麥克風的求生手冊

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 1991 was $2.1 billion, or

39.6%. Over the last 27 years (that is, since present management

took over) our per-share book value has grown from $19 to $6,437,

or at a rate of 23.7% compounded annually.

　

1991年本公司的淨值成長了21億美元，較去年增加了39.6%，而總計過去27
年以來，也就是自從現有經營階層接手之後，每股淨值從19元成長到現在的
6,437美元，年複合成長率約為23.7%。

The size of our equity capital - which now totals $7.4

billion - makes it certain that we cannot maintain our past rate

of gain or, for that matter, come close to doing so. As Berkshire

grows, the universe of opportunities that can significantly

influence the company's performance constantly shrinks. When we

were working with capital of $20 million, an idea or business

producing $1 million of profit added five percentage points to

our return for the year. Now we need a $370 million idea (i.e.,

one contributing over $550 million of pre-tax profit) to achieve

the same result. And there are many more ways to make $1 million

than to make $370 million.

現在我們股東權益的資金規模已高達74億美元，所以可以確定的是，我們可能
再也無法像過去那樣繼續維持高成長，而隨著Berkshire不斷地成長，世上所存
可以大幅影響本公司表現的機會也就越來越少。當我們操作的資金只有2,000
萬美元的時候，一項獲利100萬美元的案子就可以使得我們的年報酬率增加
5%，但時至今日，我們卻要有3.7億美元的獲利(要是以稅前計算的話，更要5.5
億美元)，才能達到相同的效果，而要一口氣賺3.7億美元比起一次賺100萬美
元的難度可是高的多了。

Charlie Munger, Berkshire's Vice Chairman, and I have set a

goal of attaining a 15% average annual increase in Berkshire's

intrinsic value. If our growth in book value is to keep up with a

15% pace, we must earn $22 billion during the next decade. Wish

us luck - we'll need it.

查理孟格-Berkshire的副主席與我一起設定，以15%做為每年公司實質價值成
長的目標，也就是說如果在未來十年內，公司要能達到這個目標，則帳面淨值至
少要增加22億美元，請大家祝我們好運吧! 我們真的很需要祝福。

Our outsized gain in book value in 1991 resulted from a

phenomenon not apt to be repeated: a dramatic rise in the price-

earnings ratios of Coca-Cola and Gillette. These two stocks

accounted for nearly $1.6 billion of our $2.1 billion growth in

net worth last year. When we loaded up on Coke three years ago,

Berkshire's net worth was $3.4 billion; now our Coke stock alone

is worth more than that.

我們在1991年所經歷帳面數字的超額成長是一種不太可能再發生的現象，受惠
於可口可樂與吉列刮鬍刀本益比的大幅飆升，光是這兩家公司就合計貢獻了我們
去年21億美元淨值成長中的16億美元，三年前當我們大筆敲進可口可樂股票
的時候，Berkshire的淨值大約是34億美元，但是現在光是我們持有可口可樂
的股票市值就超過這個數字。

Coca-Cola and Gillette are two of the best companies in the

world and we expect their earnings to grow at hefty rates in the

years ahead. Over time, also, the value of our holdings in these

stocks should grow in rough proportion. Last year, however, the

valuations of these two companies rose far faster than their

earnings. In effect, we got a double-dip benefit, delivered

partly by the excellent earnings growth and even more so by the

market's reappraisal of these stocks. We believe this reappraisal

was warranted. But it can't recur annually: We'll have to settle

for a single dip in the future.

可口可樂與吉列刮鬍刀可說是當今世上最好的兩家公司，我們預期在未來幾年他
們的獲利還會以驚人的速度成長，相對地我們持股的價值也會以等比例的程度增
加，然而另一方面去年這兩家公司的股價上漲的幅度卻遠高於其本身獲利增長的
幅度，所以說去年我們是兩面得利，一方面是靠公司絕佳的獲利能力，一方面是
市場對於公司股票的重新評價，當然我們認為這樣的調整是經得起考驗的，但這
種情況不太可能每年都發生，展望未來我們可能只能靠前面那點而獲益。

A Second Job

第二件工作

In 1989 when I - a happy consumer of five cans of Cherry

Coke daily - announced our purchase of $1 billion worth of Coca-

Cola stock, I described the move as a rather extreme example of

putting our money where my mouth was. On August 18 of last year,

when I was elected Interim Chairman of Salomon Inc, it was a

different story: I put my mouth where our money was.

1989年當我以每天五瓶櫻桃可樂的愛用者身分，宣佈買進價值10億美元的可
口可樂股票時，我曾形容這項舉動其實只是將錢花在嘴巴上的最佳例證，在去年
8月18日當我被推舉為所羅門公司的臨時主席時，則完全是另外一件事，這次
我把嘴巴擺在我們的錢上。

You've all read of the events that led to my appointment. My

decision to take the job carried with it an implicit but

important message: Berkshire's operating managers are so

outstanding that I knew I could materially reduce the time I was

spending at the company and yet remain confident that its

economic progress would not skip a beat. The Blumkins, the

Friedman family, Mike Goldberg, the Heldmans, Chuck Huggins, Stan

Lipsey, Ralph Schey and Frank Rooney (CEO of H.H. Brown, our

latest acquisition, which I will describe later) are all masters

of their operations and need no help from me. My job is merely to

treat them right and to allocate the capital they generate.

Neither function is impeded by my work at Salomon.

我想大家應該都已經從報上看過有關我個人任命為所羅門董事會臨時主席的報
導，我之所以願意接受這個職位具有一個深刻且重要的意義，那就是Berkshire
旗下事業的經理人是如此的優秀，讓我可能很放心的時間擺在別的心思之上，而
完全不必擔心公司的營運會走樣，Blumkins家族、Friedman 家族、Mike
Goldberg、the Heldmans、Chuck Huggins、Stan Lipsey 、Ralph Schey
與Frank Rooney(我們最新購併的HH Brown鞋業的CEO，後面還會有詳細的
介紹)等人，都是所屬產業的龍頭，因此根本就不需要我個人的協助，我的工作
只是要思考如何更公平合理地對待他們，同時有效地運用他們所產生出來的資
金，而這兩方面都不會因為我在所羅門的工作而受到影響。

The role that Charlie and I play in the success of our

operating units can be illustrated by a story about George Mira,

the one-time quarterback of the University of Miami, and his

coach, Andy Gustafson. Playing Florida and near its goal line,

Mira dropped back to pass. He spotted an open receiver but found

his right shoulder in the unshakable grasp of a Florida

linebacker. The right-handed Mira thereupon switched the ball to

his other hand and threw the only left-handed pass of his life -

for a touchdown. As the crowd erupted, Gustafson calmly turned to

a reporter and declared: "Now that's what I call coaching."

查理跟我在這些成功的企業所扮演的角色，可以由邁阿密大學著名的四分衛
-George Mira與他的教練-Andy Gustafson的故事來作說明，有一回在與佛
羅里達大學對抗時，在終點線前，Mira突然煞車後退並準備傳球，他看到有一
個隊友有空檔，不過他的右手邊卻有一位難以擺脫的防守球員在側，右撇子的
Mira於是將球換到左手，並丟出生平第一次的左手傳球，而後達陣成功，當所
有的球迷瘋狂地簇擁而上，教練Gustafson鎮定地轉向一位記者說到：「這都
是因為我平常訓練有素的緣故！」。

Given the managerial stars we have at our operating units,

Berkshire's performance is not affected if Charlie or I slip away

from time to time. You should note, however, the "interim" in my

Salomon title. Berkshire is my first love and one that will never

fade: At the Harvard Business School last year, a student asked

me when I planned to retire and I replied, "About five to ten

years after I die."

以我們現有的夢幻明星級的經營團隊陣容來說，Berkshire的表現絕不會因為查
理或是我偶爾蹺班而有所影響，大家必須知道，我在所羅門的名銜只是暫時的，
Berkshire才是我的最愛，而且是至死不渝的愛，去年在哈佛商學院，有學生問
我何時會退休，我的回答是：「大概要等到我死後五到十年吧！」。

Sources of Reported Earnings

帳列盈餘的來源

The table below shows the major sources of Berkshire's

reported earnings. In this presentation, 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've explained in past

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

useful to investors and managers than one utilizing generally

accepted accounting principles (GAAP), which require purchase-

price adjustments to be made 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.

下表顯示Berkshire帳列盈餘的主要來源，在這張表中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要求以個別企業基礎做調整，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。

A large amount of additional information about these

businesses is given on pages 33-47, where you also will find

our segment earnings reported on a GAAP basis. However, we will

not in this letter discuss each of our non-insurance operations,

as we have in the past. Our businesses have grown in number - and

will continue to grow - so it now makes sense to rotate coverage,

discussing one or two in detail each year.

年報中還有企業個別部門的資訊，依照一般公認會計原則所編寫的格式，另外從
今年開始我們將不再像過去那樣詳細敘述非保險業的營運，因為我們旗下事業組
織日益龐大，且以後還會繼續成長，所以實在是沒有必要每年都重複討論相同的
事情。


(000s omitted)

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

Berkshire's Share

of Net Earnings

(after taxes and

Pre-Tax Earnings minority interests)

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

1991 1990 1991 1990

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

Operating Earnings:

Insurance Group:

Underwriting ............ $(119,593) $ (26,647) $ (77,229) $ (14,936)

Net Investment Income ... 331,846 327,047 285,173 282,613

H. H. Brown (acquired 7/1/91) 13,616 --- 8,611 ---

Buffalo News .............. 37,113 43,954 21,841 25,981

Fechheimer ................ 12,947 12,450 6,843 6,605

Kirby ..................... 35,726 27,445 22,555 17,613

Nebraska Furniture Mart ... 14,384 17,248 6,993 8,485

Scott Fetzer

Manufacturing Group .... 26,123 30,378 15,901 18,458

See's Candies ............. 42,390 39,580 25,575 23,892

Wesco - other than Insurance 12,230 12,441 8,777 9,676

World Book ................ 22,483 31,896 15,487 20,420

Amortization of Goodwill .. (4,113) (3,476) (4,098) (3,461)

Other Purchase-Price

Accounting Charges ..... (6,021) (5,951) (7,019) (6,856)

Interest Expense* ......... (89,250) (76,374) (57,165) (49,726)

Shareholder-Designated

Contributions .......... (6,772) (5,824) (4,388) (3,801)

Other ..................... 77,399 58,310 47,896 35,782

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

Operating Earnings 400,508 482,477 315,753 370,745

Sales of Securities 192,478 33,989 124,155 23,348

Total Earnings - All Entities $ 592,986 $ 516,466 $ 439,908 $ 394,093

*Excludes interest expense of Scott Fetzer Financial Group and

Mutual Savings & Loan.

*不包含史考特飛茲與聯合儲貸的利息費用

"Look-Through" Earnings

透視盈餘

We've previously discussed look-through earnings, which

consist of: (1) the operating earnings reported in the previous

section, plus; (2) the retained operating earnings of major

investees that, under GAAP accounting, are not reflected in our

profits, less; (3) an allowance for the tax that would be paid by

Berkshire if these retained earnings of investees had instead been

distributed to us.

之前我們曾經討論過透視盈餘，其主要的組成份子有(1)前段所提到的帳列盈
餘，加上(2)主要被投資公司的保留盈餘，按一般公認會計原則未反應在我們公
司帳上的盈餘，扣除(3)若這些未反應的盈餘分配給我們時，估計可能要繳的所
得稅。

I've told you that over time look-through earnings must

increase at about 15% annually if our intrinsic business value is

to grow at that rate. Indeed, since present management took over in

1965, our look-through earnings have grown at almost the identical

23% rate of gain recorded for book value.

我曾經告訴各位，長期而言，如果我們的實質價值也期望以這個幅度來成長的
話，透視盈餘每年也必須增加15%，而的確過自從現有經營階層於1965年接
手後，公司的透視盈餘幾乎與帳面價值一樣，以23%的年複合成長率增加。

Last year, however, our look-through earnings did not grow at

all but rather declined by 14%. To an extent, the decline was

precipitated by two forces that I discussed in last year's report

and that I warned you would have a negative effect on look-through

earnings.

然而去年我們的透視盈餘不但沒有增加，反而減少了14%，這樣的下滑主要導
源於去年年報就曾經向各位提過的兩項因素，那時我就曾經警告各位那對我們的
透視盈餘將會有負面的影響。

First, I told you that our media earnings - both direct and

look-through - were "sure to decline" and they in fact did. The

second force came into play on April 1, when the call of our

Gillette preferred stock required us to convert it into common. The

after-tax earnings in 1990 from our preferred had been about $45

million, an amount somewhat higher than the combination in 1991 of

three months of dividends on our preferred plus nine months of

look-through earnings on the common.

首先我告訴各位旗下媒體事業的盈餘，不管是帳面直接或是間接透視一定會減
少，而事實證明確是如此，第二個因素發生在4月1號我們吉列特別股被要求
轉為普通股，1990年來自特別股的稅後盈餘是4,500萬美元，大概比1991
年一季的股利總和加上三季的普通股透視盈餘還多一點。

Two other outcomes that I did not foresee also hurt look-

through earnings in 1991. First, we had a break-even result from

our interest in Wells Fargo (dividends we received from the company

were offset by negative retained earnings). Last year I said that

such a result at Wells was "a low-level possibility - not a

likelihood." Second, we recorded significantly lower - though still

excellent - insurance profits.

另外有二項我沒有意料到的結果，也影響到我們1991年的透視盈餘，首先我們
在Well-Fargo的利益大概僅維持損益兩平(所收到的股利收入被其累積虧損所
抵消)，去年我說這樣的可能性很低的說法，其可信度存疑，第二我們的保險業
盈餘雖然算是不錯，但還是比往年低。

The following table shows you how we calculate look-through

earnings, although I warn you that the figures are necessarily very

rough. (The dividends paid to us by these investees have been

included in the operating earnings itemized on page 6, mostly

under "Insurance Group: Net Investment Income.")

各位可以從下表看出我們是如何計算透視盈餘的，不過我還是要提醒各位這些數
字有點粗糙，(被投資公司所分配的股利收入已經包含在保險事業的淨投資收益
項下)

Berkshire's Share

of Undistributed

Berkshire's Approximate Operating Earnings

Berkshire's Major Investees Ownership at Yearend (in millions)

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

1991 1990 1991 1990

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

Capital Cities/ABC Inc. ........ 18.1% 17.9% $ 61 $ 85

The Coca-Cola Company .......... 7.0% 7.0% 69 58

Federal Home Loan Mortgage Corp. 3.4%(1) 3.2%(1) 15 10

The Gillette Company ........... 11.0% --- 23(2) ---

GEICO Corp. .................... 48.2% 46.1% 69 76

The Washington Post Company .... 14.6% 14.6% 10 18

Wells Fargo & Company .......... 9.6% 9.7% (17) 19(3)

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

Berkshire's share of

undistributed earnings of major investees $230 $266

Hypothetical tax on these undistributed investee earnings (30) (35)

Reported operating earnings of Berkshire 316 371

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

Total look-through earnings of Berkshire $516 $602

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

Net of minority interest at Wesco
已扣除Wesco的少數股權

(2) For the nine months after Berkshire converted its

preferred on April 1

僅含Berkshire於4月1日申請轉換為普通股後的九個月

(3) Calculated on average ownership for the year

以年平均持有股權比例計算

* * * * * * * * * * * *

We also believe that investors can benefit by focusing on

their own look-through earnings. To calculate these, they should

determine the underlying earnings attributable to the shares they

hold in their portfolio and total these. The goal of each investor

should be to create a portfolio (in effect, a "company") that will

deliver him or her the highest possible look-through earnings a

decade or so from now.

我們也相信投資人可以透過研究自己的透視盈餘而受益，在算這個東西時，他們
就會了解到其個別投資組合所應分配到的真正盈餘的合計數，所有投資人的目
標，應該是要建立一項投資組合可以讓其透視盈餘在從現在開始的十年內極大
化。

An approach of this kind will force the investor to think

about long-term business prospects rather than short-term stock

market prospects, a perspective likely to improve results. It's

true, of course, that, in the long run, the scoreboard for

investment decisions is market price. But prices will be determined

by future earnings. In investing, just as in baseball, to put runs

on the scoreboard one must watch the playing field, not the

scoreboard.

這樣的方式將會迫使投資人思考企業真正的長期遠景而不是短期的股價表現，從
而藉此改善其投資績效，當然無可否認就長期而言，投資決策的績效還是要建立
在股價表現之上，但價格將取決於未來的獲利能力，投資就像是打棒球一樣，想
要得分大家必須將注意力集中到場上，而不是緊盯著計分板。

A Change in Media Economics and Some Valuation Math

媒體產業的變化與其評價的算式

In last year's report, I stated my opinion that the decline in

the profitability of media companies reflected secular as well as

cyclical factors. The events of 1991 have fortified that case: The

economic strength of once-mighty media enterprises continues to

erode as retailing patterns change and advertising and

entertainment choices proliferate. In the business world,

unfortunately, the rear-view mirror is always clearer than the

windshield: A few years back no one linked to the media business -

neither lenders, owners nor financial analysts - saw the economic

deterioration that was in store for the industry. (But give me a

few years and I'll probably convince myself that I did.)

在去年的報告中，我曾經表示媒體事業獲利能力衰退主要是反應景氣的循環因
素，但在1991年發生的情況則不是那麼一回事，由於零售業形態的轉變加上廣
告與娛樂事業的多元化，以往曾經一度風光的媒體事業，其競爭力已受到嚴重的
侵蝕，然而不幸的是在商業世界中，從後照鏡所看到的景象永遠比擋風玻璃的還
清楚，幾年前幾乎沒有人，包含銀行、股東與證券分析師在內，會不看好媒體事
業的發展，(若是再多給我幾年，我可能就能正確判斷出這個產業正在走下坡)。

The fact is that newspaper, television, and magazine

properties have begun to resemble businesses more than franchises

in their economic behavior. Let's take a quick look at the

characteristics separating these two classes of enterprise, keeping

in mind, however, that many operations fall in some middle ground

and can best be described as weak franchises or strong businesses.

事實是報紙、電視與雜誌等媒體的行為，越來越超越身為特許行業所應該做的
事，讓我們很快地看一下特許事業與一般事業在特性上的不同，不過請記住，很
多公司事實上是介於這兩者之間，所以也可以將之形容為弱勢的特許事業或是強
勢的一般企業。

An economic franchise arises from a product or service that:

(1) is needed or desired; (2) is thought by its customers to have

no close substitute and; (3) is not subject to price regulation.

The existence of all three conditions will be demonstrated by a

company's ability to regularly price its product or service

aggressively and thereby to earn high rates of return on capital.

Moreover, franchises can tolerate mis-management. Inept managers

may diminish a franchise's profitability, but they cannot inflict

mortal damage.

藉由特定的產品或服務，一家公司可以成為特許的行業(1)它確有需要或需求(2)
被顧客認定為找不到其他類似的替代品(3)不受價格上的管制，一家公司到底有
沒有具有以上三個特點可能從他是否能積極地為本身所提供的產品與服務訂定
價格的能力，從而賺取更高的資本報酬率，更重要的特許事業比較能夠容忍不當
的管理，無能的經理人雖然會降低特許事業的獲利能力，但是並不會造成致命
的傷害。

In contrast, "a business" earns exceptional profits only if it

is the low-cost operator or if supply of its product or service is

tight. Tightness in supply usually does not last long. With

superior management, a company may maintain its status as a low-

cost operator for a much longer time, but even then unceasingly

faces the possibility of competitive attack. And a business, unlike

a franchise, can be killed by poor management.

相對的，一般事業想要獲致高報酬就只有靠著節省成本或是當其所提供的產品或
服務供需不均之時，但是這種供給不足的情況通常維持不了多久，倒是透過優良
的管理，一家公司卻可以長期維持低成本的營運，但即使是如此，還是會面臨競
爭對手持續不斷的攻擊，而不像特許事業，一般事業有可能因為管理不善而倒閉。

Until recently, media properties possessed the three

characteristics of a franchise and consequently could both price

aggressively and be managed loosely. Now, however, consumers

looking for information and entertainment (their primary interest

being the latter) enjoy greatly broadened choices as to where to

find them. Unfortunately, demand can't expand in response to this

new supply: 500 million American eyeballs and a 24-hour day are all

that's available. The result is that competition has intensified,

markets have fragmented, and the media industry has lost some -

though far from all - of its franchise strength.

直到最近，媒體產業還擁有特許事業這三項特質，因此還能夠訂定侵略性的價格
並容忍寬鬆的管理，不過現在的消費大眾不斷地尋找不同的資訊與娛樂來源，也
越來越能夠接受各種不同的選擇，另一方面很不幸的是消費者的需求並不會隨著
供給的增加而變大，五億隻美國眼睛，一天24小時，就這麼多，不可能再增加
了。所以結果可想而知競爭會變得更激烈，市場被區隔開，媒體產業因而喪失了
部份原有的特許能力。

* * * * * * * * * * * *

The industry's weakened franchise has an impact on its value

that goes far beyond the immediate effect on earnings. For an

understanding of this phenomenon, let's look at some much over-

simplified, but relevant, math.

媒體產業轉為弱勢，除了讓短期盈餘獲利受到衝擊之外，對其本身的價值將有更
深遠的影響，為了讓大家了解這種現象，讓我們來看看稍微簡化但卻頗為相關的
數學算式。

A few years ago the conventional wisdom held that a newspaper,

television or magazine property would forever increase its earnings

at 6% or so annually and would do so without the employment of

additional capital, for the reason that depreciation charges would

roughly match capital expenditures and working capital requirements

would be minor. Therefore, reported earnings (before amortization

of intangibles) were also freely-distributable earnings, which

meant that ownership of a media property could be construed as akin

to owning a perpetual annuity set to grow at 6% a year. Say, next,

that a discount rate of 10% was used to determine the present value

of that earnings stream. One could then calculate that it was

appropriate to pay a whopping $25 million for a property with

current after-tax earnings of $1 million. (This after-tax multiplier

of 25 translates to a multiplier on pre-tax earnings of about 16.)

幾年以來一般人都認為新聞、電視或是雜誌產業的獲利能力，可以永無止盡地以
每年6%左右的比率成長，而且可以完全不必依靠額外的資金，也因此每年的折
舊費用應該會與資本支出相當，而由於所需的營運資金也相當小，所以帳列盈餘
(在扣除無形資產攤銷前)幾乎等於可以自由分配運用的盈餘，也就是說擁有一家
媒體事業，每年幾乎可以有6%穩定增加的純現金流入，同時若我們以10%的折
現率來計算現值的話，等於是一次2,500萬的投資，每年可以貢獻100萬美元
的稅後淨利貢獻(亦即約為25倍的稅後本益比，若換成稅前盈餘本益比則約為
16左右)。

Now change the assumption and posit that the $1 million

represents "normal earning power" and that earnings will bob around

this figure cyclically. A "bob-around" pattern is indeed the lot of

most businesses, whose income stream grows only if their owners are

willing to commit more capital (usually in the form of retained

earnings). Under our revised assumption, $1 million of earnings,

discounted by the same 10%, translates to a $10 million valuation.

Thus a seemingly modest shift in assumptions reduces the property's

valuation to 10 times after-tax earnings (or about 6 1/2 times

pre-tax earnings).

現在假設條件改變，這家公司只擁有普通的獲利能力，所以每年100萬的獲利
只能上上下下起伏，這種打擺子的形式就是大部分公司的狀況，而公司的獲利想
要有所成長，老闆就必須要投入更多的資金才辦得到(通常都是透過保留盈餘的
方式)，經過我們將假設重新做修正，同樣以10%加以折現，大概可以達到1,000
萬美元的價值，結果可以看出，一項看起來不大重要的假設變動卻使這家企業的
價值大幅減少至10倍稅後盈餘本益比(或6.5倍稅前盈餘本益比)。

Dollars are dollars whether they are derived from the

operation of media properties or of steel mills. What in the past

caused buyers to value a dollar of earnings from media far higher

than a dollar from steel was that the earnings of a media property

were expected to constantly grow (without the business requiring

much additional capital), whereas steel earnings clearly fell in

the bob-around category. Now, however, expectations for media have

moved toward the bob-around model. And, as our simplified example

illustrates, valuations must change dramatically when expectations

are revised.

現金就是現金，不管今天它是靠經營媒體事業或是鋼鐵工廠得來的都一樣，而過
去同樣是一元的獲利，大家之所以看重媒體事業的原因是預期他會繼續成長(股
東不需要再投入額外的資金)，而鋼鐵業很明顯會落入打擺子的那類族群，不過
現在大家對於媒體事業的看法也逐漸改為後者，而如我們剛剛所舉簡單的例子，
評價的結果可能因為這樣的修正而有很大的改變。

We have a significant investment in media - both through our

direct ownership of Buffalo News and our shareholdings in The

Washington Post Company and Capital Cities/ABC - and the intrinsic

value of this investment has declined materially because of the

secular transformation that the industry is experiencing. (Cyclical

factors have also hurt our current look-through earnings, but these

factors do not reduce intrinsic value.) However, as our Business

Principles on page 2-3 note, one of the rules by which we run

Berkshire is that we do not sell businesses - or investee holdings

that we have classified as permanent - simply because we see ways

to use the money more advantageously elsewhere. (We did sell

certain other media holdings sometime back, but these were

relatively small.)

我們在媒體事業有相當大的投資，不管是百分之百擁有的水牛城日報或是在華盛
頓郵報與資本城/ABC的股票投資，而這些媒體事業的價值因為前面所提到的產
業所面臨的形態轉變而大幅滑落，(景氣循環因素也使得我們現在的透視盈餘大
受影響，雖然還不致於讓實質價值減少)，然而就像是我們經營Berkshire的企
業原則所揭示的，我們不會只是因為還有其他更有利的資金用途，就隨便將已被
列為永恆的事業或主要投資出售，(當然之前我們也確實賣了一些媒體股，不過
規模相對較小)。

The intrinsic value losses that we have suffered have been

moderated because the Buffalo News, under Stan Lipsey's leadership,

has done far better than most newspapers and because both Cap

Cities and Washington Post are exceptionally well-managed. In

particular, these companies stayed on the sidelines during the late

1980's period in which purchasers of media properties regularly

paid irrational prices. Also, the debt of both Cap Cities and

Washington Post is small and roughly offset by cash that they hold.

As a result, the shrinkage in the value of their assets has not

been accentuated by the effects of leverage. Among publicly-owned

media companies, our two investees are about the only ones

essentially free of debt. Most of the other companies, through a

combination of the aggressive acquisition policies they pursued and

shrinking earnings, find themselves with debt equal to five or more

times their current net income.

還好我們的實質價值受到損害的情況尚稱輕微，因為水牛城日報在Stan Lipsey
的領導之下，表現遠比其他報紙同業要來的優秀，另一方面資本城與華盛頓郵報
的經營也都很上軌道，特別是在1980年代許多媒體公司以高價大舉併購同業
時，我們的投資事業都只是做壁上觀，而資本城與華盛頓郵報兩家公司的負債也
都很少，甚至於手上的現金就足以清償所有的債務，因此公司資產的縮水並沒有
因為槓桿而擴大，所以現在在所有主要的媒體事業當中，大概就只有我們投資的
這兩家公司可以免於債務所苦，而早期那些透過大量購併的同業，除了盈餘大幅
縮水之外，還同時背負著至少相當於年度獲利能力五倍以上的負債。

The strong balance sheets and strong managements of Cap Cities

and Washington Post leave us more comfortable with these

investments than we would be with holdings in any other media

companies. Moreover, most media properties continue to have far

better economic characteristics than those possessed by the average

American business. But gone are the days of bullet-proof franchises

and cornucopian economics.

總而言之，資本城及華盛頓郵報超強的資產負債表與管理階層，持有它們的股份
使得我們比持有別家公司的股份感到更放心，而且就現階段而言，媒體事業還是
比其他一般美國企業要來的有競爭力，只是不再像過去擁有金剛不壞之身與誘人
的暴利而已。

Twenty Years in a Candy Store

二十年的糖果店

We've just passed a milestone: Twenty years ago, on January 3,

1972, Blue Chip Stamps (then an affiliate of Berkshire and later

merged into it) bought control of See's Candy Shops, a West Coast

manufacturer and retailer of boxed-chocolates. The nominal price

that the sellers were asking - calculated on the 100% ownership we

ultimately attained - was $40 million. But the company had $10

million of excess cash, and therefore the true offering price was

$30 million. Charlie and I, not yet fully appreciative of the value

of an economic franchise, looked at the company's mere $7 million

of tangible net worth and said $25 million was as high as we would

go (and we meant it). Fortunately, the sellers accepted our offer.

我們剛剛跨過歷史性的一頁，二十年前也就是1972年1月3日，藍籌郵票公
司(原為Berkshire的分支機構，後來併入Berkshire)，買下喜斯糖果-西岸的一
家盒裝巧克力製造與銷售廠商，當時賣方所提的報價，以最後取得的100%股權
換算約為4,000萬美元，但當時光是公司帳上就有1,000萬美元的現金，所以
認真算起來真正出的資金只有3,000萬美金，不過當時查理跟我還不是那麼了

解一家特許事業所擁有的真正價值，所以在看過帳面淨值只有700萬美元的報

表之後，竟向對方表示2,500萬是我們可以出的最高上限(當時我們確實是這樣
子認為)，很幸運的是賣方接受了我們的報價。

The sales of trading stamps by Blue Chip thereafter declined

from $102.5 million in 1972 to $1.2 million in 1991. But See's

candy sales in the same period increased from $29 million to $196

million. Moreover, profits at See's grew even faster than sales,

from $4.2 million pre-tax in 1972 to $42.4 million last year.

之後藍籌郵票公司的郵票買賣收入從1972年的1億美元下滑到1991年的
1,200萬美元，但在同一期間喜斯糖果的營收，卻從2,900萬成長到1.96億
美元，更甚者，其獲利成長的幅度還遠高於營收成長的幅度，稅前獲利從1972
年的420萬，變成去年的4,240萬美元。

For an increase in profits to be evaluated properly, it must

be compared with the incremental capital investment required to

produce it. On this score, See's has been astounding: The company

now operates comfortably with only $25 million of net worth, which

means that our beginning base of $7 million has had to be

supplemented by only $18 million of reinvested earnings. Meanwhile,

See's remaining pre-tax profits of $410 million were distributed to

Blue Chip/Berkshire during the 20 years for these companies to

deploy (after payment of taxes) in whatever way made most sense.

對於每多賺一塊錢的效益評量，大家必須將其所需額外投入的資金考量進去，就
這點兒言，喜斯的表現實在是相當驚人，這家公司現在的淨值只有2,500萬美
元，意思是說除了原來投資時的700萬美元，後來只保留了1,800萬的盈餘未
分配，除了之外喜斯將這20年來剩下所賺的4億1,000萬美元，在扣除所得
稅之後，全部發還給藍籌郵票與Berkshire，將資金分配到更有利的地方之上。

In our See's purchase, Charlie and I had one important

insight: We saw that the business had untapped pricing power.

Otherwise, we were lucky twice over. First, the transaction was not

derailed by our dumb insistence on a $25 million price. Second, we

found Chuck Huggins, then See's executive vice-president, whom we

instantly put in charge. Both our business and personal experiences

with Chuck have been outstanding. One example: When the purchase

was made, we shook hands with Chuck on a compensation
arrangement - conceived in about five minutes and never reduced to a
written contract - that remains unchanged to this day.

在買下喜斯時，有一點是我們已預見的，那就是它尚未被發掘的訂價能力，另外
我們有兩方面算是很幸運，第一整個交易還好沒有因為我們愚昧地堅持2,500
萬美元的上限而告吹，第二我們選中Chuck Huggins-當時喜斯糖果的副總經
理，立即走馬上任，不管是在公事或是私人方面，我們與Chuck共處的經驗都
相當難得，有一個例子可以說明，當購併案完成後，我們在短短五分鐘內就與
Chuck協議好他擔任總經理的薪資報酬，而且連書面契約都沒有簽，就一直延
續到今天。

In 1991, See's sales volume, measured in dollars, matched that

of 1990. In pounds, however, volume was down 4%. All of that

slippage took place in the last two months of the year, a period

that normally produces more than 80% of annual profits. Despite the

weakness in sales, profits last year grew 7%, and our pre-tax

profit margin was a record 21.6%.

1991年喜斯糖果的銷售金額與前一年度相當，但是若是以銷售數量來算，則減
少了4%，所有減少的部份大多來自於佔年度獲利80%的最後兩個月，不過儘管
業績不太好，獲利還是成長了7%，稅前盈益率更創下21.6%的新高記錄。

Almost 80% of See's sales come from California and our

business clearly was hurt by the recession, which hit the state

with particular force late in the year. Another negative, however,

was the mid-year initiation in California of a sales tax of 7%-8?

(depending on the county involved) on "snack food" that was deemed

applicable to our candy.

喜斯糖果80%的收入都來自於加州，而我們的生意很明顯地受到景氣衰退的影
響，尤其在年度的後半段更是顯著，另外一個負面因素是加州在年度中開始對零
食課徵7%-8%的營業稅(依每個市鎮有所不同)，當然巧克力糖果也不能倖免。

Shareholders who are students of epistemological shadings will

enjoy California's classifications of "snack" and "non-snack"

foods:

若是精研認識論差異的股東應該會覺得加州對於零食與非零食的分類感到相當
有興趣。

Taxable "Snack" Foods Non-Taxable "Non-Snack" Foods

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

Ritz Crackers Soda Crackers

Popped Popcorn Unpopped Popcorn

Granola Bars Granola Cereal

Slice of Pie (Wrapped) Whole Pie

Milky Way Candy Bar Milky Way Ice Cream Bar

What - you are sure to ask - is the tax status of a melted

Milky Way ice cream bar? In that androgynous form, does it more

resemble an ice cream bar or a candy bar that has been left in the

sun? It's no wonder that Brad Sherman, Chairman of California's

State Board of Equalization, who opposed the snack food bill but

must now administer it, has said: "I came to this job as a

specialist in tax law. Now I find my constituents should have

elected Julia Child."

你一定會問，那融化的牛奶冰淇淋棒要不要課稅呢? 在這種模擬兩可的狀態下，
它到底是比較像冰淇淋棒還是在大太陽底下的糖果棒呢? 也難怪Brad
Sherman-加州公平交易委員會的主席，雖然反對這項法案但還是必須負責監督
執行，他提到我以稅務專家的身分到這個委員會任職，但我覺得大家要選的對
象，應該是小孩子才對。

Charlie and I have many reasons to be thankful for our

association with Chuck and See's. The obvious ones are that we've

earned exceptional returns and had a good time in the process.

Equally important, ownership of See's has taught us much about the

evaluation of franchises. We've made significant money in certain

common stocks because of the lessons we learned at See's.

查理跟我有太多理由要感謝Chuck跟喜斯糖果，最明顯的原因是他們幫我們賺
了那麼多錢，而且其間的過程是如此令人愉快，還有一點同樣重要的是擁有喜斯
糖果讓我們對於強勢的特許事業有更深一層的認識，我們靠著在喜斯身上所學的
東西，在別的股票投資上，又賺了更多的錢。

H. H. Brown

布朗鞋業

We made a sizable acquisition in 1991 - the H. H. Brown

Company - and behind this business is an interesting history. In

1927 a 29-year-old businessman named Ray Heffernan purchased the

company, then located in North Brookfield, Massachusetts, for

$10,000 and began a 62-year career of running it. (He also found

time for other pursuits: At age 90 he was still joining new golf

clubs.) By Mr. Heffernan's retirement in early 1990 H. H. Brown had

three plants in the United States and one in Canada; employed close

to 2,000 people; and earned about $25 million annually before

taxes.

我們在1991年做了一件大型的購併案，那就是買下布朗鞋業，這背後有一段有
趣的故事，1927年時有一位29歲的年輕商人-Ray Heffernan以10,000美
元買下這家公司，並把它搬到麻賽諸賽州，從此展開長達62年的事業(當然同時
他還有其他追求的目標，高齡90歲的他現在還在加入新的高爾夫球俱樂部)，等
1990年Heffernan先生宣佈退休時，布朗鞋業在美國已有三座工廠，還有另外
一座在加拿大，每年的稅前獲利約有2,500萬美元。

Along the way, Frances Heffernan, one of Ray's daughters,

married Frank Rooney, who was sternly advised by Mr. Heffernan

before the wedding that he had better forget any ideas he might

have about working for his father-in-law. That was one of Mr.

Heffernan's few mistakes: Frank went on to become CEO of Melville

Shoe (now Melville Corp.). During his 23 years as boss, from 1964

through 1986, Melville's earnings averaged more than 20% on equity

and its stock (adjusted for splits) rose from $16 to $960. And a

few years after Frank retired, Mr. Heffernan, who had fallen ill,

asked him to run Brown.

這期間Heffernan的一個女兒Frances嫁給了Frank Rooney，當時Heffernan
嚴正地告訴他的女婿最好斷了想要參與經營布朗鞋業的念頭，但這卻是
Heffernan先生所犯下的少數錯誤之一，Frank後來跑到另外一家鞋業Melville
擔任CEO，在他從1964年到1986年擔任主管的期間，Mellville每年的股東
權益報酬高達20%，而股價更從16元漲到960元(經過還原後)，而在Frank
退休多年後，Heffernan先生因為生病，才叫Frank回來經營布朗鞋業。

After Mr. Heffernan died late in 1990, his family decided to

sell the company - and here we got lucky. I had known Frank for a

few years but not well enough for him to think of Berkshire as a

possible buyer. He instead gave the assignment of selling Brown to

a major investment banker, which failed also to think of us. But

last spring Frank was playing golf in Florida with John Loomis, a

long-time friend of mine as well as a Berkshire shareholder, who is

always on the alert for something that might fit us. Hearing about

the impending sale of Brown, John told Frank that the company

should be right up Berkshire's alley, and Frank promptly gave me a

call. I thought right away that we would make a deal and before

long it was done.

之後在1990年Heffernan先生過世，他的家人決定要把公司賣掉，所以我們
的機會就來了，那時我們認識Frank也有好幾年了，但沒有好到讓他認為
Berkshire是布朗鞋業合適的買主，反而他把賣公司的事交給一家投資銀行來負
責，可想而知投資銀行絕對不會想到我們，但是就在去年春天，Frank跟John
Loomis一起到佛羅里達打高爾夫球，John是我多年的好友，同時也是Berkshire
的股東，他總是隨時注意有沒有適合我們投資的對象，在聽到布朗鞋業即將出售
的消息之後，John告訴Frank說這家公司應該要投到Berkshire的麾下，而
Frank也從善如流馬上打了通電話給我，我當下覺得我們應該可以談得成，果然
在不久之後，整個交易便確定了。

Much of my enthusiasm for this purchase came from Frank's

willingness to continue as CEO. Like most of our managers, he has

no financial need to work but does so because he loves the game and

likes to excel. Managers of this stripe cannot be "hired" in the

normal sense of the word. What we must do is provide a concert hall

in which business artists of this class will wish to perform.

我之所以會對這項交易這麼感興趣的原因在於Frank願意繼續留下來擔任
CEO，就像我們其他所有經理人一樣，他不需要因為經濟因素而繼續工作，但他
確實熱愛這項任務且做的很好，這類型的經理人可不是三言兩語就可以"請"得到
的，我們能做的就是盡量提供一個夠水準的演奏廳，讓這些商業界的天才藝術家
可以在這裡好好發揮。

Brown (which, by the way, has no connection to Brown Shoe of

St. Louis) is the leading North American manufacturer of work shoes

and boots, and it has a history of earning unusually fine margins

on sales and assets. Shoes are a tough business - of the billion

pairs purchased in the United States each year, about 85% are

imported - and most manufacturers in the industry do poorly. The

wide range of styles and sizes that producers offer causes

inventories to be heavy; substantial capital is also tied up in

receivables. In this kind of environment, only outstanding managers

like Frank and the group developed by Mr. Heffernan can prosper.

布朗(跟聖路易的布朗鞋子完全沒有關係)是北美地區工作鞋與工作靴的領導品
牌，同時擁有非凡的銷售毛利與資產報酬，事實上鞋子產業競爭相當地激烈，在
全美一年10億雙的採購量中，大約有85%是從國外進口，而產業中大部分的製
造工廠表現都乏善可陳，由於款式與型號繁多導致庫存壓力相當重，同時資金也
綁在大筆的應收帳款，在這樣的環境底下，只有像Frank這樣優秀的經理人再
加上Heffernan先生所建立這樣的事業才有可能生存。

A distinguishing characteristic of H. H. Brown is one of the

most unusual compensation systems I've encountered - but one that

warms my heart: A number of key managers are paid an annual salary

of $7,800, to which is added a designated percentage of the profits

of the company after these are reduced by a charge for capital

employed. These managers therefore truly stand in the shoes of

owners. In contrast, most managers talk the talk but don't walk the

walk, choosing instead to employ compensation systems that are long

on carrots but short on sticks (and that almost invariably treat

equity capital as if it were cost-free). The arrangement at Brown,

in any case, has served both the company and its managers

exceptionally well, which should be no surprise: Managers eager to

bet heavily on their abilities usually have plenty of ability to

bet on.

布朗鞋業有一個相當與眾不同的特點，那就是它的薪資獎賞制度與我之前看到的
完全不同，不過卻深得我心，公司主要的經理人每年的底薪只有7,800美元，
之後再依據公司每年的獲利，乘以一個事先訂定的百分比，並扣除運用資金的成
本，因此我們可以說這些經理人完全是與股東站在同一條船上，相對於一般說歸
說、做歸做的經理人，選擇運用紅蘿蔔長，桿子短的薪資報酬制度(總是把股東
所提供的資金當作是不用成本的)，事實證明布朗鞋業這樣的安排，不論在任何
情況下，對於公司與經理人都絕對有利，膽敢依恃個人能力來做賭注的經理人，
絕對有相當的能力來下賭。

* * * * * * * * * * * *

It's discouraging to note that though we have on four

occasions made major purchases of companies whose sellers were

represented by prominent investment banks, we were in only one of

these instances contacted by the investment bank. In the other

three cases, I myself or a friend initiated the transaction at some

point after the investment bank had solicited its own list of

prospects. We would love to see an intermediary earn its fee by

thinking of us - and therefore repeat here what we're looking for:

很令人失望的是雖然我們有四個主要的投資個案的賣方是透過著名的投資銀行
所介紹，但卻只有一家是真正由投資銀行主動聯繫我們的，其他三個案子都是在
投資銀行尋求其名單上的買主不成後，由我本人或是朋友促成最後的交易，我們
很希望中間人在賺取其佣金收入的同時，還能夠想到我們的存在，以下就是我們
想要找的企業條件

(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 "turnaround"

situations),

(3) Businesses earning good returns on equity while employing

little or no debt,

(4) Management in place (we can't supply it),

(5) Simple businesses (if there's lots of technology, we

won't understand it),

(6) An offering price (we don't want to waste our time or

that of the seller by talking, even preliminarily,

about a transaction when price is unknown).

(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)


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're interested. (With Brown,

we didn't even need to take five.) We prefer to buy for cash, but

will consider issuing stock when we receive as much in intrinsic

business value as we give.

　

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)，像是布朗鞋業這樣的案子根本就不要五分鐘，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。

Our favorite form of purchase is one fitting the pattern

through which we acquired Nebraska Furniture Mart, Fechheimer's and

Borsheim's. In cases like these, the company's owner-managers wish

to generate significant amounts of cash, sometimes for themselves,

but often for their families or inactive shareholders. At the same

time, these managers 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 such objectives and

we invite potential sellers to check us out by contacting people

with whom we have done business in the past.

　

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。

Charlie and I frequently get approached about acquisitions

that don't come close to meeting our tests: We've found that if

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

call hoping to sell you their cocker spaniels. A line from a

country song expresses our feeling about new ventures, turnarounds,

or auction-like sales: "When the phone don't ring, you'll know it's

me."

另一方面查理跟我也常常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，對於這類的事業，有首鄉村歌曲其中的一句
歌詞最能描述我們的感覺，「若電話不響，你就知道那是我」。

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 Capital Cities, Salomon, Gillette, USAir, Champion, and

American Express. We are not interested, however, in receiving

suggestions about purchases we might make in the general stock

market.

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、所羅門、吉列、美國航空、冠軍企業與美國運通這幾個
Case一樣的公司，不過對於一般直接從股票市場上買進股份的建議我們，則一
點興趣都沒有。

Insurance Operations

保險業營運

Shown below is an updated version of our usual table

presenting key figures for the property-casualty insurance

industry:

下表是產物意外險業的最新的幾項重要指數

　

Yearly Change Combined Ratio Yearly Change Inflation Rate

in Premiums After Policyholder in Incurred Measured by

Written (%) Dividends Losses (%) GDP Deflator (%)

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

1981 ..... 3.8 106.0 6.5 10.0

1982 ..... 3.7 109.6 8.4 6.2

1983 ..... 5.0 112.0 6.8 4.0

1984 ..... 8.5 118.0 16.9 4.5

1985 ..... 22.1 116.3 16.1 3.7

1986 ..... 22.2 108.0 13.5 2.7

1987 ..... 9.4 104.6 7.8 3.1

1988 ..... 4.4 105.4 5.5 3.9

1989 ..... 3.2 109.2 7.7 4.4

1990 (Revised) 4.4 109.6 4.8 4.1

1991 (Est.) 3.1 109.1 2.9 3.7

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. The higher the ratio, the worse the year.

When the investment income that an insurer earns from holding

policyholders' funds ("the 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.

綜合比率代表保險的總成本(理賠損失加上費用)佔保費收入的比例，比率在100
以下代表有承保的損失，在100以上則代表有承保的獲利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's incurred losses to grow at close to 10% annually, even

in periods when general inflation runs considerably lower. (Over

the last 25 years, incurred losses have in reality grown at a

still faster rate, 11%.) If premium growth meanwhile materially

lags that 10% rate, underwriting losses will mount.

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，(事實上過去25年以來，理賠損失係以11%的速度在成
長)，若是保費收入還是大幅落後於10%的門檻，承保損失一定會繼續增加。

However, the industry's tendency to under-reserve when

business turns bad may obscure the picture for a time - and that

could well describe the situation last year. Though premiums did

not come close to growing 10%, the combined ratio failed to

deteriorate as I had expected but instead slightly improved.

Loss-reserve data for the industry indicate that there is reason

to be skeptical of that outcome, and it may turn out that 1991's

ratio should have been worse than was reported. In the long run,

of course, trouble awaits managements that paper over operating

problems with accounting maneuvers. Eventually, managements of

this kind achieve the same result as the seriously-ill patient

who tells his doctor: "I can't afford the operation, but would

you accept a small payment to touch up the x-rays?"

然而產業普遍存在損失準備提列不足的現象，使得企業前景不佳的情況可以獲得
暫時的掩飾，這正是去年度所發生的事，雖然保費收入成長不到10%，但綜合
比率非但沒有像我所預測地那樣惡化反而還有點改善，損失準備的統計資料顯示
這樣的現象實在是相當令人懷疑，這種結果也可能導致1991年的比率將更進一
步惡化，當然就長期而言，這些利用會計手法掩蓋營運問題的經理人還是要面對
真正的麻煩，到最後這類的經理人會變得跟許多病入膏肓的病人對醫生說的一
樣：「我實在是承受不起另一次手術，不過你是否可以考慮把我的X光片給補
一補」。

Berkshire's insurance business has changed in ways that make

combined ratios, our own or the industry's, largely irrelevant

to our performance. What counts with us is the "cost of funds

developed from insurance," or in the vernacular, "the cost of

float."

於是Berkshire旗下的保險事業將與公司本身或產業經營績效越來越不相關的
綜合比率做了一番修正，對我們來說真正重要的是我們從保險業所得到的資金的
成本，套句行話就是浮存金的成本。

Float - which we generate in exceptional amounts - is the

total of loss reserves, loss adjustment expense reserves and

unearned premium reserves minus agents balances, prepaid

acquisition costs and deferred charges applicable to assumed

reinsurance. And the cost of float is measured by our

underwriting loss.

浮存金-我們靠保險業所取得大量的資金，係指將所有的損失準備、損失費用調
整準備與未賺取保費加總後，再扣除應付佣金、預付購併成本及相關再保遞延費
用，至於浮存金的成本則是以我們所發生的承保損失來衡量。

The table below shows our cost of float since we entered the

business in 1967.

下表是我們在1967年進入保險業後，浮存金的成本統計：

(1) (2) Yearend Yield

Underwriting Approximate on Long-Term

Loss Average Float Cost of Funds Govt. Bonds

(承保損失) (平均浮存金) (平均資金成本) (長期公債殖利率)

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

(In $ Millions) (Ratio of 1 to 2)

1967 ........ profit $17.3 less than zero 5.50%

1968 ........ profit 19.9 less than zero 5.90%

1969 ........ profit 23.4 less than zero 6.79%

1970 ........ $0.37 32.4 1.14% 6.25%

1971 ........ profit 52.5 less than zero 5.81%

1972 ........ profit 69.5 less than zero 5.82%

1973 ........ profit 73.3 less than zero 7.27%

1974 ........ 7.36 79.1 9.30% 8.13%

1975 ........ 11.35 87.6 12.96% 8.03%

1976 ........ profit 102.6 less than zero 7.30%

1977 ........ profit 139.0 less than zero 7.97%

1978 ........ profit 190.4 less than zero 8.93%

1979 ........ profit 227.3 less than zero 10.08%

1980 ........ profit 237.0 less than zero 11.94%

1981 ........ profit 228.4 less than zero 13.61%

1982 ........ 21.56 220.6 9.77% 10.64%

1983 ........ 33.87 231.3 14.64% 11.84%

1984 ........ 48.06 253.2 18.98% 11.58%

1985 ........ 44.23 390.2 11.34% 9.34%

1986 ........ 55.84 797.5 7.00% 7.60%

1987 ........ 55.43 1,266.7 4.38% 8.95%

1988 ........ 11.08 1,497.7 0.74% 9.00%

1989 ........ 24.40 1,541.3 1.58% 7.97%

1990 ........ 26.65 1,637.3 1.63% 8.24%

1991 ........ 119.6 1,895.0 6.31% 7.40%

As you can see, our cost of funds in 1991 was well below the

U. S. Government's cost on newly-issued long-term bonds. We have in

fact beat the government's rate in 20 of the 25 years we have been

in the insurance business, often by a wide margin. We have over

that time also substantially increased the amount of funds we hold,

which counts as a favorable development but only because the cost

of funds has been satisfactory. Our float should continue to grow;

the challenge will be to garner these funds at a reasonable cost.

各位可以看到我們1991年的資金成本甚至比美國政府新發行的長期公債利率
還低，事實上在過去25年的保險事業經營中，我們有20年是遠勝於政府公債
發行利率，而且差距的幅度通常都相當可觀，同時所持有的浮存金數量也以驚人
的幅度成長，當然這只有在資金成本低的情況下，才稱得上是好現象，展望未來，
浮存金的數量還會繼續成長，對我們而言，最大的挑戰是這些資金是否能有合理
的成本取得。

Berkshire continues to be a very large writer - perhaps the

largest in the world - of "super-cat" insurance, which is coverage

that other insurance companies buy to protect themselves against

major catastrophic losses. Profits in this business are enormously

volatile. As I mentioned last year, $100 million in super-cat

premiums, which is roughly our annual expectation, could deliver us

anything from a $100 million profit (in a year with no big

catastrophe) to a $200 million loss (in a year in which a couple of

major hurricanes and/or earthquakes come along).

Berkshire一直都是霹靂貓保單相當大的發行公司，或許規模已是全世界最大
的，這類保單通常是由其他保險公司買來分散他們本身在重大意外事故所需承擔
的風險，這類保險的獲利情況變化相當的大，就像是去年我曾經提過的，一億美
元的保費收入，這大約是我們預期一年所能接到的業務量，可能可以讓我們有一
億美元的獲利(只要當年度沒有重大災害發生)，也可能讓我們產生二億美元的損
失(只要當年度發生連續幾個颶風或地震)。

We price this business expecting to pay out, over the long

term, about 90% of the premiums we receive. In any given year,

however, we are likely to appear either enormously profitable or

enormously unprofitable. That is true in part because GAAP

accounting does not allow us to set up reserves in the catastrophe-

free years for losses that are certain to be experienced in other

years. In effect, a one-year accounting cycle is ill-suited to the

nature of this business - and that is a reality you should be aware

of when you assess our annual results.

當我們在訂價時，長期而言我們預期只要支付出90%收到的保費收入，當然在
任何一個特定年度，我們可能大賺或是大虧，一部份的原因在於一般公認會計原
則並不允許我們在沒有重大災害發生的年度提撥損失準備，以彌補其他年度一定
會發生的損失，事實上以一年為期的會計期間並不適合這類的保險業務，所以換
句話說當你在評斷我們公司的年度績效時，一定要特別注意到這一點。

Last year there appears to have been, by our definition, one

super-cat, but it will trigger payments from only about 25% of our

policies. Therefore, we currently estimate the 1991 underwriting

profit from our catastrophe business to have been about $11

million. (You may be surprised to learn the identity of the biggest

catastrophe in 1991: It was neither the Oakland fire nor Hurricane

Bob, but rather a September typhoon in Japan that caused the

industry an insured loss now estimated at about $4-$5 billion. At

the higher figure, the loss from the typhoon would surpass that

from Hurricane Hugo, the previous record-holder.)

去年照我們的定義可能會有一件霹靂貓保單要付上我們年度保費收入的25%，
因此我們預計1991年這類業務的承保獲利大約是1,100萬美元(或許你很好奇
想要知道1991年所發生的最大災害是什麼? 它既不是奧克蘭大火也不是Bob
颶風，而是九月在日本發生的颱風造成的損失估計在40-50億美元上下，若以
上限估計，這個數字將超過Hugo颶風先前所創下的最高損失記錄)。

Insurers will always need huge amounts of reinsurance

protection for marine and aviation disasters as well as for natural

catastrophes. In the 1980's much of this reinsurance was supplied

by "innocents" - that is, by insurers that did not understand the

risks of the business - but they have now been financially burned

beyond recognition. (Berkshire itself was an innocent all too often

when I was personally running the insurance operation.) Insurers,

though, like investors, eventually repeat their mistakes. At some

point - probably after a few catastrophe-scarce years - innocents

will reappear and prices for super-cat policies will plunge to

silly levels.

保險業者總會需要大量的再保險來規避航海與航空以及天然災害等意外事故，在
1980年代許多再保險保單都是由外行人來承接，這些人根本就不知道這類保險
的風險有多高，所以現在他們已經被燙的不省人事，(就連Berkshire在本人經
營這項業務時也是如此)，保險業者如同投資人一樣，還是會一再重複所發生的
錯誤，只要有一、兩年意外災害較少，就會有無知的業者跳出來以極低的價格殺
價競爭搶單。

As long as apparently-adequate rates prevail, however, we will

be a major participant in super-cat coverages. In marketing this

product, we enjoy a significant competitive advantage because of

our premier financial strength. Thinking insurers know that when

"the big one" comes, many reinsurers who found it easy to write

policies will find it difficult to write checks. (Some reinsurers

can say what Jackie Mason does: "I'm fixed for life - as long as I

don't buy anything.") Berkshire's ability to fulfill all its

commitments under conditions of even extreme adversity is

unquestioned.

然而只要市場上費率看起來合理，我們就會繼續留在這一行裡，而在推銷這類保
單時，我們所擁有的最大競爭優勢就是我們的財務實力，有遠見的客戶都知道許
多再保業者可以很輕鬆地接下保單，但是當重大的意外災害接連發生時，要他們
支付賠償金可能就有點困難，(有些再保業者就像Jackie Mason所說的一樣，我
可以一輩子不花錢，只要我不買任何東西)，相對地Berkshire在任何極端的狀
況下，都能夠履行他所做出的承諾。

Overall, insurance offers Berkshire its greatest

opportunities. Mike Goldberg has accomplished wonders with this

operation since he took charge and it has become a very valuable

asset, albeit one that can't be appraised with any precision.

總的來說，保險業提供Berkshire相當大的機會，Mike Goldberg在他接手這
項業務之後，就一直締造出優異的成績，也使得保險子公司成為我們非常寶貴的
資產，雖然我們無法以精確的數字來衡量。

Marketable Common Stocks

有價證券股票投資

On the next page we list our common stock holdings having a

value of over $100 million. 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，一部份的投資係屬於Berkshire關
係企業所持有)。

12/31/91

Shares Company Cost Market

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

(000s omitted)

3,000,000 Capital Cities/ABC, Inc. ............ $ 517,500 $1,300,500

46,700,000 The Coca-Cola Company. .............. 1,023,920 3,747,675

2,495,200 Federal Home Loan Mortgage Corp. .... 77,245 343,090

6,850,000 GEICO Corp. ......................... 45,713 1,363,150

24,000,000 The Gillette Company ................ 600,000 1,347,000

31,247,000 Guinness PLC ........................ 264,782 296,755

1,727,765 The Washington Post Company ......... 9,731 336,050

5,000,000 Wells Fargo & Company 289,431 290,000

As usual the list reflects our Rip Van Winkle approach to

investing. Guinness is a new position. But we held the other seven

stocks a year ago (making allowance for the conversion of our

Gillette position from preferred to common) and in six of those we

hold an unchanged number of shares. The exception is Federal Home

Loan Mortgage ("Freddie Mac"), in which our shareholdings increased

slightly. Our stay-put behavior reflects our view that the stock

market serves as a relocation center at which money is moved from

the active to the patient. (With tongue only partly in check, I

suggest that recent events indicate that the much-maligned "idle

rich" have received a bad rap: They have maintained or increased

their wealth while many of the "energetic rich" - aggressive real

estate operators, corporate acquirers, oil drillers, etc. - have

seen their fortunes disappear.)

一如往常，以上這張表顯示我們李伯大夢式的投資方式，健力士Guinness是我
們最新的投資部位，至於其他七項主要的投資都持有一年以上(如果把吉列從特
別股轉換成普通股也包含在內的話)，其中六項投資甚至連持股數都沒有變動，
唯一的例外是聯邦家庭貸款抵押(Freddie Mac)，我們投資的股數略微增加，我
們以不變應萬變的做法主要是反應我們把股票市場當作是財富重分配的中心，而
錢通常由積極的份子流到有耐性的投資人手中，(我嘴巴可能閉的不夠緊，我認
為最近幾件事情顯示許多躺著賺的有錢人招到許多攻擊，因為他們好像沒做什麼
事就使得本身的財富暴漲，而在此同時過去那些積極活躍的有錢人，如房地產大
亨、企業購併家與石油鑽探大亨等，卻眼睜睜地看著自己的財產一點一滴地縮
水)。

Our Guinness holding represents Berkshire's first significant

investment in a company domiciled outside the United States.

Guinness, however, earns its money in much the same fashion as

Coca-Cola and Gillette, U.S.-based companies that garner most of

their profits from international operations. Indeed, in the sense

of where they earn their profits - continent-by-continent - Coca-

Cola and Guinness display strong similarities. (But you'll never

get their drinks confused - and your Chairman remains unmovably in

the Cherry Coke camp.)

我們在健力士Guinness的持股代表Berkshire第一次對海外公司進行大規模的
投資，不過Guinness所賺的錢與可口可樂、吉列刮鬍刀等美國公司卻極為類
似，主要都是仰賴國際部門的營運，確實以國際性的眼光來看，Guinness與可
口可樂的獲利來源有相當的共通性，(但是大家絕對不能將自己最愛的飲料搞混
掉，像我個人的最愛依舊是櫻桃可口可樂)。

We continually search for large businesses with

understandable, enduring and mouth-watering economics that are run

by able and shareholder-oriented managements. This focus doesn't

guarantee results: We both have to buy at a sensible price and get

business performance from our companies that validates our

assessment. But this investment approach - searching for the

superstars - offers us our only chance for real success. Charlie

and I are simply not smart enough, considering the large sums we

work with, to get great results by adroitly buying and selling

portions of far-from-great businesses. Nor do we think many others

can achieve long-term investment success by flitting from flower to

flower. Indeed, we believe that according the name "investors" to

institutions that trade actively is like calling someone who

repeatedly engages in one-night stands a romantic.

我們還是持續地在尋找大型的企業，那種令人容易了解、具有持續性且讓人垂涎
三尺的事業，並且由有能力才幹並以股東利益為優先的經營階層，雖然這些要求
的重點並不一定保證結果就一定令人滿意，當然我們一定要以合理的價格投資並
且確保我們的被投資公司績效表現與我們當初所評估的一致，這樣的投資方法-
尋找產業的超級明星，是我們唯一能夠成功的機會，查理跟我的天資實在是有
限，以我們目前操作的資金規模，實在是無法靠著買賣一些平凡普通的企業來賺
取足夠的利益，當然我們也不認為其他人就有辦法以這種小蜜蜂飛到西、飛到東
的方法成功，事實上我們認為將這些短線進出如此頻繁的法人機構稱為投資人，
就好像是把一個每天尋找一夜情的花花公子稱作為浪漫情人一樣。

If my universe of business possibilities was limited, say, to

private companies in Omaha, I would, first, try to assess the long-

term economic characteristics of each business; second, assess the

quality of the people in charge of running it; and, third, try to

buy into a few of the best operations at a sensible price. I

certainly would not wish to own an equal part of every business in

town. Why, then, should Berkshire take a different tack when

dealing with the larger universe of public companies? And since

finding great businesses and outstanding managers is so difficult,

why should we discard proven products? (I was tempted to say "the

real thing.") Our motto is: "If at first you do succeed, quit

trying."

今天假設我的投資天地僅限於比如說奧瑪哈地區的私人企業，那麼首先我們仔細
地評估每家企業長期的競爭力，第二我會再評估經營者的特質，之後再以合理的
價格買進一小部份的股權，既然我不可能雨露均霑地去買鎮上所有公司的股權，
那麼為什麼Berkshire在面對全美一大堆上市大公司時，就要採取不同的態度，
也因為要找到好的事業並加上好的經理人是如此的困難，那麼為什麼我們要拋棄
那些已經被證明過的投資對象呢? (通常我喜歡把它們稱做是狠角色)，我們的座
右銘是如果你第一次就成功了，那就不要費力再去試別的了。

John Maynard Keynes, whose brilliance as a practicing investor

matched his brilliance in thought, wrote a letter to a business

associate, F. C. Scott, on August 15, 1934 that says it all: "As

time goes on, I get more and more convinced that the right method

in investment is to put fairly large sums into enterprises which

one thinks one knows something about and in the management of
which one thoroughly believes. It is a mistake to think that one limits

one's risk by spreading too much between enterprises about which

one knows little and has no reason for special confidence. . . .

One's knowledge and experience are definitely limited and there are

seldom more than two or three enterprises at any given time in

which I personally feel myself entitled to put full confidence."

著名經濟學家凱因斯，他的投資績效跟他的理論思想一樣傑出，在1934年8
月15日他曾經寫了一封信給生意夥伴Scott上面寫到，隨著時光的流逝，我越
來越相信正確的投資方式是將大部分的資金投入在自己認為了解且相信的事業
之上，而不是將資金分散到自己不懂且沒有特別信心的一大堆公司，每個人的知
識與經驗一定有其限度，就我本身而言，我很難同時有兩三家以上的公司可以讓
我感到完全的放心。

Mistake Du Jour

即時供應的錯誤

In the 1989 annual report I wrote about "Mistakes of the First

25 Years" and promised you an update in 2015. My experiences in the

first few years of this second "semester" indicate that my backlog

of matters to be discussed will become unmanageable if I stick to

my original plan. Therefore, I will occasionally unburden myself in

these pages in the hope that public confession may deter further

bumblings. (Post-mortems prove useful for hospitals and football

teams; why not for businesses and investors?)

在1989年的年報中，我曾經寫過Berkshire頭25所犯的錯誤，而且承諾在
2015年還會再有更新的報告，但是第二階段的頭幾年讓我覺得若是堅持原來的
計畫的話，可能讓這些記錄多到難以管理，因此我決定每隔一段時間會在這裡丟
出一點東西，所謂自首無罪，抓到雙倍，希望我公開的懺悔能夠免於大家繼續對
我的轟炸(不管是醫院的死後驗屍或是足球隊常常用到的事後檢討，我想應該也
能夠適用在企業與投資人之上)。

Typically, our most egregious mistakes fall in the omission,

rather than the commission, category. That may spare Charlie and me

some embarrassment, since you don't see these errors; but their

invisibility does not reduce their cost. In this mea culpa, I am

not talking about missing out on some company that depends upon an

esoteric invention (such as Xerox), high-technology (Apple), or

even brilliant merchandising (Wal-Mart). We will never develop the

competence to spot such businesses early. Instead I refer to

business situations that Charlie and I can understand and that seem

clearly attractive - but in which we nevertheless end up sucking

our thumbs rather than buying.

通常我們很多重大的錯誤不是發生在我們已經做的部份，而是在於我們沒有去做
的那部份，雖然因為各位看不到這些失誤，所以查理跟我可以少一點難堪，但看
不到不代表我們就不必付出代價，而這些我公開承認的錯誤，並不是指我錯過了
某些革命性的新發明(就像是全錄影印技術)、高科技(像是蘋果電腦)或是更優秀
的通路零售商(像是威名百貨)，我們永遠不可能擁有在早期發掘這些優秀公司的
能力，反而我指的是那些查理跟我可以很容易就了解且很明顯對我們有吸引力的
公司，無奈在當時我們只是不斷地咬著指甲猶豫不決，就是不能下定決心把他們
買下來。

Every writer knows it helps to use striking examples, but I

wish the one I now present wasn't quite so dramatic: In early 1988,

we decided to buy 30 million shares (adjusted for a subsequent

split) of Federal National Mortgage Association (Fannie Mae), which

would have been a $350-$400 million investment. We had owned the

stock some years earlier and understood the company's business.

Furthermore, it was clear to us that David Maxwell, Fannie Mae's

CEO, had dealt superbly with some problems that he had inherited

and had established the company as a financial powerhouse - with

the best yet to come. I visited David in Washington and confirmed

that he would not be uncomfortable if we were to take a large

position.

每位作者都知道，要讓讀者了解其意思最好的方式就是舉個例子，不過希望我現
在舉的例子不會過於極端，回顧1988年當時我們決定以3.5億到4億美元之
間，買進3,000萬股(經過事後的分割調整)的聯邦國家貸款協會，簡稱Fannie
Mae，我們之前曾經擁有過這家公司的股份，也對其所處的產業相當了解，另外
很顯然的，也很清楚David Maxwell也就是Fannie Mae的總裁，有能力處理
他所接下的一堆問題，同時進一步將公司建立成為一個金融巨擘，一切可說是前
景看好，為此我還特地到華盛頓拜訪David，確認他對於我們持有該公司一大部
分的股權不會感到任何的不愉快。

After we bought about 7 million shares, the price began to

climb. In frustration, I stopped buying (a mistake that,

thankfully, I did not repeat when Coca-Cola stock rose similarly

during our purchase program). In an even sillier move, I

surrendered to my distaste for holding small positions and sold the

7 million shares we owned.

只不過當我們開始買進不到700萬股時，該公司股價就開始上漲，失望之餘，
我立刻停止買進(事後回想還好我沒有在買進可口可樂時犯下相同的錯誤)，更有
甚者，我覺得區區700萬股對我們來說實在是沒有太大的意義，所以之後又把
持有的700萬股全部賣掉。

I wish I could give you a halfway rational explanation for my

amateurish behavior vis-a-vis Fannie Mae. But there isn't one.

What I can give you is an estimate as of yearend 1991 of the

approximate gain that Berkshire didn't make because of your

Chairman's mistake: about $1.4 billion.

我期盼對於我這樣不具職業水準的投資行為可以給各位一個稍微合理一點的解
釋，不過我實在是編不出來，不過我倒是可以跟各位報告因為本人的這項錯誤，
大概使得Berkshire在1991年少賺了14億美元。

Fixed-Income Securities

固定收益證券

We made several significant changes in our fixed-income

portfolio during 1991. As I noted earlier, our Gillette preferred

was called for redemption, which forced us to convert to common

stock; we eliminated our holdings of an RJR Nabisco issue that was

subject to an exchange offer and subsequent call; and we purchased

fixed-income securities of American Express and First Empire State

Corp., a Buffalo-based bank holding company. We also added to a

small position in ACF Industries that we had established in late

1990. Our largest holdings at yearend were:

1991年我們在固定收益證券這方面的投資有很大的變動，如同先前曾提到的我
們的吉列可轉換特別股被強制贖回，使得我們必須將之轉換為普通股，另外我們
也出清了RJR Nabisco的債券，因為它在被轉換後贖回，在另一方面我們也買
進美國運通與第一帝國-一家水牛城的銀行控股公司的固定收益證券，此外還在
1990年底買進了一些ACF工業的債券，以下是截至年底我們持有的主要部位：

(000s omitted)

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

Cost of Preferreds and

Issuer Amortized Value of Bonds Market

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

ACF Industries ................ $ 93,918(2) $118,683

American Express .............. 300,000 263,265(1)(2)

Champion International ........ 300,000(2) 300,000(1)

First Empire State 40,000 50,000(1)(2)

RJR Nabisco 222,148(2) 285,683

Salomon 700,000(2) 714,000(1)

USAir 358,000(2) 232,700(1)

Washington Public Power Systems 158,553(2) 203,071

(1)Fair value as determined by Charlie and me
(1)公平價值是由查理跟我來判斷

(2) Carrying value in our financial statements

(2)是指財務報表上的帳面價值

Our $40 million of First Empire State preferred carries a 9%

coupon, is non-callable until 1996 and is convertible at $78.91 per

share. Normally I would think a purchase of this size too small for

Berkshire, but I have enormous respect for Bob Wilmers, CEO of

First Empire, and like being his partner on any scale.

我們在第一帝國9%收益率的特別股投資了4,000萬美元，在1996年前公司無
法贖回，每股轉換價格訂為78.91美元，通常我會認為這樣的規模對於
Berkshire來說實在是太小了，但由於我們對於該公司總裁Bob Wilmers實在
是過於崇敬，所以不管金額大小，還是希望有機會能與他一起合夥共事。

Our American Express preferred is not a normal fixed-income

security. Rather it is a "Perc," which carries a fixed dividend of

8.85% on our $300 million cost. Absent one exception mentioned

later, our preferred must be converted three years after issuance,

into a maximum of 12,244,898 shares. If necessary, a downward

adjustment in the conversion ratio will be made in order to limit

to $414 million the total value of the common we receive. Though

there is thus a ceiling on the value of the common stock that we

will receive upon conversion, there is no floor. The terms of the

preferred, however, include a provision allowing us to extend the

conversion date by one year if the common stock is below $24.50 on

the third anniversary of our purchase.

至於美國運通的投資則不是一般的固定收益證券，它算是一種Perc-每年可以為
我們3億美元的投資貢獻8.85%的股利收入，除了接下來會提到的一個特點，
那就是我們的特別股在發行後的三年可以轉換成最多12,244,898股的普通
股，若有必要我們可轉換的股份可能會向下調整，以確定我們所收到的股份總值
不能夠超過4.14億美元，雖然對於可能取得的普通股價值有其上限，但相對地
卻沒有下限，不過這樣的特別條款還包含若是三年期限到時公司股價低於24.5
美元時，可以有權請求延長轉換期限一年。

Overall, our fixed-income investments have treated us well,

both over the long term and recently. We have realized large

capital gains from these holdings, including about $152 million in

1991. Additionally, our after-tax yields have considerably exceeded

those earned by most fixed-income portfolios.

總的來說，不管最近或是是長期而言，我們在固定收益證券上的投資表現還算不
錯，靠著這樣的投資我們賺取大量的資本利得，在1991年這個數字大約在1.52
億美元左右，此外我們的稅後投資報酬率也遠高於一般的固定收益證券。

Nevertheless, we have had some surprises, none greater than

the need for me to involve myself personally and intensely in the

Salomon situation. As I write this letter, I am also writing a

letter for inclusion in Salomon's annual report and I refer you to

that report for an update on the company. (Write to: Corporate

Secretary, Salomon Inc, Seven World Trade Center, New York, NY

10048) Despite the company's travails, Charlie and I believe our

Salomon preferred stock increased slightly in value during 1991.

Lower interest rates and a higher price for Salomon's common

produced this result.

不過在這期間也發生一些小意外，當然沒有像所羅門事件那樣讓我本人都跳進
去，當我在撰寫這封信時，我也同時寫了一封信要放在所羅門的年度報告之內，
我順便提出來算是對於該公司近況的一份報告，(寫給紐約第七世貿大樓所羅門
公司)，雖然公司遭逢不幸，但查理跟我都相信，目前低利率的環境加上所羅門
普通股的股價回昇，使我們在所羅門的特別股價值已略見增加。

Last year I told you that our USAir investment "should work

out all right unless the industry is decimated during the next few

years." Unfortunately 1991 was a decimating period for the

industry, as Midway, Pan Am and America West all entered

bankruptcy. (Stretch the period to 14 months and you can add

Continental and TWA.)

去年我曾告訴各位除非航空業的經營環境在未來幾年內加速惡化，否則我們在美
國航空的投資應該可以有不錯的結果，不過很不幸的隨著中美、汎美與美西航空
相繼倒閉，1991年正是航空業加速惡化的一年，(若是把時間延長為14個月，
則還要包括大陸航空與TWA兩家航空公司)。

The low valuation that we have given USAir in our table

reflects the risk that the industry will remain unprofitable for

virtually all participants in it, a risk that is far from

negligible. The risk is heightened by the fact that the courts have

been encouraging bankrupt carriers to continue operating. These

carriers can temporarily charge fares that are below the industry's

costs because the bankrupts don't incur the capital costs faced by

their solvent brethren and because they can fund their losses - and

thereby stave off shutdown - by selling off assets. This burn-the-

furniture-to-provide-firewood approach to fare-setting by bankrupt

carriers contributes to the toppling of previously-marginal

carriers, creating a domino effect that is perfectly designed to

bring the industry to its knees.

表上我們對於在美國航空投資的評價之所以如此的低，反應出整個產業目前所面
臨到的獲利前景不佳的風險，這個風險又因為法院鼓勵已經宣佈破產的航空公司
繼續營運而更加提高，這些同業得以用比一般成本還低的價格，因為它們完全可
以不必在乎其他還咽咽一息的同業所需負擔的資金成本，因為為了避免營運停
擺，它們可以靠著變賣資產來彌補所發生的損失，這種拆傢具拿來當材火燒的做
法，有可能進一步危及其他營運還算正常的同業，然後引發骨牌效應，使得整個
產業一敗塗地。

Seth Schofield, who became CEO of USAir in 1991, is making

major adjustments in the airline's operations in order to improve

its chances of being one of the few industry survivors. There is no

tougher job in corporate America than running an airline: Despite

the huge amounts of equity capital that have been injected into it,

the industry, in aggregate, has posted a net loss since its birth

after Kitty Hawk. Airline managers need brains, guts, and

experience - and Seth possesses all three of these attributes.

Seth Schofield在1991年成為美國航空公司的總裁，正對整個公司的營運做出
相當重大的調整，期能增加其成為航空業僅存的幾位倖存者之一，在美國沒有比
經營一家航空公司還要困難的行業，雖然大筆的資金已經投入到這個產業，但是
從小鷹號誕生開始，航空業歷史累積加總所產生的損失卻是相當驚人，航空公司
的經理人需要的不只是智慧、勇氣還要再加上經驗，而毫無疑問的，Seth 同時
具有以上三項的特質。

Miscellaneous

其他事項

About 97.7% of all eligible shares participated in Berkshire's

1991 shareholder-designated contributions program. Contributions

made through the program were $6.8 million, and 2,630 charities

were recipients.

大約有97.7%的有效股權參與1991年的股東指定捐贈計劃，總計約680萬美
元捐出的款項分配給2,630家慈善機構。

We suggest that new shareholders read the description of our

shareholder-designated contributions program that appears on pages

48-49. To participate in future programs, you must 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 August 31, 1992 will be ineligible for the 1992

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1992年8月31日之前完成登記，才有權利參與1992
年的捐贈計畫。

In addition to the shareholder-designated contributions that

Berkshire distributes, managers of our operating businesses make

contributions, including merchandise, averaging about $1.5 million

annually. These contributions support local charities, such as The

United Way, and produce roughly commensurate benefits for our

businesses.

Berkshire除了透過股東指定捐贈計畫對外捐贈之外，我們旗下事業的經理人每
年也會透過公司對外捐贈，包含商品在內每年平均金額約在150萬美元左右。
這些捐贈主要是贊助當地像是聯合勸募等慈善團體，所得的效益應該與我們所捐
出的相當。

However, neither our operating managers nor officers of the

parent company use Berkshire funds to make contributions to broad

national programs or charitable activities of special personal

interest to them, except to the extent they do so as shareholders.

If your employees, including your CEO, wish to give to their alma

maters or other institutions to which they feel a personal

attachment, we believe they should use their own money, not yours.

然而不管是旗下事業或是母公司的經理人在利用Berkshire的資金對外捐贈給
全國性組織或特別利益團體時，都是以站在股東利益立場所應該做的，相對地若
是你的員工也包含CEO在內，想要與其校友會或其他人建立個人關係的，我們
認為他們最好是用自己的錢，而不是從你的口袋裡掏錢。

* * * * * * * * * * * *

The faithful will notice that, for the first time in some

years, Charlie's annual letter to Wesco shareholders is not

reprinted in this report. Since his letter is relatively barebones

this year, Charlie said he saw no point in including it in these

pages; my own recommendation, however, is that you get a copy of

the Wesco report. Simply write: Corporate Secretary, Wesco

Financial Corporation, 315 East Colorado Boulevard, Pasadena, CA

91101.

死忠的巴菲特迷可能會發現，許多年來頭一次大家在年報中找不到查理孟格寫給
Wesco股東的信，主要是因為他認為今年的報告相當陽春，所以沒有必要附在
我們的年報中，不過我個人還是建議，想辦法寫信給Wesco公司的秘書，就可
以拿到Wesco的年報。

* * * * * * * * * * * *

Malcolm G. Chace, Jr., now 88, has decided not to stand for

election as a director this year. But the association of the Chace

family with Berkshire will not end: Malcolm III (Kim), Malcolm's

son, will be nominated to replace him.

現年88歲的Malcolm Chace二世，決定從今年起不再擔任本公司的董事，但
Berkshire與Chace家族的關係卻不會斷，他兒子也就是Malcolm三世會接替
其位置繼續擔任本公司董事。

In 1931, Malcolm went to work for Berkshire Fine Spinning

Associates, which merged with Hathaway Manufacturing Co. in 1955 to

form our present company. Two years later, Malcolm became Berkshire

Hathaway's Chairman, a position he held as well in early 1965 when

he made it possible for Buffett Partnership, Ltd. to buy a key

block of Berkshire stock owned by some of his relatives. This

purchase gave our partnership effective control of the company.

Malcolm's immediate family meanwhile kept its Berkshire stock and

for the last 27 years has had the second-largest holding in the

company, trailing only the Buffett family. Malcolm has been a joy

to work with and we are delighted that the long-running

relationship between the Chace family and Berkshire is continuing

to a new generation.

1931年Malcolm進入Berkshire針織工廠工作，後來該公司在1955年與
Hathaway工業合併，成為現在的Berkshire Hathaway，之後兩年他接任本公
司董事長的職位，直到1965年由他一手促成巴菲特合夥事業買下他與親人大部
分的股權，而使得我們成功入主該公司，之後Malcolm家族在往後的27年內
繼續持有本公司的股份成為僅次於巴菲特家族，本公司第二大股東，Malcolm
一直是個很容易相處的夥伴，我們很高興Chase家族與巴菲特家族的感情能夠
延續到下一代。

* * * * * * * * * * * *

The annual meeting this year will be held at the Orpheum

Theater in downtown Omaha at 9:30 a.m. on Monday, April 27, 1992.

Attendance last year grew to a record 1,550, but that still leaves

plenty of room at the Orpheum.

今年的股東會預計在1992年4月27日，星期一早上9點30分在位於奧瑪哈
市中心的Orpheum中心召開，去年股東會參加人數又創新高突破1,550人，
不過會場還是剩下很多座位。

We recommend that you get your hotel reservations early at one

of these hotels: (1) The Radisson-Redick Tower, a small (88 rooms)

but nice hotel across the street from the Orpheum; (2) the much

larger Red Lion Hotel, located about a five-minute walk from the

Orpheum; or (3) the Marriott, located in West Omaha about 100 yards

from Borsheim's and a twenty minute drive from downtown. We will

have buses at the Marriott that will leave at 8:30 and 8:45 for the

meeting and return after it ends.

我們建議大家最好先向以下旅館預訂房間(1)Radisson-Redick旅館-就位在
Orpheum中心對街擁有88個房間的一家小旅館(2)較大一點的Red Lion旅館
-離Orpheum中心約五分鐘路程，或是(3)Marriott位在奧瑪哈西區，離波仙珠
寶店約100公尺，開車到市中心約需20分鐘，屆時將會有巴士接送大家往返
股東會會場。

Charlie and I always enjoy the meeting, and we hope you can

make it. The quality of our shareholders is reflected in the

quality of the questions we get: We have never attended an annual

meeting anywhere that features such a consistently high level of

intelligent, owner-related questions.

查理跟我一直都很喜歡開股東會，我也希望大家能夠來參加，我們股東的素質可
由大家所提出的問題看得出來，我們參加過很多股東會，但從來沒有別的公司的
股東像Berkshire的股東一樣由高智慧水準與經營者榮枯與共的股東組合。

An attachment to our proxy material explains how you can

obtain the card you will need for admission to the meeting. With

the admission card, we will enclose information about parking

facilities located near the Orpheum. If you are driving, come a

little early. Nearby lots fill up quickly and you may have to

walk a few blocks.

後面附有股東會開會投票的相關資料，跟各位解釋如何拿到入場所許的識別證，
因為開會當天會場不好停車，我們特地為大家預留了一些位置，附件也有相關說
明供大家參考。

As usual, we will have buses to take you to Nebraska Furniture

Mart and Borsheim's after the meeting and to take you from there to

downtown hotels or the airport later. I hope that you will allow

plenty of time to fully explore the attractions of both stores.

Those of you arriving early can visit the Furniture Mart any day of

the week; it is open from 10 a.m. to 5:30 p.m. on Saturdays and

from noon to 5:30 p.m. on Sundays. While there, stop at the See's

Candy Cart and find out for yourself why Americans ate 26 million

pounds of See's products last year.

一如往年，會後我們備有巴士帶大家到內布拉斯加傢具店與波仙珠寶店或是到飯
店與機場，我希望大家能有多一點的時間好好探索這兩家店的奧妙，當然早幾天
到的股東也可利用假日逛逛傢具店，星期六從早上10點到下午5點30分，星
期日則從中午開到下午5點30分，到那裡時記得到喜斯糖果攤逛逛，了解一下

為何美國人一年能夠吞下2,600萬磅的喜斯糖果。

Borsheim's normally is closed on Sunday, but we will be open

for shareholders and their guests from noon to 6 p.m. on Sunday,

April 26. Borsheim's will also have a special party the previous

evening at which shareholders are welcome. (You must, however,

write Mrs. Gladys Kaiser at our office for an invitation.) On

display that evening will be a 150-year retrospective of the most

exceptional timepieces made by Patek Philippe, including watches

once owned by Queen Victoria, Pope Pius IX, Rudyard Kipling, Madame

Curie and Albert Einstein. The centerpiece of the exhibition will

be a $5 million watch whose design and manufacture required nine

years of labor by Patek Philippe craftsmen. Along with the rest of

the collection, this watch will be on display at the store on

Sunday - unless Charlie has by then impulsively bought it.

波仙星期天通常不開門營業，但在股東會期間特別為股東與來賓開放，4月26
日星期天從中午開到下午6點，同時前一天晚上還將為所有股東舉行一個特別
的Party，(但必須事先向我們辦公室的Gladys Kaiser女士登記取得邀請函)，
當晚將會展示Patek Philippe過去150年來的作品回顧，包含英國維多利亞女
皇、教宗Pius四世與愛因斯坦等歷史名人所擁有的手錶，另外會場中的重頭戲
是一隻由Patek Philippe工匠設計打造，耗時一年價值500萬美元的手錶，如
無意外也會隨著其他物品一起展出，除非查理忍不住誘惑先買下了它。

Nicholas Kenner nailed me - again - at last year's meeting,

pointing out that I had said in the 1990 annual report that he was

11 in May 1990, when actually he was 9. So, asked Nicholas rather

caustically: "If you can't get that straight, how do I know the

numbers in the back [the financials] are correct?" I'm still

searching for a snappy response. Nicholas will be at this year's

meeting - he spurned my offer of a trip to Disney World on that

day - so join us to watch a continuation of this lop-sided battle

of wits.

去年股東會Nicholas Kenner又槓上我了，他表示：「我在去年1990年報中
表示他在1990年5月11號滿十歲，但事實上他那時才剛滿9歲」，他接著又
用很嘲諷的語氣說：「如果你連這個都搞不清楚，我如何還能相信你報告中的其
他數字是正確的」到現在我還在想如何做出一個有力的回答，今年Nicholas還
會出席，他拒絕了我邀請他當天到迪士尼樂園玩的建議，所以請大家繼續好好觀
賞這一面倒的機智問答。

Warren E. Buffett

February 28, 1992 Chairman of the Board

華倫．巴菲特

董事會主席

1992年2月28日