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 1996 was $6.2 billion, or 36.1%. Per-

share book value, however, grew by less, 31.8%, because the number of

Berkshire shares increased: We issued stock in acquiring FlightSafety

International and also sold new Class B shares.* Over the last 32 years

(that is, since present management took over) per-share book value has

grown from $19 to $19,011, or at a rate of 23.8% compounded annually.

　

1996年本公司的淨值成長了36.1%，約62億美元，不過每股淨值僅成長了31.8%，
原因在於去年我們以發行新股的方式併購了國際飛安公司，同時另外還追加發行了一
些B級普通股*，總計過去32年以來，也就是自從現有經營階層接手之後，每股淨值
由當初的19元成長到現在的19,011美元，年複合成長率約為23.8%。

* Each Class B share has an economic interest equal to 1/30th of

that possessed by a Class A share, which is the new designation for

the only stock that Berkshire had outstanding before May 1996.

Throughout this report, we state all per-share figures in terms of

"Class A equivalents," which are the sum of the Class A shares

outstanding and 1/30th of the Class B shares outstanding.

* B級普通股擁有A級普通股三十分之一的權利，這是從1996年五月開始Berkshire新增的股份類
型，在年報中所謂的每股數字係以A級普通股約當數為基礎，亦即全部流通在外的A級普通股數加上
流通在外的B級普通股數的三十分之一。

For technical reasons, we have restated our 1995 financial

statements, a matter that requires me to present one of my less-than-

thrilling explanations of accounting arcana. I'll make it brief.

基於技術性原因，我們必須將1995年的財務報表予以重編，這使我能夠再度展現令
人震攝的會計密技，相信我，我會試著長話短說。

The restatement was required because GEICO became a wholly-owned

subsidiary of Berkshire on January 2, 1996, whereas it was previously

classified as an investment. From an economic viewpoint - taking into

account major tax efficiencies and other benefits we gained - the value

of the 51% of GEICO we owned at year-end 1995 increased significantly

when we acquired the remaining 49% of the company two days later.

Accounting rules applicable to this type of "step acquisition," however,

required us to write down the value of our 51% at the time we moved to

100%. That writedown - which also, of course, reduced book value -

amounted to $478.4 million. As a result, we now carry our original 51%

of GEICO at a value that is both lower than its market value at the time

we purchased the remaining 49% of the company and lower than the value at

which we carry that 49% itself.

重編的原因是因為原先被列為被投資的GEICO保險在1996年1月2日正式成為
Berkshire 100%持有的子公司，從經濟觀點來看，考量可觀的租稅優惠與其他優點，
我們原先在1995年底持有的51%的GEICO股權，其價值在二天後我們取得剩餘49%
股權之後大幅增加，然而對於這種漸進式購併，一般公認會計原則卻要求我們必須在
取得100%股權時，將原因帳上51%的成本反向予以調減，使得帳面價值減少為4.784
億美元，這結果使得原來51%股權的帳面價值不但遠低於後來49%股權的取得市價，
也低於我們持有後來這49%股權的帳面價值。

There is an offset, however, to the reduction in book value I have

just described: Twice during 1996 we issued Berkshire shares at a

premium to book value, first in May when we sold the B shares for cash

and again in December when we used both A and B shares as part-payment

for FlightSafety. In total, the three non-operational items affecting

book value contributed less than one percentage point to our 31.8% per-

share gain last year.

不過除了剛剛提到淨值的減少之外，我們在1996年兩度溢價發行股份，第一次是在
五月辦理現金增資發行B級普通股，第二次是在十二月發行A級與B級普通股，以購
併國際飛安公司，總的來說，以上三項非營業項目對於去年本公司31.8%的每股淨值
成長率的淨影響還不到1%。

I dwell on this rise in per-share book value because it roughly

indicates our economic progress during the year. But, as Charlie Munger,

Berkshire's Vice Chairman, and I have repeatedly told you, what counts at

Berkshire is intrinsic value, not book value. The last time you got that

message from us was in the Owner's Manual, sent to you in June after we

issued the Class B shares. In that manual, we not only defined certain

key terms - such as intrinsic value - but also set forth our economic

principles.

今年我之所以一再強調每股淨值，原因在於它大約就等於我們在去年的實質進展，不
過就像是查理跟我一再提醒各位的，對Berkshire來說，真正重要的不是帳面價值，
而是實質價值，最近一次跟各位提到是在今年六月本公司發行B級普通股時，在送給
各位的股東手冊當中，我們不但對於一些名詞予以定義，諸如實質價值等，同時也揭
露了我們的企業宗旨。

For many years, we have listed these principles in the front of our

annual report, but in this report, on pages 58 to 67, we reproduce the

entire Owner's Manual. In this letter, we will occasionally refer to the

manual so that we can avoid repeating certain definitions and

explanations. For example, if you wish to brush up on "intrinsic value,"

see pages 64 and 65.

多年來，我們在年報前頭揭示這些宗旨，在這裡我們偶爾也會提到股東手冊，這樣我
們就可以不必再重複解釋一些常用的名詞，比如說如果你想要了解一下什麼叫實質價
值，建議大家可以再翻翻那本手冊的第64、65頁。

Last year, for the first time, we supplied you with a table that

Charlie and I believe will help anyone trying to estimate Berkshire's

intrinsic value. In the updated version of that table, which follows, we

trace two key indices of value. The first column lists our per-share

ownership of investments (including cash and equivalents) and the second

column shows our per-share earnings from Berkshire's operating businesses

before taxes and purchase-accounting adjustments but after all interest

and corporate overhead expenses. The operating-earnings column excludes

all dividends, interest and capital gains that we realized from the

investments presented in the first column. In effect, the two columns

show what Berkshire would have reported had it been broken into two parts.

從去年開始我們首度提供給各位一張查理跟我本人認為可以幫助大家估計Berkshire
公司實質價值的表格，在下面這張經過更新資料的表上，我們可以發現到兩項與價值
相關的重要指標，第一欄是我們平均每股持有的投資金額(包含現金與約當現金)，第
二欄則是每股在扣除利息與營業費用之後，來自本業的營業利益(但未扣除所得稅與購
買法會計調整數)，當然後者已經扣除了所有來自第一欄投資所貢獻的股利收入、利息
收入與資本利得，事實上，若是把Berkshire拆成兩部份的話，這兩欄數字將分別代
表這兩個部門的損益績效。

Pre-tax Earnings Per Share

Investments Excluding All Income from

Year Per Share Investments

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

1965................................$ 4 $ 4.08

1975................................ 159 (6.48)

1985................................ 2,443 18.86

1995................................ 22,088 258.20

1996................................ 28,500 421.39

Annual Growth Rate, 1965-95......... 33.4% 14.7%

One-Year Growth Rate, 1995-96 ...... 29.0% 63.2%

As the table tells you, our investments per share increased in 1996

by 29.0% and our non-investment earnings grew by 63.2%. Our goal is to

keep the numbers in both columns moving ahead at a reasonable (or, better

yet, unreasonable) pace.

從這張表大家可以看出，我們1996年的每股投資金額增加了29%，而非投資的本業
盈餘則增加了63.2%，我們的目標是讓這兩欄的數字以合理的速度穩定地成長，當然
若是偶爾能以不合理的速度暴增也不錯。

Our expectations, however, are tempered by two realities. First,

our past rates of growth cannot be matched nor even approached:

Berkshire's equity capital is now large - in fact, fewer than ten

businesses in America have capital larger - and an abundance of funds

tends to dampen returns. Second, whatever our rate of progress, it will

not be smooth: Year-to-year moves in the first column of the table above

will be influenced in a major way by fluctuations in securities markets;

the figures in the second column will be affected by wide swings in the

profitability of our catastrophe-reinsurance business.

不過這樣的預期可能會受到兩項現實的因素所干擾，首先，我們很難再達到或接近過
去那樣高的成長速度，原因在於Berkshire現在的資本規模實在是太龐大了，事實上
以我們現在的資本規模已經可以排在全美企業的前十名，過多的浮濫資金一定會影響
到整體的報酬率，第二點，不管成長的速度如何，鐵定很難以平穩的速度增加，第一
欄的數字將很容易隨著股市大環境上下波動，第二欄的數字則會跟著超級災害再保業
務獲利的不穩定變動而變化。

In the table, the donations made pursuant to our shareholder-

designated contributions program are charged against the second column,

though we view them as a shareholder benefit rather than as an expense.

All other corporate expenses are also charged against the second column.

These costs may be lower than those of any other large American

corporation: Our after-tax headquarters expense amounts to less than two

basis points (1/50th of 1%) measured against net worth. Even so, Charlie

used to think this expense percentage outrageously high, blaming it on my

use of Berkshire's corporate jet, The Indefensible. But Charlie has

recently experienced a "counter-revelation": With our purchase of

FlightSafety, whose major activity is the training of corporate pilots,

he now rhapsodizes at the mere mention of jets.

在這張表中，股東指定捐贈的款項被列為第二欄的減項，雖然我們將之視為股東的福
利而非支出，企業其他的支出同樣也被放在第二欄當作減項，這些開支遠低於其他美
國大企業的平均水準，每年我們企業總部的費用佔淨值的比率大約不到萬分之五，即
便如此查理還是認為這樣的比率高得離譜，我想主要要怪罪於我個人所使用的
Berkshire企業專機-無可辯解號，不過最近在我們買下國際飛安-這家專門負責訓練
飛行的公司之後，查理的態度有了180度的轉變，現在只要一提到飛機他就狂樂不
已。

Seriously, costs matter. For example, equity mutual funds incur

corporate expenses - largely payments to the funds' managers - that

average about 100 basis points, a levy likely to cut the returns their

investors earn by 10% or more over time. Charlie and I make no promises

about Berkshire's results. We do promise you, however, that virtually

all of the gains Berkshire makes will end up with shareholders. We are

here to make money with you, not off you.

認真的說，控制成本開支絕對重要，舉例來說很多共同基金每年的營業費用大多在
2%上下，這等於間接剝削了投資人將近10%的投資報酬，雖然查理跟我不敢向各位
保證我們的投資績效，但我們卻可以向各位打包票，Berkshire所賺的每一分錢一定
會分文不差地落入股東的口袋裡，我們是來幫各位賺錢，而不是幫各位花錢的。

The Relationship of Intrinsic Value to Market Price

實質價值與股票市價的關係

In last year's letter, with Berkshire shares selling at $36,000, I

told you: (1) Berkshire's gain in market value in recent years had

outstripped its gain in intrinsic value, even though the latter gain had

been highly satisfactory; (2) that kind of overperformance could not

continue indefinitely; (3) Charlie and I did not at that moment consider

Berkshire to be undervalued.

去年當Berkshire的股價約在36,000美元時，我曾向各位報告過(1)Berkshire這幾
年的股價表現遠超越實質價值，雖然後者的成長幅度也相當令人滿意，(2)這樣的情況
不可能無限制地持續下去，(3)查理跟我不認為當時Berkshire的價值有被低估的可能
性。

Since I set down those cautions, Berkshire's intrinsic value has

increased very significantly - aided in a major way by a stunning

performance at GEICO that I will tell you more about later - while the

market price of our shares has changed little. This, of course, means

that in 1996 Berkshire's stock underperformed the business.

Consequently, today's price/value relationship is both much different

from what it was a year ago and, as Charlie and I see it, more

appropriate.

自從我下了這些註解之後，Berkshire的實質價值又大幅地增加了，主要的原因在於
GEICO驚人的表現，(關於這點在後面還會向大家詳細報告)，而在此同時Berkshire
的股價卻維持不動，這代表在1996年Berkshire的實質價值表現優於股價，也就是
說，在今日Berkshire的價格/價值比比起一年以前而言，又有很大的不同，這同時
也是查理跟我認為比較合理的情況。

Over time, the aggregate gains made by Berkshire shareholders must

of necessity match the business gains of the company. When the stock

temporarily overperforms or underperforms the business, a limited number

of shareholders - either sellers or buyers - receive outsized benefits at

the expense of those they trade with. Generally, the sophisticated have

an edge over the innocents in this game.

就長期而言，Berkshire股東的整體利得一定會與企業經營的獲利一致，當公司股價
的表現暫時優於或劣於企業經營時，少部份的股東-不管是買進的人或是賣出的人，
將會因為做出這樣的舉動而從交易的對方身上佔到一些便宜，通常來說，都是老經驗
的一方在這場遊戲中佔上風。

Though our primary goal is to maximize the amount that our

shareholders, in total, reap from their ownership of Berkshire, we wish

also to minimize the benefits going to some shareholders at the expense

of others. These are goals we would have were we managing a family

partnership, and we believe they make equal sense for the manager of a

public company. In a partnership, fairness requires that partnership

interests be valued equitably when partners enter or exit; in a public

company, fairness prevails when market price and intrinsic value are in

sync. Obviously, they won't always meet that ideal, but a manager - by

his policies and communications - can do much to foster equity.

雖然我們主要的目標是希望讓Berkshire的股東經由持有公司所有權所獲得的利益極
大化，但在此同時我們也期望能讓一些股東從其他股東身上所佔到的便宜能夠極小
化，我想這是一般人在經營家族企業時相當重視的，不過我們相信這也適用在上市公
司的經營之上，對合夥企業來說，合夥權益在合夥人加入或退出時必須能夠以合理的
方式評量，才能維持公平，同樣地，對於上市公司來說，惟有讓公司的股價與實質價
值一致，公司股東的公平性才得以維持，當然很明顯，這樣理想的情況很難一直維持，
不過身為公司經理人可以透過其政策與溝通的方式來大力維持這樣的公平性。

Of course, the longer a shareholder holds his shares, the more

bearing Berkshire's business results will have on his financial

experience - and the less it will matter what premium or discount to

intrinsic value prevails when he buys and sells his stock. That's one

reason we hope to attract owners with long-term horizons. Overall, I

think we have succeeded in that pursuit. Berkshire probably ranks number

one among large American corporations in the percentage of its shares

held by owners with a long-term view.

當然股東持有股份的時間越長，那麼Berkshire本身的表現與他的投資經驗就會越接
近，而他買進或賣出股份時的價格相較於實質價值是折價或溢價的影響程度也就越
小，這也是為什麼我們希望能夠吸引具有長期投資意願的股東加入的原因之一，總的
來說，我認為就這點而言，我們算是做的相當成功，Berkshire大概是所有美國大企
業中擁有最多具長期投資觀點股東的公司。

Acquisitions of 1996

1996年的併購案

We made two acquisitions in 1996, both possessing exactly the

qualities we seek - excellent business economics and an outstanding

manager.

我們在1996年進行了兩件併購案，兩者皆擁有我們想要的特質-那就是絕佳的競爭
優勢與優秀的經理人。

The first acquisition was Kansas Bankers Surety (KBS), an insurance

company whose name describes its specialty. The company, which does

business in 22 states, has an extraordinary underwriting record, achieved

through the efforts of Don Towle, an extraordinary manager. Don has

developed first-hand relationships with hundreds of bankers and knows

every detail of his operation. He thinks of himself as running a company

that is "his," an attitude we treasure at Berkshire. Because of its

relatively small size, we placed KBS with Wesco, our 80%-owned

subsidiary, which has wanted to expand its insurance operations.

第一樁購併案是堪薩斯銀行家保險-從字面上可知，這是一家專門提供銀行業者保險
的保險公司，在全美22個州從事相關業務，擁有相當不錯的承保記錄，全仰賴Don
Towle這位傑出的經理人的努力，Don與上百位銀行家皆保持良好的關係，而且也了
解他所從事業務的每一項細節，那種感覺就好像是在經營"自己"的事業一樣，這種精
神是Berkshire最欣賞的，由於它的規模不太大，同時正好Berkshire 持有80%股
權的Wesco有意拓展保險事業，所以我們決定把它擺在Wesco之下成為其子公司。

You might be interested in the carefully-crafted and sophisticated

acquisition strategy that allowed Berkshire to nab this deal. Early in

1996 I was invited to the 40th birthday party of my nephew's wife, Jane

Rogers. My taste for social events being low, I immediately, and in my

standard, gracious way, began to invent reasons for skipping the event.

The party planners then countered brilliantly by offering me a seat next

to a man I always enjoy, Jane's dad, Roy Dinsdale - so I went.

大家或許會對我們這次精心設計的購併計畫感到興趣，在1996年初我受邀參加侄媳
婦Jane 40歲的生日宴會，由於我個人對於社交活動通常不太感興趣，所以很自然地
我按照慣例想出許多理由以婉拒這項邀請，不過對方顯然有備而來，特別將我安排在
另外一位我極有興趣打交道的對象-Roy Dinsdale也就是Jane的父親，此舉使得我
無法拒絕而欣然赴會。

The party took place on January 26. Though the music was loud - Why

must bands play as if they will be paid by the decibel? - I just managed

to hear Roy say he'd come from a directors meeting at Kansas Bankers

Surety, a company I'd always admired. I shouted back that he should let

me know if it ever became available for purchase.

生日宴會在1月26日舉行，雖然當時現場音樂震耳欲聾(我實在搞不懂為何樂隊總是
要彈得那麼大聲，難道他們的出場費是按照分貝數計算的嗎?)，不過我還是聽到Roy
說他剛參加完堪薩斯銀行家保險的董事會，這是我一直相當欣賞的一家公司，我大聲
地回應他說，如果這家公司有意出售的話，記得一定要通知我。

On February 12, I got the following letter from Roy: "Dear Warren:

Enclosed is the annual financial information on Kansas Bankers Surety.

This is the company that we talked about at Janie's party. If I can be

of any further help, please let me know." On February 13, I told Roy we

would pay $75 million for the company - and before long we had a deal.

I'm now scheming to get invited to Jane's next party.

2月12日我收到一封Roy的來函，上面寫到：親愛的華倫，隨函附送一份堪薩斯銀
行家保險的年度財務報表，就是上次在Janie的生日宴會上提到的那一家公司，如果
你有任何需要，請務必讓我知道。2月13日，我告訴Roy願意出7,500萬美元買下
這家公司，不久之後，整個交易就搞定，現在的我正盤算明年還要再參加Jane的生
日宴會。

Our other acquisition in 1996 - FlightSafety International, the

world's leader in the training of pilots - was far larger, at about $1.5

billion, but had an equally serendipitous origin. The heroes of this

story are first, Richard Sercer, a Tucson aviation consultant, and

second, his wife, Alma Murphy, an ophthalmology graduate of Harvard

Medical School, who in 1990 wore down her husband's reluctance and got

him to buy Berkshire stock. Since then, the two have attended all our

Annual Meetings, but I didn't get to know them personally.

1996年發生的另一件購併案，全世界最大的飛行員訓練公司-國際飛安公司，其規
模比起前一個案子要大得多了，總金額高達15億美元，不過這個案子發生的過程一
樣充滿戲劇性，本案的功臣首推Richard Sercer-他是塔克森市的飛行顧問，當然還
要歸功於他的妻子-Alma Murphy，哈佛醫學院眼科學系畢業的她好不容易在1990
年說服她的丈夫買進Berkshire的股份，而且在那之後每年都到奧瑪哈參加我們的股
東會，只是我一直沒有機會與他們認識。

Fortunately, Richard had also been a long-time shareholder of

FlightSafety, and it occurred to him last year that the two companies

would make a good fit. He knew our acquisition criteria, and he thought

that Al Ueltschi, FlightSafety's 79-year-old CEO, might want to make a

deal that would both give him a home for his company and a security in

payment that he would feel comfortable owning throughout his lifetime.

So in July, Richard wrote Bob Denham, CEO of Salomon Inc, suggesting that

he explore the possibility of a merger.

碰巧的是，Richard同時也是國際飛安公司長期投資的股東，剛好在去年他認為這兩
家公司應該有機會可以做一個結合，他相當了解Berkshire購併公司的標準，同時也
知道國際飛安79歲的總裁-Al Ueltschi想要為自己的公司找一個理想的歸宿，以為
自己的股權找到一層保障，所以就在七月份，Richard寫信給所羅門公司的總裁-Bob
Denham請他研究這項合併交易的可能性。

Bob took it from there, and on September 18, Al and I met in New

York. I had long been familiar with FlightSafety's business, and in

about 60 seconds I knew that Al was exactly our kind of manager. A month

later, we had a contract. Because Charlie and I wished to minimize the

issuance of Berkshire shares, the transaction we structured gave

FlightSafety shareholders a choice of cash or stock but carried terms

that encouraged those who were tax-indifferent to take cash. This nudge

led to about 51% of FlightSafety's shares being exchanged for cash, 41%

for Berkshire A and 8% for Berkshire B.

Bob於是接手進行這個案子，在9月18日我和Al正式在紐約碰面，我對國際飛安
這家公司的經營狀況本來就相當熟悉，而在60秒內我馬上就知道Al正是符合我們類
型的經理人，一個月後，合約正式敲定，由於查理跟我希望能夠盡量避免再發行
Berkshire的新股份，所以在這項交易中，雖然我們提供國際飛安原股東換取股票或
現金兩種選擇，但是交易條件等於間接鼓勵這些稅負沒有太大差異的股東選擇領取現
金，結果總計最後有51%的股份領取現金，41%換得Berkshire A級普通股，另外
8%換得Berkshire B級普通股。

Al has had a lifelong love affair with aviation and actually piloted

Charles Lindbergh. After a barnstorming career in the 1930s, he began

working for Juan Trippe, Pan Am's legendary chief. In 1951, while still

at Pan Am, Al founded FlightSafety, subsequently building it into a

simulator manufacturer and a worldwide trainer of pilots (single-engine,

helicopter, jet and marine). The company operates in 41 locations,

outfitted with 175 simulators of planes ranging from the very small, such

as Cessna 210s, to Boeing 747s. Simulators are not cheap - they can cost

as much as $19 million - so this business, unlike many of our

operations, is capital intensive. About half of the company's revenues

are derived from the training of corporate pilots, with most of the

balance coming from airlines and the military.

Al 一生熱愛飛行，曾經駕駛過查理林登號，在經過1930年代轟轟烈烈的飛行事業
之後，他開始擔任汎美航空的機長，之後並在1951年創立國際飛安公司，將這家公
司塑造成飛行模擬器製造與飛行員訓練的世界級領導公司(單引擎、直升機、客機與水
上飛機)，營業據點遍佈41個地方，擁有175座的飛行模擬器，大至波音747客機，
小到Cessna 210型小飛機，大家要知道飛行模擬器的造價可不便宜，有的要價甚至
高達1,900萬美金，所以這一行不像我們原來擁有的其他事業，算是相當資本密集
的，該公司大約有一半的營業收入來自於訓練飛行員的收入，其餘則來自於航空公司
與軍事單位。

Al may be 79, but he looks and acts about 55. He will run

operations just as he has in the past: We never fool with success. I

have told him that though we don't believe in splitting Berkshire stock,

we will split his age 2-for-1 when he hits 100.

Al 今年雖然已經79歲，不過外表舉止看起來像55歲，他將一如往常繼續經營這家
公司，我們從來不會把成功搞混，我甚至跟他開玩笑說，雖然我們從沒想過將
Berkshire的股份予以分割，不過等他滿100歲時，我們倒是可以考慮把他的年紀一
分為二。

An observer might conclude from our hiring practices that Charlie

and I were traumatized early in life by an EEOC bulletin on age

discrimination. The real explanation, however, is self-interest: It's

difficult to teach a new dog old tricks. The many Berkshire managers who

are past 70 hit home runs today at the same pace that long ago gave them

reputations as young slugging sensations. Therefore, to get a job with

us, just employ the tactic of the 76-year-old who persuaded a dazzling

beauty of 25 to marry him. "How did you ever get her to accept?" asked

his envious contemporaries. The comeback: "I told her I was 86."

有人可能會懷疑我們現在雇用人的政策，可能是緣於早期年齡歧視政策所受到的創
傷，其實真正的原因乃是出於自私的觀點，因為我們認為實在是很難教新狗老把戲！
在Berkshire，許多經理人雖然已經年過70，但是他們還是像年輕時一樣活躍，頻頻
擊出全壘打，所以如果各位有意到本公司謀得一職，請記得運用一位高齡76歲老翁
如何追到25歲年輕辣妹的技巧，當同年齡的同伴很欽羨地問他：你到底是如何說服
對方同意的呢?? 他回答到：很簡單，我告訴她我今年86歲!

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

And now we pause for our usual commercial: If you own a large

business with good economic characteristics and wish to become associated

with an exceptional collection of businesses having similar

characteristics, Berkshire may well be the home you seek. Our

requirements are set forth on page 21. If your company meets them - and

if I fail to make the next birthday party you attend - give me a call.

接下來休息一下，順便做點廣告，如果你擁有具極佳競爭優勢的大企業同時想要與擁
有同樣特質的企業群為伍的話，Berkshire可以提供你絕佳的歸宿，我們的要求條件
詳如附件，若是你的公司符合這些條件，而我又沒能來得及參加你的生日派對，記得
打電話給我。

Insurance Operations - Overview

保險事業盈餘-總檢討

Our insurance business was terrific in 1996. In both primary

insurance, where GEICO is our main unit, and in our "super-cat"

reinsurance business, results were outstanding.

在1996年，我們保險事業的營運大放異彩，不管是初級保險-其中以GEICO車險為
主，或者是霹靂貓再保業務的表現都很傑出。

As we've explained in past reports, what counts in our insurance

business is, first, the amount of "float" we generate and, second, its

cost to us. These are matters that are important for you to understand

because float is a major component of Berkshire's intrinsic value that is

not reflected in book value.

就像是在過去年報中一再跟各位解釋的，對於我們的保險事業來說，真正重要的，第
一是我們因此取得的保險浮存金，第二就是取得它的成本，這兩點相當的重要，大家
必須了解浮存金雖然不會反應在公司淨值之上，但卻是Berkshire實質價值構成的關
鍵因素之一。

To begin with, float is money we hold but don't own. In an

insurance operation, float arises because premiums are received before

losses are paid. Secondly, the premiums that an insurer takes in

typically do not cover the losses and expenses it eventually must pay.

That leaves it running an "underwriting loss," which is the cost of

float. An insurance business has value if its cost of float over time is

less than the cost the company would otherwise incur to obtain funds.

But the business is an albatross if the cost of its float is higher than

market rates for money.

更進一步說，浮存金是一項我們持有但不屬於我們的資金，在保險公司的營運中，浮
存金的產生原因在於保險公司在真正支付損失理賠之前，一般會先向保戶收取保費，
而通常保險業者收取的保費不足以因應最後支付出去的相關損失與費用，於是保險公
司便會發生承保損失，這就是浮存金的成本，而當浮存金成本長期而言低於從其它管
道取得資金的成本時，保險公司就有存在的價值，不過保險事業取得浮存金的成本若
遠高於資金市場利率時，它就像是一隻在陸地上笨重的信天翁。

As the numbers in the following table show, Berkshire's insurance

business has been a huge winner. For the table, we have calculated our

float - which we generate in large amounts relative to our premium

volume - by adding loss reserves, loss adjustment reserves, funds held

under reinsurance assumed and unearned premium reserves, and then

subtracting agents' balances, prepaid acquisition costs, prepaid taxes

and deferred charges applicable to assumed reinsurance. Our cost of

float is determined by our underwriting loss or profit. In those years

when we have had an underwriting profit, such as the last four, our cost

of float has been negative. In effect, we have been paid for holding

money.

不過如同下表中的數字所顯示的，Berkshire的保險事業可說是大獲全勝，表中的浮
存金，係將所有的損失準備、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，相對於我們的保費收入總額，我們的浮存金
部位算是相當大的，至於浮存金的成本則決定於所發生的承保損失或利益而定，在某
些年度，就像是最近四年，由於我們有承保利益，所以換句話說，我們的資金成本甚
至是負的，光是持有這些資金我們就已經開始賺錢了。

(1) (2) Yearend Yield

Underwriting Approximat on Long-Term

Loss Average Float Cost of Funds Govt. Bonds

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

(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.......... 119.59 1,895.0 6.31% 7.40%

1992.......... 108.96 2,290.4 4.76% 7.39%

1993.......... profit 2,624.7 less than zero 6.35%

1994.......... profit 3,056.6 less than zero 7.88%

1995.......... profit 3,607.2 less than zero 5.95%

1996.......... profit 6,702.0 less than zero 6.64%

Since 1967, when we entered the insurance business, our float has

grown at an annual compounded rate of 22.3%. In more years than not, our

cost of funds has been less than nothing. This access to "free" money has

boosted Berkshire's performance in a major way. Moreover, our acquisition

of GEICO materially increases the probability that we can continue to

obtain "free" funds in increasing amounts.

自從1967年我們進軍保險業以來，我們的浮存金每年以22.3%複合成長率增加，大
部分的年度，我們的資金成本都在零以下，受惠於這些免費的資金，大大地幫助
Berkshire的績效提昇。更甚者，在完成對GEICO的併購之後，我們取得免費資金的
成長速度又加快了許多。

Super-Cat Insurance

霹靂貓保險業務

As in the past three years, we once again stress that the good results

we are reporting for Berkshire stem in part from our super-cat business

having a lucky year. In this operation, we sell policies that insurance

and reinsurance companies buy to protect themselves from the effects of

mega-catastrophes. Since truly major catastrophes are rare occurrences,

our super-cat business can be expected to show large profits in most years

- and to record a huge loss occasionally. In other words, the

attractiveness of our super-cat business will take a great many years to

measure. What you must understand, however, is that a truly terrible year

in the super-cat business is not a possibility - it's a certainty. The

only question is when it will come.

與過去三年一樣，我們再次強調今年Berkshire保險事業之所以能夠有這麼好的成
績，部份的原因要歸功於霹靂貓業務又渡過幸運的一年，從事這類業務，我們出售保
單給保險公司與再保公司以分散其面臨超大型意外災害所可能承擔的風險，由於真正
重大的災害並不常發生，所以我們的霹靂貓業務有可能在連續幾年賺大錢後，才突然
發生重大的損失，換句話說，我們這項霹靂貓業務到底有多吸引人可能要花上好幾年
才有辦法看得清，不過大家必須明瞭，所謂的重大損失的年頭不是可能會發生，而是
肯定會發生，唯一的問題是它什麼時候會降臨。

I emphasize this lugubrious point because I would not want you to

panic and sell your Berkshire stock upon hearing that some large

catastrophe had cost us a significant amount. If you would tend to react

that way, you should not own Berkshire shares now, just as you should

entirely avoid owning stocks if a crashing market would lead you to panic

and sell. Selling fine businesses on "scary" news is usually a bad

decision. (Robert Woodruff, the business genius who built Coca-Cola over

many decades and who owned a huge position in the company, was once
asked when it might be a good time to sell Coke stock. Woodruff had a
simple answer: "I don't know. I've never sold any.")

我之所以會把醜話說在前頭，是因為我不希望大家那天突然聽到Berkshire因為某某
大型意外災害須理賠一大筆錢時，恐慌地拋售手中的持股，而如果屆時你真的會有這
種反應，那麼你根本就不應該擁有本公司的股份，就像是如果你是那種碰到股市崩
盤，會恐慌性的拋售手中股票的人，我建議你最好不要投資股票，聽到壞消息而把手
中的好股票賣掉通常不會是一個明智的決定，(數十年前創辦可口可樂的天才企業家
-Robert Woodruff曾經被問到，什麼情況下是出售可口可樂股票的好時機，
Woodruff簡短的回答到，我不知道，我從來就沒有賣過!)。

In our super-cat operation, our customers are insurers that are

exposed to major earnings volatility and that wish to reduce it. The

product we sell - for what we hope is an appropriate price - is our

willingness to shift that volatility to our own books. Gyrations in

Berkshire's earnings don't bother us in the least: Charlie and I would

much rather earn a lumpy 15% over time than a smooth 12%. (After all, our

earnings swing wildly on a daily and weekly basis - why should we demand

that smoothness accompany each orbit that the earth makes of the sun?)

We are most comfortable with that thinking, however, when we have

shareholder/partners who can also accept volatility, and that's why we

regularly repeat our cautions.

談到霹靂貓保險業務，我們的客戶主要是一些想要降低本身必須承擔盈餘變動劇烈風
險的保險公司，而我們販賣的產品-當然一定要以合理的價格，將這些盈餘變動的風
險轉移到本公司的帳上，因為我們對於Berkshire公司盈餘劇烈的變動一點都不會介
意，查理跟我寧可接受上下變動但平均可達15%的結果，也不要平穩的12%，(就像
是我們知道公司的盈餘每天、每週都會變動，那麼我們又何必強求公司的盈餘變化一
定要跟地球環繞太陽軌道的時間一致呢?) 我想如果Berkshire的股東合夥人也能有
這樣的看法，那麼我們執行業務時便能更得心應手，而這也是為什麼我們要一再提出
相同警告的原因。

We took on some major super-cat exposures during 1996. At mid-year
we wrote a contract with Allstate that covers Florida hurricanes, and though

there are no definitive records that would allow us to prove this point, we

believe that to have then been the largest single catastrophe risk ever

assumed by one company for its own account. Later in the year, however, we

wrote a policy for the California Earthquake Authority that goes into

effect on April 1, 1997, and that exposes us to a loss more than twice that

possible under the Florida contract. Again we retained all the risk for

our own account. Large as these coverages are, Berkshire's after-tax

"worst-case" loss from a true mega-catastrophe is probably no more than

$600 million, which is less than 3% of our book value and 1.5% of our market

value. To gain some perspective on this exposure, look at the table on

page 2 and note the much greater volatility that security markets have

delivered us.

我們在1996年陸續接了好幾件大業務，在年中我們與全美保險簽約承保佛羅里達颶
風險，雖然沒有確切的資料可供佐證，但我們相信這應該是單一公司獨力承受單一風
險的最高記錄，接著到年底，我們又與加州地震局簽約承保比佛羅里達颶風高出一倍
的理賠上限，保單預計從1997年4月1日開始生效，再一次我們獨立承攬所有的風
險，雖然承保的金額相當龐大，但是即使在最壞的狀況下，任何一件大型災害的稅後
損失也不會超過六億美元，大約不到Berkshire淨值的3%或市值的1.5%，大家要了
解這類風險的影響性，比起年報第二頁所示的股票市場變動對我們的影響性來說，前
者可謂是小巫見大巫。

In the super-cat business, we have three major competitive advantages.

First, the parties buying reinsurance from us know that we both can and

will pay under the most adverse of circumstances. Were a truly cataclysmic

disaster to occur, it is not impossible that a financial panic would

quickly follow. If that happened, there could well be respected reinsurers

that would have difficulty paying at just the moment that their clients

faced extraordinary needs. Indeed, one reason we never "lay off" part of

the risks we insure is that we have reservations about our ability to

collect from others when disaster strikes. When it's Berkshire promising,

insureds know with certainty that they can collect promptly.

在霹靂貓保險業務，我們主要有三項競爭優勢，首先向我們投保再保險的客戶都知道
我們有能力，也會在最糟糕的情況下履約付款，因為萬一真的發生什麼樣的大災難，
很難保證金融恐慌就不會接踵而至，屆時在其客戶最需要援助時，可能連一些原本享
有盛譽的再保公司都拿不出錢來，而事實上我們之所以從來不將風險再轉嫁出去的一
個原因也是因為我們對於災難發生時，其他保險公司能否順利支付賠款的能力有所保
留，反之只要是Berkshire做出的保證，所有的保戶都可以百分之百確定一定可以立
即得到理賠。

Our second advantage - somewhat related - is subtle but important.

After a mega-catastrophe, insurers might well find it difficult to obtain

reinsurance even though their need for coverage would then be particularly

great. At such a time, Berkshire would without question have very

substantial capacity available - but it will naturally be our long-standing

clients that have first call on it. That business reality has made major

insurers and reinsurers throughout the world realize the desirability of

doing business with us. Indeed, we are currently getting sizable "stand-

by" fees from reinsurers that are simply nailing down their ability to get

coverage from us should the market tighten.

我們的第二項優勢，跟第一項有點關聯，雖然不顯著但卻相當重要，當一件大災害發
生後，保險公司最迫切需要重新辦理投保時，可能會發現很難再找到新保單，在這個
時候，Berkshire保證絕對可以提供任何服務，當然我們會優先受理原來與我們有長
期往來的客戶，這個經驗已經使得全世界的保險公司與再保公司了解與我們維持往來
的必要性，事實上，我們現在正從許多再保公司那裡收取預備準備費，以防萬一市場
情況緊繃時，他們可以確保取得再保的優先機會。

Our final competitive advantage is that we can provide dollar

coverages of a size neither matched nor approached elsewhere in the

industry. Insurers looking for huge covers know that a single call to

Berkshire will produce a firm and immediate offering.

我們擁有的最後一項優勢是我們能夠提供別處得不到單一最高的投保上限，保險業者
都知道只要打一通電話到Berkshire，就可以立即得到確定滿意的答覆。

A few facts about our exposure to California earthquakes - our largest

risk - seem in order. The Northridge quake of 1994 laid homeowners' losses

on insurers that greatly exceeded what computer models had told them to

expect. Yet the intensity of that quake was mild compared to the "worst-

case" possibility for California. Understandably, insurers became - ahem -

shaken and started contemplating a retreat from writing earthquake coverage

into their homeowners' policies.

有關加州大地震方面有幾點需要在這裡做說明，因為這是我們最大的風險部位所在，
1994年發生的北嶺大地震使得保險業的住宅保險損失遠超過電腦所估算的預期範
圍，不過這次地震的震度比起預估可能的最壞情況，最還算是相對輕微的，所以可想
而知某些保險業者肯定都嚇壞了，因此開始考慮將地震險從他們的住宅險保單條款中
撤掉。

In a thoughtful response, Chuck Quackenbush, California's insurance

commissioner, designed a new residential earthquake policy to be written by

a state-sponsored insurer, The California Earthquake Authority. This

entity, which went into operation on December 1, 1996, needed large layers

of reinsurance - and that's where we came in. Berkshire's layer of

approximately $1 billion will be called upon if the Authority's aggregate

losses in the period ending March 31, 2001 exceed about $5 billion. (The

press originally reported larger figures, but these would have applied only

if all California insurers had entered into the arrangement; instead only

72% signed up.)

深富遠見的加州保險委員會委員Chuch Quackenbush立即規劃出一張由加州地震
局背後支持新的住宅地震保單，然而這項預計從1996年12月1日開始正式生效的
措施極需要再保險的庇護，這時候就輪到我們上場了，Berkshire總共提供10億美
元的再保險防護，當地震局在2001年3月31日之前因地震發生的損失超過50億
美元時，(媒體原先報導的數字比這更高，不過那是在所有保險業者都一同加入時的情
況，總計最後只有72%的業者參與簽約)。

So what are the true odds of our having to make a payout during the

policy's term? We don't know - nor do we think computer models will help

us, since we believe the precision they project is a chimera. In fact,

such models can lull decision-makers into a false sense of security and

thereby increase their chances of making a really huge mistake. We've

already seen such debacles in both insurance and investments. Witness

"portfolio insurance," whose destructive effects in the 1987 market crash

led one wag to observe that it was the computers that should have been

jumping out of windows.

大家一定會問在保單有效期間我們最後真正必須支付理賠的機率到底有多大?? 老實
說我們實在是不知道，而我們也不認為用電腦運算出來的程式可以幫我們什麼忙，基
本上電腦做出的預測根本就是垃圾，它們反而會讓做決策的人誤以為得到某種確定的
假象，從而使得他們犯下大錯的機會大增，過去不管是在保險或投資業者，這種離譜
的情況屢見不鮮，看看投資組合保險在1987年股市大崩盤時所造成的慘況，有人開
玩笑說，當時應該要跳樓是電腦而不是那些被它所愚弄的人。

Even if perfection in assessing risks is unattainable, insurers can

underwrite sensibly. After all, you need not know a man's precise age to

know that he is old enough to vote nor know his exact weight to recognize

his need to diet. In insurance, it is essential to remember that virtually

all surprises are unpleasant, and with that in mind we try to price our

super-cat exposures so that about 90% of total premiums end up being

eventually paid out in losses and expenses. Over time, we will find out

how smart our pricing has been, but that will not be quickly. The super-

cat business is just like the investment business in that it often takes a

long time to find out whether you knew what you were doing.

雖然保險業者無法準確地評估風險到底有多大，不過我們卻還是可以合理的接下保
單，就像是你並不一定要真的知道一個人的實際年齡，才能判斷他是否可以去投票或
是一定要知道一個人幾公斤重才認為他該不該減肥，同樣的，從事保險這一行，大家
必須謹記的是，基本上所有的意外都不會讓人感到愉快，所以在接下保單時，我們心
裡早有預備，準備把90%的保費收入花在損失理賠與相關費用之上，慢慢的一段時間
下來，我們就會發現，這樣的訂價是否合理，這絕對需要時間來證明，霹靂貓保險這
一行就像是投資事業一樣，絕對需要一段很長的時間，你才能確定知道自己到底在幹
什麼。

What I can state with certainty, however, is that we have the best

person in the world to run our super-cat business: Ajit Jain, whose value

to Berkshire is simply enormous. In the reinsurance field, disastrous

propositions abound. I know that because I personally embraced all too

many of these in the 1970s and also because GEICO has a large runoff

portfolio made up of foolish contracts written in the early-1980s, able

though its then-management was. Ajit, I can assure you, won't make

mistakes of this type.

不過有一點我絕對可以向各位保證的是，我們擁有全世界最優秀的霹靂貓保險保險專
家，那就是Ajit Jain，他在Berkshire的價值大到難以想像，在再保險這一行，恐怖
的災難時常發生，我很清楚的原因是我個人在1970年代就抱了不少個地雷，而
GEICO在1980年代初期，即使當時擁有最能幹的經理人，也同樣簽了一堆愚蠢的保
險合約，不過提到Ajit，我可以向各位保證，絕對不會再犯同樣的錯誤。

I have mentioned that a mega-catastrophe might cause a catastrophe in

the financial markets, a possibility that is unlikely but not far-fetched.

Were the catastrophe a quake in California of sufficient magnitude to tap

our coverage, we would almost certainly be damaged in other ways as well.

For example, See's, Wells Fargo and Freddie Mac could be hit hard. All in

all, though, we can handle this aggregation of exposures.

另一方面我也說過，自然災害的發生同樣也會間接導致金融風暴的發生，這樣的可能
性不大，但也不是不可能，要是加州真的發生規模大到我們理賠下限的大地震，我們
旗下其他事業也可能會受到嚴重的打擊，比如說喜斯糖果、富國銀行或Freddie Mac
等，不過總的來說，我們應該可以妥善處理發生的狀況。

In this respect, as in others, we try to "reverse engineer" our future

at Berkshire, bearing in mind Charlie's dictum: "All I want to know is

where I'm going to die so I'll never go there." (Inverting really works:

Try singing country western songs backwards and you will quickly regain

your house, your car and your wife.) If we can't tolerate a possible

consequence, remote though it may be, we steer clear of planting its seeds.

That is why we don't borrow big amounts and why we make sure that our

super-cat business losses, large though the maximums may sound, will not

put a major dent in Berkshire's intrinsic value.

就這方面而言，我們試著事先規劃Berkshire的未來，時時謹記查理常說的一句格言，
「希望能夠知道自己最後會死在哪裡，然後打死都不去那裡！」(事先回想真的有效，
大家可以試著多唱唱以前流行的鄉村歌曲，很快的你就會發現重新找回你的房子、車
子跟老婆)，如果我們沒辦法承擔可能的後果，不管其可能性有多小，那麼我們就必須
避免播下罪惡的種子，這也是為什麼我們不大幅舉債的原因，同時雖然霹靂貓損失理
賠的上限金額看起來很大，但對Berkshire本身價值的影響卻極其有限。

Insurance - GEICO and Other Primary Operations

保險事業營運-GEICO以及其他主要保險

When we moved to total ownership of GEICO early last year, our

expectations were high - and they are all being exceeded. That is true

from both a business and personal perspective: GEICO's operating chief,

Tony Nicely, is a superb business manager and a delight to work with.

Under almost any conditions, GEICO would be an exceptionally valuable

asset. With Tony at the helm, it is reaching levels of performance that

the organization would only a few years ago have thought impossible.

去年當我們完全取得GEICO的所有權之後，我們曾對它抱以深切的期望，如今這些
期望不但全部實現，甚至是有過之而無不及，不論是從企業或個人的觀點來看皆是如
此，GEICO的領導者Tony Nicely不但是一個傑出的經理人同時也是令人感到愉快
的工作夥伴，不論在任何的情況下，GEICO永遠都是我們價值不菲的珍貴資產，有
Tony負責掌舵，GEICO甚至邁入幾年前根本就想像不到的營運高峰。

There's nothing esoteric about GEICO's success: The company's

competitive strength flows directly from its position as a low-cost

operator. Low costs permit low prices, and low prices attract and retain

good policyholders. The final segment of a virtuous circle is drawn when

policyholders recommend us to their friends. GEICO gets more than one

million referrals annually and these produce more than half of our new

business, an advantage that gives us enormous savings in acquisition

expenses - and that makes our costs still lower.

GEICO的成功沒有任何深奧的道理，該公司的競爭優勢完全拜其超低成本的經營模式
所賜，低成本代表低售價，低售價自然能夠吸引並留住優良的保險客戶，而整個營業
流程在滿意的客戶向他們的朋友推薦GEICO時劃下完美的句點，靠著客戶的推薦，
GEICO每年至少因此增加100萬張保單，佔新接業務量的半數以上，也使得我們新
接業務成本大幅下降，從而又進一步降低我們的成本。

This formula worked in spades for GEICO in 1996: Its voluntary auto

policy count grew 10%. During the previous 20 years, the company's best-

ever growth for a year had been 8%, a rate achieved only once. Better yet,

the growth in voluntary policies accelerated during the year, led by major

gains in the nonstandard market, which has been an underdeveloped area at

GEICO. I focus here on voluntary policies because the involuntary business

we get from assigned risk pools and the like is unprofitable. Growth in

that sector is most unwelcome.

這種模式在1996年大放異彩，自動上門的保險量成長了10%，過去二十年來，該公
司最高也不過是在有一年達到8%而已，更好的是，這些自願保單的增加主要源自於
非制式的保單市場，這個市場對GEICO來說算是亟待開發的一塊，我之所以一再強
調自願保單的原因在於，從別處分配到的集體性非自願的保單根本就沒什麼利潤，那
方面的成長就可有可無。

GEICO's growth would mean nothing if it did not produce reasonable

underwriting profits. Here, too, the news is good: Last year we hit our

underwriting targets and then some. Our goal, however, is not to widen our

profit margin but rather to enlarge the price advantage we offer customers.

Given that strategy, we believe that 1997's growth will easily top that of

last year.

如果不能產生合理的承保獲利，GEICO保費收入的成長就沒有任何意義，不過再一次
我們得到的答案是正面的肯定，去年我們順利達到原先設定的承保目標，甚至還超
越，不過我們真正的目標不是要擴大承保的利差，而是將利潤透過價格的調整回饋給
客戶，在這樣的策略之下，我們相信1997年的成長一定還會超越1996年的表現。

We expect new competitors to enter the direct-response market, and

some of our existing competitors are likely to expand geographically.

Nonetheless, the economies of scale we enjoy should allow us to maintain or

even widen the protective moat surrounding our economic castle. We do best

on costs in geographical areas in which we enjoy high market penetration.

As our policy count grows, concurrently delivering gains in penetration, we

expect to drive costs materially lower. GEICO's sustainable cost advantage

is what attracted me to the company way back in 1951, when the entire

business was valued at $7 million. It is also why I felt Berkshire should

pay $2.3 billion last year for the 49% of the company that we didn't then

own.

同時我們也預期會有新的競爭者加入直效行銷的市場，而現有的一些競爭同業也有可
能會擴大他們的營業區域，不過不管怎樣，我們目前所建立的規模經濟，絕對可以確
保甚至是擴大我們現在佔有的經濟堡壘，我們在擁有最高市佔率的地區盡量降低成
本，預期還會將成本進一步地降低，GEICO永續性的成本優勢是當初在1951年吸引
我投資該公司的主要原因，當時整家公司的市值不過只有700萬美元，而那也是為
什麼我在去年願意花23億美元買下另外一半不屬於Berkshire的股權的原因。

Maximizing the results of a wonderful business requires management and

focus. Lucky for us, we have in Tony a superb manager whose business focus

never wavers. Wanting also to get the entire GEICO organization

concentrating as he does, we needed a compensation plan that was itself

sharply focused - and immediately after our purchase, we put one in.

想要讓一家好公司的表現發揮到極致，必須依賴優秀的管理人員與明確的目標方向，
值得慶幸的是我們已經有像Tony這樣優秀的專業經理人以及絕對不會動搖的目標，
而為了確保GEICO所有的組織成員都能像Tony一樣專注一致，我們需要一套能夠
搭配的薪資酬勞計畫，所以在整個購併案完成之後，我們立刻落實執行。

Today, the bonuses received by dozens of top executives, starting with

Tony, are based upon only two key variables: (1) growth in voluntary auto

policies and (2) underwriting profitability on "seasoned" auto business

(meaning policies that have been on the books for more than one year). In

addition, we use the same yardsticks to calculate the annual contribution

to the company's profit-sharing plan. Everyone at GEICO knows what counts.

現在，以Tony為首的幾個主要高階經理人所領取的薪資獎勵主要就看兩個指數︰(1)
自願性保單的成長，以及(2)常態性保單承保的獲利(指留在公司超過一年的保單)，此
外，我們也將同樣的標準運用於公司每年員工盈餘分配的計畫，所以基本上在GEICO
每個人都知道真正重要的是什麼。

The GEICO plan exemplifies Berkshire's incentive compensation

principles: Goals should be (1) tailored to the economics of the specific

operating business; (2) simple in character so that the degree to which

they are being realized can be easily measured; and (3) directly related to

the daily activities of plan participants. As a corollary, we shun

"lottery ticket" arrangements, such as options on Berkshire shares, whose

ultimate value - which could range from zero to huge - is totally out of

the control of the person whose behavior we would like to affect. In our

view, a system that produces quixotic payoffs will not only be wasteful for

owners but may actually discourage the focused behavior we value in

managers.

GEICO這項計畫充分說明的Berkshire薪資獎勵的原則，那就是必須要能夠達到以下
目標(1)適用於個別公司經營狀況(2)簡單明瞭的規則，如此可以很清楚的加以衡量(3)
與每個參與的員工直接相關；所以很自然的，我們避免給予員工不勞而獲的樂透彩，
比如說Berkshire的認股權，其最終的價值可能由極少到極大，但這卻不是那些我們
想要影響其行為的人員所能夠直接控制影響的，在我們的觀念中，不合理的薪資獎勵
辦法，不但是浪費股東的錢，同時也會讓旗下的經理人分心而產生不當的行為。

Every quarter, all 9,000 GEICO associates can see the results that

determine our profit-sharing plan contribution. In 1996, they enjoyed the

experience because the plan literally went off the chart that had been

constructed at the start of the year. Even I knew the answer to that

problem: Enlarge the chart. Ultimately, the results called for a record

contribution of 16.9% ($40 million), compared to a five-year average of

less than 10% for the comparable plans previously in effect. Furthermore,

at Berkshire, we never greet good work by raising the bar. If GEICO's

performance continues to improve, we will happily keep on making larger

charts.

每一季，GEICO公司總共9,000名的員工都可以看到根據盈餘分配計畫所計算出來
的結果，1996年他們確實享受到這項成果，因為根據這項計畫所計算出來的數字早
已打破當初規劃時的最高上限，連我也知道要如何解決這個問題，那就是把上限再擴
大，到最後，員工總共分配到年度獲利的16.9%，金額將近有4,000萬美元，遠高
於過去五年平均不到10%的比率，同時在Berkshire對於員工辛勤工作的表現，我們
絕對不會回以更高的門檻，如果GEICO的員工繼續保持如此優異的表現，我們還會
繼續提高獎勵的上限。

Lou Simpson continues to manage GEICO's money in an outstanding

manner: Last year, the equities in his portfolio outdid the S&P 500 by 6.2

percentage points. In Lou's part of GEICO's operation, we again tie

compensation to performance - but to investment performance over a four-

year period, not to underwriting results nor to the performance of GEICO as

a whole. We think it foolish for an insurance company to pay bonuses that

are tied to overall corporate results when great work on one side of the

business - underwriting or investment - could conceivably be completely

neutralized by bad work on the other. If you bat .350 at Berkshire, you

can be sure you will get paid commensurately even if the rest of the team

bats .200. In Lou and Tony, however, we are lucky to have Hall-of-Famers

in both key positions.

負責管理GEICO資金的Lou Simpson同樣繼續其優異的表現，去年他的投資組合超
越S&P 500指數整整6.2個百分點，關於Lou在GEICO的表現，再一次我們將其
獎勵計畫跟其投資績效綁在一起，不看GEICO的承保績效或整體的成績，而是以過
去四年平均的投資績效為準，對於有些保險公司不分承保部門或投資部門，完全不顧
一方優異的表現可能被另一方糟糕的表現所抵消掉的情況，而將其薪資獎勵計畫完全
綁在一起，一視同仁的做法感到愚不可及，在Berkshire如果你的打擊率高達三成五，
我可以向你保證絕對不會虧待你，即使其他同隊的球員平均打擊率只有二成而已，不
過很慶幸在GEICO，不論是在保險或投資部門，我們都擁有像Lou與Tony這類足
以列入名人堂的優秀球員。

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

Though they are, of course, smaller than GEICO, our other primary

insurance operations turned in equally stunning results last year.

National Indemnity's traditional business had a combined ratio of 74.2 and,

as usual, developed a large amount of float compared to premium volume.

Over the last three years, this segment of our business, run by Don

Wurster, has had an average combined ratio of 83.0. Our homestate

operation, managed by Rod Eldred, recorded a combined ratio of 87.1 even

though it absorbed the expenses of expanding to new states. Rod's three-

year combined ratio is an amazing 83.2. Berkshire's workers' compensation

business, run out of California by Brad Kinstler, has now moved into six

other states and, despite the costs of that expansion, again achieved an

excellent underwriting profit. Finally, John Kizer, at Central States

Indemnity, set new records for premium volume while generating good

earnings from underwriting. In aggregate, our smaller insurance operations

(now including Kansas Bankers Surety) have an underwriting record virtually

unmatched in the industry. Don, Rod, Brad and John have all created

significant value for Berkshire, and we believe there is more to come.

雖然比起GEICO，我們其他主要保險事業規模要小得多，但他們在去年同樣繳出驚人
的成績單，國家賠償公司的傳統業務綜合比率只有74.2，同時以其保費收入來看，
還貢獻了大量的浮存金，過去三年以來，這個由Don Wurster負責的部門平均的綜
合比率只有83.0；另外由Rod Eldred負責的Homestate業務也有相當幅度的成長，
去年雖然必須負擔開拓新州業務的費用，但綜合比率仍只有87.1，過去三年平均為
83.2；另外原先由Brad負責的加州勞工退休基金現在已將業務重心移到其他六個
州，雖然初期須負擔沈重的開辦費用，但是仍然能維持可觀的承保獲利；最後負責中
央州立產險公司營運的John Kizer則依然表現出色，保費收入不但大幅成長，同時
承保利益更大幅增加，總的來說，我們幾個小型保險事業(包含堪薩斯銀行家保險在內)
的表現是其他同業所比不上的，Don、Rod、Brad與John全都替Berkshire創造了
可觀的價值，而我們也相信他們未來的潛力仍然可期。

Taxes

租稅問題

In 1961, President Kennedy said that we should ask not what our

country can do for us, but rather ask what we can do for our country. Last

year we decided to give his suggestion a try - and who says it never hurts

to ask? We were told to mail $860 million in income taxes to the U.S.

Treasury.

1961年，甘迺迪總統曾經說過一句名言︰不要問國家能為你做些什麼，問問你能為
國家做些什麼! 去年我們決定照他的建議試一試，不過不知道是誰說問問沒有關係
的?? 我們最後得到的答案是總共要繳8.6億美元的所得稅給美國國庫。

Here's a little perspective on that figure: If an equal amount had

been paid by only 2,000 other taxpayers, the government would have had a

balanced budget in 1996 without needing a dime of taxes - income or Social

Security or what have you - from any other American. Berkshire

shareholders can truly say, "I gave at the office."

這個數字到底有多大呢? 如果全美能夠有2,000名跟Berkshire一樣的納稅義務人的
話，則美國國庫不需要再徵收其他任何的所得稅、社會安全捐或任何你想得到名目的
稅捐，1996年的預算收支就能夠打平，所以Berkshire的股東可以大聲地說自己，
功在國庫。

Charlie and I believe that large tax payments by Berkshire are

entirely fitting. The contribution we thus make to society's well-being is

at most only proportional to its contribution to ours. Berkshire prospers

in America as it would nowhere else.

查理跟我本人對於Berkshire必須支付如此高額的稅負感到完全接受，我們對於整個
社會的貢獻遠遠比不上社會對我們所作的貢獻，要不是身在美國，Berkshire不可能
有這樣的榮景。

Sources of Reported Earnings

帳列盈餘的來源

The table that follows shows the main sources of Berkshire's reported

earnings. In this presentation, purchase-accounting adjustments are not

assigned to 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. For the reasons discussed on pages 65 and 66, 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-premiums to be charged off business-by-business. The

total 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。

(in millions)

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

Berkshire's Share

of Net Earnings

(after taxes and

Pre-tax Earnings minority interests)

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

1996 1995(1) 1996 1995(1)

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

Operating Earnings:

Insurance Group:

Underwriting.....................$ 222.1 $ 20.5 $ 142.8 $ 11.3

Net Investment Income............ 726.2 501.6 593.1 417.7

Buffalo News........................... 50.4 46.8 29.5 27.3

Fechheimer............................. 17.3 16.9 9.3 8.8

Finance Businesses..................... 23.1 20.8 14.9 12.6

Home Furnishings....................... 43.8 29.7(2) 24.8 16.7(2)

Jewelry................................ 27.8 33.9(3) 16.1 19.1(3)

Kirby.................................. 58.5 50.2 39.9 32.1

Scott Fetzer Manufacturing Group....... 50.6 34.1 32.2 21.2

See's Candies.......................... 51.9 50.2 30.8 29.8

Shoe Group............................. 61.6 58.4 41.0 37.5

World Book............................. 12.6 8.8 9.5 7.0

Purchase-Accounting Adjustments........ (75.7) (27.0) (70.5) (23.4)

Interest Expense(4).................... (94.3) (56.0) (56.6) (34.9)

Shareholder-Designated Contributions.. (13.3) (11.6) (8.5) (7.0)

Other.................................. 58.8 37.4 34.8 24.4

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

Operating Earnings....................... 1,221.4 814.7 883.1 600.2

Sales of Securities...................... 2,484.5 194.1 1,605.5 125.0

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

Total Earnings - All Entities........... $3,705.9 $1,008.8 $2,488.6 $ 725.2

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

Before the GEICO-related restatement.
(1)不包含GEICO重編部份。

(2) Includes R.C. Willey from June 29, 1995.
(2)包含R.C. Willey 1995年6月29日以後的盈餘
(3) Includes Helzberg's from April 30, 1995.
(3)包含Helzberg 1995年4月30日以後的盈餘

(4) Excludes interest expenseof Finance Businesses.

(4)扣除金融事業的利息支出

In this section last year, I discussed three businesses that reported

a decline in earnings - Buffalo News, Shoe Group and World Book. All, I'm

happy to say, recorded gains in 1996.

去年到這段時，我曾提到有三個事業盈餘大幅下滑-水牛城新聞報、鞋子事業與世界
百科全書，今年我們高興向大家報告，這幾個事業都大有進步。

World Book, however, did not find it easy: Despite the operation's

new status as the only direct-seller of encyclopedias in the country

(Encyclopedia Britannica exited the field last year), its unit volume fell.

Additionally, World Book spent heavily on a new CD-ROM product that began

to take in revenues only in early 1997, when it was launched in association

with IBM. In the face of these factors, earnings would have evaporated had

World Book not revamped distribution methods and cut overhead at

headquarters, thereby dramatically reducing its fixed costs. Overall, the

company has gone a long way toward assuring its long-term viability in both

the print and electronic marketplaces.

不過對於世界百科全書來說，這可不是一件簡單的事，儘管如今它們是全美僅存以直
銷的方式銷售百科全書的業者(大英百科全書在去年退出了這個市場)，不過它的銷售
數量還是呈現下滑的狀態，另外世界百科全書還投入大筆的經費在CD版的新產品之
上，但其效益至少要等到1997年初與IBM的合作正式展開後才有可能顯現，在種種
不利的狀況下，世界百科全書如果不能大力改革通路方式並降低總部營運開銷，以徹
底降低固定成本的話，盈餘可能會消失殆盡，不過總的來說，該公司已想盡各種方法
以確保自身能夠在競爭激烈的印刷與電子出版市場上繼續存活下去。

Our only disappointment last year was in jewelry: Borsheim's did

fine, but Helzberg's suffered a material decline in earnings. Its expense

levels had been geared to a sizable increase in same-store sales,

consistent with the gains achieved in recent years. When sales were

instead flat, profit margins fell. Jeff Comment, CEO of Helzberg's, is

addressing the expense problem in a decisive manner, and the company's

earnings should improve in 1997.

去年唯一讓我們感到失望的反而是珠寶事業，波仙還不錯，不過Helzberg的盈餘卻
大幅下滑，單店平均費用持續大幅增加，但是當營收表現平平時，獲利自然縮減，針
對這個問題該公司總裁-Jeff Comment已經採取必要的措施，我想它們1997年的
盈餘表現應該能夠有所改善。

Overall, our operating businesses continue to perform exceptionally,

far outdoing their industry norms. For this, Charlie and I thank our

managers. If you should see any of them at the Annual Meeting, add your

thanks as well.

不過總的來說，我們旗下所有的營利事業的表現，比起其同業來說仍然相當傑出，對
此查理跟我本身向所有經理人致上深深的敬意，而如果各位在年會上遇到他們，也請
大家不吝給予掌聲。

More information about our various businesses is given on pages 36-

46, where you will also find our segment earnings reported on a GAAP

basis. In addition, on pages 51-57, we have rearranged Berkshire's

financial data into four segments on a non-GAAP basis, a presentation

that corresponds to the way Charlie and I think about the company. Our

intent is to supply you with the financial information that we would wish

you to give us if our positions were reversed.

在年報中你可以找到依照一般公認會計原則編製，詳細的部門別資訊，另外你還可以
找到經過重編，依照Berkshire四大部門的資訊，這是查理跟我能夠完整呈現
Berkshire現況的模式，我們的目的是希望能夠換個角度設想，提供大家所有必要的
資訊。

"Look-Through" Earnings

完整透視盈餘

Reported earnings are a poor measure of economic progress at

Berkshire, in part because the numbers shown in the table presented

earlier include only the dividends we receive from investees - though

these dividends typically represent only a small fraction of the earnings

attributable to our ownership. Not that we mind this division of money,

since on balance we regard the undistributed earnings of investees as

more valuable to us than the portion paid out. The reason is simple:

Our investees often have the opportunity to reinvest earnings at high

rates of return. So why should we want them paid out?

我們認為帳列盈餘很難表現Berkshire實際的營運狀況，部份原因在於列示在本公司
帳上的股利收入，事實上僅佔被投資公司收益的一小部份，其實對我們而言，我們更
重視未分配的那一部份，因為他們可以為我們創造出更高的價值，原因很簡單，因為
我們的被投資公司往往比母公司更有機會把資金投入到高投資報酬的用途之上，既然
如此又何必一定要強迫他們把盈餘分配回來呢?

To depict something closer to economic reality at Berkshire than

reported earnings, though, we employ the concept of "look-through"

earnings. As we calculate these, they consist of: (1) the operating

earnings reported in the previous section, plus; (2) our share of 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. When tabulating "operating

earnings" here, we exclude purchase-accounting adjustments as well as

capital gains and other major non-recurring items.

為了要能更真實的反應Berkshire實際的經營狀況，於是乎我們運用了完整透視盈餘
的觀念，這個數字總共包含(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。在這裡我們所謂的營業盈餘係已扣除資
本利得、特別會計調整與企業其他非常態的項目。

The following table sets forth our 1996 look-through earnings,

though I warn you that the figures can be no more than approximate, since

they are based on a number of judgment calls. (The dividends paid to us

by these investees have been included in the operating earnings itemized

on page 12, mostly under "Insurance Group: Net Investment Income.")

各位可以從下表看出我們是如何計算出1996年透視盈餘的，不過我還是要提醒各位
這些數字只不過是估計數，很多都是基於簡單的判斷，(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(1) (in millions)(2)

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

American Express Company........ 10.5% $ 132

The Coca-Cola Company........... 8.1% 180

The Walt Disney Company......... 3.6% 50

Federal Home Loan Mortgage Corp. 8.4% 77

The Gillette Company............ 8.6% 73

McDonald's Corporation.......... 4.3% 38

The Washington Post Company..... 15.8% 27

Wells Fargo & Company........... 8.0% 84

------

Berkshire's share of undistributed earnings of major investees.. 661

Hypothetical tax on these undistributed investee earnings(3).... (93)

Reported operating earnings of Berkshire........................ 954

------

Total look-through earnings of Berkshire.................. $1,522

======

(1) Does not include shares allocable to minority interests

(2) Calculated on average ownership for the year

(3) The tax rate used is 14%, which is the rate Berkshire pays on

the dividends it receives

　

Common Stock Investments

股票投資

Below we present our common stock investments. Those with a market

value of more than $500 million are itemized.

下表是我們市價超過五億美元以上的普通股投資。

12/31/96

Shares Company Cost* Market

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

(dollars in millions)

49,456,900 American Express Company...........$1,392.7 $ 2,794.3

200,000,000 The Coca-Cola Company.............. 1,298.9 10,525.0

24,614,214 The Walt Disney Company............ 577.0 1,716.8

64,246,000 Federal Home Loan Mortgage Corp.. 333.4 1,772.8

48,000,000 The Gillette Company............... 600.0 3,732.0

30,156,600 McDonald's Corporation............. 1,265.3 1,368.4

1,727,765 The Washington Post Company........ 10.6 579.0

7,291,418 Wells Fargo & Company.............. 497.8 1,966.9

Others............................. 1,934.5 3,295.4

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

Total Common Stocks................ $7,910.2 $27,750.6

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

* Represents tax-basis cost which, in aggregate, is $1.2 billion

less than GAAP cost.

*係以稅務為基礎的成本，比一般公認會計原則的帳面成本少12億美元。

Our portfolio shows little change: We continue to make more money

when snoring than when active.

我們的投資組合還是沒有多大變動，我們打盹時賺的錢比起醒著時多很多。

Inactivity strikes us as intelligent behavior. Neither we nor most

business managers would dream of feverishly trading highly-profitable

subsidiaries because a small move in the Federal Reserve's discount rate

was predicted or because some Wall Street pundit had reversed his views

on the market. Why, then, should we behave differently with our minority

positions in wonderful businesses? The art of investing in public

companies successfully is little different from the art of successfully

acquiring subsidiaries. In each case you simply want to acquire, at a

sensible price, a business with excellent economics and able, honest

management. Thereafter, you need only monitor whether these qualities

are being preserved.

按兵不動對我們來說是一項明智的行為，就像是我們或其他經理人不可能因為謠傳聯
準會可能調整貼放利率或是華爾街那幫土匪大幅改變他們對股市前景的看法，就決定
把旗下高獲利的金雞母賣來賣去一樣，我們也不會對擁有部份所有權的好公司股票任
意出脫，投資上市公司股票的祕訣與取得百分之百的子公司的方法沒有什麼兩樣，都
是希望能夠以合理的價格取得擁有絕佳競爭優勢與才德兼備的經理人，也因此大家真
正應該關心注意的是這些特質是否有任何改變。

When carried out capably, an investment strategy of that type will

often result in its practitioner owning a few securities that will come

to represent a very large portion of his portfolio. This investor would

get a similar result if he followed a policy of purchasing an interest

in, say, 20% of the future earnings of a number of outstanding college

basketball stars. A handful of these would go on to achieve NBA stardom,

and the investor's take from them would soon dominate his royalty stream.

To suggest that this investor should sell off portions of his most

successful investments simply because they have come to dominate his

portfolio is akin to suggesting that the Bulls trade Michael Jordan

because he has become so important to the team.

只要執行得當，運用這樣投資策略的投資人到最後會發現，少數幾家公司的股份將會
佔他投資組合的一大部分，這樣的方式就好像一個人買下假設一群極具潛力的大學明
星籃球隊員20%的未來權益，其中有一小部份的球員可能可以進到NBA殿堂打球，
那麼投資人會發現其因此從中收取的權利金將會佔其收入的絕大部分，要是有人建議
把這部份的權益轉讓掉就好像是要公牛隊把麥可喬登交易出去一樣，只因為他對球隊
來說實在是太重要了。

In studying the investments we have made in both subsidiary

companies and common stocks, you will see that we favor businesses and

industries unlikely to experience major change. The reason for that is

simple: Making either type of purchase, we are searching for operations

that we believe are virtually certain to possess enormous competitive

strength ten or twenty years from now. A fast-changing industry

environment may offer the chance for huge wins, but it precludes the

certainty we seek.

不管是研究買下整家公司或股票投資時，大家會發現我們偏愛變化不大的公司與產
業，原因很簡單，我們希望買到的公司是能夠持續擁有競爭優勢達十年或二十年以上
者，變遷快速的產業環境或許可能讓人一夕之間大發利市，但卻無法提供我們想要的
穩定性。

I should emphasize that, as citizens, Charlie and I welcome change:

Fresh ideas, new products, innovative processes and the like cause our

country's standard of living to rise, and that's clearly good. As

investors, however, our reaction to a fermenting industry is much like

our attitude toward space exploration: We applaud the endeavor but

prefer to skip the ride.

另一方面我必須強調的是，身為公民的一份子，查理跟我相當歡迎改變，因為新的觀
念、新的產品或創新的方法可以提升我們的生活水準，這點很明顯的對我們有好處，
不過身為投資人對於熱門流行產業的態度就好像在太空探險一樣，對於這種勇猛的行
為我們給予喝采，但是若要我們自己上場，那就再說吧!

Obviously all businesses change to some extent. Today, See's is

different in many ways from what it was in 1972 when we bought it: It

offers a different assortment of candy, employs different machinery and

sells through different distribution channels. But the reasons why

people today buy boxed chocolates, and why they buy them from us rather

than from someone else, are virtually unchanged from what they were in

the 1920s when the See family was building the business. Moreover, these

motivations are not likely to change over the next 20 years, or even 50.

當然所有的產業都會變化，在今日喜斯糖果的經營形態與我們當初在1972年買下這
家公司時又有很大的不同，喜斯提供了更多樣的糖果、生產設備與銷售通路也大不相
同，不過人們為什麼要購買盒裝巧克力的動機，與購買盒裝巧克力又為什麼一定要選
擇喜斯的原因，自從喜斯在1920年代由喜太太家族創立以來就從來沒有變過，而我
想這原因在往後20年，乃至於50年都不會有所改變。

We look for similar predictability in marketable securities. Take

Coca-Cola: The zeal and imagination with which Coke products are sold

has burgeoned under Roberto Goizueta, who has done an absolutely

incredible job in creating value for his shareholders. Aided by Don

Keough and Doug Ivester, Roberto has rethought and improved every aspect

of the company. But the fundamentals of the business - the qualities

that underlie Coke's competitive dominance and stunning economics - have

remained constant through the years.

在買進股票時我們同樣的也追求可預測的未來，以可口可樂來說，可口可樂產品所代
表的熱情與想像在總裁古崔塔的帶領下昇華到極點，此舉為公司股東創造出可觀的價
值，在Don Keough與Doug Ivester的協助之下，古崔塔從頭到尾重新塑造公司的
每一部份，不過這家公司的本質-可口可樂強力的競爭優勢與主導性，多年來卻從未
改變。

I was recently studying the 1896 report of Coke (and you think that

you are behind in your reading!). At that time Coke, though it was

already the leading soft drink, had been around for only a decade. But

its blueprint for the next 100 years was already drawn. Reporting sales

of $148,000 that year, Asa Candler, the company's president, said: "We

have not lagged in our efforts to go into all the world teaching that

Coca-Cola is the article, par excellence, for the health and good feeling

of all people." Though "health" may have been a reach, I love the fact

that Coke still relies on Candler's basic theme today - a century later.

Candler went on to say, just as Roberto could now, "No article of like

character has ever so firmly entrenched itself in public favor." Sales

of syrup that year, incidentally, were 116,492 gallons versus about 3.2

billion in 1996.

最近我正在研讀可口可樂1896年的年報(所以大家現在看我們的年報應該還不嫌太
晚)，雖然當時可口可樂已經成為冷飲市場的領導者，但那也不過只有十年的光景，然
而在當時該公司卻早已規劃好未來的百年大計，面對年僅14.8萬美元的銷售額，公
司總裁Asa Candler表示：「我們從沒有放棄告訴全世界，可口可樂是能夠提升人類
健康與快樂、最卓越超凡的一件東西。」雖然我認為健康這檔子事還有待努力，但我
很高興可口可樂在一百年後的今天，始終還是遵循Candler當初立下的願景，Candler
又繼續談到：「沒有其他東西的味道能夠像可樂一樣深植人心。」當年的可樂糖漿銷
售量不過只有11.6萬加侖，時至今日，銷售量已達到32億加侖。

I can't resist one more Candler quote: "Beginning this year about

March 1st . . . we employed ten traveling salesmen by means of which,

with systematic correspondence from the office, we covered almost the

territory of the Union." That's my kind of sales force.

我實在忍不住想要在引用Candler的另一段話：「從今年三月開始，我們雇用了十位
業務員，在與總公司保持密切聯繫下巡迴各地推銷產品，基本上我們的業務範圍已涵
蓋整個美聯共和國。」這才是我心目中的銷售力量。

Companies such as Coca-Cola and Gillette might well be labeled "The

Inevitables." Forecasters may differ a bit in their predictions of exactly
how much soft drink or shaving-equipment business these companies

will be doing in ten or twenty years. Nor is our talk of inevitability

meant to play down the vital work that these companies must continue to

carry out, in such areas as manufacturing, distribution, packaging and

product innovation. In the end, however, no sensible observer - not even

these companies' most vigorous competitors, assuming they are assessing

the matter honestly - questions that Coke and Gillette will dominate

their fields worldwide for an investment lifetime. Indeed, their

dominance will probably strengthen. Both companies have significantly

expanded their already huge shares of market during the past ten years,

and all signs point to their repeating that performance in the next

decade.

像可口可樂與吉列這類的公司應該可以被歸類為"永恆的持股"，分析師對於這些公司
在未來一、二十年飲料或刮鬍刀市場的預測可能會有些許的不同，而我們所說的永恆
並不意味這些公司可以不必繼續貫徹在製造、配銷、包裝與產品創新上的努力，只是
就算是最沒有概念的觀察家或甚至是其最主要的競爭對手，也不得不承認可口可樂與
吉列，在終其一生的投資生涯，仍將在其各自的領域中獨領風騷，甚至於他們的優勢
還有可能會繼續增強，過去十年來，兩家公司在原有極大的市佔率又擴大許多，而所
有的跡象顯示，在往後的十年間，他們還會繼續以此態勢擴大版圖。

Obviously many companies in high-tech businesses or embryonic

industries will grow much faster in percentage terms than will The

Inevitables. But I would rather be certain of a good result than hopeful

of a great one.

當然比起一些具爆發性高科技或新創的事業來說，這些被永恆持股公司的成長力略顯
不足，但與其兩鳥在林，還不如一鳥在手。

Of course, Charlie and I can identify only a few Inevitables, even

after a lifetime of looking for them. Leadership alone provides no

certainties: Witness the shocks some years back at General Motors, IBM

and Sears, all of which had enjoyed long periods of seeming

invincibility. Though some industries or lines of business exhibit

characteristics that endow leaders with virtually insurmountable

advantages, and that tend to establish Survival of the Fattest as almost

a natural law, most do not. Thus, for every Inevitable, there are dozens

of Impostors, companies now riding high but vulnerable to competitive

attacks. Considering what it takes to be an Inevitable, Charlie and I

recognize that we will never be able to come up with a Nifty Fifty or

even a Twinkling Twenty. To the Inevitables in our portfolio, therefore,

we add a few "Highly Probables."

雖然查理跟我本人終其一生追求永恆的持股，但能夠真正讓我們找到的卻屬鱗毛鳳
角，光是取得市場領導地位並不足以保證成功，看看過去幾年來通用汽車、IBM與西
爾斯這些公司，都曾是領導一方的產業霸主，在所屬的產業都被賦予其無可取代的優
勢地位，大者恆存的自然定律似乎牢不可破，但實際結果卻不然，也因此在找到真正
的真命天子之前，旁邊可能還有好幾打假冒者，這些公司雖然曾經紅極一時，但卻完
全經不起競爭的考驗，換個角度來看，既然能夠被稱為永恆的持股，查理跟我早就有
心理準備，其數量絕對不可能超過五十家或甚至是不到二十家，所以就我們的投資組
合來說，除了幾家真正夠格的公司之外，還有另外幾家則是屬於極有可能的潛在候選
人。

You can, of course, pay too much for even the best of businesses.

The overpayment risk surfaces periodically and, in our opinion, may now

be quite high for the purchasers of virtually all stocks, The Inevitables

included. Investors making purchases in an overheated market need to

recognize that it may often take an extended period for the value of even

an outstanding company to catch up with the price they paid.

當然有時你也很有可能以過高的價格買下一家好的公司，這種風險並不是沒有，而以
我個人的看法，像現在的時機買任何股票就都有可能必須承擔這樣的風險，當然也包
含永恆的持股在內，在過熱的股市進場買股票的投資人必須要先做好心理準備，那就
是對於付出高價買進的優良企業來說，必須要有更長的一段時間才有辦法讓他們的價
值得以彰顯。

A far more serious problem occurs when the management of a great

company gets sidetracked and neglects its wonderful base business while

purchasing other businesses that are so-so or worse. When that happens,

the suffering of investors is often prolonged. Unfortunately, that is

precisely what transpired years ago at both Coke and Gillette. (Would

you believe that a few decades back they were growing shrimp at Coke and

exploring for oil at Gillette?) Loss of focus is what most worries

Charlie and me when we contemplate investing in businesses that in

general look outstanding. All too often, we've seen value stagnate in

the presence of hubris or of boredom that caused the attention of

managers to wander. That's not going to happen again at Coke and

Gillette, however - not given their current and prospective managements.

有一個問題倒是很值得注意，那就是有一些體質原本不錯的公司，由於經營階層規劃
的方向產生偏差，將原本良好的本業基礎棄之不顧，反而跑去購併一堆平凡普通的公
司，當這種狀況發生時，其投資人所須承受的煎熬便會加重加長，而不幸的這正是幾
年前發生在可口可樂與吉列身上的慘事，(大家可以想像十幾年前，可口可樂大舉投入
養蝦事業，而吉列竟熱衷於石油探勘嗎?)，失去聚焦是查理跟我在思考是否投資一些
外表看起來很不錯的公司時最關心的重點，我想傲慢或不甘寂寞的出現，使得這些經
理人胡思亂想進而導致企業的價值停滯不前，這種情形屢見不鮮，不過還好這種情況
應該不會再在可口可樂與吉列現在與未來儲備的管理階層身上發生。

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

Let me add a few thoughts about your own investments. Most

investors, both institutional and individual, will find that the best way

to own common stocks is through an index fund that charges minimal fees.

Those following this path are sure to beat the net results (after fees

and expenses) delivered by the great majority of investment

professionals.

對於各位個人的投資方式，讓我提供一點心得給各位參考，大部分的投資人，不管法
人或是散戶，可能會認為投資股票最好的方式是直接去買手續費低廉的指數型基金，
當然這樣的做法所得到的結果(在扣除相關手續費用之後)，應該可以很輕易地擊敗市
場上大部分的投資專家。

Should you choose, however, to construct your own portfolio, there

are a few thoughts worth remembering. Intelligent investing is not

complex, though that is far from saying that it is easy. What an

investor needs is the ability to correctly evaluate selected businesses.

Note that word "selected": You don't have to be an expert on every

company, or even many. You only have to be able to evaluate companies

within your circle of competence. The size of that circle is not very

important; knowing its boundaries, however, is vital.

其實你也可以選擇建立自己的投資組合，但有幾點是大家必須特別注意的，智慧型投
資並不複雜，當然它也不是一件容易的事，投資人真正需要具備的是給予所選擇的企
業正確評價的能力，請特別注意"所選擇"這個字，你不必像很多專家一樣同時研究許
多家公司，相反的你要做的只是選擇少數幾家在你能力範圍之內的公司就好，能力範
圍的大小並不重要，要緊的是你要很清楚自己的能力範圍。

To invest successfully, you need not understand beta, efficient

markets, modern portfolio theory, option pricing or emerging markets.

You may, in fact, be better off knowing nothing of these. That, of

course, is not the prevailing view at most business schools, whose

finance curriculum tends to be dominated by such subjects. In our view,

though, investment students need only two well-taught courses - How to

Value a Business, and How to Think About Market Prices.

投資要成功，你不需要研究什麼是Beta值、效率市場、現代投資組合理論、選擇權
定價或是新興市場，事實上大家最好不要懂得這一些理論，當然我這種看法與目前以
這些課程為主流的學術界有明顯不同，就我個人認為，有志從事投資的學生只要修好
兩門課程-亦即"如何給予企業正確的評價"以及"思考其與市場價格的關係"即可。

Your goal as an investor should simply be to purchase, at a rational

price, a part interest in an easily-understandable business whose

earnings are virtually certain to be materially higher five, ten and

twenty years from now. Over time, you will find only a few companies

that meet these standards - so when you see one that qualifies, you

should buy a meaningful amount of stock. You must also resist the

temptation to stray from your guidelines: If you aren't willing to own a

stock for ten years, don't even think about owning it for ten minutes.

Put together a portfolio of companies whose aggregate earnings march

upward over the years, and so also will the portfolio's market value.

身為一位投資人，大家其實只要以合理的價格買進一些很容易了解且其盈餘在未來五
到十年內會大幅成長的企業的部份股權，當然一段時間下來，你會發現只有少數幾家
公司符合這樣的標準，所以要是你真的找到這樣的公司，那就一定要買進足夠份量的
股權，在這期間，你必須盡量避免自己受到外界誘惑而偏離這個準則，如果你不打算
持有一家公司股份十年以上，那最好連十分鐘你都不要擁有它，在慢慢找到這樣盈餘
加總能持續累積的投資組合後，你就會發現其市值也會跟著穩定增加。

Though it's seldom recognized, this is the exact approach that has

produced gains for Berkshire shareholders: Our look-through earnings

have grown at a good clip over the years, and our stock price has risen

correspondingly. Had those gains in earnings not materialized, there

would have been little increase in Berkshire's value.

雖然我們很少承認，但這正是Berkshire股東累積財富的唯一方式，我們的透視盈餘
在過去幾年間大幅躍進，而同期間我們的股票價格也跟著大漲，要不是我們的盈餘大
幅增加，Berkshire所代表的價值就不可能大幅成長。

The greatly enlarged earnings base we now enjoy will inevitably

cause our future gains to lag those of the past. We will continue,

however, to push in the directions we always have. We will try to build

earnings by running our present businesses well - a job made easy because

of the extraordinary talents of our operating managers - and by

purchasing other businesses, in whole or in part, that are not likely to

be roiled by change and that possess important competitive advantages.

當然我們現在背負龐大的資金基礎將無可避免地會影響到我們未來盈餘成長的能
力，但我們還是會按照和過去一致的方向，在現有的基礎之上，這部份的難度較低，
因為我們擁有一群傑出的經理人，同時繼續買進全部或部份一些不會受外界環境影響
且擁有競爭優勢的新事業。

USAir

美國航空

When Richard Branson, the wealthy owner of Virgin Atlantic Airways,

was asked how to become a millionaire, he had a quick answer: "There's

really nothing to it. Start as a billionaire and then buy an airline."

Unwilling to accept Branson's proposition on faith, your Chairman decided

in 1989 to test it by investing $358 million in a 9.25% preferred stock of

USAir.

當Richard Branson-維京亞特蘭大航空公司的老闆被問到要如才能夠變成一個百萬
富翁，他的回答很簡單：其實也沒有什麼! 首先你要先成為一個億萬富翁，然後再去
買一家航空公司就成了! 但由於各位的董事長-也就是我本人不信邪，所以我在1989
年決定以3.58億美元投資取得美國航空年利率9.25%的特別股。

I liked and admired Ed Colodny, the company's then-CEO, and I still

do. But my analysis of USAir's business was both superficial and wrong.

I was so beguiled by the company's long history of profitable

operations, and by the protection that ownership of a senior security

seemingly offered me, that I overlooked the crucial point: USAir's

revenues would increasingly feel the effects of an unregulated, fiercely-

competitive market whereas its cost structure was a holdover from the

days when regulation protected profits. These costs, if left unchecked,

portended disaster, however reassuring the airline's past record might

be. (If history supplied all of the answers, the Forbes 400 would

consist of librarians.)

那時我相當喜愛同時也崇拜美國航空當時的總裁-Ed Colodny，直到現在仍是如此，
不過我對於美國航空業的分析研究實在是過於膚淺且錯誤百出，我被該公司過去歷年
來的獲利能力所矇騙，同時過分相信特別股可以提供給我們在債權上的保護，以致於
忽略了最關鍵的一點︰那就是美國航空的營收受到毫無節制的激烈價格競爭而大幅
下滑的同時，其成本結構卻仍舊停留在從前管制時代的高檔，這樣的高成本結構若不
能找到有效解決的辦法，將成為災難的前兆，不管以前航空業曾經享有多麼輝煌的歷
史(如果歷史可以給人們所有的答案，那麼富比士四百大富翁不就應該都是圖書館員了
嗎?)。

To rationalize its costs, however, USAir needed major improvements

in its labor contracts - and that's something most airlines have found it

extraordinarily difficult to get, short of credibly threatening, or

actually entering, bankruptcy. USAir was to be no exception.

Immediately after we purchased our preferred stock, the imbalance between

the company's costs and revenues began to grow explosively. In the 1990-

1994 period, USAir lost an aggregate of $2.4 billion, a performance that

totally wiped out the book equity of its common stock.

要讓成本結構合理化，美國航空必須大幅修改其勞資契約，不過這偏偏又是航空公司
難以達成的罩門，除了公司真正面臨倒閉的威脅或甚至是真的倒閉，而美國航空也不
例外，就在我們投資該公司特別股不久之後，公司營收與支出的缺口突然開始大幅擴
大，在1990年至1994年間，美國航空累計虧損了24億美元，此舉讓公司普通股
的股東權益幾乎耗損殆盡。

For much of this period, the company paid us our preferred

dividends, but in 1994 payment was suspended. A bit later, with the

situation looking particularly gloomy, we wrote down our investment by

75%, to $89.5 million. Thereafter, during much of 1995, I offered to

sell our shares at 50% of face value. Fortunately, I was unsuccessful.

在這段期間內，美國航空還是繼續支付特別股股利給我們，直到1994年才停止，也
因此在不久後，由於該公司前景展望不太樂觀，我們決定將美國航空特別股投資的帳
面價值調減75%，只剩下8,950萬美元，從而到了1995年，我甚至對外提出以面
額50%的折價，打算出售這筆投資，所幸最後並沒有成功出脫。

Mixed in with my many mistakes at USAir was one thing I got right:

Making our investment, we wrote into the preferred contract a somewhat

unusual provision stipulating that "penalty dividends" - to run five

percentage points over the prime rate - would be accrued on any

arrearages. This meant that when our 9.25% dividend was omitted for two

years, the unpaid amounts compounded at rates ranging between 13.25% and 14%.

幸運的是在投資美國航空所犯的一連串錯誤當中，我總算做對了一件事，那就是當初
在投資時，我們在特別股投資合約當中，特地加了一項"懲罰股息"條款，也就是說萬
一該公司延遲支付股息的話，除原有欠款外，還必須外加依基本利率5%的利息，也
就是說因為這兩年我們沒有收到9.25%的股息，所以以後美國航空必須就未支付的款
項加計13.25%與14%的利息。

Facing this penalty provision, USAir had every incentive to pay

arrearages just as promptly as it could. And in the second half of 1996,

when USAir turned profitable, it indeed began to pay, giving us $47.9

million. We owe Stephen Wolf, the company's CEO, a huge thank-you for

extracting a performance from the airline that permitted this payment.

Even so, USAir's performance has recently been helped significantly by an

industry tailwind that may be cyclical in nature. The company still has

basic cost problems that must be solved.

面對這樣的懲罰條款將督促美國航空盡快清償對我們的欠款，而等到1996年下半年
美國航空開始轉虧為盈時，他們果真開始清償這筆合計4,790萬美元的欠款，為此我
們特別要感謝美國航空現任總裁-Stephen Wolf，是他讓這家落難的航空公司得以付
出這筆錢，同時美國航空的表現也歸因於航空業景氣復甦，當然該公司還是有成本結
構的問題有待解決。

In any event, the prices of USAir's publicly-traded securities tell

us that our preferred stock is now probably worth its par value of $358

million, give or take a little. In addition, we have over the years

collected an aggregate of $240.5 million in dividends (including $30

million received in 1997).

不過不論如何，目前美國航空普通股的市價顯示我們所持有特別股的價值應該回復到
3.58億美元的面額左右，另外不要忘了，這幾年來我們還陸陸續續從該公司收到2.4
億美元的股息(包含1997年的3,000萬美元在內)。

Early in 1996, before any accrued dividends had been paid, I tried

once more to unload our holdings - this time for about $335 million.

You're lucky: I again failed in my attempt to snatch defeat from the

jaws of victory.

在稍早1996年初，我們還尚未收到積欠的股息之前，我再度嘗試以3.35億美元把
這筆投資賣掉，所幸這次的舉動又沒有成功，使得我們得以從勝利之神口中逃過失敗
的命運。

In another context, a friend once asked me: "If you're so rich, why

aren't you smart?" After reviewing my sorry performance with USAir, you

may conclude he had a point.

在另外一個場合，有一位朋友問我：「你很有錢，可是為什麼還這麼笨? 」在進一步
檢討本人在美國航空這個案子上的表現後，你可能會覺得他說得很有道理。

Financings

財務融資

We wrote four checks to Salomon Brothers last year and in each case

were delighted with the work for which we were paying. I've already

described one transaction: the FlightSafety purchase in which Salomon was

the initiating investment banker. In a second deal, the firm placed a

small debt offering for our finance subsidiary.

去年我們總共付了四次錢給所羅門兄弟公司，而很高興每一張支票都代表著該公司為
我們提供了不錯的服務，先前我已經說明過其中的一項交易-那就是買進國際飛安公
司的交易，所羅門擔任這項交易的投資銀行顧問，第二個案子是所羅門幫我們旗下的
財務子公司安排了一項融資案。

Additionally, we made two good-sized offerings through Salomon, both

with interesting aspects. The first was our sale in May of 517,500

shares of Class B Common, which generated net proceeds of $565 million.

As I have told you before, we made this sale in response to the

threatened creation of unit trusts that would have marketed themselves as

Berkshire look-alikes. In the process, they would have used our past,

and definitely nonrepeatable, record to entice naive small investors and

would have charged these innocents high fees and commissions.

此外，透過所羅門我們完成另外兩件案子，兩者也都有相當有趣的特點，一件是在五
月我們發行了517,500股的B級股，總共募得5.65億美元的資金，關於這件案子，
先前我就已經做過相關的說明，主要是因應坊間有些模仿Berkshire的基金，避免他
們以Berkshire過去傲人的績效記錄對外吸引一些不知情的小額投資人，在收取高昂
的手續費與佣金之後，卻無法提供給投資人一個令人滿意的投資結果。

I think it would have been quite easy for such trusts to have sold

many billions of dollars worth of units, and I also believe that early

marketing successes by these trusts would have led to the formation of

others. (In the securities business, whatever can be sold will be sold.)

The trusts would have meanwhile indiscriminately poured the proceeds of

their offerings into a supply of Berkshire shares that is fixed and

limited. The likely result: a speculative bubble in our stock. For at

least a time, the price jump would have been self-validating, in that it

would have pulled new waves of naive and impressionable investors into

the trusts and set off still more buying of Berkshire shares.

我相信這些仿Berkshire基金可以很容易募得大筆的資金，而我也認為在這些基金成
功募集到資金之後，一定還會有更多的基金跟進打著我們的旗號對外吸收資金，在證
券業，沒有什麼是賣不掉的東西，而這些基金無可避免的會將所募得的資金大舉投入
到Berkshire現有少數的股票投資組合，最後的結果很可能是Berkshire本身以及其
概念股股價暴漲而泡沫化，然後股價的上漲很可能又會吸引新一波的無知且敏感的投
資人蜂擁投入這些基金，造成進一步的惡性循環。

Some Berkshire shareholders choosing to exit might have found that

outcome ideal, since they could have profited at the expense of the

buyers entering with false hopes. Continuing shareholders, however,

would have suffered once reality set in, for at that point Berkshire

would have been burdened with both hundreds of thousands of unhappy,

indirect owners (trustholders, that is) and a stained reputation.

有些Berkshire的股東可能會發現這是一個大好的機會，因為可以利用新加入者不當
的預期而想要趁機出脫持股賺取額外的利益，但在此同時選擇繼續留下來的股東卻必
須承擔後來的苦果，因為等到回歸現實後，我們會發現Berkshire會有一群成千上萬
高檔套牢的間接股東(亦即基金投資人)，以及受到毀損的企業清譽。

Our issuance of the B shares not only arrested the sale of the

trusts, but provided a low-cost way for people to invest in Berkshire if

they still wished to after hearing the warnings we issued. To blunt the

enthusiasm that brokers normally have for pushing new issues - because

that's where the money is - we arranged for our offering to carry a

commission of only 1.5%, the lowest payoff that we have ever seen in a

common stock underwriting. Additionally, we made the amount of the

offering open-ended, thereby repelling the typical IPO buyer who looks

for a short-term price spurt arising from a combination of hype and

scarcity.

B級普通股的發行正可以抑止這些仿Berkshire基金的銷售，同時提供小額投資人投
資Berkshire的低成本管道，如果在他們聽過我之前所提出的警告後仍執意要投資的
話，而為了降低經紀人一般喜歡推銷新股發行的習慣(因為這是真正有賺頭的所在)，
我們刻意將承銷佣金降到1.5%，這是所有發行新股承銷佣金最低的比率，此外我們
對發行新股的數量不設上限，以避免一些專門投資初次上市股票搶帽子的投機客，利
用新股數量稀少而刻意炒作賺取短期股價飆漲的差價。

Overall, we tried to make sure that the B stock would be purchased

only by investors with a long-term perspective. Those efforts were

generally successful: Trading volume in the B shares immediately

following the offering - a rough index of "flipping" - was far below the

norm for a new issue. In the end we added about 40,000 shareholders,

most of whom we believe both understand what they own and share our time

horizons.

總而言之，我們希望買進B級普通股的投資人是真正希望長期投資的，事實證明我們
的做法相當成功，在公開發行後的B級普通股成交量(亦即代表換手的情形)遠低於一
般初次上市的股票，結果總計我們因此新增了40,000名的股東，我相信他們大部分
都了解他們到底在投資什麼，同時與我們擁有相同的經營理念。

Salomon could not have performed better in the handling of this

unusual transaction. Its investment bankers understood perfectly what we

were trying to achieve and tailored every aspect of the offering to meet

these objectives. The firm would have made far more money - perhaps ten

times as much - if our offering had been standard in its make-up. But

the investment bankers involved made no attempt to tweak the specifics in

that direction. Instead they came up with ideas that were counter to

Salomon's financial interest but that made it much more certain

Berkshire's goals would be reached. Terry Fitzgerald captained this

effort, and we thank him for the job that he did.

在這次不常見的交易中，所羅門的表現好得不能再好了，身為我們的投資銀行，他們
充分了解我們想要達成的目標，從而量身訂做，提供符合我們需要的服務，事實上若
是按照一般的標準模式，所羅門應該可以賺進更多錢，有可能比現在多十倍以上，不
過他們並沒有刻意引導我們這樣子去做，相反地有時他們還是提出一些對自己本身利
益衝突，但卻有助於Berkshire達成目的的一些建議，感謝Terry這次為我們操刀所
做的努力與貢獻。

Given that background, it won't surprise you to learn that we again

went to Terry when we decided late in the year to sell an issue of

Berkshire notes that can be exchanged for a portion of the Salomon shares

that we hold. In this instance, once again, Salomon did an absolutely

first-class job, selling $500 million principal amount of five-year notes

for $447.1 million. Each $1,000 note is exchangeable into 17.65 shares

and is callable in three years at accreted value. Counting the original

issue discount and a 1% coupon, the securities will provide a yield of 3%

to maturity for holders who do not exchange them for Salomon stock. But

it seems quite likely that the notes will be exchanged before their

maturity. If that happens, our interest cost will be about 1.1% for the

period prior to exchange.

基於這樣的背景，大家不難想像當Berkshire決定發行以所持有的所羅門股份做為轉
換標的的可轉換票券時，我們又再度找上Terry，再一次所羅門的表現一流，賣出以
五年為期、總面額五億美元的票券，共取得4.471億美元的資金，每張面額1,000
美元的票券可以轉換成17.65股的所羅門股份，同時有權在三年後要求以帳面價值賣
回，總計原先票面折價加上1%的票面利息，此證券可以給予到期不選擇轉換成所羅
門股份的投資人3%的報酬率，不過我想投資人在到期前選擇不轉換的機率微乎其
微，若果真如此，在轉換前我們實際負擔的利率成本大約在1.1%左右。

In recent years, it has been written that Charlie and I are unhappy

about all investment-banking fees. That's dead wrong. We have paid a

great many fees over the last 30 years - beginning with the check we

wrote to Charlie Heider upon our purchase of National Indemnity in 1967 -

and we are delighted to make payments that are commensurate with

performance. In the case of the 1996 transactions at Salomon Brothers,

we more than got our money's worth.

近年來，媒體不斷報導查理跟我對於支付投資銀行所有的費用都很感冒，這樣的報導
完全不對，事實上做過去三十年來，從1967年我們請Charlie Heider協助我們買
下國家賠償保險公司開始，我們就很樂於簽支票給他們，只要他們所提供的服務與表
現值得的話，而以1996年所羅門這次的案子來說，我們就覺得物超所值。

Miscellaneous

其他事項

Though it was a close decision, Charlie and I have decided to enter

the 20th Century. Accordingly, we are going to put future quarterly and

annual reports of Berkshire on the Internet, where they can be accessed

via http://www.berkshirehathaway.com. We will always "post" these

reports on a Saturday so that anyone interested will have ample time to

digest the information before trading begins. Our publishing schedule

for the next 12 months is May 17, 1997, August 16, 1997, November 15,

1997, and March 14, 1998. We will also post any press releases that we

issue.

雖然這個決定有點趕，查理跟我本人已決定正式跨入二十世紀，我們決定從現在開始
將在公司網路上公佈每季與每年最新的Berkshire年報，大家可以透過以下這個網址
http://www.berkshirehathaway.com.找到相關的訊息，我們會固定選在星期六把
報告擺上去，主要的目的是希望大家能夠有充足的時間在股市開盤做出進出的決定，
預計未來一年內公佈報告的時間為1997年5月17日、8月16日、11月15日以
及1998年3月14日，同時網站上也會有我們對外發佈的其他公開訊息。

At some point, we may stop mailing our quarterly reports and simply

post these on the Internet. This move would eliminate significant costs.

Also, we have a large number of "street name" holders and have found

that the distribution of our quarterlies to them is highly erratic: Some

holders receive their mailings weeks later than others.

在此同時，我們也將停止過去郵寄每季季報的習慣，而直接將它們公佈在公司網站
上，此舉不但可以大幅減少郵寄的成本，同時也因為我們有一些股東的股份是登記在
別人的名下，這使得季報最後送到真正股東手上的時間很不一定，有的股東收到報告
的時間整整比其他股東晚了好幾個禮拜。

The drawback to Internet-only distribution is that many of our

shareholders lack computers. Most of these holders, however, could

easily obtain printouts at work or through friends. Please let me know

if you prefer that we continue mailing quarterlies. We want your input -

starting with whether you even read these reports - and at a minimum will

make no change in 1997. Also, we will definitely keep delivering the

annual report in its present form in addition to publishing it on the

Internet.

當然透過網路公佈也有一個很大的缺點，那就是許多我們的股東從來不使用電腦，當
然大家還是可以透過同事或朋友的幫助把它們給列印下來，如果大家覺得還是用寄得
比較好的話可以向我反應，我們很想聽聽大家的意見，至少在1997年還是會持續原
來的做法，另外必須強調的是，每年的年報除了在網路上公佈之外，依然還是會用郵
寄的方式送到各位的手上。

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

About 97.2% of all eligible shares participated in Berkshire's 1996

shareholder-designated contributions program. Contributions made were

$13.3 million, and 3,910 charities were recipients. A full description

of the shareholder-designated contributions program appears on pages 48-

49.

大約有97.2%的有效股權參與1996年的股東指定捐贈計劃，總計約1,330萬
美元捐出的款項分配給3,910家慈善機構，詳細的名單參閱附錄。

Every year a few shareholders miss out on the program because they

don't have their shares registered in their own names on the prescribed

record date or because they fail to get the designation form back to us

within the 60-day period allowed. This is distressing to Charlie and me.

But if replies are received late, we have to reject them because we

can't make exceptions for some shareholders while refusing to make them

for others.

每年都有一小部份的股東由於沒有將股份登記在本人的名下，或是沒能在60天
的期限內，將指定捐贈的表格送回給我們，而沒辦法參加我們的指定捐贈計畫，
對此查理跟我感到相當頭痛，不過我們必須忍痛將這些指定捐贈剔除，因為我們不
可能在拒絕其他不符合規定股東的同時，還破例讓這些人參與。

To participate in future programs, you must own Class A shares that

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

broker, bank or depository. Shares not so registered on August 31, 1997,

will be ineligible for the 1997 program. When you get the form, return

it promptly so that it does not get put aside or forgotten.

想要參加這項計畫者，請必須擁有A級普通股，同時確定您的股份是登記在自
己而非股票經紀人或保管銀行的名下，同時必須在1997年8月31日之前完成
登記，才有權利參與1997年的捐贈計畫，當你收到表格後，請立即填寫後寄回，
以免被丟在一旁給忘記了。

The Annual Meeting

股東年會

Our capitalist's version of Woodstock -the Berkshire Annual Meeting-

will be held on Monday, May 5. Charlie and I thoroughly enjoy this

event, and we hope that you come. We will start at 9:30 a.m., break for

about 15 minutes at noon (food will be available - but at a price, of

course), and then continue talking to hard-core attendees until at least

3:30. Last year we had representatives from all 50 states, as well as

Australia, Greece, Israel, Portugal, Singapore, Sweden, Switzerland, and

the United Kingdom. The annual meeting is a time for owners to get their

business-related questions answered, and therefore Charlie and I will

stay on stage until we start getting punchy. (When that happens, I hope

you notice a change.)

資本家版的伍斯達克音樂會-Berkshire股東年會將在五月五日星期一舉行，查理跟我
實在是很喜歡這場盛會，所以我們很希望大家都能來，會議預計從早上9點半正式開
始，中午休息15分鐘(現場備有餐點，不過必須付費)，然後會繼續與許多死忠的股
東談到下午三點半，去年全美50州都有股東代表出席，另外還有來自海外地區，如
澳洲、希臘、以色列、葡萄牙、新加坡、瑞典、瑞士以及英國等國家，股東年會是公
司股東可以得到有關公司經營所有問題解答的場合，所以查理跟我一定會竭盡所能地
回答各位提出的問題，直到我們頭昏腦脹為止(如果查理跟我有異狀時，希望各位能及
時發現)。

Last year we had attendance of 5,000 and strained the capacity of

the Holiday Convention Centre, even though we spread out over three

rooms. This year, our new Class B shares have caused a doubling of our

stockholder count, and we are therefore moving the meeting to the

Aksarben Coliseum, which holds about 10,000 and also has a huge parking

lot. The doors will open for the meeting at 7:00 a.m., and at 8:30 we

will - upon popular demand - show a new Berkshire movie produced by Marc

Hamburg, our CFO. (In this company, no one gets by with doing only a

single job.)

去年總共有5,000名股東與會，雖然我們預先另外準備了三間小會議室，不過還是把
當時的會場- Holiday會議中心給擠爆了，今年由於發行B級普通股的關係使得我們
的股東人數又增加了整整一倍，因此我們決定把開會的場地移到可以容納10,000人
同時備有寬廣停車場的阿肯薩本體育館，大門會在當天早上七點開放，同時在八點
半，我們會播放由財務長Marc Hamburg製作的全新Berkshire電影短片供大家欣
賞(在Berkshire所有人都必須身兼數職)。

Overcoming our legendary repugnance for activities even faintly

commercial, we will also have an abundant array of Berkshire products for

sale in the halls outside the meeting room. Last year we broke all

records, selling 1,270 pounds of See's candy, 1,143 pairs of Dexter

shoes, $29,000 of World Books and related publications, and 700 sets of

knives manufactured by our Quikut subsidiary. Additionally, many

shareholders made inquiries about GEICO auto policies. If you would like

to investigate possible insurance savings, bring your present policy to

the meeting. We estimate that about 40% of our shareholders can save

money by insuring with us. (We'd like to say 100%, but the insurance

business doesn't work that way: Because insurers differ in their

underwriting judgments, some of our shareholders are currently paying

rates that are lower than GEICO's.)

為了克服大家對於商業氣息的厭惡，我們在會場外大廳備有Berkshire各式各樣的產
品供大家選購，去年我們打破記錄，總共賣出1,270磅的糖果、1,143雙的鞋子以
及價值超過29,000美元的世界百科全書與相關出版品，外加700隻由旗下子公司
Quikut所生產的小刀，另外在現場許多股東詢問有關GEICO汽車保險的資訊，如果
你想在汽車保險費上省一筆錢，記得把你現在的保單帶到現場，我們估計至少有40%
的股東可以因此而節省不少保費(我很想說100%，不過保險業實務的經營並非如此，
因為每家保險業者對於風險的估計都不同，事實上，我們有些股東支付的保費就比跟
GEICO投保要來得低)。

An attachment to the proxy material enclosed with this report

explains how you can obtain the card you will need for admission to the

meeting. We expect a large crowd, so get both plane and hotel

reservations promptly. American Express (800-799-6634) will be happy to

help you with arrangements. As usual, we will have buses servicing the

larger hotels to take you to and from the meeting, and also to take you

to Nebraska Furniture Mart, Borsheim's and the airport after it is over.

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，

由於預期會有相當多的人與會，我們建議大家最好先預訂機位與住宿，美國運通(電話
800-799-6634)將會很高興為您提供相關安排服務，如同以往，我們會安排巴士接
送大家往返各大旅館與會場之間，並在會後接送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。

NFM's main store, located on a 75-acre site about a mile from

Aksarben, is open from 10 a.m. to 9 p.m. on weekdays, 10 a.m. to 6 p.m.

on Saturdays, and noon to 6 p.m. on Sundays. Come by and say hello to

"Mrs. B" (Rose Blumkin). She's 103 now and sometimes operates with an

oxygen mask that is attached to a tank on her cart. But if you try to

keep pace with her, it will be you who needs oxygen. NFM did about $265

million of business last year - a record for a single-location home

furnishings operation - and you'll see why once you check out its

merchandise and prices.

佔地75英畝的NFM主館距離會場約1英哩遠，營業時間平日從早上10點到
下午9點，星期六從早上10點到下午6點，星期日則從中午開到下午6點，
記得去向Rose Blumkin-B太太問好，她今年高齡103歲，有時還會戴上氧氣罩在
輪椅上工作，不過如果你想要跟得上她的腳步，需要氧氣的可能是你，NFM去年的
營業額高達2.65億美元，這是全美單一傢具店營業的新高記錄，記得去現場查一查
商品的種類與標價，你就會知道原因了。

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

shareholders from 10 a.m. to 6 p.m. on May 4th. Last year on

"Shareholder Sunday" we broke every Borsheim's record in terms of

tickets, dollar volume and, no doubt, attendees per square inch. Because

we expect a capacity crowd this year as well, all shareholders attending

on Sunday must bring their admission cards. Shareholders who prefer a

somewhat less frenzied experience will get the same special treatment on

Saturday, when the store is open from 10 a.m. to 5:30 p.m., or on Monday

between 10 a.m. and 8 p.m. Come by at any time this year and let Susan

Jacques, Borsheim's CEO, and her skilled associates perform a painless

walletectomy on you.

平時禮拜天不營業的波仙珠寶，特地在五月四日股東會當天會為股東與來賓開放，從
中午開到下午6點，去年在星期六股東會前一天，我們打破了波仙單日的訂單量與營
業額記錄，當然還包括每平方英吋的參觀人數記錄，今年我們考量到參觀人數還會再
增加，所以大家在當天一定要準備好入場證，當然不想人擠人的股東可以選擇在前一
天或後一天前往參觀，星期六從早上10點開到下午5點半，星期一則從早上10點
開到晚上8點，無論如何今年大家一定要來看看波仙的總裁Susan是如何施展她的
技巧將你的荷包給掏空。

My favorite steakhouse, Gorat's, was sold out last year on the

weekend of the annual meeting, even though it added an additional seating

at 4 p.m. on Sunday. You can make reservations beginning on April 1st

(but not earlier) by calling 402-551-3733. I will be at Gorat's on

Sunday after Borsheim's, having my usual rare T-bone and double order of

hashbrowns. I can also recommend - this is the standard fare when Debbie

Bosanek, my invaluable assistant, and I go to lunch - the hot roast beef

sandwich with mashed potatoes and gravy. Mention Debbie's name and you

will be given an extra boat of gravy.

我個人最愛的牛排館-Gorat's去年在股東年會的那個週末完全客滿，雖然臨時還在星
期天下午四點多排出的一個空檔，今年該餐廳從四月一號開始接受預訂(電話402-
551-3733)，我會在星期天參加完波仙珠寶的活動後到Gorat's享用我最常點的丁骨
牛排加上雙份的肉丸，當然我也推薦我的寶貝助理Debbie標準的菜單-生烤牛肉三
明治外加馬鈴薯泥與肉湯，記得報上Debbie的名號，你就可以多得到一碗肉湯。

The Omaha Royals and Indianapolis Indians will play baseball on

Saturday evening, May 3rd, at Rosenblatt Stadium. Pitching in my normal

rotation - one throw a year - I will start.

在前一天5月3日，星期六晚上，Rosenblatt體育館將會有一場奧瑪哈皇家隊對印
第安納拿波里市印第安人隊的比賽，一如往年輪到由我先發，每一年就投那麼一球。

Though Rosenblatt is normal in appearance, it is anything but: The

field sits on a unique geological structure that occasionally emits short

gravitational waves causing even the most smoothly-delivered pitch to

sink violently. I have been the victim of this weird phenomenon several

times in the past but am hoping for benign conditions this year. There

will be lots of opportunities for photos at the ball game, but you will

need incredibly fast reflexes to snap my fast ball en route to the plate.

雖然Rosenblatt球場的外觀看起來與其他球場沒有多大的不同，不過它的投手丘地
形卻相當特殊，有時會發出特殊的重力短波，導致本來很平穩投出的球突然急速往下
墜，過去有好幾次我都成為這種怪異自然現象的受害者，不過我還是希望今年的情況
會好一點，雖然當天會場有許多拍照的機會，不過我還是奉勸大家的快門要抓準一
點，才能完整捕捉由我投出向本壘板急速奔去的快速球。

Our proxy statement includes information about obtaining tickets to

the game. We will also provide an information packet listing restaurants

that will be open on Sunday night and describing various things that you

can do in Omaha on the weekend. The entire gang at Berkshire looks

forward to seeing you.

股東會資料將告訴大家如何取得球賽入場的門票，同時我們也會提供星期天晚上會開
張的餐廳資訊，同時列出假日期間在奧瑪哈你可以從事的活動介紹，Berkshire總部
所有成員都期待能夠見到大家。

Warren E. Buffett

February 28, 1997 Chairman of the Board

華倫．巴菲特

董事會主席

1997年2月28日