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Berkshire公司全體股東:

Our gain in net worth during 2005 was $5.6 billion, which increased the per-share book value of both our Class A and Class B stock by 6.4%. Over the last 41 years (that is, since present management took over) book value has grown from $19 to $59,377, a rate of 21.5% compounded annually.*

經結算本公司2005年的淨值增加56億美元，A股及B股每股的帳面淨值均增加了6.4%，累計自現有經營階層接手後的41年以來，每股淨值由當初的19元成長到目前的59,377美元，年複合成長率約為21.5%*。



Berkshire had a decent year in 2005. We initiated five acquisitions (two of which have yet to close) and most of our operating subsidiaries prospered. Even our insurance business in its entirety did well, though Hurricane Katrina inflicted record losses on both Berkshire and the industry. We estimate our loss from Katrina at $2.5 billion – and her ugly sisters, Rita and Wilma, cost us an additional $.9 billion. Credit GEICO – and its brilliant CEO, Tony Nicely – for our stellar insurance results in a disaster-ridden year. One statistic stands out: In just two years, GEICO improved its productivity by 32%.

Berkshire 2005年可謂豐收的一年，我們總計進行了五項購併案(其中兩件尚未結案)，而旗下大部份的營運單位也大發利市，保險事業總體來說表現也相當不錯，即便卡翠娜颶風來襲，造成Berkshire及整體保險業史上最大的損失，預估光是我方損失即高達25億美元，至於其它兩個姐妹麗塔及威爾瑪，也讓我們另外付出九千萬美元的代價。這都要歸功於GEICO及其傑出的經理人Tony Nicely，因為去年GEICO的生產力又大幅提高了32%，是他們的使得我們在災難頻傳的這一年，還能有耀眼的成績。



Remarkably, employment fell by 4% even as policy count grew by 26% – and more gains are in store. When we drive unit costs down in such a dramatic manner, we can offer ever-greater value to our customers. The payoff: Last year, GEICO gained market-share, earned commendable profits and strengthened its brand. If you have a new son or grandson in 2006, name him Tony.

特別的是，雖然GEICO員工人數減少了4%，但保單數量卻成長了26%，而且未來的成長可期，在大幅降低成本的同時，我們還能夠提供給客戶更多的價值，其結果是去年GEICO的市佔率大幅提昇，同時獲得可觀的利潤，並強化其品牌，如果你身邊最近有小孩出生，可以考慮取名為Tony。



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

My goal in writing this report is to give you the information you need to estimate Berkshire’s intrinsic value. I say “estimate” because calculations of intrinsic value, though all-important, are necessarily imprecise and often seriously wrong. The more uncertain the future of a business, the more possibility there is that the calculation will be wildly off-base. (For an explanation of intrinsic value, see pages 77 – 78.) Here Berkshire has some advantages: a wide variety of relatively-stable earnings streams, combined with great liquidity and minimum debt. These factors mean that Berkshire’s intrinsic value can be more precisely calculated than can the intrinsic value of most companies.

撰寫年報的目的是讓各位獲得足夠的訊息以估算Berkshire實際的價值，之所以說是「估算」，其原因在於實際的價值，雖然至為重要，但實在是很難精確計算，有時甚至大錯特錯，企業未來的不確定性越高，則計算出來的結果就可能會越離譜，(何謂實際價值請參閱第77-78頁)，但在這方面Berkshire具有幾項優勢，多元化且相對穩定的盈餘收入來源、高度的流動性以及最低限度的負債，這些因素意謂著相較於大部份的公司來說，Berkshire的價值算是比較容易估算的了。



Yet if precision is aided by Berkshire’s financial characteristics, the job of calculating intrinsic value has been made more complex by the mere presence of so many earnings streams. Back in 1965, when we owned only a small textile operation, the task of calculating intrinsic value was a snap. Now we own 68 distinct businesses with widely disparate operating and financial characteristics. This array of unrelated enterprises, coupled with our massive investment holdings, makes it impossible for you to simply examine our consolidated financial statements and arrive at an informed estimate of intrinsic value. We have attempted to ease this problem by clustering our businesses into four logical groups, each of which we discuss later in this report. In these discussions, we will provide the key figures for both the group and its important components. Of course, the value of Berkshire may be either greater or less than the sum of these four parts. The outcome depends on whether our many units function better or worse by being part of a larger enterprise and whether capital allocation improves or deteriorates when it is under the direction of a holding company.

雖然說這些特點讓Berkshire的價值相對容易估算，但光是面對如此多元的盈餘來源，就讓人覺得頭很大，回顧1965年，當時我們只不過擁有幾座紡織工廠，要估算其價值再容易不過了，但時至今日我們旗下控有68家各種不同型態的事業體，其營運模式與財務特性各異，再加上重大的股票投資部位，使得各位無法單靠檢視合併財務報表，就得出Berkshire的實際價值，為此我們試著將這些公司劃分為四大類，並在後續的報告中分別詳加說明，在每個類別中，我們都將提供重要數據以及其重要成員，當然Berkshire的整體價值，有可能高於或低於這四大類事業體的加總，這取決於我們旗下各單位事業其隸屬於Berkshire的表現，包括資金運用的效率，究竟是優於或劣於各自獨立時的表現。



In other words, does Berkshire ownership bring anything to the party, or would our shareholders be better off if they directly owned shares in each of our 68 businesses? These are important questions but ones that you will have to answer for yourself.

換句話說，為Berkshire所有，是否就能為這些事業帶來什麼，若是我們的股東直接而不透過Berkshire持有這些公司的股份，會不會更好?? 這些都是非常重要的關鍵，但我想這需要由股東們自行判斷。



Before we look at our individual businesses, however, let’s review two sets of figures that show where we’ve come from and where we are now. The first set is the amount of investments (including cash and cash-equivalents) we own on a per-share basis. In making this calculation, we exclude investments held in our finance operation because these are largely offset by borrowings:

在開始檢視各個事業之前，讓我們先看看兩組數據，以確定我們從何而來，以及現在的所在位置，第一個數據是我們每股平均的投資金額(包含現金及約當現金)，但請注意這部份並不包含金融事業所持有的投資部位，因為這部份的投資仰賴極高的財務槓桿。

*All figures used in this report apply to Berkshire’s A shares, the successor to the only stock that the company had outstanding before 1996. The B shares have an economic interest equal to 1/30th that of the A.

*在年報中所有的數據，指的是A股，這是1996年以前所發行的股份，至於B股則僅擁有A股1/30的經濟利益。



Year

Per-Share Investments*

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

1975 ..................................................................... 159

1985 ..................................................................... 2,407

1995 ..................................................................... 21,817

2005 ..................................................................... $74,129

Compound Growth Rate 1965-2005.................... 28.0%

Compound Growth Rate 1995-2005.................... 13.0%

*Net of minority interests



In addition to these marketable securities, which with minor exceptions are held in our insurance companies, we own a wide variety of non-insurance businesses. Below, we show the pre-tax earnings (excluding goodwill amortization) of these businesses, again on a per-share basis:

除了這些有價證券投資之外(其中一小部份為保險公司所持有)，我們擁有各種不同的非保險事業，以下我們列出這些事業每股平均稅前盈餘(已扣除商譽攤銷) :



Year

Per-Share Earnings*

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

1975 ..................................................................... 4

1985 ..................................................................... 52

1995 ..................................................................... 175

2005 ..................................................................... $2,441

Compound Growth Rate 1965-2005.................... 17.2%

Compound Growth Rate 1995-2005.................... 30.2%

*Pre-tax and net of minority interests



When growth rates are under discussion, it will pay you to be suspicious as to why the beginning and terminal years have been selected. If either year was aberrational, any calculation of growth will be distorted. In particular, a base year in which earnings were poor can produce a breathtaking, but meaningless, growth rate. In the table above, however, the base year of 1965 was abnormally good; Berkshire earned more money in that year than it did in all but one of the previous ten.

一般在談到成長率時，各位可能會懷疑基期與終期是如何選定的，因為如果選擇不當，任何計算出來的結果都可能會被大大扭曲，尤其當基期的盈餘過低時，很可能得出驚人但卻不合理的成長率，不過在上表中，1965年的表現算是相當的不錯，當年度的獲利在那之前的十年中排名第二。



As you can see from the two tables, the comparative growth rates of Berkshire’s two elements of value have changed in the last decade, a result reflecting our ever-increasing emphasis on business acquisitions. Nevertheless, Charlie Munger, Berkshire’s Vice Chairman and my partner, and I want to increase the figures in both tables. In this ambition, we hope – metaphorically – to avoid the fate of the elderly couple who had been romantically challenged for some time. As they finished dinner on their 50th anniversary, however, the wife – stimulated by soft music, wine and candlelight – felt a long-absent tickle and demurely suggested to her husband that they go upstairs and make love. He agonized for a moment and then replied, “I can do one or the other, but not both.”

從這兩張表中大家可以看出，這兩項決定Berkshire價值因素的成長率，在過去十年中有著相當大的轉變，這主要反應出我們重心越來越擺在企業購併之上，儘管如此，Berkshire的副董事長，也是本人的主要合夥人-查理曼格跟我本人還是努力想要增加上面這兩張表的數字，在這方面，我們儘量避免像某對相愛多年的老夫婦一樣，當他們歡度五十年結婚紀念日大餐之後，老太太受到浪漫的音樂、美酒及燭光所刺激，難得一陣激情湧上心頭，害羞地暗示老伴帶她到樓上嘿咻嘿咻，只見他老公沉默了一陣，然後說到:「親愛的，以我這把年紀，一次只能做好一件事…」。



Acquisitions

購併案

Over the years, our current businesses, in aggregate, should deliver modest growth in operating earnings. But they will not in themselves produce truly satisfactory gains. We will need major acquisitions to get that job done.

In this quest, 2005 was encouraging. We agreed to five purchases: two that were completed last year, one that closed after yearend and two others that we expect to close soon. None of the deals involve the issuance of Berkshire shares. That’s a crucial, but often ignored, point: When a management proudly acquires another company for stock, the shareholders of the acquirer are concurrently selling part of their interest in everything they own. I’ve made this kind of deal a few times myself – and, on balance, my actions have cost you money.

展望未來，我們旗下各個營運單位，總的來說，應該可以繳出不錯的營運成績，但想要有大幅度的成長其可能性卻不高，除非是仰賴大型的購併案，就這方面而言，2005年的成果無疑令人感到相當振奮，最近我們已達成五個案子，兩個已於去年結案，還有一個於在今年年初完成，另外兩個也可望於近日結案，五個案子全部都不涉及發行新股，這點相當重要，但卻經常被忽略，當某家公司的經營階層很驕傲地宣佈將以換股方式購併另一家公司時，事實上這代表併購方的股東將出售自己原有權益的一部份以換取新公司，我自己過去就曾從事不少這樣的案子，事後證明，這類的交易讓各位損失不貸。



Here are last year’s purchases:

以下是去年幾件購併案的說明:

• On June 30 we bought Medical Protective Company (“MedPro”), a 106-year-old medical malpractice insurer based in Fort Wayne. Malpractice insurance is tough to underwrite and has proved to be a graveyard for many insurers. MedPro nevertheless should do well. It will have the attitudinal advantage that all Berkshire insurers share, wherein underwriting discipline trumps all other goals. Additionally, as part of Berkshire, MedPro has financial strength far exceeding that of its competitors, a quality assuring doctors that long-to-settle claims will not end up back on their doorstep because their insurer failed. Finally, the company has a smart and energetic CEO, Tim Kenesey, who instinctively thinks like a Berkshire manager.

•六月三十日我們買下醫療防護公司(以下簡稱MedPro)，這是一家位於Fort Wayne擁有106年歷史的過失醫療險保險公司，過失醫療險這門生意很難做，很多保險公司為此因而陣亡，不過MedPro在這方面卻做的相當不錯，它享有與Berkshire旗下保險公司類似的競爭優勢，那就是核保紀律至上的原則，此外，在加入Berkshire之後，MedPro的財務實力將因此大大超越其它競爭對手，這將使得投保的醫生不必擔心，萬一將來有一天保險公司倒閉，火會再燒回到自家門口，最後該公司擁有一位既聰明、精力又旺盛的領導者，Tim Kenesey，他可謂天生的Berkshire專業經理人。



• Forest River, our second acquisition, closed on August 31. A couple of months earlier, on June 21, I received a two-page fax telling me – point by point – why Forest River met the acquisition criteria we set forth on page 25 of this report. I had not before heard of the company, a recreational vehicle manufacturer with $1.6 billion of sales, nor of Pete Liegl, its owner and manager. But the fax made sense, and I immediately asked for more figures. These came the next morning, and that afternoon I made Pete an offer. On June 28, we shook hands on a deal. Pete is a remarkable entrepreneur. Some years back, he sold his business, then far smaller than today, to an LBO operator who promptly began telling him how to run the place. Before long, Pete left, and the business soon sunk into bankruptcy. Pete then repurchased it. You can be sure that I won’t be telling Pete how to manage his operation.

Forest River has 60 plants, 5,400 employees and has consistently gained share in the RV business, while also expanding into other areas such as boats. Pete is 61 – and definitely in an acceleration mode. Read the piece from RV Business that accompanies this report, and you’ll see why Pete and Berkshire are made for each other.

•Forest River-我們第二項購併案，在8/31結案，就在幾個月前，我收到一封兩頁的傳真，上面條列出該公司是如何符合我在年報中開出的購併條件，在這之前，我從來沒有聽過這家專門以製造休旅車年營業額達到16億美元的公司，當然更不認識它的老闆Pete Liegl，但這封傳真卻言之成理，所以當下我請他們提供更多的資料，隔天在我收到相關資訊之後，下午我就立刻開價給Pete，6/28我們握手成交，Pete實在是一位相當傑出的企業家，許多年前，當公司的營運規模還很小的時候，他把公司賣給融資購併業者，後者告訴他該如何經營這家公司，沒多久Pete因為看不下去就離開，而旋即這家公司也破產，於是Pete又把它給買回來，不過大家可以放心，我絕不會教Pete如何經營公司，Forest River擁有60個工廠，5,400位員工，在休旅車的市場佔有率持續攀升中，同時也試圖擴展包含船舶在內的新領域，Pete現年61歲，所以還在衝刺階段，大家可以參考後附有關休旅車市場的報導，你將會知道為何Pete跟Berkshire可說是天造地設的一對。



• On November 12, 2005, an article ran in The Wall Street Journal dealing with Berkshire’s unusual acquisition and managerial practices. In it Pete declared, “It was easier to sell my business than to renew my driver’s license.”

•2005/11/12，華爾街日報刊登了一篇文章，透露出Berkshire與眾不同的購併與經營方式，在這篇文章中，Pete說到，「賣公司比換駕照還容易」。



In New York, Cathy Baron Tamraz read the article, and it struck a chord. On November 21, she sent me a letter that began, “As president of Business Wire, I’d like to introduce you to my company, as I believe it fits the profile of Berkshire Hathaway subsidiary companies as detailed in a recent Wall Street Journal article.”

在紐約的Cathy Baron Tamraz在讀到這篇文章，靈機一動，11/21她寫了一封信給我，開頭寫到，身為Business Wire的總裁，我想向你介紹本公司，因為我相信它應該符合最近華爾街日報所刊登的成為Berkshire Hathaway關係企業的各項條件。



By the time I finished Cathy’s two-page letter, I felt Business Wire and Berkshire were a fit. I particularly liked her penultimate paragraph: “We run a tight ship and keep unnecessary spending under wraps. No secretaries or management layers here. Yet we’ll invest big dollars to gain a technological advantage and move the business forward.”

當我讀完Cathy所寫兩頁的信之後，我覺得Business Wire跟Berkshire真是天生的一對，我特別喜歡她寫的最後一段話，我們的紀律嚴明，且絕不容許絲毫的浪費，我們沒有秘書或管理階層，但我們卻願意花大把銀子以取得技術上的領先，使整個公司與時俱進。



I promptly gave Cathy a call, and before long Berkshire had reached agreement with Business Wire’s controlling shareholder, Lorry Lokey, who founded the company in 1961 (and who had just made Cathy CEO). I love success stories like Lorry’s. Today 78, he has built a company that disseminates information in 150 countries for 25,000 clients. His story, like those of many entrepreneurs who have selected Berkshire as a home for their life’s work, is an example of what can happen when a good idea, a talented individual and hard work converge.

我立刻打電話給Cathy，沒多久Berkshire便與Business Wire的大股東Lorry Lokey達成協議，他是在1961年創辦這家公司，正是他選定Cathy接任總裁的，我很喜歡像Lorry這樣的成功故事，現年78歲，他建立一家在全球150個國家散播各項訊息給25,000名客戶，他的故事，就像是其它選擇Berkshire做為企業最終歸宿的許多創辦人一樣，是結合理念，天份以及努力所產生的結晶。



• In December we agreed to buy 81% of Applied Underwriters, a company that offers a combination of payroll services and workers’ compensation insurance to small businesses. A majority of Applied’s customers are located in California.

十二月我們同意買下應用保險81%的股權，這家公司專門提供薪資服務與勞工退休保險套裝服務給中小企業，該公司大部份的客戶集中在加州地區。



In 1998, though, when the company had 12 employees, it acquired an Omaha-based operation with 24 employees that offered a somewhat-similar service. Sid Ferenc and Steve Menzies, who have built Applied’s remarkable business, concluded that Omaha had many advantages as an operational base – a brilliant insight, I might add – and today 400 of the company’s 479 employees are located here.

1998年，雖然當時公司的員工只有12個，不過它們卻買下奧瑪哈提供類似服務擁有24名員工的同業，Sid跟Steve 兩位建立起應用優質的企業，後來他們發現奧瑪哈更適合做為營運基地，我必須說他們真有眼光，時至今日，在全體479位員工中，有400位長駐於此。



Less than a year ago, Applied entered into a large reinsurance contract with Ajit Jain, the extraordinary manager of National Indemnity’s reinsurance division. Ajit was impressed by Sid and Steve, and they liked Berkshire’s method of operation. So we decided to join forces. We are pleased that Sid and Steve retain 19% of Applied. They started on a shoestring only 12 years ago, and it will be fun to see what they can accomplish with Berkshire’s backing.

就在一年以前，應用公司與Ajit Jain簽下一件大型的再保險合約，Ajit是國家產險再保部門優秀的經理人，他對Sid跟Steve的表現印象深刻，而對方也相當欣賞我們的營運模式，所以我們決定通力合作，我們很高興Sid跟Steve 繼續保有該公司19%的股權，他們在12年前草創這家公司，我們很期待在Berkshire的支持之下，他們會有怎樣的表現。



• Last spring, MidAmerican Energy, our 80.5% owned subsidiary, agreed to buy PacifiCorp, a major electric utility serving six Western states. An acquisition of this sort requires many regulatory approvals, but we’ve now obtained these and expect to close this transaction soon. Berkshire will then buy $3.4 billion of MidAmerican’s common stock, which MidAmerican will supplement with $1.7 billion of borrowing to complete the purchase. You can’t expect to earn outsized profits in regulated utilities, but the industry offers owners the opportunity to deploy large sums at fair returns – and therefore, it makes good sense for Berkshire. A few years back, I said that we hoped to make some very large purchases in the utility field. Note the plural – we’ll be looking for more.

去年春天，美中能源-我們持有80.5%股權的子公司，同意買下太平洋能源集團，該公司係美西六大州的主要電力供應商，這類的大型購併案需要通過許多主管機關的審核，但目前我們已取得核准，渴望於近日完成整個交易案，除了Berkshire將認購其總值34億美元的普通股，另外該公司還將對外舉債17億美元以取得足夠的資金，在公用管制事業中，你絕對無法賺取暴利，但這個產業讓投資人可以運用大筆的資金獲取合理的利潤，這對Berkshire來說相當合適，幾年前，我就曾說過，在這個領域，我們會投入大筆的資金進行許多購併案，請注意我講的是「許多」，後續仍將有許多好戲等著上場。



In addition to buying these new operations, we continue to make “bolt-on” acquisitions. Some aren’t so small: Shaw, our carpet operation, spent about $550 million last year on two purchases that furthered its vertical integration and should improve its profit margin in the future. XTRA and Clayton Homes also made value-enhancing acquisitions.

除了買進新事業之外，我們也將持續另一類企業內部擴充型的購併，事實上有些案子規模還不小，Shaw我們的地毯事業，去年就斥資5.5億美元買進兩家公司進行垂直整合，此舉將有助於提高公司的獲利率，XTRA跟Clayton房屋也進行類似價值增強的購併案。



Unlike many business buyers, Berkshire has no “exit strategy.” We buy to keep. We do, though, have an entrance strategy, looking for businesses in this country or abroad that meet our six criteria and are available at a price that will produce a reasonable return. If you have a business that fits, give me a call. Like a hopeful teenage girl, I’ll be waiting by the phone.

不像其它買主，Berkshire並沒有所謂的退出策略，我們買了之後就擺著不動，當然我們有所謂的進入策略，尋找國內外符合年報所列六項條件的對象，同時所開出的價格又能滿足我們要求的合理投資報酬率，所以如果你正好有符合條件的公司要賣，記得打電話給我，就像一個思春的少女，我會在電話旁苦苦守候。



Insurance

保險事業

Let’s now talk about our four sectors and start with insurance, our core business. What counts here is the amount of “float” and its cost over time. For new readers, let me explain. “Float” is money that doesn’t belong to us but that we temporarily hold. Most of our float arises because (1) premiums are paid upfront though the service we provide – insurance protection – is delivered over a period that usually covers a year and; (2) loss events that occur today do not always result in our immediately paying claims, because it sometimes takes many years for losses to be reported (asbestos losses would be an example), negotiated and settled. The $20 million of float that came with our 1967 entry into insurance has now increased – both by way of internal growth and acquisitions – to $49 billion.

接下來就讓我們來聊聊這四大事業，首先是保險業，這也是我們的核心事業，最重要的是浮存金的數量以及其長期的成本，對新讀者來說這名詞可能有點陌生，讓我先稍做一點解釋，這筆資金雖然不屬於我們所有，但卻可暫時為我們所用，而我們的浮存金之所以增加係由於(1)保費通常在我們提供服務之前就先預繳，(2)今天發生的損失不代表我們立刻就要理賠，其原因在於損害有時要在發生後好幾年才會被發現，從而協調及合解(比如說石棉案就是很好的例子)，這筆金額從1967年最早介入保險事業時的2,000萬美元，經由多年的內部成長及對外購併，累積增加至現在的490億美元之譜。



Float is wonderful – if it doesn’t come at a high price. Its cost is determined by underwriting results, meaning how the expenses and losses we will ultimately pay compare with the premiums we have received. When an insurer earns an underwriting profit – as has been the case at Berkshire in about half of the 39 years we have been in the insurance business – float is better than free. In such years, we are actually paid for holding other people’s money. For most insurers, however, life has been far more difficult: In aggregate, the property-casualty industry almost invariably operates at an underwriting loss. When that loss is large, float becomes expensive, sometimes devastatingly so.

浮存金固然不錯，但前提是取得成本要夠低，而其成本取決於核保的績效，也就是損失與費用佔保費收入的比例，當核保有利益時，就像Berkshire過去39年來多數的情況一樣，此時浮存金甚至比免費還好，在這些年度，意謂著別人付費來請我們幫他們保管資金，然而對於其他大部份的保險同業來說，可就沒有那麼好過了，總的來說，產物意外險業通常都會有核保損失，當損失過大時，就代表浮存金的成本過高，有時甚至高得離譜。



In 2004 our float cost us less than nothing, and I told you that we had a chance – absent a megacatastrophe – of no-cost float in 2005. But we had the mega-cat, and as a specialist in that coverage, Berkshire suffered hurricane losses of $3.4 billion. Nevertheless, our float was costless in 2005 because of the superb results we had in our other insurance activities, particularly at GEICO.

2004年我們持有浮存金的成本低於零，而之前我跟各位報告過，除非2005年發生什麼重大的天災地變，我們浮存金的成本也將在零以下，可惜2005年我們確實因為颶風損失了34億美元，不過我要跟各位報告，即便如此，由於包含GEICO在內的其他保險公司表現相當優異，使得2005年我們的浮存金的成本依舊低於零以下。



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

Auto policies in force grew by 12.1% at GEICO, a gain increasing its market share of U.S. private passenger auto business from about 5.6% to about 6.1%. Auto insurance is a big business: Each share point equates to $1.6 billion in sales.

去年GEICO的有效車險保單增加了12.1%，這使得該公司的在私人小客車車險的市場佔有率從5.6%成長至6.1%，汽車保險的市場很大，每一個百分點代表著是16億美元的銷售額。



While our brand strength is not quantifiable, I believe it also grew significantly. When Berkshire acquired control of GEICO in 1996, its annual advertising expenditures were $31 million. Last year we were up to $502 million. And I can’t wait to spend more.

雖然我們的品牌實力無法量化，但我相信同樣也大幅成長，當Berkshire在1996正式取得GEICO的控制權時，該公司每年的廣告預算是3,100萬美元，去年這個數字成長到5億美元，而現在我等不及要再追加預算。



Our advertising works because we have a great story to tell: More people can save money by insuring with us than is the case with any other national carrier offering policies to all comers. (Some specialized auto insurers do particularly well for applicants fitting into their niches; also, because our national competitors use rating systems that differ from ours, they will sometimes beat our price.) Last year, we achieved by far the highest conversion rate – the percentage of internet and phone quotes turned into sales – in our history. This is powerful evidence that our prices are more attractive relative to the competition than ever before. Test us by going to GEICO.com or by calling 800-847-7536. Be sure to indicate you are a shareholder because that fact will often qualify you for a discount.

我們的廣告奏效的原因在於我們的故事真的很精彩，一般大眾來我們這裡投保都可以比其它任何全國性保險公司獲得更多的折扣，(某些特殊的保險公司確實會給某些符合其條件的特定保戶特別優惠，而也由於各家計費公式不同，偶爾我們的競爭同業的價格會比我們優惠)，去年我們的成交率創下歷史新高，這泛指透過網路與電話成功投保的比率，這代表相較於同業我們在價格方面享有競爭力的最利有力證據，請上GEICO網站或是打800-847-7536詢問相關事宜，記得表明股東的身份，因為這樣通常會讓你享有特殊的折扣。



I told you last year about GEICO’s entry into New Jersey in August, 2004. Drivers in that state love us. Our retention rate there for new policyholders is running higher than in any other state, and by sometime in 2007, GEICO is likely to become the third largest auto insurer in New Jersey. There, as elsewhere, our low costs allow low prices that lead to steady gains in profitable business. That simple formula immediately impressed me 55 years ago when I first discovered GEICO. Indeed, at age 21, I wrote an article about the company – it’s reproduced on page 24 – when its market value was $7 million. As you can see, I called GEICO “The Security I Like Best.” And that’s what I still call it.

去年我曾向各位報告GEICO在八月重返紐澤西的市場，該州的駕駛人愛死我們了，其續保率甚至比全美其他任何一州都還要高，GEICO有希望在2007年一舉躍居該州第三大車險公司，如同其它地方一樣，超低的成本外加超低的保費使得企業的獲利能夠穩定的成長，55年前我第一次發現GEICO時，就是這樣簡單的公式讓我印象深刻，當時我只有21歲，立刻寫了一篇文章報導這家公司，詳後附，當時他的市值只有700萬美元，如大家所看到的，我將它稱之為我最鍾愛的股票，到現在還是如此。



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We have major reinsurance operations at General Re and National Indemnity. The former is run by Joe Brandon and Tad Montross, the latter by Ajit Jain. Both units performed well in 2005 considering the extraordinary hurricane losses that battered the industry. It’s an open question whether atmospheric, oceanic or other causal factors have dramatically changed the frequency or intensity of hurricanes. Recent experience is worrisome. We know, for instance, that in the 100 years before 2004, about 59 hurricanes of Category 3 strength, or greater, hit the Southeastern and Gulf Coast states, and that only three of these were Category 5s. We further know that in 2004 there were three Category 3 storms that hammered those areas and that these were followed by four more in 2005, one of them, Katrina, the most destructive hurricane in industry history. Moreover, there were three Category 5s near the coast last year that fortunately weakened before landfall.

我們的再保事業主要放在通用再保與國家產險之上，前者由Joe跟Tod所領導，後者則由Ajit Jain負責，兩家公司去年的表現都不錯，尤其考量去年超級颶風所帶來的重大損失，目前有關大氣或海洋或其他任何可能的因素是否大幅改變了颶風的強度與頻率並沒有標準的答案，不過最近的感受並不是很好，舉例來說我們知道，2004年以來的一百年內，大約有59個三級以上的颶風侵襲東南地區及墨西哥灣等地，其中只有三個是屬於五級，我們也知道光是2004年就有3個三級的颶風來襲，而2005年更增加為四個，其中一個正是大名鼎鼎的卡崔娜，這是有史以來造成損失最慘的颶風，令人慶幸的是有三個五級的颶風在登陸以前就順利減弱。



Was this onslaught of more frequent and more intense storms merely an anomaly? Or was it caused by changes in climate, water temperature or other variables we don’t fully understand? And could these factors be developing in a manner that will soon produce disasters dwarfing Katrina? Joe, Ajit and I don’t know the answer to these all-important questions. What we do know is that our ignorance means we must follow the course prescribed by Pascal in his famous wager about the existence of God. As you may recall, he concluded that since he didn’t know the answer, his personal gain/loss ratio dictated an affirmative conclusion.

這一連串的強烈猛攻究竟將會變成常態或只是一時的異常呢?? 或者這是因為氣候改變水面溫度或其它我們不知道的因素改變所致，而這些因素在未來是否會造成比卡崔娜更重大的災害呢?? Joe Ajit跟我都不知道這個問題的答案，我們只知道大意忽視將讓我們步上Pascal所提著名的上帝是否存在的賭注理論-巴斯卡賭注，大家應該記得，他所做的結論，正因為他不知道答案，所以他個人的得失賠率顯而易見。



So guided, we’ve concluded that we should now write mega-cat policies only at prices far higher than prevailed last year – and then only with an aggregate exposure that would not cause us distress if shifts in some important variable produce far more costly storms in the near future. To a lesser degree, we felt this way after 2004 – and cut back our writings when prices didn’t move. Now our caution has intensified. If prices seem appropriate, however, we continue to have both the ability and the appetite to be the largest writer of mega-cat coverage in the world.

有了前車之鑑，我們得到結論就是，我們只願意以遠高於去年的價格簽下巨災保單，而且我們只願承擔萬一這些因素果真釀成重大損害時我們不會覺得難受的總合風險，緣此在2004年後價格沒有明顯上昇的情況下，我們大幅縮減簽單的幅度，然而如果價格理想，我們依舊有能力也有意願成為全世界最大的巨災保險公司。



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

Our smaller insurers, with MedPro added to the fold, delivered truly outstanding results last year. However, what you see in the table below does not do full justice to their performance. That’s because we increased the loss reserves of MedPro by about $125 million immediately after our purchase. No one knows with any precision what amount will be required to pay the claims we inherited. Medical malpractice insurance is a “long-tail” line, meaning that claims often take many years to settle. In addition, there are other losses that have occurred, but that we won’t even hear about for some time.

我們的小型保險公司，去年包含新加入的MedPro表現依舊亮眼，然而下表所顯示的數字並不足以反應這個事實，這是因為在買下MedPro之後，我們在帳上立即提列了1.25億美元的損失準備金，沒有人可以精確地估算未來理賠的金額是多少，醫療不當險是一種長尾型的保險，這意味著理賠往往要耗費好幾年以上才能搞定，此外還有許多損失可能已經發生，只是我們還不知道而已。



One thing, though, we have learned – the hard way – after many years in the business: Surprises in insurance are far from symmetrical. You are lucky if you get one that is pleasant for every ten that go the other way. Too often, however, insurers react to looming loss problems with optimism. They behave like the fellow in a switchblade fight who, after his opponent has taken a mighty swipe at his throat, exclaimed, “You never touched me.” His adversary’s reply: “Just wait until you try to shake your head.” Excluding the reserves we added for prior periods, MedPro wrote at an underwriting profit. And our other primary companies, in aggregate, had an underwriting profit of $324 million on $1,270 million of volume. This is an extraordinary result, and our thanks go to Rod Eldred of Berkshire Hathaway Homestate Companies, John Kizer of Central States Indemnity, Tom Nerney of U. S. Liability, Don Towle of Kansas Bankers Surety and Don Wurster of National Indemnity.

只不過我們可以肯定一件事，那是我們在這行多年來的經驗，那就是意外隨時都可能會上門，而十次意外中，只要有一次是好的就已經偷笑了，而偏偏保險業者往往過度樂觀，這種行為就好像是兩個武士在決鬥時一般，在被對手迅速地在喉嚨劃上一刀之後，他大叫一聲道，「你碰不到我的」，只見對手說到，「等你搖搖頭之後再說吧」，在我們未補提額外的損失準備之前，該公司帳面上仍有核保利益。而我們旗下其它的保險公司，合計12.7億美元的保費收入中，仍有3.24億美元的利益，這樣的成績實在是相當的不錯，這一切都要感謝，Homestate的Rod、Central States的John、Kansas銀行保險的Don及國家產險的Don。



Here’s the overall tally on our underwriting and float for each major sector of insurance:

以下係主要保險事業的核保損益與浮存金數額。

(in $ millions)

Underwriting Profit (Loss) Yearend Float

Insurance Operations 2005 2004 2005 2004

General Re ....................... $( 334) $ 3 $22,920 $23,120
B-H Reinsurance.............. (1,069) 417 16,233 15,278

GEICO ............................. 1,221 970 6,692 5,960

Other Primary................... 235* 161 3,442 1,736

Total ................................. $ 53 $1,551 $49,287 $46,094

*Includes MedPro from June 30, 2005.

Regulated Utility Business



We have an 80.5% (fully diluted) interest in MidAmerican Energy Holdings, which owns a wide variety of utility operations. The largest of these are (1) Yorkshire Electricity and Northern Electric, whose 3.7 million electric customers make it the third largest distributor of electricity in the U.K.; (2) MidAmerican Energy, which serves 706,000 electric customers, primarily in Iowa; and (3) Kern River and Northern Natural pipelines, which carry 7.8% of the natural gas consumed in the U.S. When our PacifiCorp acquisition closes, we will add 1.6 million electric customers in six Western states, with Oregon and Utah providing us the most business. This transaction will increase MidAmerican’s revenues by $3.3 billion and its assets by $14.1 billion.

經由持股80.5%(按完全稀釋基礎計算)美中能源控股公司，我們擁有眾多公用事業的權益，其中主要的項目包括(1)擁有370萬用戶，英國第三大的電力公司約克夏電力以及北方電力(2)在愛荷華州擁有70.6萬用戶的美中能源公司(3)肯特河及北方天然等兩條天然氣輸送管線，約佔全美7.8%的天然氣運能，而當我們太平洋能源集團收購案完成之後，我們在西部六州將新增160個用電客戶，其中主要集中在奧瑞岡及猶它兩州，這項交易將使得美中能源的營收與資產各增加33億及141億美元。



The Public Utility Holding Company Act (“PUHCA”) was repealed on August 8, 2005, a milestone that allowed Berkshire to convert its MidAmerican preferred stock into voting common shares on February 9, 2006. This conversion ended a convoluted corporate arrangement that PUHCA had forced upon us. Now we have 83.4% of both the common stock and the votes at MidAmerican, which allows us to consolidate the company’s income for financial accounting and tax purposes. Our true economic interest, however, is the aforementioned 80.5%, since there are options outstanding that are sure to be exercised within a few years and that upon exercise will dilute our ownership.

公用事業控股公司管理法(PUHCA)在2005/8/8正式廢止，這將使Berkshire得以在2006/2/9將所持有的特別股轉換成具投票權的普通股，這次的轉換將使得該公司因PUHCA所造成扭曲的股權結構得以改正，現在我們同時持有83.4%的股權與投票權，這也使我們得以將該公司的營收與資產正式併入Berkshire的財務報表之中，然而我們在該公司所擁有的權益依舊維持在80.5%的水準，考量流通在外往後陸續會實現的股票認股權，這部份將使得我們的權益受到稀釋。



Though our voting power has increased dramatically, the dynamics of our four-party ownership have not changed at all. We view MidAmerican as a partnership among Berkshire, Walter Scott, and two terrific managers, Dave Sokol and Greg Abel. It’s unimportant how many votes each party has; we will make major moves only when we are unanimous in thinking them wise. Five years of working with Dave, Greg and Walter have underscored my original belief: Berkshire couldn’t have better partners. You will notice that this year we have provided you with two balance sheets, one representing our actual figures per GAAP on December 31, 2005 (which does not consolidate MidAmerican) and one that reflects the subsequent conversion of our preferred. All future financial reports of Berkshire will include MidAmerican’s figures.

雖然我們的投票權大幅增加，但四方合夥的態勢完全沒有改變，我們將美中能源視為Berkshire、Walter Scott及另外兩位傑出經理人Dave Sokol及Greg Abel的合夥事業，誰擁有投票權並不重要，只有在大家都具有共識的情況下，我們才會做出重大的決定，與Dave Greg 及Walter共事的這五年來，更加深我當初的信念，那就是Berkshire再也找不到更好的合夥人，大家會發現今年我們的資產負債表共有兩張，一張我們依照一般公認會計原則所編製的2005年年底的財務狀況(未將美中能源納入)，另一張則反應我們特別股轉換之後的狀況，至於以後年度的財務報告都會將美中能源納入其中。



Somewhat incongruously, MidAmerican owns the second largest real estate brokerage firm in the U.S. And it’s a gem. The parent company’s name is HomeServices of America, but our 19,200 agents operate through 18 locally-branded firms. Aided by three small acquisitions, we participated in $64 billion of transactions last year, up 6.5% from 2004. Currently, the white-hot market in residential real estate of recent years is cooling down, and that should lead to additional acquisition possibilities for us. Both we and Ron Peltier, the company’s CEO, expect HomeServices to be far larger a decade from now.

有點奇怪的是，美中能源另外還擁有全美第二大的不動產仲介商，而她卻是一顆耀眼的寶石，母公司的名稱是美國居家服務，不過旗下總共19,200名的仲介在全美18州則以不同的名稱營業，包含剛購併的三個據點在內，我們去年總共完成了總值640億美元的不動產交易，較2004年增加了6.5%，近年來呈現白熱化的住宅不動產交易市場有冷卻的跡象，這將使得我們有更多購併的機會，包含我們跟該公司的總裁Ron Peltier在內，都預期美國居家服務在未來十年內還有非常大的成長空間。



Here are some key figures on MidAmerican’s operations:

下表係美中能源幾項主要的營運數字:

Earnings (in $ millions)

2005 2004

U.K. utilities ....................................................................... $ 308 $ 326

Iowa utility ............................................................................ 288 268

Pipelines ............................................................................... 309 288

HomeServices......................................................................... 148 130

Other (net) ............................................................................ 107 172

Income (loss) from discontinued zinc project ..................................... 8 (579)

Earnings before corporate interest and taxes ................................ 1,168 605

Interest, other than to Berkshire ................................................. (200) (212)

Interest on Berkshire junior debt ................................................. (157) (170)

Income tax .............................................................................. (248) (53)

Net earnings........................................................................... $ 563 $ 170

Earnings applicable to Berkshire*................................................. $ 523 $ 237

Debt owed to others.............................................................. 10,296 10,528

Debt owed to Berkshire ........................................................... 1,289 1,478

*Includes interest earned by Berkshire (net of related income taxes) of $102 in 2005 and $110 in 2004.



Finance and Financial Products

財務與金融商品

The star of our finance sector is Clayton Homes, masterfully run by Kevin Clayton. He does not owe his brilliant record to a rising tide: The manufactured-housing business has been disappointing since Berkshire purchased Clayton in 2003. Industry sales have stagnated at 40-year lows, and the recent uptick from Katrina-related demand will almost certainly be short-lived. In recent years, many industry participants have suffered losses, and only Clayton has earned significant money. In this brutal environment Clayton has bought a large amount of manufactured-housing loans from major banks that found them unprofitable and difficult to service. Clayton’s operating expertise and Berkshire’s financial resources have made this an excellent business for us and one in which we are preeminent. We presently service $17 billion of loans, compared to $5.4 billon at the time of our purchase. Moreover, Clayton now owns $9.6 billion of its servicing portfolio, a position built up almost entirely since Berkshire entered the picture.

在金融方面，我們的耀眼明星當屬由Kevin所大力領導的Claytons房屋，他能有今天這樣的成績絕非佼倖，自從Berkshire在2003年買下Clayton後，整個組合房屋製造業的景氣每況愈下，營業總值創下四十年來新低，而卡崔娜所帶來需求的推昇僅屬短期效應，近年來許多同業虧損連連，卻只有Clayton賺了不少錢，在這樣惡劣的經營環境之下，Clayton從銀行手中買下大量的房屋融資債權，後者發現無利可圖，且難以提供服務，Clayton優異的經營手法外加Berkshire堅強的財務實力，讓我們能夠把這個產業經營得有聲有色，目前Clayton經手的房屋融資就高達170億美元之譜，這個數字遠比當初我們買下Clayton時的54億美元要高得許多，更甚者，光是Clayton直接持有的債權就有96億美元，這全都是Berkshire介入這個產業之後才建立的部位。



To finance this portfolio, Clayton borrows money from Berkshire, which in turn borrows the same amount publicly. For the use of its credit, Berkshire charges Clayton a one percentage-point markup on its borrowing cost. In 2005, the cost to Clayton for this arrangement was $83 million. That amount is included in “Other” income in the table on the facing page, and Clayton’s earnings of $416 million are after deducting this payment. On the manufacturing side, Clayton has also been active. To its original base of twenty plants, it first added twelve more in 2004 by way of the bankruptcy purchase of Oakwood, which just a few years earlier was one of the largest companies in the business. Then in 2005 Clayton purchased Karsten, a four plant operation that greatly strengthens Clayton’s position on the West Coast.

為了買下這些債權， Clayton於是回頭向Berkshire借錢，後者則對外舉借同樣的金額，因為要借助母公司的債信，於是Berkshire就向Clayton收取1%加成的保證費用，2005年這筆服務費的金額約為8,300萬美元，這筆款項列在其他收入項下，扣除這筆費用之後，Clayton還淨賺4.16億美元，至於在製造這方面，Clayton也同等活躍，除了原本遍佈全美的20座工廠，2004年經由購併破產的Oakwood，該公司又新增了12座工廠，後者在幾年前，還是全美最大的業者之一，2005年Clayton再度買下Karsten，新增的4座工廠使得Clayton在西岸的實力因而大增。



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Long ago, Mark Twain said: “A man who tries to carry a cat home by its tail will learn a lesson that can be learned in no other way.” If Twain were around now, he might try winding up a derivatives business. After a few days, he would opt for cats. We lost $104 million pre-tax last year in our continuing attempt to exit Gen Re’s derivative operation. Our aggregate losses since we began this endeavor total $404 million. Originally we had 23,218 contracts outstanding. By the start of 2005 we were down to 2,890. You might expect that our losses would have been stemmed by this point, but the blood has kept flowing. Reducing our inventory to 741 contracts last year cost us the $104 million mentioned above.

很久以前，馬克吐恩曾經說過，「如果有人曾經想抓著貓的尾巴進門，他一定會留下慘痛的經驗，」我想要是馬克吐恩活在現代，他應該嘗試去關掉衍生性金融商品部門，我保證不出幾天，他寧可選擇抓貓進門，去年光是為了繼續退出通用再保衍生性金融商品部門的任務，我們就承受了1.04億美元的損失，累計的損失已高達4.04億美元，當初退出時，我們留有23,218件合約，如今則還剩下2,890件，或許你會以為，我們的損失應該可以就此打住吧，事實上，血流一直到現在都還沒有止，去年光是為了終結741項合約就讓我們失血1.04億美元。



Remember that the rationale for establishing this unit in 1990 was Gen Re’s wish to meet the needs of insurance clients. Yet one of the contracts we liquidated in 2005 had a term of 100 years! It’s difficult to imagine what “need” such a contract could fulfill except, perhaps, the need of a compensation conscious trader to have a long-dated contract on his books. Long contracts, or alternatively those with multiple variables, are the most difficult to mark to market (the standard procedure used in accounting for derivatives) and provide the most opportunity for “imagination” when traders are estimating their value. Small wonder that traders promote them.

還記得1990年當初通用再保之所以會成立這個部門就是為了滿足保戶所需，但誇張的是在2005年我們終結的合約中，有一件的合約期限竟然長達100年，實在是很難想像，有誰會需要這樣的合約，除非是為了滿足那些仰賴獎金過活的交易員，要知道長期合約或是那些仰賴許多變數的合約是最難訂定市場價格的(這是標準的會計評量方法)，同時也是最具有想像空間，好讓交易雙方上下其手，也難怪交易員會大力推薦這類的合約。



A business in which huge amounts of compensation flow from assumed numbers is obviously fraught with danger. When two traders execute a transaction that has several, sometimes esoteric, variables and a far-off settlement date, their respective firms must subsequently value these contracts whenever they calculate their earnings. A given contract may be valued at one price by Firm A and at another by Firm B. You can bet that the valuation differences – and I’m personally familiar with several that were huge – tend to be tilted in a direction favoring higher earnings at each firm. It’s a strange world in which two parties can carry out a paper transaction that each can promptly report as profitable.

當一個行業焦點集中在大量獎金與推估數字的交易，很顯然的就很容易發生舞弊，當交易雙方訂下一件多項變數，(有時甚至是很怪異的變數)，同時約定結算日又特別長時，則交易員背後所代表的公司在結算其盈虧時就應該要特別注意評價問題，同樣的一件合約，在A公司可能是一個價格，在B公司又是另一個價格，我敢打賭這兩者之間的差異(有些我發現金額甚至相當巨大)，一定都對雙方有利，天下間竟然有一種合約是在簽下合約的那一刻，雙方都能同時認列獲利，這實在是非常詭異!!



I dwell on our experience in derivatives each year for two reasons. One is personal and unpleasant. The hard fact is that I have cost you a lot of money by not moving immediately to close down

每年我之所以都會提及衍生性金融商品主要有兩個原因，一個是私人且不甚愉快的經驗，事實上，由於我未能果斷及時退出這個市場，讓各位損失了大筆的金錢。



Gen Re’s trading operation. Both Charlie and I knew at the time of the Gen Re purchase that it was a problem and told its management that we wanted to exit the business. It was my responsibility to make sure that happened. Rather than address the situation head on, however, I wasted several years while we attempted to sell the operation. That was a doomed endeavor because no realistic solution could have extricated us from the maze of liabilities that was going to exist for decades. Our obligations were particularly worrisome because their potential to explode could not be measured. Moreover, if severe trouble occurred, we knew it was likely to correlate with problems elsewhere in financial markets. So I failed in my attempt to exit painlessly, and in the meantime more trades were put on the books. Fault me for dithering. (Charlie calls it thumb-sucking.) When a problem exists, whether in personnel or in business operations, the time to act is now.

通用再保的交易部門，在當初買下該公司時，查理跟我就知道這是個大麻煩，所以當時我們也知會公司主管，我們要退出這個市場的想法，只是沒有貫徹意志是我的責任，未能及時快刀斬亂麻，我還浪費了好幾年的時間想要將這個部門對外求售，只是這樣的舉動事後證明終將徒勞無功，因為這類燙手的山竽是不會有人笨到會想要去接手的，而這類的潛在負債特別棘手，因為沒有人能夠預估未來潛在的風險有多高，更甚者，我們慢慢了解如果市場上有任何風吹草動，所可能引發的連鎖效應，就這樣我未能成功地達成毫髮不傷退出市場的任務，目前許多的交易依舊留在帳上，大家可以怪我無能，(查理則說我是低能兒)，每當發現問題存在，不管是人事上或是營運上，最佳的解決時點就是現在!



The second reason I regularly describe our problems in this area lies in the hope that our experiences may prove instructive for managers, auditors and regulators. In a sense, we are a canary in this business coal mine and should sing a song of warning as we expire. The number and value of derivative contracts outstanding in the world continues to mushroom and is now a multiple of what existed in 1998, the last time that financial chaos erupted.

Our experience should be particularly sobering because we were a better-than-average candidate to exit gracefully. Gen Re was a relatively minor operator in the derivatives field. It has had the good fortune to unwind its supposedly liquid positions in a benign market, all the while free of financial or other pressures that might have forced it to conduct the liquidation in a less-than-efficient manner. Our accounting in the past was conventional and actually thought to be conservative. Additionally, we know of no bad behavior by anyone involved.

而我之所以常常苦口婆心的第二個原因，是我想要將這類慘痛的經驗提供給企業經理人、會計師以及主管當局參考，希望能夠對其有所幫助，從某個角度來說，之前我們身處地雷中心，在我們順利脫身的同時，也應該大聲視警，目前全球流通在外的衍生性金融商品的數量與金額屢創新高，相較1998年最近一次金融風暴發生時，又爆增了好幾倍，儘管我們很幸運地在市場風平浪靜時平和的退出，而通用再保在這個市場中還只能算是個小角色，但損失都已如此的慘重，實在是很難想像當市場發生動盪，大家爭相退出市場時，會是一個怎樣的景況，而我們的會計認列原則，在過去一向被視為極為保守，實際上也是如此，此外就我們所知，旗下事業並無任何人員涉及到可能的誠信問題。



It could be a different story for others in the future. Imagine, if you will, one or more firms (troubles often spread) with positions that are many multiples of ours attempting to liquidate in chaotic markets and under extreme, and well-publicized, pressures. This is a scenario to which much attention should be given now rather than after the fact. The time to have considered – and improved – the reliability of New Orleans’ levees was before Katrina.

When we finally wind up Gen Re Securities, my feelings about its departure will be akin to those expressed in a country song, “My wife ran away with my best friend, and I sure miss him a lot.”

不過對於別人來說，以後可能就會面臨很大的問題，各位可以想像，若是有一家或很多家的公司(禍總是不單行的)，持有的部份大於我們好幾倍，想要在一個極度混亂壓力大且公開的市場中退出，會是一個怎樣的景況，我想大家實在是有必要要未雨稠繆，防範卡崔娜最有利的時機是在她還未來臨之前，我想有一天當我們正式結束通用再保證券之時，我的感想只有一首鄉村歌曲可以形容，「我的老婆跟我最要好的朋友跑了，我實在是很懷念他!」



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Below are the results of our various finance and financial products activities:

(in $ millions)

下表是我們各類財務與金融商品的營運數字:



Pre-Tax Earnings Interest-Bearing Liabilities

2005 2004 2005 2004

Trading – ordinary income ............................ $ 200 $ 264 $1,061 $5,751

Gen Re Securities (loss) ................................. (104) (44) 2,617* 5,437*

Life and annuity operation ............................. 11 (57) 2,461 2,467

Value Capital (loss) ....................................... (33) 30 N/A N/A

Leasing operations ......................................... 173 92 370 391
Manufactured-housing finance (Clayton)....... 416 192 9,299 3,636

Other............................................................... 159 107 N/A N/A

Income before capital gains............................ 822 584

Trading – capital gains (losses) ..................... (234) 1,750

Total .............................................................. $ 588 $2,334

*Includes all liabilities



Manufacturing, Service and Retailing Operations

製造服務與零售部門營運狀況



Our activities in this part of Berkshire cover the waterfront. Let’s look, though, at a summary balance sheet and earnings statement for the entire group.

Berkshire在這部份的營運範圍可謂包山又包海，讓我們從整體的營運數字著手檢視。



Balance Sheet 12/31/05 (in $ millions)

Assets Liabilities and Equity

Cash and equivalents .............................. $ 1,004 Notes payable ............................ $ 1,469

Accounts and notes receivable ............... 3,287 Other current liabilities.............. 5,371

Inventory ................................................ 4,143 Total current liabilities .............. 6,840

Other current assets ................................ 342

Total current assets................................. 8,776

Goodwill and other intangibles............... 9,260 Deferred taxes............................ 338

Fixed assets............................................. 7,148 Term debt and other liabilities... 2,188

Other assets............................................. 1,021 Equity ........................................ 16,839

$26,205 $26,205

Earnings Statement (in $ millions)

2005 2004 2003

Revenues .................................................................................... $46,896 $44,142 $32,106

Operating expenses (including depreciation of $699 in 2005,

$676 in 2004 and $605 in 2003).......................................... 44,190 41,604 29,885

Interest expense (net).............................................................. 83 57 64

Pre-tax earnings................................................................... 2,623 2,481 2,157

Income taxes........................................................................... 977 941 813

Net income ........................................................................ $ 1,646 $ 1,540 $ 1,344


This eclectic collection, which sells products ranging from Dilly Bars to fractional interests in Boeing 737s, earned a very respectable 22.2% on average tangible net worth last year. It’s noteworthy also that these operations used only minor financial leverage in achieving that return. Clearly, we own some terrific businesses. We purchased many of them, however, at substantial premiums to net worth – a point reflected in the goodwill item shown on the balance sheet – and that fact reduces the earnings on our average carrying value to 10.1%.

這些精挑細選的組合，所販賣的產品從冰棒到波音737客機部份所有權，應有盡有，去年股東權益報酬率高達22.2%，特別值得說明的是他們極少運用財務槓桿，他們無疑是最優秀的企業，當然由於我們大多以高於淨值相當大的幅度買下，因此帳上會出現大量的商譽，而商譽的攤銷也使得我們帳列成本的投資報酬率降為10.1%。



Here are the pre-tax earnings for the larger categories or units.

以下係主要營業項目的盈餘明細:



Pre-Tax Earnings

(in $ millions)

2005 2004

Building Products ...................................................................... $ 751 $ 643

Shaw Industries ............................................................................ 485 466

Apparel & Footwear ...................................................................... 348 325

Retailing of Jewelry, Home Furnishings and Candy ............................... 257 215

Flight Services............................................................................. 120 191

McLane....................................................................................... 217 228

Other businesses ........................................................................... 445 413
$2,623 $2,481



• In both our building-products companies and at Shaw, we continue to be hit by rising costs for raw materials and energy. Most of these operations are significant users of oil (or more specifically, petrochemicals) and natural gas. And prices for these commodities have soared. We, likewise, have raised prices on many products, but there are often lags before increases become effective. Nevertheless, both our building-products operations and Shaw delivered respectable results in 2005, a fact attributable to their strong business franchises and able managements.

‧在建材與地毯業務方面，我們面臨了原料成本與能源價格持續上漲的困境，大部份公司的營運都極為仰賴石油及石化相關產品與天然氣，這類的物資價格飛漲，為此我們也以調漲產品價格因應，只是這期間通常存在著些許落差，儘管如此，我們的建材與地毯業務在2005年依然繳出漂亮的成績單，這都要歸功於公司營運的競爭力與管理團隊的經營能力。



• In apparel, our largest unit, Fruit of the Loom, again increased earnings and market-share. You know, of course, of our leadership position in men’s and boys’ underwear, in which we account for about 48.7% of the sales recorded by mass-marketers (Wal-Mart, Target, etc.). That’s up from 44.2% in 2002, when we acquired the company. Operating from a smaller base, we have made still greater gains in intimate apparel for women and girls that is sold by the mass-marketers, climbing from 13.7% of their sales in 2002 to 24.7% in 2005. A gain like that in a major category doesn’t come easy. Thank John Holland, Fruit’s extraordinary CEO, for making this happen.

‧在服飾業方面，我們最大部門Fruit of Loom的盈餘與市佔率再度創下新高，大家當然知道我們男士內衣褲與兒童服飾在量販通路(諸如威名百貨與Target等)的領導地位，市佔率從2002年的44.2%一路攀升到現在的48.7%，另外在女性內衣褲與少女服方面，受惠於營運基期較低的緣故，在量販通路的市場佔有率更從2002年的13.7%大舉攀升至2005年的24.7%，以這類大宗物資行業來說，能有這樣的成長實在是不容易，這都要感謝該公司的總裁John。



• I told you last year that Ben Bridge (jewelry) and R. C. Willey (home furnishings) had same-store sales gains far above the average of their industries. You might think that blow-out figures in one year would make comparisons difficult in the following year. But Ed and Jon Bridge at their operation and Scott Hymas at R. C. Willey were more than up to this challenge. Ben Bridge had a 6.6% same-store gain in 2005, and R. C. Willey came in at 9.9%.

‧去年我曾向各位報告Ben Bridge珠寶及R.C.Willey傢俱的單店營業額成長率遠高於同業平均，各位或許會認為，這樣爆炸性的成長今年將很難再看到，但Ben Bridge的Ed和Jon與R.C.Willey的Scott卻再次完成不可能的任務，Ben Bridge的單店營業額成長了6.6%，至於R.C.Willey更成長了9.9%。



Our never-on-Sunday approach at R. C. Willey continues to overwhelm seven-day competitors as we roll out stores in new markets. The Boise store, about which I was such a skeptic a few years back, had a 21% gain in 2005, coming off a 10% gain in 2004. Our new Reno store, opened in November, broke out of the gate fast with sales that exceeded Boise’s early pace, and we will begin business in Sacramento in June. If this store succeeds as I expect it to, Californians will see many more R. C. Willey stores in the years to come.

我們R.C.Willey推動的星期天不開張政策持續在新據點所向披靡，打得其他全年無休的同業招架不住，Boise分店-這家幾年前首度開張時曾被我提出質疑的店面，2005年繳出25%成長的成績單，比前一年的10%又更上一層樓，而我們去年11月才在Reno新開的店面，其開張初期的營業額甚至打破Boise原來的記錄，今年六月我們也將在沙加緬度設立據點，而如果這家店一如我所預期的將一炮而紅，往後各位在加州地區將可以看到更多R.C.Willey的傢俱店。



• In flight services, earnings improved at FlightSafety as corporate aviation continued its rebound. To support growth, we invest heavily in new simulators. Our most recent expansion, bringing us to 42 training centers, is a major facility at Farnborough, England that opened in September. When it is fully built out in 2007, we will have invested more than $100 million in the building and its 15 simulators. Bruce Whitman, FlightSafety’s able CEO, makes sure that no competitor comes close to offering the breadth and depth of services that we do. Operating results at NetJets were a different story. I said last year that this business would earn money in 2005 – and I was dead wrong.

Our European operation, it should be noted, showed both excellent growth and a reduced loss. Customer contracts there increased by 37%. We are the only fractional-ownership operation of any size in Europe, and our now-pervasive presence there is a key factor in making NetJets the worldwide leader in this industry.

在航空服務方面，國際飛安受惠於企業航空景氣反彈獲利持續改善，為了因應業務成長，我們繼續砸重心添購新的飛行模擬器，最近我們擴編至42個訓練中心，其中大多是位於英國Farnborogh，預訂於今年九月開幕，等到2007年全部完工之後，我們總計要投資一億美元在建築與15座飛行模擬器之上，國際飛安的總裁Bruce保證不會有任何一家同業能夠提供像我們這樣既深且廣的服務，然而另外一方面，NetJets的經營情況卻剛好相反，去年我跟各位報告說2005年公司將轉虧為盈，事實證明，我大錯特錯，雖然我們在歐洲地區方面的營運好轉，營業額成長，損失減少，簽約的客戶增加了37%，而且我們也是歐洲地區惟一一家分時業者，事實上這也是讓NetJets得以成為這個產業領導者關鍵的因素之一。



Despite a large increase in customers, however, our U.S. operation dipped far into the red. Its efficiency fell, and costs soared. We believe that our three largest competitors suffered similar problems, but each is owned by aircraft manufacturers that may think differently than we do about the necessity of making adequate profits. The combined value of the fleets managed by these three competitors, in any case, continues to be less valuable than the fleet that we operate. Rich Santulli, one of the most dynamic managers I’ve ever met, will solve our revenue/expense problem. He won’t do it, however, in a manner that impairs the quality of the NetJets experience. Both he and I are committed to a level of service, security and safety that can’t be matched by others.

然而儘管客戶數大幅成長，但我們在美國地區的營運卻深陷於赤字之中，它的效率下滑，成本飆升，我們相信其它三家競爭對手也面臨同樣的問題，但由於他們背後各有大型飛機製造業者做為靠山，所以獲利與否並非其最重要的考量，這三家公司擁有的機隊價值總合，從任何一個角度來說，都比不上我們，Rich Santulli，是我所見過最有活力的經理人之一，我相信他一定會解決營收與成本的問題，當然前提是NetJets所提供的服務絕對不能打折扣，我們都矢志要提供最安全、最有保障的服務給我們的客戶。



• Our retailing category includes See’s Candies, a company we bought early in 1972 (a date making it our oldest non-insurance business). At that time, Charlie and I immediately decided to put Chuck Huggins, then 46, in charge. Though we were new at the game of selecting managers, Charlie and I hit a home run with this appointment. Chuck’s love for the customer and the brand permeated the organization, which in his 34-year tenure produced a more-than-tenfold increase in profits. This gain was achieved in an industry growing at best slowly and perhaps not at all. (Volume figures in this industry are hard to pin down.)

•我們的零售事業包含喜斯糖果，這家我們在1972年買下的公司(這是Berkshire買下最早的一家非保險公司)，在那時查理跟我立刻決定由當時46歲的Chuck Huggins主掌公司，雖然那個時候查理跟我還不太曉得該如何挑選經理人，但我們第一次出擊就擊出全壘打，Chuck對於顧客與品牌的熱愛感染了整個公司上下，這使得公司在他在任的34年內獲利成長了十幾倍，這在一個幾乎沒有成長的成熟型產業中尤屬難得，(有關這類產業的規模並不容易估算)。



At yearend, Chuck turned the reins at See’s over to Brad Kinstler, who previously had served Berkshire well while running Cypress Insurance and Fechheimer’s. It’s unusual for us to move managers around, but Brad’s record made him an obvious choice for the See’s job. I hope Chuck and his wife, Donna, are at the annual meeting. If they are, shareholders can join Charlie and me in giving America’s number one candy maker a richly-deserved round of applause.

去年年底Chuck將棒子正式交給Brad Kinstler，後者原本為Berkshire管理Cypress保險公司與Fechheimer傢具公司，我們很少將旗下事業經理人調來調去，但Brad過去的成績證明他應該能夠勝任喜斯的工作，我希望Chuck跟他太太Donna能夠出席今年的股東會，如果他們真的出現了，我希望所有出席的股東能和查理跟我一起給予這位美國一代糖果大師最熱烈的掌聲。



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

Every day, in countless ways, the competitive position of each of our businesses grows either weaker or stronger. If we are delighting customers, eliminating unnecessary costs and improving our products and services, we gain strength. But if we treat customers with indifference or tolerate bloat, our businesses will wither. On a daily basis, the effects of our actions are imperceptible; cumulatively, though, their consequences are enormous.

When our long-term competitive position improves as a result of these almost unnoticeable actions, we describe the phenomenon as “widening the moat.” And doing that is essential if we are to have the kind of business we want a decade or two from now. We always, of course, hope to earn more money in the short-term. But when short-term and long-term conflict, widening the moat must take precedence.

每天，在各種不同的情況下，我們旗下事業的競爭力都會有所變化，有時強化，有時則衰退，每當我們讓客戶滿意，削減不必要的開支，改進我們的產品與服務，我們的競爭力就會增加，但每當我們對客戶冷漠以對或是態度高傲，我們的企業就會委縮，若從每天來看，這樣的變化或許細微到難以察覺，但長久累積下來，其所產生的影響卻是相當巨大的，當我們的長期競爭力因為這些細微的動作而加強時，我們將這種現象稱之為「強化城牆」，這對於致力於建立百年事業的我們來說極為重要，當然大家都想要在短期內賺到最多的錢，但是當短期與長期利益兩者相衝突時，我們寧可選擇後者。



If a management makes bad decisions in order to hit short-term earnings targets, and consequently gets behind the eight-ball in terms of costs, customer satisfaction or brand strength, no amount of subsequent brilliance will overcome the damage that has been inflicted. Take a look at the dilemmas of managers in the auto and airline industries today as they struggle with the huge problems handed them by their predecessors. Charlie is fond of quoting Ben Franklin’s “An ounce of prevention is worth a pound of cure.” But sometimes no amount of cure will overcome the mistakes of the past. Our managers focus on moat-widening – and are brilliant at it. Quite simply, they are passionate about their businesses. Usually, they were running those long before we came along; our only function since has been to stay out of the way. If you see these heroes – and our four heroines as well – at the annual meeting, thank them for the job they do for you.

換言之，如果經營者為了達到短期的盈餘目標做出錯誤的決策，因而犧牲了客戶滿意度或品牌力，則造成的損害將永難彌補，看看目前汽車業與航空業經營者普遍面臨的困境，被迫接下前任經營者所留下的燙手山竽，查理常常喜歡引用富蘭克林的一句名言，「一盎斯的預防遠勝於一磅的治療」，但我認為有時傷害在造成之後，任何的治療都已於事無補，我們的經理人專注於擴大城牆，而且可說是相當在行，我想道理很簡單，那就是他們對於所管理的事業充滿了熱情，通常在我們加入之前，他們就已經在原來的崗位之上了，我們惟一能做的就是不要擋到他們的路，如果各位在股東會上遇到這些英雄們(當然也包括英雌)，記得向他們致上深深的謝意。



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

The attitude of our managers vividly contrasts with that of the young man who married a tycoon’s only child, a decidedly homely and dull lass. Relieved, the father called in his new son-in-law after the wedding and began to discuss the future:

我們旗下經理人所抱持的態度與某位剛剛娶到一個長相平庸卻是大老闆獨生女的年輕人完全相反，在完成多年心願之後，這位岳父在婚禮後將他的乘龍快婿叫來要跟他討論未來企業發展的大計。



“Son, you’re the boy I always wanted and never had. Here’s a stock certificate for 50% of the company. You’re my equal partner from now on.”

“Thanks, dad.”

“Now, what would you like to run? How about sales?”

“I’m afraid I couldn’t sell water to a man crawling in the Sahara.”

“Well then, how about heading human relations?”

“I really don’t care for people.”

“No problem, we have lots of other spots in the business. What would you like to do?”

“Actually, nothing appeals to me. Why don’t you just buy me out?”

「兒子，你知道我一直想要一個像你這樣的男孩子，這是這家公司一半的股權，從現在開始，你將是我對等的合夥人，」

「爸，多謝你」

「那現在你說說對那個部門有興趣，業務部門如何」

「我的業務能力很差，恐怕連在沙漠賣水都不會」

「好吧，那人事部門如何」

「我不太會面對人群」

「沒關係，公司還有很多職務，你到底想要那一個」

「爸，其實我一點興趣都沒有，不如你將我那一半的股權買回去!!! 」



Investments

投資組合

We show below our common stock investments. Those that had a market value of more than $700 million at the end of 2005 are itemized.

下表列示Berkshire 2005年市價超過七億美元以上的股票投資。



12/31/05

Percentage of

Shares Company Company Owned Cost* Market

(in $ millions)

151,610,700 American Express Company ................... 12.2 $1,287 $ 7,802

30,322,137 Ameriprise Financial, Inc..................... 12.1 183 1,243

43,854,200 Anheuser-Busch Cos., Inc.................... 5.6 2,133 1,884

200,000,000 The Coca-Cola Company ........................ 8.4 1,299 8,062

6,708,760 M&T Bank Corporation .......................... 6.0 103 732

48,000,000 Moody’s Corporation .............................. 16.2 499 2,948

2,338,961,000 PetroChina “H” shares (or equivalents)... 1.3 488 1,915

100,000,000 The Procter & Gamble Company .......... 3.0 940 5,788

19,944,300 Wal-Mart Stores, Inc. ......................... 0.5 944 933

1,727,765 The Washington Post Company .............. 18.0 11 1,322

95,092,200 Wells Fargo & Company......................... 5.7 2,754 5,975

1,724,200 White Mountains Insurance..................... 16.0 369 963

Others ...................................................... 4,937 7,154
Total Common Stocks ............................. $15,947 $46,721



*This is our actual purchase price and also our tax basis; GAAP “cost” differs in a few cases because of write-ups or write-downs that have been required.

*此為我們實際取得的成本，也是按稅務基礎，至於依會計原則的成本則由於攤銷或調升而有所不同。



A couple of last year’s changes in our portfolio occurred because of corporate events: Gillette was merged into Procter & Gamble, and American Express spun off Ameriprise. In addition, we substantially increased our holdings in Wells Fargo, a company that Dick Kovacevich runs brilliantly, and established positions in Anheuser-Busch and Wal-Mart.

去年我們投資組合之所以發生變動的原因在於企業購併，吉列被寶僑家品合併，而美國運通則將Ameriprise分割出去，我們還大幅加碼了富國銀行，這家公司在Dick的經營下相當耀眼，此外我們也首度建立在威名百貨與Anheuser-Busch啤酒的部位。



Expect no miracles from our equity portfolio. Though we own major interests in a number of strong, highly-profitable businesses, they are not selling at anything like bargain prices. As a group, they may double in value in ten years. The likelihood is that their per-share earnings, in aggregate, will grow 6- 8% per year over the decade and that their stock prices will more or less match that growth. (Their managers, of course, think my expectations are too modest – and I hope they’re right.)

大家不要寄望這些投資組合會有什麼奇蹟發生，雖然我們持有一些高獲利且知名公司大量的股權，但他們的股價實在是稱不上是便宜，就整體而言，他們的股價在十年內極可能會倍增，總的來說在未來十年內，每股盈餘可能會有6%-8%的年成長，而其股價可能也會成等比例的上漲，(當然這些公司的經理人，可能會認為我的預估太過保守，不過我寧可相信他們是對的)。



* * * * * * * * * * *

The P&G-Gillette merger, closing in the fourth quarter of 2005, required Berkshire to record a $5.0 billion pre-tax capital gain. This bookkeeping entry, dictated by GAAP, is meaningless from an economic standpoint, and you should ignore it when you are evaluating Berkshire’s 2005 earnings. We didn’t intend to sell our Gillette shares before the merger; we don’t intend to sell our P&G shares now; and we incurred no tax when the merger took place.

It’s hard to overemphasize the importance of who is CEO of a company. Before Jim Kilts arrived at Gillette in 2001, the company was struggling, having particularly suffered from capital-allocation blunders. In the major example, Gillette’s acquisition of Duracell cost Gillette shareholders billions of dollars, a loss never made visible by conventional accounting. Quite simply, what Gillette received in business value in this acquisition was not equivalent to what it gave up. (Amazingly, this most fundamental of yardsticks is almost always ignored by both managements and their investment bankers when acquisitions are under discussion.)

2005年第四季，寶僑家品完成與吉列的合併案，依照一般公認會計原則的規定Berkshire帳上必須因此認列50億美元的稅前資本利得，然而從經濟的角度來看，這並無任何實質意義，各位在評估Berkshire 2005年的盈餘時，可以完全不必把這件事列入考慮，在公司被合併之前，我們從未考慮出售持股，在合併案完成之後，我們也沒有這個打算，我們也不會因為這個合併案多繳任何的稅，一家公司的總裁是誰其重要性實在是無以言喻，在Jim Kilts於2001年就任該公司總裁以前，這家公司載浮載沉，尤其在資本配置上鑄下許多大錯，其中尤以吉列購併Duracell電池一案最甚，公司因此浪擲了數十億美元，而這項損失按照傳統的會計原則卻一點都看不出來，道理很簡單，那就是吉列所獲得的企業價值遠遠不及其所付出的，(讓人驚訝的是，這個天經地義的道理，在雙方的經營階層與投資銀行討論合併案時，竟然完全被忽視不顧)。



Upon taking office at Gillette, Jim quickly instilled fiscal discipline, tightened operations and energized marketing, moves that dramatically increased the intrinsic value of the company. Gillette’s merger with P&G then expanded the potential of both companies. For his accomplishments, Jim was paid very well – but he earned every penny. (This is no academic evaluation: As a 9.7% owner of Gillette, Berkshire in effect paid that proportion of his compensation.) Indeed, it’s difficult to overpay the truly extraordinary CEO of a giant enterprise. But this specie is rare.

在接掌吉列之後，Jim很快地灌輸正確的財務觀念，縮減營運開支，強化市場行銷，這些舉措讓公司的實質價值大幅提昇，之後與寶僑家品的合併，更讓雙方未來發展的潛力更為大增，由於他的貢獻，Jim獲取了高額的報酬，但這份所得實至名歸，(雖然並未經過學術的估算，但身為吉列9.7%的權益擁有者，Berkshire事實上依比例付出了這份報酬，我們認為物超所值)，確實對待真正優秀的大型企業經理人，給予再多報酬都不為過，但這類的人才實在是鳳毛麟角。



Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won’t change, moreover, because the deck is stacked against investors when it comes to the CEO’s pay. The upshot is that a mediocre-or-worse CEO – aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo – all too often receives gobs of money from an ill-designed compensation arrangement.

然而觀諸現今美國企業高階經理人的報酬，與其本身的表現相較，普遍高得離譜，而且這樣的趨勢將很難改變，每當談到CEO的報酬時，代表股東的一方通常處於極為不利的一面，結局往往是表現平庸的總裁，在其親自挑選的人事主管與配合的顧問公司的護航之下，一再從設計不良的報酬制度中大撈一票。



Take, for instance, ten year, fixed-price options (and who wouldn’t?). If Fred Futile, CEO of Stagnant, Inc., receives a bundle of these – let’s say enough to give him an option on 1% of the company – his self-interest is clear: He should skip dividends entirely and instead use all of the company’s earnings to repurchase stock.

舉例來說，一項十年期固定價格的認股權(誰不是這樣發呢)就是最好的例子 ，現在假設，不成長企業的總裁不成材先生，取得大量這樣的認股權，又假設其可認股數約佔公司股份的1%，那麼我想為了自己的利益，他應該很清楚該怎麼做，他肯定不會發放股利給股東，而把公司所賺的錢全數用來買回公司的股份。



Let’s assume that under Fred’s leadership Stagnant lives up to its name. In each of the ten years after the option grant, it earns $1 billion on $10 billion of net worth, which initially comes to $10 per share on the 100 million shares then outstanding. Fred eschews dividends and regularly uses all earnings to repurchase shares. If the stock constantly sells at ten times earnings per share, it will have appreciated 158% by the end of the option period. That’s because repurchases would reduce the number of shares to 38.7 million by that time, and earnings per share would thereby increase to $25.80. Simply by withholding earnings from owners, Fred gets very rich, making a cool $158 million, despite the business itself improving not at all. Astonishingly, Fred could have made more than $100 million if Stagnant’s earnings had declined by 20% during the ten-year period.

現在又假設，在不成材先生的領導下，不成長公司果真如其名不怎麼成長，在之後的十年內，100億淨值的公司，每年都只賺10億，也就是流通在外的1億股，每股盈餘1美元，由於不成材一直不肯發放股利，而是將所有的盈餘用來買回股份，又假設公司的本益比一直維持在十倍上下，則在認股權截止時，公司的股價將上漲158%，原因在於買回股份使得公司流通在外的股份減少了3,870萬股，每股盈餘因而增加到25.8美元，而光是將股東的盈餘保留在公司，不成材先生就削翻了，儘管公司的狀況一點都沒有改善，但不成材卻能淨賺1.58億美元，更離譜的是，就算這十年間不成長公司的盈餘減少了20%，他老兄照樣有1億美元可以拿。



Fred can also get a splendid result for himself by paying no dividends and deploying the earnings he withholds from shareholders into a variety of disappointing projects and acquisitions. Even if these initiatives deliver a paltry 5% return, Fred will still make a bundle. Specifically – with Stagnant’s p/e ratio remaining unchanged at ten – Fred’s option will deliver him $63 million. Meanwhile, his shareholders will wonder what happened to the “alignment of interests” that was supposed to occur when Fred was issued options.

此外就算不發放股利給股東，也不用來買回公司股份，不成材也可以將盈餘拿去亂投資一通，就算這些投資只賺了區區的5%，不成材還是可以海撈一票，只要不成長公司的十倍本益比不變，光是他拿到的認股權就值6,300萬，在這之後，股東們才會驚覺，當初不成材拿到認股權時，口口聲聲說與股東的利益站在同一陣線，是怎麼一回事。



A “normal” dividend policy, of course – one-third of earnings paid out, for example – produces less extreme results but still can provide lush rewards for managers who achieve nothing. CEOs understand this math and know that every dime paid out in dividends reduces the value of all outstanding options. I’ve never, however, seen this manager-owner conflict referenced in proxy materials that request approval of a fixed-priced option plan. Though CEOs invariably preach internally that capital comes at a cost, they somehow forget to tell shareholders that fixed-price options give them capital that is free.

當然一般來說，通常的股利政策都會發放一部份，比如說發放三分之一的盈餘給股東，這樣的情況當然比較輕微，但經理人照樣還是可以海撈一票，公司總裁們很清楚這中間的遊戲規則，曉得每付出一個錢給股東，則其所持有的認股權價值就會少一分，但奇怪的是，我從來就不曾在認股權發行的股東會文件中提到這中間所牽涉到的利益衝突，雖然總裁們總是在公司內部一再提到取得資金是需要成本的，但不知為何他們卻忘了告訴股東，認股權等於讓經理人可以分文不出就取得公司股份。



It doesn’t have to be this way: It’s child’s play for a board to design options that give effect to the automatic build-up in value that occurs when earnings are retained. But – surprise, surprise – options of that kind are almost never issued. Indeed, the very thought of options with strike prices that are adjusted for retained earnings seems foreign to compensation “experts,” who are nevertheless encyclopedic about every management-friendly plan that exists. (“Whose bread I eat, his song I sing.”) Getting fired can produce a particularly bountiful payday for a CEO. Indeed, he can “earn” more in that single day, while cleaning out his desk, than an American worker earns in a lifetime of cleaning toilets. Forget the old maxim about nothing succeeding like success: Today, in the executive suite, the all too- prevalent rule is that nothing succeeds like failure.

我認為實在大可不必這樣，我想董事會要設計出一套將盈餘保留產生價值累積列入考量的認股權並不是件難事，但令人訝異的是，現實世界中，從來沒有人這樣做，這樣的想法對於那些薪資報酬專家來說好像是前所未聞，但他們卻極為清楚該如何討好經營階層的各項把戲，畢竟拿人手短，而身為總裁就算是被開除，在臨走之前仍然可以海撈一票，光是最後一天清理桌子打包走人所賺的錢，可能都比一個普通清潔工一輩子所賺的還多，今日，在總裁包廂，最最流行的一項法則就是，沒有比失敗還要成功的了。



Huge severance payments, lavish perks and outsized payments for ho-hum performance often occur because comp committees have become slaves to comparative data. The drill is simple: Three or so directors – not chosen by chance – are bombarded for a few hours before a board meeting with pay statistics that perpetually ratchet upwards. Additionally, the committee is told about new perks that other managers are receiving. In this manner, outlandish “goodies” are showered upon CEOs simply because of a corporate version of the argument we all used when children: “But, Mom, all the other kids have one.” When comp committees follow this “logic,” yesterday’s most egregious excess becomes today’s baseline.

鉅額的遣散費、豪華的福利，以及給予平庸表現的經理人過度的報酬，之所以常常會發生，是因為薪資委員會早已成為資料比較的俘虜，這中間的過程很簡單，三個左右的董事，這當然是事先挑選過的，在正式的董事會之前，往往會被迫接受長達數小時的數字轟炸，當然報表中所秀的薪資數字往往都是直線上昇，此外委員會還會被告知，某位高階經理人又得到了什麼樣特殊的待遇，在這樣的情況下，各種離譜的禮物就這樣落在總裁的身上，這情況在媽媽帶小孩的時候常會看到，「媽媽可是別的小孩都有」，會吵的小孩有糖吃，當薪資委員會遵循這樣的邏輯時，上次最誇張的要求，就變成這次最起碼的底線。



Comp committees should adopt the attitude of Hank Greenberg, the Detroit slugger and a boyhood hero of mine. Hank’s son, Steve, at one time was a player’s agent. Representing an outfielder in negotiations with a major league club, Steve sounded out his dad about the size of the signing bonus he should ask for. Hank, a true pay-for-performance guy, got straight to the point, “What did he hit last year?” When Steve answered “.246,” Hank’s comeback was immediate: “Ask for a uniform.”

(Let me pause for a brief confession: In criticizing comp committee behavior, I don’t speak as a true insider. Though I have served as a director of twenty public companies, only one CEO has put me on his comp committee. Hmmmm . . .)

我認為薪資委員會應該採取底特律老虎隊強打者Hank Greenberg的態度，他是我童年時期的偶像，Hank的兒子Steve，有一度擔任球員經紀人，他代表一位外野手與大聯盟球團談判，Steve大聲問他父親他到底可以拿多少獎金時，Hank這位有一分實力說一分話的漢子，直接切中要點問到，「他去年的打擊率是多少」，當Steve回答說二成四六時，Hank的回答直接了當，「能拿到球衣就不錯了」，(講到這裡，我必須坦誠，在批評薪資委員會的同時，我並沒有直接參與其中，因為我擔任過二十家上市公司的董事，但只有一位總裁敢把我安排在薪資委員會內，哦….)。

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

My views on America’s long-term problem in respect to trade imbalances, which I have laid out in previous reports, remain unchanged. My conviction, however, cost Berkshire $955 million pre-tax in 2005. That amount is included in our earnings statement, a fact that illustrates the differing ways in which GAAP treats gains and losses. When we have a long-term position in stocks or bonds, year-to-year changes in value are reflected in our balance sheet but, as long as the asset is not sold, are rarely reflected in earnings. For example, our Coca-Cola holdings went from $1 billion in value early on to $13.4 billion at yearend 1998 and have since declined to $8.1 billion – with none of these moves affecting our earnings statement. Long-term currency positions, however, are daily marked to market and therefore have an effect on earnings in every reporting period. From the date we first entered into currency contracts, we are $2.0 billion in the black.

從以前報告提出以來，我個人關於美國長期存在的貿易逆差問題，到目前為止，看法並沒有任何改變，只是我這樣的想法，讓Berkshire在2005年付出了稅前9.55億美元的代價，這筆金額已認列在公司當期的損益報表之上，事實上這反應出會計原則對於損益認列處理方式的不同，當我們持有股票或債券的長期部位時，每年價值的變動都會反應在資產負債表之上，只要資產沒有實際處份，其損益很少會反應在帳上，舉例來說，我們在可口可樂的持股價值從一開始的10億美元，一路飆到1998年底的134億美元，然後又滑落到81億美元，這一路走來，公司帳上的損益完全沒有受到影響，然而長期持有的外幣部位每天卻必須要按市價評量，也就是每當財務報表公佈時，損益就會因此變動，不過自從我們介入外匯合約以來，累積的獲利是20億美元。



We reduced our direct position in currencies somewhat during 2005. We partially offset this change, however, by purchasing equities whose prices are denominated in a variety of foreign currencies and that earn a large part of their profits internationally. Charlie and I prefer this method of acquiring nondollar exposure. That’s largely because of changes in interest rates: As U.S. rates have risen relative to those of the rest of the world, holding most foreign currencies now involves a significant negative “carry.” The carry aspect of our direct currency position indeed cost us money in 2005 and is likely to do so again in 2006. In contrast, the ownership of foreign equities is likely, over time, to create a positive carry – perhaps a substantial one.

2005年中我們確實減少了部份外幣直接部位，不過另外我們又轉而買進部份以外幣計價且其獲利有一大部份來自海外的公司股票，查理跟我對於用這種方式取得外幣部位感覺還不錯，主要的原因在於利率的變化，隨著美國利率水準相對於其它國家逐漸升高之際，使得現在許多外國貨幣承擔極大的負利差，這使得我們必須在2005年為持有的外幣付出代價，而2006年這情況仍會持續下去，相較之下，持有外國證券就長期而言，就可能會產生正的利差，而且差異可能還不小。



The underlying factors affecting the U.S. current account deficit continue to worsen, and no letup is in sight. Not only did our trade deficit – the largest and most familiar item in the current account – hit an all-time high in 2005, but we also can expect a second item – the balance of investment income – to soon turn negative. As foreigners increase their ownership of U.S. assets (or of claims against us) relative to U.S. investments abroad, these investors will begin earning more on their holdings than we do on ours. Finally, the third component of the current account, unilateral transfers, is always negative. The U.S., it should be emphasized, is extraordinarily rich and will get richer. As a result, the huge imbalances in its current account may continue for a long time without their having noticeable deleterious effects on the U.S. economy or on markets. I doubt, however, that the situation will forever remain benign. Either Americans address the problem soon in a way we select, or at some point the problem will likely address us in an unpleasant way of its own.

目前造成美國貿易逆差的原因依舊在持續惡化當中，而且眼前並無停止的態勢，不只是我們的貿易逆差(這是經常帳最主要也是最常見的項目)在2005年創下歷史新高，而且可預期的是我們第二個主項-投資收益的收支也很快就會轉為負值，隨著外國人持有越來越多美國資產(或者說是債權)，相較於美國人持有的外國資產，這些外國投資人所賺的錢也將慢慢比我們賺得還要多，而經常帳的第三個項目，也就是平衡項目，一直以來就都是負值，然而必須強調的是，美國原本就非常的富有，而且以後還會更有錢，也因此，短期間經常帳鉅額的逆差對於美國的經濟或者股市來說，可能看不出有太大的負面影響，但我不認為這樣的情況能夠無止盡的繼續下去，若是我們不趕快提出解決辦法對症下藥，一旦問題惡化到無可收拾的地步，那麻煩可就大了。



How to Minimize Investment Returns

如何減少投資收益



It’s been an easy matter for Berkshire and other owners of American equities to prosper over the years. Between December 31, 1899 and December 31, 1999, to give a really long-term example, the Dow rose from 66 to 11,497. (Guess what annual growth rate is required to produce this result; the surprising answer is at the end of this section.) This huge rise came about for a simple reason: Over the century American businesses did extraordinarily well and investors rode the wave of their prosperity. Businesses continue to do well. But now shareholders, through a series of self-inflicted wounds, are in a major way cutting the returns they will realize from their investments.

這些年來，對Berkshire及其它美國股市投資人來說，要賺錢實在是再容易不過的事了，從1899年12月31日到1999年12月31日期間，這應該算是相當長一段期間了，道瓊指數從66點漲到11,497點，(請各位猜猜需要多少年複合成長率，才能達到這個目標，令人訝異的答案會在稍後揭曉)，如此大幅上漲的原因其實很簡單，那就是這一個世紀以來，美國企業的表現的確相當優異，而投資人則有幸隨著企業繁榮而受惠，如今企業的表現依舊相當不錯，但投資人由於一連串地自我引發的傷害，導致本身所能夠獲得的投資報酬大幅縮水。



The explanation of how this is happening begins with a fundamental truth: With unimportant exceptions, such as bankruptcies in which some of a company’s losses are borne by creditors, the most that owners in aggregate can earn between now and Judgment Day is what their businesses in aggregate earn. True, by buying and selling that is clever or lucky, investor A may take more than his share of the pie at the expense of investor B. And, yes, all investors feel richer when stocks soar. But an owner can exit only by having someone take his place. If one investor sells high, another must buy high. For owners as a whole, there is simply no magic – no shower of money from outer space – that will enable them to extract wealth from their companies beyond that created by the companies themselves. Indeed, owners must earn less than their businesses earn because of “frictional” costs. And that’s my point: These costs are now being incurred in amounts that will cause shareholders to earn far less than they historically have.

要解釋這種現象背後的原因，首先必須從事情的本質談起，(扣除一些不重要的例外，例如說公司倒閉，這其中有部份損失是由債權人所承擔)，股東們所能夠賺取的，應該是約當於公司從現在到審判日為止的獲利總合，確實，經由買進賣出，投資人A只要夠聰明或夠幸運，有可能從投資人B那裡奪取較大的一塊餅，也確實，當股市上漲時，所有的投資人都覺得自己變得更富有了，但有股東要出場就代表必須找到另外一位股東來接手，如果他要賣高價，則代表接手的股東必須高價買入，對於整體股東來說，這中間並沒有什麼神奇的空間，天上不會掉下意外的禮物，使得股東們能夠得到比公司本身賺取的還要多，甚至於由於中間存在著許多摩擦成本，使得股東最後拿到的遠比公司賺取的還要少，在這裡我要提出我個人的看法，那就是目前這些飆升的交易成本已使得股東們拿到的，遠低於歷史的水平。



To understand how this toll has ballooned, imagine for a moment that all American corporations are, and always will be, owned by a single family. We’ll call them the Gotrocks. After paying taxes on dividends, this family – generation after generation – becomes richer by the aggregate amount earned by its companies. Today that amount is about $700 billion annually. Naturally, the family spends some of these dollars. But the portion it saves steadily compounds for its benefit. In the Gotrocks household everyone grows wealthier at the same pace, and all is harmonious.

為了要了解這中間的成本爆漲的原因，請大家想像一下，假設全美的企業皆由同一個家族所擁有，我們姑且將之稱呼為Gotrocks家族，本來在支付相關的稅負之後，這個家族在公司每年賺取的利潤累積之下，一代比一代富有，到今天這筆財富已累積到7,000億美元之譜，當然這個家族也會有必要的開支，但剩下的部份依舊會繼續累積賺取複利，對於Gotrocks的家族成員來說，大家都以一致的速度累積財富，家族間和諧相處。

But let’s now assume that a few fast-talking Helpers approach the family and persuade each of its members to try to outsmart his relatives by buying certain of their holdings and selling them certain others. The Helpers – for a fee, of course – obligingly agree to handle these transactions. The Gotrocks still own all of corporate America; the trades just rearrange who owns what. So the family’s annual gain in wealth diminishes, equaling the earnings of American business minus commissions paid. The more that family members trade, the smaller their share of the pie and the larger the slice received by the Helpers. This fact is not lost upon these broker-Helpers: Activity is their friend and, in a wide variety of ways, they urge it on.

但現在讓我們假設，有一群口才便給的外人突然出現，跑來說服家族成員，聲稱可以利用買進或賣出部份股權而拿到比其它家族成員更多的財富，當然這群外人經由處理這些買賣也能賺取部份佣金，當然Gotrocks依舊擁有美國企業所有的股權，這些交易只是決定那些成員擁有那些公司的股權，就這樣整個家族每年的所得因而減少，因為原來可以領取的盈餘，必須再扣除支付出去的佣金，而交易的越頻繁，家族可以分到的餅就越少，支付給外人的佣金就越多，當然外人很清楚這中間的遊戲規則，一再鼓勵家族成員大量從事交易。



After a while, most of the family members realize that they are not doing so well at this new “beat my- brother” game. Enter another set of Helpers. These newcomers explain to each member of the Gotrocks clan that by himself he’ll never outsmart the rest of the family. The suggested cure: “Hire a manager – yes, us – and get the job done professionally.” These manager-Helpers continue to use the broker-Helpers to execute trades; the managers may even increase their activity so as to permit the brokers to prosper still more. Overall, a bigger slice of the pie now goes to the two classes of Helpers. The family’s disappointment grows. Each of its members is now employing professionals. Yet overall, the group’s finances have taken a turn for the worse. The solution? More help, of course. It arrives in the form of financial planners and institutional consultants, who weigh in to advise the Gotrocks on selecting manager-Helpers. The befuddled family welcomes this assistance. By now its members know they can pick neither the right stocks nor the right stock-pickers. Why, one might ask, should they expect success in picking the right consultant? But this question does not occur to the Gotrocks, and the consultant-Helpers certainly don’t suggest it to them.

漸漸地，家族成員慢慢地了解，這種擊敗兄弟的遊戲沒有想像中好玩，這時另一群外人又出現了，這群新人告訴家族成員說，光是靠自己的力量並不足以打敗其它兄弟。

他們建議家族成員應該雇用專業經理人，也就是他們來管理，不過這群經理外人卻依舊雇用原來的經紀外人進行交易，有時這些經理外人甚至會故意提高交易量好讓經紀外人多賺一些，結果到頭來，更多的餅都被這兩群人所分走，當然可想而知，家族成員失望的情緒也日益升高，結果所有的成員都有自己專屬的專業經理人，但家族的財務狀況卻是每況愈下，該怎麼辦呢?? 當然是再尋求更多的協助囉，這時理財專員跟投資顧問適時地出現了，他們協助家族成員如何挑選適合的經理外人，頭昏腦脹的家族欣然地接受其建議，到現在家族成員終於明瞭，他們自己實在是沒有能力去挑選股票或是股票挑選人，當然有人或許會問，他們自己怎麼有可能會找到對的顧問呢?? Gotrocks家族不會想到這個問題，而投資顧問也不會主動提出來。





The Gotrocks, now supporting three classes of expensive Helpers, find that their results get worse, and they sink into despair. But just as hope seems lost, a fourth group – we’ll call them the hyper-Helpers – appears. These friendly folk explain to the Gotrocks that their unsatisfactory results are occurring because the existing Helpers – brokers, managers, consultants – are not sufficiently motivated and are simply going through the motions. “What,” the new Helpers ask, “can you expect from such a bunch of zombies?”

The new arrivals offer a breathtakingly simple solution: Pay more money. Brimming with self-confidence, the hyper-Helpers assert that huge contingent payments – in addition to stiff fixed fees – are what each family member must fork over in order to really outmaneuver his relatives.

現在由於Gotrocks家族要養三個階層的外人，使得收入銳減，陷入了絕望地步，而就在希望破滅之際，第四個團體適時出現了，我們姑且稱之為超級好幫手，這群友善的人士向Gotrocks家族解釋說，他們之所以會有這樣令人感到不滿意的結果出現，完全是因為現有的幫手，包含經紀人、經理人及投資顧問在內受到的激勵手段不夠所致，所以他們只會照章行事，這些新幫手問到，你能期望這群麻木不仁的人替你做些什麼呢?? 方法很簡單，這群新貴提出了令人窒息的解決方案，那就是「付更多的錢」，充滿了自信，這群超級幫手信誓旦旦地說，除了固定的費用之外，再加上高額的獎金，將是一舉戰勝其它家族成員的不二法門。



The more observant members of the family see that some of the hyper-Helpers are really just manager-Helpers wearing new uniforms, bearing sewn-on sexy names like HEDGE FUND or PRIVATE EQUITY. The new Helpers, however, assure the Gotrocks that this change of clothing is all-important, bestowing on its wearers magical powers similar to those acquired by mild-mannered Clark Kent when he changed into his Superman costume. Calmed by this explanation, the family decides to pay up.

比較機警的家族成員或許會發現，這些所謂的超級幫手只不過是原來的經理人穿上新的制服上面繡著醒目的”避險基金”或是”私募基金”的字眼罷了，但這些新貴卻告訴Gotrocks家族，這樣衣著的改變確實相當重要，就像是原本平庸的克拉克，在換上超人的衣服後，就脫胎換骨一樣，接受這樣的解釋之後，Gotrocks家族決定買單。



And that’s where we are today: A record portion of the earnings that would go in their entirety to owners – if they all just stayed in their rocking chairs – is now going to a swelling army of Helpers. Particularly expensive is the recent pandemic of profit arrangements under which Helpers receive large portions of the winnings when they are smart or lucky, and leave family members with all of the losses – and large fixed fees to boot – when the Helpers are dumb or unlucky (or occasionally crooked).

而這就是我們現在的處境，本來只要大家安份地待在搖椅上，全部都可以進入口袋的盈餘，現在卻必須由一大堆米蟲所瓜分，最離譜的是最近流行的約定是，當這群人夠聰明或幸運時，賺了錢，他們先分一大半，而若他們太笨或運氣不佳(有時甚至心懷鬼胎)，一旦發生損失，包含高昂的固定開支，卻都必須由家族成員來承擔。



A sufficient number of arrangements like this – heads, the Helper takes much of the winnings; tails, the Gotrocks lose and pay dearly for the privilege of doing so – may make it more accurate to call the family the Hadrocks. Today, in fact, the family’s frictional costs of all sorts may well amount to 20% of the earnings of American business. In other words, the burden of paying Helpers may cause American equity investors, overall, to earn only 80% or so of what they would earn if they just sat still and listened to no one.

有很多合約都是這樣安排的，賺錢，超級幫手分一大半，虧錢，Gotrocks家族承擔，同時還要支付一筆可觀的管理費用，我想將這個家族改名叫做冤大頭應該比較貼切，時至今日，美國投資人必須負擔的摩擦成本可能高達盈餘的20%，換句話說，整個家族最後拿到手的，可能只有原來的八成。



Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, “I can calculate the movement of the stars, but not the madness of men.” If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.

很久以前，牛頓就告訴我們三大運動定律，但我想牛頓的智慧並未擴及到投資領域，他在南海泡沫中賠了一大筆錢，之後他檢討說，「我可以準確計算出天體的運轉，但卻不能理解人類的瘋狂」，我想要不是受到投資損失的創傷，他極有可能會發現第四運動定律，那就是「對於整體投資人來說，收益會隨著變動而遞減」。



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

Here’s the answer to the question posed at the beginning of this section: To get very specific, the Dow increased from 65.73 to 11,497.12 in the 20th century, and that amounts to a gain of 5.3% compounded annually. (Investors would also have received dividends, of course.) To achieve an equal rate of gain in the 21st century, the Dow will have to rise by December 31, 2099 to – brace yourself – precisely 2,011,011.23. But I’m willing to settle for 2,000,000; six years into this century, the Dow has gained not at all.

現在答案揭曉，若要精確一點的話，回顧20世紀道瓊指數從65.73點上漲至11,497.12點，換算年複合成長率為5.3%(當然這期間股東另外還會收到一些股利)，而21世紀若要有相同的成長率，則在2099/12/31以前，道瓊必須要漲到2,011,011.23點才行，好啦，掐頭去尾二百萬就好，只是到目前為止，這個世紀已經過了六年了，道瓊指數卻連一點都沒有漲。



Debt and Risk

債務與風險



As we consolidate MidAmerican, our new balance sheet may suggest that Berkshire has expanded its tolerance for borrowing. But that’s not so. Except for token amounts, we shun debt, turning to it for only three purposes:

1) We occasionally use repos as a part of certain short-term investing strategies that incorporate ownership of U.S. government (or agency) securities. Purchases of this kind are highly opportunistic and involve only the most liquid of securities. A few years ago, we entered into several interesting transactions that have since been unwound or are running off. The offsetting debt has likewise been cut substantially and before long may be gone.

在併入美中能源的財務數字之後，我們新出爐的財務報表顯示Berkshire似乎對舉債的容忍度大為提高，但事實並非如此，除了象徵性的金額之外，我們儘量不傾向舉債，除非為了以下三種目的，1)我們偶爾會利用再買回，做為運用短期資金投資美國公債的策略之一，由於這類的投資具高度投機性，所以買進的標的也必須具高度流通性，幾年前，我們也曾介入幾項很有趣的交易，而隨著交易的陸續落幕，相對應的負債也大幅縮減，不久之後將完全消失。



2) We borrow money against portfolios of interest-bearing receivables whose risk characteristics we understand. We did this in 2001 when we guaranteed $5.6 billion of bank debt to take over, in partnership with Leucadia, a bankrupt Finova (which held a broad range of receivables). All of that debt has been repaid. More recently, we have borrowed to finance a widely-diversified, predictably-performing portfolio of manufactured-home receivables managed by Clayton. Alternatively, we could “securitize” – that is, sell – these receivables, but retain the servicing of them. If we followed this procedure, which is common in the industry, we would not show the debt that we do on our balance sheet, and we would also accelerate the earnings we report. In the end, however, we would earn less money. Were market variables to change so as to favor securitization (an unlikely event), we could sell part of our portfolio and eliminate the related debt. Until then, we prefer better profits to better cosmetics.

2)我們也會舉債用來買進有利息收入且我們了解其風險屬性的應收帳款，像我們在2001年就與Leucadia合作聯合對當時破產的融資公司Finova(其應收帳款琳瑯滿目)給予56億美元的債務擔保，目前該筆借款業已清償完畢，而最近，我們也借錢給子公司Clayton房屋以協助其買進風險相當分散且容易預估績效的房屋貸款債權，當然我們大可以像其它同業一樣將這些債權證券化賣掉，只保留後續的服務部份，如此我們帳上不但可以降低負債比例，而且可以達到美化帳面的目的，但如此一來，我們卻必須犧牲部份利潤，除非市場真的轉變，使得證券化較有利(我想這樣的可能性不大)，我們才可能出售部份應收帳款以降低負債，在這之前，我們寧要裡子不要面子。



3) At MidAmerican, we have substantial debt, but it is that company’s obligation only. Though it will appear on our consolidated balance sheet, Berkshire does not guarantee it.

3)子公司美中能源借了不少錢，但那是該公司的債務與我們無關，雖然這部份的債務確實會出現在母公司Berkshire的合併報表之上，但Berkshire並未對其保證。



Even so, this debt is unquestionably secure because it is serviced by MidAmerican’s diversified stream of highly-stable utility earnings. If there were to be some bolt from the blue that hurt one of MidAmerican’s utility properties, earnings from the others would still be more than ample to cover all debt requirements. Moreover, MidAmerican retains all of its earnings, an equity building practice that is rare in the utility field.

即便如此，我想這筆債務應該相當安全，因為背後所支應的是美中能源極為穩定且分散的電力事業收入，就算其中一條收入來源出現突發狀況，其他的收入也足以因應所有的債務要求，此外，美中能源還將所有的盈餘保留在公司，這在公用事業業界來說，可以說是相當罕見的。



From a risk standpoint, it is far safer to have earnings from ten diverse and uncorrelated utility operations that cover interest charges by, say, a 2:1 ratio than it is to have far greater coverage provided by a single utility. A catastrophic event can render a single utility insolvent – witness what Katrina did to the local electric utility in New Orleans – no matter how conservative its debt policy. A geographical disaster – say, an earthquake in a Western state – can’t have the same effect on MidAmerican. And even a worrier like Charlie can’t think of an event that would systemically decrease utility earnings in any major way. Because of MidAmerican’s everwidening diversity of regulated earnings, it will always utilize major amounts of debt.

從風險的角度來考量，有十項不同來源彼此不相干的收入來源來支應利息支出，會比單一收入來源的風險要低得許多，即便後者的利息保障倍數比較高，因為單一收入來源很有可能因為單一重大意外就癱瘓，看看卡崔娜對於紐奧良當地的電力事業所產生的影響就知道，不管它的負債比例有多保守都一樣，相較之下單一地域性的災害，比如說發生在西岸地區的地震，對美中能源就不致產生致命性的影響，就像神經質如查理這類的人，也很難想出任何會導致美中能源的收入全面性受到衝擊的可能事件，也就是因為該公司擁有相當分散且多元的收入來源，才使得我們放心讓它大幅舉債。



And that’s about it. We are not interested in incurring any significant debt at Berkshire for acquisitions or operating purposes. Conventional business wisdom, of course, would argue that we are being too conservative and that there are added profits that could be safely earned if we injected moderate leverage into our balance sheet.

就這樣，除此之外，我們不會因為購併或營運所需而進行大幅度舉債，傳統的企業觀念或許會認為我們這樣過於保守，只要運用適度的財務槓桿就可輕易地為公司增添獲利。



Maybe so. But many of Berkshire’s hundreds of thousands of investors have a large portion of their net worth in our stock (among them, it should be emphasized, a large number of our board and key managers) and a disaster for the company would be a disaster for them. Moreover, there are people who have been permanently injured to whom we owe insurance payments that stretch out for fifty years or more. To these and other constituencies we have promised total security, whatever comes: financial panics, stock-exchange closures (an extended one occurred in 1914) or even domestic nuclear, chemical or biological attacks.

這道理固然沒錯，但由於許多股東都將其個人大部份的資產擺在Berkshire的股票之上，(我必須強調也包含大部份的董事與主要經理人在內)，若公司有個三長兩短，大家可能都會受到影響，此外還有許多人在未年五十年內可能會須要我們的保險理賠，對於這些人來說，我們必須百分之百確保安全性，無論發生了什麼事，不管是金融風暴，股市停止交易(包含1914那次)，甚至是美國遭到核生化的恐佈攻擊都一樣。



We are quite willing to accept huge risks. Indeed, more than any other insurer, we write high-limit policies that are tied to single catastrophic events. We also own a large investment portfolio whose market value could fall dramatically and quickly under certain conditions (as happened on October 19, 1987). Whatever occurs, though, Berkshire will have the net worth, the earnings streams and the liquidity to handle the problem with ease.

我們很願意去承擔任何大型的風險，事實上，我們比任何保險公司承擔更多單一事件最高上限的保單，我們同時持有大量與股市連動性極高的投資組合，在某些情況下，其股價可能會發生重挫，就像1987年十月股市大崩盤時那樣，但不論發生什麼事，Berkshire擁有龐大淨值與穩定的收入來源以及足夠的流動性資金，因應任何可能發生的狀況。



Any other approach is dangerous. Over the years, a number of very smart people have learned the hard way that a long string of impressive numbers multiplied by a single zero always equals zero. That is not an equation whose effects I would like to experience personally, and I would like even less to be responsible for imposing its penalties upon others.

除此之外，任何的方法都相當危險，長久以來，許多相當聰明的人都為此學到慘痛的教訓，大費周章的結果到頭來一場空，這可是我個人所不願意見到的，而我更不願意大夥被我一起拖下水。



Management Succession

接班人選問題



As owners, you are naturally concerned about whether I will insist on continuing as CEO after I begin to fade and, if so, how the board will handle that problem. You also want to know what happens if I should die tonight. That second question is easy to answer. Most of our many businesses have strong market positions, significant momentum, and terrific managers. The special Berkshire culture is deeply ingrained throughout our subsidiaries, and these operations won’t miss a beat when I die.

身為股東，各位自然很關心，在我慢慢老化之際，我是否還會堅持繼續擔任公司的總裁，若答案是肯定的，各位或許又會問，那董事會將會如何處理這個問題，另外各位可能也很想知道，萬一那天我突然死掉，公司會變得怎樣，我想後面這個問題比較容易回答，因為我們旗下大部份事業都擁有穩固的市場地位、強勁的動能與優秀的經理人，Berkshire特殊的企業文化早已深植在各個分支機構當中，這一切在我死之後，都不會有任何影響。



Moreover, we have three managers at Berkshire who are reasonably young and fully capable of being CEO. Any of the three would be much better at certain management aspects of my job than I. On the minus side, none has my ‘crossover experience that allows me to be comfortable making decisions in either the business arena or in investments. That problem will be solved by having another person in the organization handle marketable securities. That’s an interesting job at Berkshire, and the new CEO will have no problem in hiring a talented individual to do it. Indeed, that’s what we have done at GEICO for 26 years, and our results have been terrific.

更重要的是，目前Berkshire有三位年紀既輕且適合擔任總裁的人選，任何一位在某些管理層面甚至比我還要勝任，但可惜的是，沒有任何一位能夠像我一樣兼具企業與投資兩個領域的共同經驗，所幸這個問題可以用選任另一個人選專責處理股票投資的方式來解決，這個工作相當有趣，因此新任總裁絕對有能力找到適當的人選來接任，就像GEICO過去26年以來就是如此，所得到的結果也令人感到相當滿意。



Berkshire’s board has fully discussed each of the three CEO candidates and has unanimously agreed on the person who should succeed me if a replacement were needed today. The directors stay updated on this subject and could alter their view as circumstances change – new managerial stars may emerge and present ones will age. The important point is that the directors know now – and will always know in the future – exactly what they will do when the need arises.

Berkshire的董事會業已充份討論過這三位可能的接班人選，且一致同意一旦任何意外發生，其中任何一位都能接替我的職位，且董事會隨著都會收到最新的訊息，一旦情況轉變，他們可以隨時改變其看法，不論是有新的潛力人選出現或是現在的候選人年紀變大等等，最重要的是，當需要他們做決定時，董事們知道該怎麼做。



The other question that must be addressed is whether the Board will be prepared to make a change if that need should arise not from my death but rather from my decay, particularly if this decay is accompanied by my delusionally thinking that I am reaching new peaks of managerial brilliance. That problem would not be unique to me. Charlie and I have faced this situation from time to time at Berkshire’s subsidiaries. Humans age at greatly varying rates – but sooner or later their talents and vigor decline. Some managers remain effective well into their 80s – Charlie is a wonder at 82 – and others noticeably fade in their 60s. When their abilities ebb, so usually do their powers of self-assessment. Someone else often needs to blow the whistle.

此外，還有一個狀況必須注意，那就是萬一我一直不死，但隨著年紀越來越大，智力明顯退化，特別是我覺得自己的腦力還處於巔峰時，該如何處理，我想這個問題不單單發生在我個人身上，事實上，我們旗下許多事業也面臨類似的問題，雖然人類老化的速度因人而異，但體力與智力會退化卻是遲早的事，有人過了八十歲還是一尾活龍，像查理就已經82歲了，但有人到了六十歲就很明顯的不行了，當他們的體力衰退，自我判斷的能力很可能也一樣，這時候就必須有人要跳出來提出警告了。



When that time comes for me, our board will have to step up to the job. From a financial standpoint, its members are unusually motivated to do so. I know of no other board in the country in which the financial interests of directors are so completely aligned with those of shareholders. Few boards even come close. On a personal level, however, it is extraordinarily difficult for most people to tell someone, particularly a friend, that he or she is no longer capable.

我想當我真的該下台時，董事會一定會跳出來做這件事，從個人現實的利益面來說，他們確實也該這樣做，我還沒有看到美國那一家公司的董事會成員，其利益與股東們如此相關的，當然從私人情誼的角度來說，要一般人告訴別人，特別是自己的好朋友，「他或她已經不行」，實在是很令人感傷的一件事。



If I become a candidate for that message, however, our board will be doing me a favor by delivering it. Every share of Berkshire that I own is destined to go to philanthropies, and I want society to reap the maximum good from these gifts and bequests. It would be a tragedy if the philanthropic potential of my holdings was diminished because my associates shirked their responsibility to (tenderly, I hope) show me the door. But don’t worry about this. We have an outstanding group of directors, and they will always do what’s right for shareholders.

如果哪天我真的到了那樣的地步，董事們一定會跟我說，而我持有的所有Berkshire股份也將全數捐給慈善基金會，我希望基金會能利用這筆捐贈增進社會最大的福祇，而我想若我的董事會同儕們因為未能善盡告知要我下台的義務，(當然我希望處理方式可以婉轉一點)，而使得這筆資產縮水的話，將會是令人感到相當遺憾的一件事，但對於這點我並不擔心，我們有最出色的董事會成員，他們永遠都會做出對股東有利的決定。



And while we are on the subject, I feel terrific.

所以每當談論到這件事時，我都覺得再自在不過了。



The Annual Meeting

年度股東大會



Our meeting this year will be on Saturday, May 6. As always, the doors will open at the Qwest Center at 7 a.m., and the latest Berkshire movie will be shown at 8:30. At 9:30 we will go directly to the question-and-answer period, which (with a break for lunch at the Qwest’s stands) will last until 3:00. Then, after a short recess, Charlie and I will convene the annual meeting at 3:15. This schedule worked well last year, because it let those who wanted to attend the formal session to do so, while freeing others to shop.

今年的股東會將於五月六日星期六舉行，一如以往，Qwest中心的大門會在早上七點鐘準時開放，最新的Berkshire電影短片照例會在八點半播放，九點半會直接進入Q&A的時間，(Qwest會場中午備有點心攤位)，一直到下午三點為止，然後在短暫的休息之後，查理跟我在三點十五分會親自主持正式會議，去年這樣的模式運作的相當不錯，有興趣的人可以留下來開會，沒興趣的人則可以出去血拼。



You certainly did your share in this respect last year. The 194,300 square foot hall adjoining the meeting area was filled with the products of Berkshire subsidiaries, and the 21,000 people who came to the meeting allowed every location to rack up sales records. Kelly Broz (neé Muchemore), the Flo Ziegfeld of Berkshire, orchestrates both this magnificent shopping extravaganza and the meeting itself. The exhibitors love her, and so do I. Kelly got married in October, and I gave her away. She asked me how I wanted to be listed in the wedding program. I replied “envious of the groom,” and that’s the way it went to press.

去年各位的表現相當不錯，面積19.4萬多平方英呎的會場中佈滿了Berkshire關係企業各式各樣的產品，21,000名出席的股東讓股東年會期間產品的銷售數量屢創新高，Kelly Broz - Berkshire的齊格飛，主導了整個股東年會的購物秀，所有參展的公司都愛死她了，當然我也一樣，Kelly去年十月結婚，我被迫放棄掉她，她問我在婚禮上該如何被稱呼，我回答說「最嫉妒新郎的人」，結果喜帖上還真的就這樣印。



This year we will showcase two Clayton homes (featuring Acme brick, Shaw carpet, Johns Manville insulation, MiTek fasteners, Carefree awnings and NFM furniture). You will find that these homes, priced at $79,000 and $89,000, deliver excellent value. In fact, three shareholders came so firmly to that conclusion last year that they bought the $119,000 model we then showcased. Flanking the Clayton homes on the exhibition floor will be RVs from Forest River.

今年會場內將展示二個Clayton的組合屋，配備有Acme磚塊、Shaw地毯、Johns Manville隔熱材料、MiTek螺栓、Carefree屋簷以及NFM家具，價格只要7萬9到8萬9不等，可謂物超所值，事實上去年有三個股東，選擇了11萬9的那一型，今年在Clayton組合屋旁也將首度展示Forest River的休旅車。



GEICO will have a booth staffed by a number of its top counselors from around the country, all of them ready to supply you with auto insurance quotes. In most cases, GEICO will be able to give you a special shareholder discount (usually 8%). This special offer is permitted by 45 of the 50 jurisdictions in which we operate. (One supplemental point: The discount is not additive if you qualify for another, such as that given certain groups.) Bring the details of your existing insurance and check out whether we can save you money. For at least 50% of you, I believe we can. And while you’re at it, sign up for the new GEICO credit card. It’s the one I now use.

GEICO公司會再度派出各地區最頂尖的業務員，在會場設立攤位，隨時提供股東們汽車保單的報價，在大多數的情況下，GEICO都可以提供給你一個相當優惠的股東折扣(大約8%)，這個特別優惠在我們有營業據點的全美50州中的45州都有效，(有一點必須要補充的是這項折扣不能夠和其它優惠一起適用)，各位請記得將自己現在的投保資料帶來，看看是否能幫自己省下一筆錢，我相信半數以上的人都可以享受，另外記得順便辦一張GEICO信用卡，我自己現在也在使用。



On Saturday, at the Omaha airport, we will have the usual array of aircraft from NetJets® available for your inspection. Stop by the NetJets booth at the Qwest to learn about viewing these planes. Come to Omaha by bus; leave in your new plane.

星期六在奧瑪哈機場，我們仍將展示NetJets@一系列的機隊供大家參觀，請到Qwest會場向EJA的業務代表洽詢參觀的事宜，來的時候坐車，回去可以搭飛機。



The Bookworm boutique at the Qwest broke all records last year selling Berkshire-related books. An amazing 3,500 of these were Poor Charlie’s Almanack, the collected wisdom of my partner. This means that a copy was sold every 9 seconds. And for good reason: You will never find a book with more useful ideas. Word-of-mouth recommendations have caused Charlie’s first printing of 20,500 copies to sell out, and we will therefore have a revised and expanded edition on sale at our meeting. Among the other 22 titles and DVDs available last year at the Bookworm, 4,597 copies were sold for $84,746. Our shareholders are a bookseller’s dream.

去年書蟲書店在會場設攤販售Berkshire相關書籍，其數量再次打破紀錄，其中光是我合夥人查理的智慧語錄-可憐查理的年鑑就賣出了3,500本，這意味著每隔九秒就賣出一本，這當然是有原因的，你再也找不到其他任何一本如此實用的了，光是靠著口耳相傳，第一刷的20,500本一下子就賣光了，使得我們趕緊在年會中推出修訂二版，其它22種書目及影音光碟，總計也賣出了4,597份，銷售金額達84,746美元，我們的股東群實在是書商們的最愛。



An attachment to the proxy material that is enclosed with this report explains how you can obtain the credential you will need for admission to the meeting and other events. As for plane, hotel and car reservations, we have again signed up American Express (800-799-6634) to give you special help. Carol Pedersen, who handles these matters, does a terrific job for us each year, and I thank her for it.

後面附有股東會開會投票的相關資料，向各位解釋如何拿到股東會入場及其他活動必須的識別證，至於有關機位、住宿、租車等預訂服務，我們很高興與美國運通(電話800-799-6634)再次簽約為您提供相關安排，負責為我們處理相關事宜的美國運通的承辦人員Carol做的相當不錯，每年都為大家提供非常好的服務，在此謹代表大家向她說聲謝謝。



At Nebraska Furniture Mart, located on a 77-acre site on 72nd Street between Dodge and Pacific, we will again be having “Berkshire Weekend” pricing. We initiated this special event at NFM nine years ago, and sales during the “Weekend” grew from $5.3 million in 1997 to $27.4 million in 2005 (up 9% from a year earlier). I get goose bumps just thinking about this volume.

位於道奇街與太平洋街佔地77英畝的內布拉斯加傢具店NFM，再度會有Berkshire週特賣，我們在九年前首次推出這種促銷活動，營業額更一舉從1997年的530萬美元成長到2005年的2,740萬美元，較去年又成長了9%，每當我想到這裡，就不禁高興地跳了起來。



To obtain the discount, you must make your purchases between Thursday, May 4 and Monday, May 8 inclusive, and also present your meeting credential. The period’s special pricing will even apply to the products of several prestigious manufacturers that normally have ironclad rules against discounting but that, in the spirit of our shareholder weekend, have made an exception for you. We appreciate their cooperation. NFM is open from 10 a.m. to 9 p.m. Monday through Saturday, and 10 a.m. to 6 p.m. on Sunday. On Saturday this year, from 5:30 p.m. to 8 p.m., we are having a special affair for shareholders only. I’ll be there, eating barbeque, drinking Coke, and counting sales.

想要享有折扣記得在5/4星期四到5/8星期一間來此採購，並出示股東開會證明，在這期間的特賣活動也適用於許多原本從不打折的頂級品牌，這可是為了股東會才特別破例，我們很感謝他們的配合，NFM的營業時間平日從早上10點到下午9點，星期六及星期日則從早上10點到下午6點，在今年的星期六，我們將有一個股東會特賣會，時間從下午5點半到下午8點，我本人也將出席，吃點烤肉配可樂，順便清點一下營業額。



Borsheim’s again will have two shareholder-only events. The first will be a cocktail reception from 6 p.m. to 10 p.m. on Friday, May 5. The second, the main gala, will be from 9 a.m. to 4 p.m. on Sunday, May 7. On Saturday, we will be open until 6 p.m.

波仙珠寶在股東會期間將會有兩場專為股東舉辦的展覽會，第一場是在5/5星期五的雞尾酒會，時間從下午6點到晚上10點，第二場主秀則在5/7星期天舉行，從早上9點到下午4點，星期六則營業到下午6點。



We will have huge crowds at Borsheim’s throughout the weekend. For your convenience, therefore, shareholder prices will be available from Monday, May 1 through Saturday, May 13. During that period, just identify yourself as a shareholder through your meeting credentials or a brokerage statement.

Borsheim’s operates on a gross margin that, even before the shareholders’ discount, is fully twenty percentage points below that of its major rivals. Last year, our shareholder-period business increased 9% from 2004, which came on top of a 73% gain the year before. The store sold 5,000 Berkshire Monopoly games – and then ran out. We’ve learned: Plenty will be in stock this year.

整個週末波仙都將人滿為患，從5/1星期一到5/13星期六的股東會期間，波仙都將提供股東特惠價，只要出示出席證或者是委託書表明股東的身分即可享有折扣，波仙的營業毛利要比其他主要競爭對手要低20個百分點以上，去年的營業額較前年又成長了9%，去年該店賣光了5,000套Berkshire大富翁遊戲，今年我們記取教訓，一定會備妥庫存。



In a tent outside of Borsheim’s, Patrick Wolff, twice U.S. chess champion, will take on all comers in groups of six – blindfolded. Additionally, we will have Bob Hamman and Sharon Osberg, two of the world’s top bridge experts, available to play with our shareholders on Sunday afternoon. They plan to keep their eyes open – but Bob never sorts his cards, even when playing for a national championship.

波仙外面所搭的棚子內，Patrick Wolff-美國棋兩度冠軍，也會再度在會場矇著眼與所有挑戰者分六個一組分批對奕，此外兩位世界級橋牌頂尖高手Bob Hamman、Sharon Osberg也會在星期天下午與大家同樂，當然他們不會矇眼，不過以Bob的習慣，他從來不整理牌組，就算是在參加全國橋牌大賽時，也是如此。



Gorat’s – my favorite steakhouse – will again be open exclusively for Berkshire shareholders on Sunday, May 7, and will be serving from 4 p.m. until 10 p.m. Please remember that to come to Gorat’s on that day, you must have a reservation. To make one, call 402-551-3733 on April 1 (but not before).

至於我個人最愛的牛排館-Gorat's，為了Berkshire股東年會，再度破例在5/7星期天開門營業，從下午4點開始營業，一直到晚上10點，請記得星期天事先若沒有訂位的人請勿前往以免向隅，要預約請在4/1以後打電話(402-551-3733)。



In this school year, about 35 university classes will come to Omaha for sessions with me. I take almost all – in aggregate, perhaps 2,000 students – to lunch at Gorat’s. And they love it. To learn why, come join us on Sunday.

今年一整學年，預計將有35所大專院校要來奧瑪哈與我對談，而我總共將帶領2,000名學生到Gorat's用餐，我想他們都愛死它了，想知道為什麼嗎?? 記得星期天與我們一起參加股東會。



We will again have a special reception from 4:00 to 5:30 on Saturday afternoon for shareholders who have come from outside of North America. Every year our meeting draws many people from around the globe, and Charlie and I want to be sure we personally greet those who have come so far. Last year we enjoyed meeting more than 400 of you from many dozens of countries. Any shareholder who comes from other than the U.S. or Canada will be given a special credential and instructions for attending this function.

今年股東會當天星期六下午四點到五點半，我們也會為來自北美以外地區的股東舉行歡迎會，每年股東年會吸引了來自世界各地的人們參與，查理跟我希望能夠親自接待這些遠道而來的股東，去年人數達到四百多位，任何來自美國與加拿大地區以外的股東事先都會拿到參與這項儀式的證明與注意事項。



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

Charlie and I are extraordinarily lucky. We were born in America; had terrific parents who saw that we got good educations; have enjoyed wonderful families and great health; and came equipped with a “business” gene that allows us to prosper in a manner hugely disproportionate to other people who contribute as much or more to our society’s well-being. Moreover, we have long had jobs that we love, in which we are helped every day in countless ways by talented and cheerful associates. No wonder we tapdance to work. But nothing is more fun for us than getting together with our shareholder-partners at Berkshire’s annual meeting. So join us on May 6th at the Qwest for our annual Woodstock for Capitalists.

We’ll see you there.

查理跟我相當幸運得以出生在美國，有最棒的父母讓我們接受最好的教育，並擁有最好的家庭與健康的身體，同時讓我們具備生意頭腦使得我們能夠獲得比別人更多的回報，更重要的是每天我們都能夠從事自己熱愛的工作，同時有這麼多具有幹勁的同仁從旁協助，也難怪我們每天都能夠跳著舞去上班，當然每年能夠與股東夥伴們同樂更是一大樂事，所以再次歡迎大家5/6到Qwest中心參與資本主義家的伍斯達克年度音樂會。

股東會上見!



February 28, 2006 Warren E. Buffett

Chairman of the Board

華倫．巴菲特

董事長

2006年2月28日