利於公司皆然,為了化解這個難題,KKR決定支付
Arcata每股37美元再加上政府額外賠償款的三分之二,作為購併的條件。


Appraising this arbitrage opportunity, we had to ask

ourselves whether KKR would consummate the transaction since,

among other things, its offer was contingent upon its obtaining

昼atisfactory financing.?A clause of this kind is always

dangerous for the seller: It offers an easy exit for a suitor

whose ardor fades between proposal and marriage. However, we

were not particularly worried about this possibility because

KKR旧 past record for closing had been good.


在評估過這項投資機會之後,我們自問KKR能否真正完成這項交易的關鍵在於
他們是否能夠順利取得融資,這對賣方來說永遠是風險最高的一項條款,追求者
在提出求婚到正式結婚的這段期間,要落跑是很容易的一件事,不過在這個案子
我們卻不太擔心,原因在於KKR過去的記錄還算不錯。


We also had to ask ourselves what would happen if the KKR

deal did fall through, and here we also felt reasonably

comfortable: Arcata旧 management and directors had been shopping

the company for some time and were clearly determined to sell.

If KKR went away, Arcata would likely find another buyer, though

of course, the price might be lower.


我們還必須捫心自問若是KKR真的失敗會如何,在這點我們覺得還好,Arcata
的董事會與經營階層已經在外兜售好一段時間了,顯示該公司卻有決心要出售,
如果KKR跑掉,Arcata一定還會再找新的買主,當然屆時的價格可能會差一點。


Finally, we had to ask ourselves what the redwood claim

might be worth. Your Chairman, who can急 tell an elm from an

oak, had no trouble with that one: He coolly evaluated the claim

at somewhere between zero and a whole lot.


最後我們還必須問自己,那塊紅木林的價值到底有多少?坦白說我雖然個人連榆
樹跟橡木都分不出來,但對於這個問題我的處理方式倒很簡單,反正就是介於零
到一大筆錢之間就對了。


We started buying Arcata stock, then around $33.50, on

September 30 and in eight weeks purchased about 400,000 shares,

or 5% of the company. The initial announcement said that the

$37.00 would be paid in January, 1982. Therefore, if everything

had gone perfectly, we would have achieved an annual rate of

return of about 40% - not counting the redwood claim, which would

have been frosting.


後來我們開始從九月開始以每股33.5元買進Arcata股票,八個禮拜之內總共
買進40萬股,約佔該公司5%的股權,隔年一月第一次對外公佈股東每股可以
拿到37元,換算年投資報酬約為40%,這還不包含可以的紅木林賠償損失。


All did not go perfectly. In December it was announced that

the closing would be delayed a bit. Nevertheless, a definitive

agreement was signed on January 4. Encouraged, we raised our

stake, buying at around $38.00 per share and increasing our

holdings to 655,000 shares, or over 7% of the company. Our

willingness to pay up - even though the closing had been

postponed - reflected our leaning toward 贈 whole lot?rather

than 逓ero?for the redwoods.


然而過程中不太順利,到了12月宣佈交易可能會延後,儘管如果1月鐵定會簽
約,受到這項鼓勵,我們決定再加碼以38元每股至65.5萬股,約7%的股權,
我們的努力終於獲得回報,雖然有點拖延,但結果卻相當令人滿意。


Then, on February 25 the lenders said they were taking a

昼econd look?at financing terms ?in view of the severely

depressed housing industry and its impact on Arcata旧 outlook.?

The stockholders?meeting was postponed again, to April. An

Arcata spokesman said he 続id not think the fate of the

acquisition itself was imperiled.?When arbitrageurs hear such

reassurances, their minds flash to the old saying: 浅e lied like

a finance minister on the eve of devaluation.?


接著在2月25日融資銀行說有鑑於房地產景氣不佳,連帶對Arcata的前景可
能有所疑慮,故有關融資條件可能還要再談,股東臨時會也因此再度延期到四月
舉行,同時Arcata公司發言人表示他不認為購併案已觸礁,但是當套利客聽到
這種重申時,腦中便閃過一句老話︰他說謊的方式就好像是即將面臨匯率崩盤的
財政部長一樣。


On March 12 KKR said its earlier deal wouldn急 work, first

cutting its offer to $33.50, then two days later raising it to

$35.00. On March 15, however, the directors turned this bid down

and accepted another group旧 offer of $37.50 plus one-half of any

redwood recovery. The shareholders okayed the deal, and the

$37.50 was paid on June 4.


3月12日KKR宣佈先前的約定無效,並將報價砍至33.5美元一股,兩天後再
調高至35美元,然而到了3月15日董事會拒絕了這項提議,並接受另一家集
團37.5美元外加紅木林一半的收益,股東會迅速通過這項交易,並於6月4日
收到現金。


We received $24.6 million versus our cost of $22.9 million;

our average holding period was close to six months. Considering

the trouble this transaction encountered, our 15% annual rate of

return excluding any value for the redwood claim - was more than

satisfactory.


總計我們花了近六個月的時間,投資2,290萬美元,最後收回2,460萬美元,
但若是加計這項交易中間所經歷的風風雨雨,則15%的年報酬率(未包含紅木林
潛在收益)還算令人滿意。


But the best was yet to come. The trial judge appointed two

commissions, one to look at the timber旧 value, the other to

consider the interest rate questions. In January 1987, the first

commission said the redwoods were worth $275.7 million and the

second commission recommended a compounded, blended rate of

return working out to about 14%.


不過好戲還在後頭,承審法院指派兩個委員會來解決這項紛爭,一個負責認定紅
木林的價值,一個則負責應該適用的利率,隔年1月委員會認定紅木林的價值
為2.75億美元,適用的複利率應為14%。


In August 1987 the judge upheld these conclusions, which

meant a net amount of about $600 million would be due Arcata.

The government then appealed. In 1988, though, before this

appeal was heard, the claim was settled for $519 million.

Consequently, we received an additional $29.48 per share, or

about $19.3 million. We will get another $800,000 or so in 1989.


到了八月法官裁定這項決議,這代表政府需要再支付高達6億美元的賠償金,
聯邦政府立刻提出上訴,而就在上訴即將宣判結果時,雙方以5.19億美元達成
和解,因此我們又額外收到1,930萬美元,相當於每股29.48美元的大紅包,
之後還可以再拿到80萬美元的進帳。


Berkshire旧 arbitrage activities differ from those of many

arbitrageurs. First, we participate in only a few, and usually

very large, transactions each year. Most practitioners buy into

a great many deals perhaps 50 or more per year. With that many

irons in the fire, they must spend most of their time monitoring

both the progress of deals and the market movements of the

related stocks. This is not how Charlie nor I wish to spend our

lives. (What旧 the sense in getting rich just to stare at a

ticker tape all day?)


Berkshire的套利活動與其他套利客有些不同,首先相較於一般套利客一年從事
好幾十個案子,每年我們只參與少數通常是大型的交易案,有這麼多鍋子同時在
煮,他們必須花很多時間在監控交易的進度與相關股票的股價變動,這並不是查
理跟我想要過的生活方式,(為了致富,整天盯著電腦螢幕到底有何意義?)


Because we diversify so little, one particularly profitable

or unprofitable transaction will affect our yearly result from

arbitrage far more than it will the typical arbitrage operation.

So far, Berkshire has not had a really bad experience. But we

will - and when it happens we歓l report the gory details to you.


也因為我們只專注在少數幾個案子,所以一個特別好或是特別差的案子,可能會
大大地影響到我們一整年的套利成績,所幸到目前為止,Berkshire還沒有遇到
什麼慘痛的經驗,一旦發生我一定會一五一十的向各位報告。


The other way we differ from some arbitrage operations is

that we participate only in transactions that have been publicly

announced. We do not trade on rumors or try to guess takeover

candidates. We just read the newspapers, think about a few of

the big propositions, and go by our own sense of probabilities.


另有一點不同的是我們只參與已經公開對外宣佈的案子,我們不會僅靠著謠言或
是去預測可能被購併的對象,我們只看報紙,思考幾項關鍵因素,並依照我們判
斷的可能性做決定。


At yearend, our only major arbitrage position was 3,342,000

shares of RJR Nabisco with a cost of $281.8 million and a market

value of $304.5 million. In January we increased our holdings to

roughly four million shares and in February we eliminated our

position. About three million shares were accepted when we

tendered our holdings to KKR, which acquired RJR, and the

returned shares were promptly sold in the market. Our pre-tax

profit was a better-than-expected $64 million.


到了年底,我們剩下唯一的套利投資是334.2萬股的RJR Nabisco,投資成本
2.82億美元,目前市價3.04億美元,今年一月我們增加持股到400萬股,接
著在二月全部出清。有300萬股是KKR決定購併RJR後,我們賣給KKR的,
獲利6,400萬美元略高於預期。


Earlier, another familiar face turned up in the RJR bidding

contest: Jay Pritzker, who was part of a First Boston group that

made a tax-oriented offer. To quote Yogi Berra; 戦t was deja vu

all over again.?


稍早之前,另外一個競爭對手Jay Pritzker-第一波士頓集團浮現加入對RJR的
競爭行列,提出以租稅規劃為導向的提案,套句Yogi Berra的說法:這感覺識曾
相識!


During most of the time when we normally would have been

purchasers of RJR, our activities in the stock were restricted

because of Salomon旧 participation in a bidding group.

Customarily, Charlie and I, though we are directors of Salomon,

are walled off from information about its merger and acquisition

work. We have asked that it be that way: The information would

do us no good and could, in fact, occasionally inhibit

Berkshire旧 arbitrage operations.


大部分的時間我們買進RJR相當大的限制,由於我們在也是競爭者的所羅兄公司
有投資,雖然查理跟我都是所羅門的董事,但我們卻與整個購併案的所有資訊隔
絕,而我們認為這樣也好,額外的資訊對我們不見得就有好處,事實上,有時還
會妨礙到Berkshire進行套利的投資。


However, the unusually large commitment that Salomon

proposed to make in the RJR deal required that all directors be

fully informed and involved. Therefore, Berkshire旧 purchases of

RJR were made at only two times: first, in the few days

immediately following management旧 announcement of buyout plans,

before Salomon became involved; and considerably later, after the

RJR board made its decision in favor of KKR. Because we could

not buy at other times, our directorships cost Berkshire

significant money.


然而由於所羅門的提案規模相當的大,以致於所有的董事都必須完全被知會並參
與,因此Berkshire總共只有兩個時點可以進行買進RJR的動作,第一次是當
RJR經營階層宣佈整個購併計畫的幾天內,當時所羅門還未宣佈加入競標,另外
是後來RJR董事會決定優先考慮KKR的提案,也因為所羅門的董事職務,使得
Berkshire的投資成本大大提高。


Considering Berkshire旧 good results in 1988, you might

expect us to pile into arbitrage during 1989. Instead, we expect

to be on the sidelines.


看到1988年如此豐碩的套利成果,你可能會覺得我們應該繼續朝這方面加強,
但事實上,我們決定採取觀望的態度。


One pleasant reason is that our cash holdings are down -

because our position in equities that we expect to hold for a

very long time is substantially up. As regular readers of this

report know, our new commitments are not based on a judgment

about short-term prospects for the stock market. Rather, they

reflect an opinion about long-term business prospects for

specific companies. We do not have, never have had, and never

will have an opinion about where the stock market, interest

rates, or business activity will be a year from now.


一個好的理由是因為我們決定大幅提高在長期股權方面的投資,所以目前的現金
水位已經下降,常常讀我們年報的人可能都知道,我們的決定不是基於短期股市
的表現,反而我們注重的是個別企業的長期經濟展望,我們從來沒有、以後也不
會對短期股市、利率或企業活動做任何的評論。


Even if we had a lot of cash we probably would do little in

arbitrage in 1989. Some extraordinary excesses have developed in

the takeover field. As Dorothy says: 荘oto, I have a feeling

we虐e not in Kansas any more.?


然而就算是我們現金滿滿,我們在1989年可能也不會從事太多的套利交易,購
併市場的發展已經有點過頭了,就像桃樂斯所說的:「奧圖,我覺得我們好像已
經不是在堪薩斯市了!」


We have no idea how long the excesses will last, nor do we

know what will change the attitudes of government, lender and

buyer that fuel them. But we do know that the less the prudence

with which others conduct their affairs, the greater the prudence

with which we should conduct our own affairs. We have no desire

to arbitrage transactions that reflect the unbridled - and, in

our view, often unwarranted - optimism of both buyers and

lenders. In our activities, we will heed the wisdom of Herb

Stein: 戦f something can急 go on forever, it will end.?


我們不太確定這種過熱的現象會持續多久,包含參與熱潮的政府、金主與買家的
態度會如何轉變,不過我們可以確定的是,當別人越沒有信心參與這些活動時,
我們的信心也就越高,我們不願意參與那些反應買方與金主無可救藥的樂觀,通
常我們認為那是無保障的,在此我們寧願注重Herb Stein的智慧,若一件事不
能持久不衰,那麼它終將結束。


Efficient Market Theory

效率市場理論


The preceding discussion about arbitrage makes a small

discussion of 堕fficient market theory?(EMT) also seem relevant.

This doctrine became highly fashionable - indeed, almost holy

scripture in academic circles during the 1970s. Essentially, it

said that analyzing stocks was useless because all public

information about them was appropriately reflected in their

prices. In other words, the market always knew everything. As a

corollary, the professors who taught EMT said that someone

throwing darts at the stock tables could select a stock portfolio

having prospects just as good as one selected by the brightest,

most hard-working security analyst. Amazingly, EMT was embraced

not only by academics, but by many investment professionals and

corporate managers as well. Observing correctly that the market

was frequently efficient, they went on to conclude incorrectly

that it was always efficient. The difference between these

propositions is night and day.


前面提到的套利活動使得我們有必要討論一下市場效率理論,這理論在近年來變
得非常熱門,尤其在1970年代的學術圈被奉為聖旨,基本上它認為分析股票是
沒有用的,因為所有公開的資訊皆已反應在其股價之上,換句話說,市場永遠知
道所有的事,學校教市場效率理論的教授因此做了一個推論,比喻說任何一個人
射飛鏢隨機所選出來的股票組合可以媲美,華爾街最聰明、最努力的證券分析師
所選出來的投資組合,令人驚訝的是市場效率理論不但為學術界所擁抱,更被許
多投資專家與企業經理人所接受,正確地觀察到市場往往是具有效率的,他們卻
繼續下了錯誤的結論,市場永遠都具有效率,這中間的假設差異,簡直有天壤之
別。


In my opinion, the continuous 63-year arbitrage experience

of Graham-Newman Corp. Buffett Partnership, and Berkshire

illustrates just how foolish EMT is. (There旧 plenty of other

evidence, also.) While at Graham-Newman, I made a study of its

earnings from arbitrage during the entire 1926-1956 lifespan of

the company. Unleveraged returns averaged 20% per year.

Starting in 1956, I applied Ben Graham旧 arbitrage principles,

first at Buffett Partnership and then Berkshire. Though I挙e not

made an exact calculation, I have done enough work to know that

the 1956-1988 returns averaged well over 20%. (Of course, I

operated in an environment far more favorable than Ben旧; he had

1929-1932 to contend with.)


就我個人的看法,就我個人過去在葛拉罕-紐曼公司、巴菲特合夥企業與
Berkshire公司連續63年的套利經驗,說明了效率市場理論有多麼的愚蠢(當然
還有其他一堆證據),當初在葛拉罕-紐曼公司上班時,我將該公司1926年到
1956年的套利成果做了一番研究,每年平均20%的投資報酬率,之後從1956
年開始我在巴菲特合夥企業與之後的Berkshire公司,運用葛拉罕的套利原則,
雖然我並沒有仔細地去算,但1956年到1988年間的投資報酬率應該也有超過
20%,(當然之後的投資環境比起葛拉罕當時要好的許多,因為當時他遇到過
1929-1932年的景氣大蕭條)。


All of the conditions are present that are required for a

fair test of portfolio performance: (1) the three organizations

traded hundreds of different securities while building this 63-

year record; (2) the results are not skewed by a few fortunate

experiences; (3) we did not have to dig for obscure facts or

develop keen insights about products or managements - we simply

acted on highly-publicized events; and (4) our arbitrage

positions were a clearly identified universe - they have not been

selected by hindsight.


所有的條件皆以具備來公平測試投資組合的表現(1)三個公司63年來買賣了上
百種不同的股票證券(2)結果應該不會因為某個特別好的個案所扭曲(3)我們不需
要故意隱瞞事實或是宣揚我們的產品優秀或是經營者眼光獨到,我們只是從事高
度公開的個案(4)我們的套利部份可以很容易就被追查到,他們並不是事後才特
別挑選出來的


Over the 63 years, the general market delivered just under a

10% annual return, including dividends. That means $1,000 would

have grown to $405,000 if all income had been reinvested. A 20%

rate of return, however, would have produced $97 million. That

strikes us as a statistically-significant differential that

might, conceivably, arouse one旧 curiosity.


過去63年來,大盤整體的投資報酬(加計股利)大概只有10%,意思是說若當初
投入1,000美元的話,現在可以獲得405,000美元,但是若投資報酬率改為
20%的話,現在卻會變成9,700萬美元,統計上如此大的差異使得我們不禁好
奇的想要懷疑,然而理論支持者從來就不會去注意理論與現實如此地不相符,確
實現在他們講話已不如過去那麼大聲,但據我所知卻沒有任何一個人願意承認錯
誤,不管他們已經誤導了多少個學生,市場效率理論還是繼續在各個企管名校間
列為投資課程的重要教材之一,很顯然的,死不悔改、甚而曲解神意,不是只有
神學家才做的出來。


Yet proponents of the theory have never seemed interested in

discordant evidence of this type. True, they don急 talk quite as

much about their theory today as they used to. But no one, to my

knowledge, has ever said he was wrong, no matter how many

thousands of students he has sent forth misinstructed. EMT,

moreover, continues to be an integral part of the investment

curriculum at major business schools. Apparently, a reluctance

to recant, and thereby to demystify the priesthood, is not

limited to theologians.

Naturally the disservice done students and gullible

investment professionals who have swallowed EMT has been an

extraordinary service to us and other followers of Graham. In

any sort of a contest - financial, mental, or physical - it旧 an

enormous advantage to have opponents who have been taught that

it旧 useless to even try. From a selfish point of view,

Grahamites should probably endow chairs to ensure the perpetual

teaching of EMT.


自然而然,這些遇人不淑的學生與被騙的投資專家在接受市場效率理論後,對於
我們與其他葛拉罕的追隨者實在有莫大的幫助,在任何的競賽中,不管是投資、
心智或是體能方面,要是遇到對手被告知思考與嘗試是沒有用的,對我們來說等
於是占盡了優勢,從一個自私的觀點來看,葛拉罕學派應該祈禱市場效率理論
能夠在校園中永為流傳。


All this said, a warning is appropriate. Arbitrage has

looked easy recently. But this is not a form of investing that

guarantees profits of 20% a year or, for that matter, profits of

any kind. As noted, the market is reasonably efficient much of

the time: For every arbitrage opportunity we seized in that 63-

year period, many more were foregone because they seemed

properly-priced.


說了那麼多,最後還是要提出一個警告,最近套利看起來相當容易,但它卻不是
永遠都保證有20%報酬的投資活動,現在的市場比起過去來的有效率許多,除
了我們過去63年所真正掌握的套利活動之外,還有更多是因為價格合理而因此
被捨棄掉的。


An investor cannot obtain superior profits from stocks by

simply committing to a specific investment category or style. He

can earn them only by carefully evaluating facts and continuously

exercising discipline. Investing in arbitrage situations, per

se, is no better a strategy than selecting a portfolio by

throwing darts.


一個投資者很難只靠單一一種投資類別或投資風格而創造超人的利益,他只能靠
著仔細評估事實並持續地遵照原則才能賺取超額利潤,就套利投資本身而言,並
沒有比選擇利用飛鏢選股的策略好到哪裡去。


New York Stock Exchange Listing

紐約證券交易所掛牌


Berkshire旧 shares were listed on the New York Stock

Exchange on November 29, 1988. On pages 50-51 we reproduce the

letter we sent to shareholders concerning the listing.


Berkshire的股份於1988年11月29日正式在紐約證券交易所掛牌,後面附
有我們寫給股東有關掛牌的正式聲明。


Let me clarify one point not dealt with in the letter:

Though our round lot for trading on the NYSE is ten shares, any

number of shares from one on up can be bought or sold.


除了那封信之外,我個人還有一點要說明,雖然我們在交易所的基本交易單位是
10股,但只要是1股以上還是一樣可以進行買賣。


As the letter explains, our primary goal in listing was to

reduce transaction costs, and we believe this goal is being

achieved. Generally, the spread between the bid and asked price

on the NYSE has been well below the spread that prevailed in the

over-the-counter market.


另外如同信中所提到的,我們之所以決定掛牌的主要目的是要降低交易成本,而
我相信這目的也已經達到,一般來說,在NYSE買賣之間的價差會比在櫃台買賣
要來得小的多。


Henderson Brothers, Inc., the specialist in our shares, is

the oldest continuing specialist firm on the Exchange; its

progenitor, William Thomas Henderson, bought his seat for $500 on

September 8, 1861. (Recently, seats were selling for about

$625,000.) Among the 54 firms acting as specialists, HBI ranks

second in number of stocks assigned, with 83. We were pleased

when Berkshire was allocated to HBI, and have been delighted with

the firm旧 performance. Jim Maguire, Chairman of HBI, personally

manages the trading in Berkshire, and we could not be in better

hands.


負責買賣Berkshire股份的是Henderson兄弟公司-交易所中一家老牌專家,
它的前身William Thomas Henderson,是在1861年以500塊美金買下一個
交易所的席位(最近一個席位的成交價大約是62.5萬美金),在所有54家交易
公司當中,HBI共被分配到第二多的83種股票,我們很高興Berkshire能夠被
分配給HBI負責交易,到目前為止對於他們的服務感到相當滿意,該公司負責人
Jim Maguire親自負責Berkshire的交易,他是我們可以找到的最佳人選。


In two respects our goals probably differ somewhat from

those of most listed companies. First, we do not want to

maximize the price at which Berkshire shares trade. We wish

instead for them to trade in a narrow range centered at intrinsic

business value (which we hope increases at a reasonable - or,

better yet, unreasonable - rate). Charlie and I are bothered as

much by significant overvaluation as significant undervaluation.

Both extremes will inevitably produce results for many

shareholders that will differ sharply from Berkshire旧 business

results. If our stock price instead consistently mirrors

business value, each of our shareholders will receive an

investment result that roughly parallels the business results of

Berkshire during his holding period.


有兩點是我們與其他掛牌公司最大不同的地方,第一我們不希望Berkshire的股
價過高,主要是希望它能夠反應的實質價值範圍內交易(當然我們希望實質價值
能夠以合理的速度增加,當然能夠不合理的增加更好),查理跟我都不希望,股
價被過分高估或是被過分低估,兩者都會使Berkshire的股東的獲利與公司本身
經營獲利狀況不相當,所以如果Berkshire的股價持續地反應企業實質的價值,
則我們可以確定每個股東在他持有公司股份的期間所獲得的利益,都能與公司本
身營運的獲利成等比。


Second, we wish for very little trading activity. If we ran

a private business with a few passive partners, we would be

disappointed if those partners, and their replacements,

frequently wanted to leave the partnership. Running a public

company, we feel the same way.


第二我們希望交易量越少越好,如果我們經營的是一家只有幾位合夥人的私人企
業,我們也不希望合夥人時常進進出出合夥事業,經營一家公開上市公司也是同
樣的道理。


Our goal is to attract long-term owners who, at the time of

purchase, have no timetable or price target for sale but plan

instead to stay with us indefinitely. We don急 understand the

CEO who wants lots of stock activity, for that can be achieved

only if many of his owners are constantly exiting. At what other

organization - school, club, church, etc. - do leaders cheer when

members leave? (However, if there were a broker whose livelihood

depended upon the membership turnover in such organizations, you

could be sure that there would be at least one proponent of

activity, as in: 荘here hasn急 been much going on in Christianity

for a while; maybe we should switch to Buddhism next week.?


我們希望能夠吸引具有遠見的投資人,在買進股份時,抱著打算與我們永遠同在
而不是訂有賣出價格的時間表,我們實在不能理解為何有公司的CEO希望自己
公司的股份交易量越多越好,這代表公司的股東組合會變來變去,在其他如學
校、俱樂部、教堂等社會機構當中,沒有主持人希望自己的組織成員離開的,(然
而偏偏就有營業員就是要靠著說服成員離開組織來維生,你有沒有聽過有人勸你
反正最近基督教也沒有什麼搞頭,不如下禮拜大家改信佛教試一試)。


Of course, some Berkshire owners will need or want to sell

from time to time, and we wish for good replacements who will pay

them a fair price. Therefore we try, through our policies,

performance, and communications, to attract new shareholders who

understand our operations, share our time horizons, and measure

us as we measure ourselves. If we can continue to attract this

sort of shareholder - and, just as important, can continue to be

uninteresting to those with short-term or unrealistic

expectations - Berkshire shares should consistently sell at

prices reasonably related to business value.


當然還是有些Berkshire股東需要或是想要偶爾把他持有的股份賣掉,而我們希
望能夠找到合適的人以適當的價格來接手,因此我們試著透過我們的政策、表現
與溝通,吸引真正了解我們營運、認同我們理念並用同樣的方式來對待我們的新
股東,如果我們能夠持續地吸引這種類型的股東,同時很重要的,讓那些短視近
利的投資人遠離我們,相信Berkshire一定能夠持續地以合理的價格交易買賣。


David L. Dodd

大衛.陶德


Dave Dodd, my friend and teacher for 38 years, died last

year at age 93. Most of you don急 know of him. Yet any long-

time shareholder of Berkshire is appreciably wealthier because of

the indirect influence he had upon our company.


與我相交38年亦師亦友的大衛.陶德,於去年以高齡93歲過世,大多數的人
可能都不知道他是誰,但是許多Berkshire的老股東卻因為他對本公司的間接影
響而受益良多。


Dave spent a lifetime teaching at Columbia University, and

he co-authored Security Analysis with Ben Graham. From the

moment I arrived at Columbia, Dave personally encouraged and

educated me; one influence was as important as the other.

Everything he taught me, directly or through his book, made

sense. Later, through dozens of letters, he continued my

education right up until his death.


大衛終其一生在哥倫比亞大學教書,同時他也與葛拉罕合作著述「證券分析」一
書,自從我到哥倫比亞之後,大衛不時地鼓勵與教導我,給我的影響一個接著一
個,他所教導我的很一件事,不論是直接或透過他的著作都非常有道理,後來畢
業後,透過不斷往來的信件,他給我的教育持續到他逝世之前。


I have known many professors of finance and investments but

I have never seen any, except for Ben Graham, who was the match

of Dave. The proof of his talent is the record of his students:

No other teacher of investments has sent forth so many who have

achieved unusual success.


我認識許多財經與投資學的教授,除了葛拉罕以外,沒有人可以比得上大衛,最
好的證明就是他學生的成績,沒有其他投資學的教授可以造就出那麼多傑出的英
才。


When students left Dave旧 classroom, they were equipped to

invest intelligently for a lifetime because the principles he

taught were simple, sound, useful, and enduring. Though these

may appear to be unremarkable virtues, the teaching of principles

embodying them has been rare.


當學生離開大衛的教室,就代表著他們一生將具備有投資智慧,因為他所教導的
原則是如此的簡單、完整有用且持久,雖然這些特點看起來並不顯著,但要將這
些原則教導給學生卻不是一件容易的事。


It旧 particularly impressive that Dave could practice as

well as preach. just as Keynes became wealthy by applying his

academic ideas to a very small purse, so, too, did Dave. Indeed,

his financial performance far outshone that of Keynes, who began

as a market-timer (leaning on business and credit-cycle theory)

and converted, after much thought, to value investing. Dave was

right from the start.


讓我印象最深刻的是大衛總是言行一致,就像凱因斯運用自己研究出的學術觀點
來致富,大衛也是如此。事實上他在財務操作上的表現遠比凱因斯來得出色,憑
藉著企業與信用循環理論,之後再演變成價值投資,大衛一開始就選擇了正確的
方向。


In Berkshire旧 investments, Charlie and I have employed the

principles taught by Dave and Ben Graham. Our prosperity is the

fruit of their intellectual tree.


查理跟我運用大衛與葛拉罕所教的原則,在Berkshire的投資之上,我們的成功
正代表著他們心血的結晶。


Miscellaneous

其他事項


We hope to buy more businesses that are similar to the ones

we have, and we can use some help. If you have a business that

fits the following criteria, call me or, preferably, write.


我們希望能夠買進更多像我們現在擁有一樣的企業,當然我們可以透過大家的協
助,如果你擁有符合以下條件的企業,記得打電話或者是寫信告訴我,


Here旧 what we虐e looking for:

(1) large purchases (at least $10 million of after-tax

earnings),

(2) demonstrated consistent earning power (future projections

are of little interest to us, nor are 鋳urnaround?

situations),

(3) businesses earning good returns on equity while employing

little or no debt,

(4) management in place (we can急 supply it),

(5) simple businesses (if there旧 lots of technology, we won急

understand it),

(6) an offering price (we don急 want to waste our time or that

of the seller by talking, even preliminarily, about a

transaction when price is unknown).


我們想要找

(1)鉅額交易(每年稅後盈餘至少有一千萬美元)
(2)持續穩定獲利(我們對有遠景或具轉機的公司沒興趣)
(3)高股東報酬率(並且甚少舉債)
(4)具備管理階層(我們無法提供)
(5)簡單的企業(若牽涉到太多高科技,我們弄不懂)
(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)
我們不會進行敵意的購併,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,除非我們所換得的內含價值跟我們付出的一樣
多,否則不考慮發行股份。

我們最喜歡的交易對象之一是像B太太- Heldman家族那樣,公司經營者希望
能馬上有一大筆現金,不管是給自己、家人或是其他股東,最好這些經營者如往
常一樣能夠繼續留在公司,我想我們可以提供具有以上想法的經營者,一個滿意
的方式,我們也歡迎可能的賣方與那些過去與我們合作過的對象打聽。


We will not engage in unfriendly takeovers. We can promise

complete confidentiality and a very fast answer - customarily

within five minutes - as to whether we虐e interested. We prefer

to buy for cash, but will consider issuing stock when we receive

as much in intrinsic business value as we give.

Our favorite form of purchase is one fitting the Blumkin-

Friedman-Heldman mold. In cases like these, the company旧 owner-

managers wish to generate significant amounts of cash, sometimes

for themselves, but often for their families or inactive

shareholders. However, these managers also wish to remain

significant owners who continue to run their companies just as

they have in the past. We think we offer a particularly good fit

for owners with these objectives and invite potential sellers to

check us out by contacting people with whom we have done business

in the past.

Charlie and I frequently get approached about acquisitions

that don急 come close to meeting our tests: We挙e found that if

you advertise an interest in buying collies, a lot of people will

call hoping to sell you their cocker spaniels. Our interest in

new ventures, turnarounds, or auction-like sales can best be

expressed by another Goldwynism: 禅lease include me out.?


另一方面我們也持續接到一些不符合我們條件的詢問,包括新事業、轉機股、拍
賣案以及最常見的仲介案。我們發現如果你登廣告要買牧羊犬,結果卻有一大堆
人打電話來要賣你長耳獵犬,在此重申我們對這些交易,只有高德溫的另一句話
可以形容,請把我排除在外。


Besides being interested in the purchase of businesses as

described above, we are also interested in the negotiated

purchase of large, but not controlling, blocks of stock

comparable to those we hold in Cap Cities and Salomon. We have a

special interest in purchasing convertible preferreds as a long-

term investment, as we did at Salomon.


除了以上買下整家公司的購併案外,我們也會考慮買進一大部份不具控制權的股
份,就像我們在資本城與所羅門這兩個Case一樣,尤其是我們對於像這次購買
所羅門一樣的可轉換特別股當作長期投資特別有興趣。

* * *

We received some good news a few weeks ago: Standard &

Poor旧 raised our credit rating to AAA, which is the highest

rating it bestows. Only 15 other U.S. industrial or property-

casualty companies are rated AAA, down from 28 in 1980.


幾個禮拜以前,我們接到了一個好消息,史坦普評等機構將我們的債信等級調高
的三A的最高標準,相較於1980年的28家,目前全美只有15家公司可以擁
有此殊榮。


Corporate bondholders have taken their lumps in the past few

years from 堕vent risk.?This term refers to the overnight

degradation of credit that accompanies a heavily-leveraged

purchase or recapitalization of a business whose financial

policies, up to then, had been conservative. In a world of

takeovers inhabited by few owner-managers, most corporations

present such a risk. Berkshire does not. Charlie and I promise

bondholders the same respect we afford shareholders.


過去幾年企業公司債的持有人在事件風險上跌了一大跤,意思是說一家原本財務
操作保守的公司,因為進行高槓桿購併或是重整再造,使得公司在一夜之間被大
幅調降信用評等,購併的世界之中,除了少數經營權與所有權一致的公司之外,
大部分的公司都會面臨這樣的風險,但Berkshire絕對不會,查理跟我保證給債
券持有人與股東一樣的承諾。

* * *

About 97.4% of all eligible shares participated in

Berkshire旧 1988 shareholder-designated contributions program.

Contributions made through the program were $5 million, and 2,319

charities were recipients. If we achieve reasonable business

results, we plan to increase the per-share contributions in 1989.


大約有97.4%的有效股權參與1988年的股東指定捐贈計劃,總計約500萬美
元捐出的款項分配給2,319家慈善機構,若經營情況許可,我們計畫在1989年
擴大這項捐贈計畫。

We urge new shareholders to read the description of our

shareholder-designated contributions program that appears on

pages 48-49. If you wish to participate in future programs, we

strongly urge that you immediately make sure your shares are

registered in the name of the actual owner, not in the nominee

name of a broker, bank or depository. Shares not so registered

on September 30, 1989 will be ineligible for the 1989 program.


我們敦促新加入的股東,仔細閱讀年報上有關股東捐贈計畫的詳細內容,如果在
未來年度內,你想要參加這類的計畫,我們強烈建議你將股份登記在自己而不是
受託人的名下,必須在1989年9月30日之前完成登記,才有權利參與1989
年的計畫。

* * *

Berkshire旧 annual meeting will be held in Omaha on Monday,

April 24, 1989, and I hope you will come. The meeting provides

the forum for you to ask any owner-related questions you may

have, and we will keep answering until all (except those dealing

with portfolio activities or other proprietary information) have

been dealt with.


今年的股東會將在1989年4月24日星期一在奧瑪哈舉行,我們希望大家都能
來參加,這個會議提供一個場所讓你能夠提出任何與股東有關的問題,我們會一
直回答到所有股東都滿意為止(除了那些想要知道投資組合明牌或是內線消息的
人)

After the meeting we will have several buses available to

take you to visit Mrs. B at The Nebraska Furniture Mart and Ike

Friedman at Borsheim旧. Be prepared for bargains.


會後我們將安排幾台巴士載著有興趣的股東到B太太的傢具廣場與波仙珠寶
店,準備大撿便宜貨吧!

Out-of-towners may prefer to arrive early and visit Mrs. B

during the Sunday store hours of noon to five. (These Sunday

hours seem ridiculously short to Mrs. B, who feels they scarcely

allow her time to warm up; she much prefers the days on which the

store remains open from 10 a.m. to 9 p.m.) Borsheims, however, is

not open on Sunday.


外地來的股東可以會選擇提早一點來,B太太的店星期天會從中午開到下午五
點,只有五個小時可能不夠B太太暖身,她可能希望還是能夠像平日一樣從早上
10點到晚上9點,另外波仙珠寶星期天並不開門營業。


Ask Mrs. B the secret of her astonishingly low carpet

prices. She will confide to you - as she does to everyone - how

she does it: I can sell so cheap because I work for this dummy

who doesnt know anything about carpet.?


記得問B太太地毯價格為什麼會如此便宜的祕密,她一定會向跟所有人一樣地偷
偷跟你講她是如何辦到的,(我之所以能夠賣的這麼便宜是因為我的老闆對於地
毯根本就一無所知!)


Warren E. Buffett

February 28, 1989 Chairman of the Board

華倫.巴菲特

董事會主席

1989年2月28日

 

 
創作者介紹

市場求生手冊

stasis 發表在 痞客邦 PIXNET 留言(0) 人氣()