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:
Operating earnings improved to $41.9 million in 1980 from $36.0 million in
1979, but return on beginning equity capital (with securities valued at cost)
fell to 17.8% from 18.6%. We believe the latter yardstick to be the most
appropriate measure of single-year managerial economic performance.
Informed use of that yardstick, however, requires an understanding of many
factors, including accounting policies, historical carrying values of assets,
financial leverage, and industry conditions.
1980年本公司的營業利益為4,190萬美元，較1979年的3,600萬美元成長，但期
初股東權益報酬率(持有股票投資以原始成本計)卻從去年的18.6%滑落至17.8%。我
們認為這個比率最能夠作為衡量公司管理當局單一年度經營績效的指標。當然要運用
這項指標，還必須對包含會計原則、資產取得歷史成本、財務槓桿與產業狀況等在內
的主要因素有一定程度的了解才行。
In your evaluation of our economic performance, we suggest that two
factors should receive your special attention - one of a positive nature
peculiar, to a large extent, to our own operation, and one of a negative nature
applicable to corporate performance generally. Let’s look at the bright side
first.
各位在判斷本公司的經營績效時，有兩個因素是你必須特別注意的，一項是對公司營
運相當有利的，而另一項則企業績效相對較不利的。讓我們先從好的那一面看起:。
Non-Controlled Ownership Earnings
無控制權持股之盈餘
When one company owns part of another company, appropriate
accounting procedures pertaining to that ownership interest must be
selected from one of three major categories. The percentage of voting stock
that is owned, in large part, determines which category of accounting
principles should be utilized.
當一家公司擁有另一家公司部份股權時，在會計上通常有三種方式來處理投資公司在
被投資公司所擁有的權益，其中所持有的股權多寡將決定公司採用何種方式。
Generally accepted accounting principles require (subject to exceptions,
naturally, as with our former bank subsidiary) full consolidation of sales,
expenses, taxes, and earnings of business holdings more than 50% owned.
Blue Chip Stamps, 60% owned by Berkshire Hathaway Inc., falls into this
category. Therefore, all Blue Chip income and expense items are included in
full in Berkshire’s Consolidated Statement of Earnings, with the 40%
ownership interest of others in Blue Chip’s net earnings reflected in the
Statement as a deduction for “minority interest”.
一般公認會計原則規定若持有股權比例超過百分之五十(除了少數例外，就像我們先前
持有的銀行股份)，則投資公司必須完全合併該被投資公司，包含營收、費用、所得稅
與盈餘等在內的所有會計科目。比如說像是Berkshire持有60%股權的藍籌郵票公
司，便是屬於這一類，至於其它40%股東的權益在財務報表上則以少數股東權益列示。
Full inclusion of underlying earnings from another class of holdings,
companies owned 20% to 50% (usually called “investees”), also normally
occurs. Earnings from such companies - for example, Wesco Financial,
controlled by Berkshire but only 48% owned - are included via a one-line
entry in the owner’s Statement of Earnings. Unlike the over-50% category,
all items of revenue and expense are omitted; just the proportional share of
net income is included. Thus, if Corporation A owns one-third of
Corporation B, one-third of B’s earnings, whether or not distributed by B, will
end up in A’s earnings. There are some modifications, both in this and the
over-50% category, for intercorporate taxes and purchase price adjustments,
the explanation of which we will save for a later day. (We know you can hardly
wait.)
而若是持有股權比例介於20%-50% 之間，像Wesco金融公司雖係由Berkshire所
控制但卻僅持有48%的股權，則在投資公司的帳上僅記錄一個分錄，將被投資公司依
股權比例所認列的投資損失或利益予以入帳。因此如果A公司擁有B公司三分之一的
股權，則不論B公司是否將年度盈餘全數發放，A公司都必須依比例認列投資利益，
另外這兩類的會計原則都規定，必須附帶一些企業間所得稅、購買法價格調整等調整
分錄，這部份的細節請容我們以後有空再詳加說明，(雖然我知道大家可能等不及了)。
Finally come holdings representing less than 20% ownership of another
corporation’s voting securities. In these cases, accounting rules dictate that
the owning companies include in their earnings only dividends received from
such holdings. Undistributed earnings are ignored. Thus, should we own
10% of Corporation X with earnings of $10 million in 1980, we would report
in our earnings (ignoring relatively minor taxes on intercorporate dividends)
either (a) $1 million if X declared the full $10 million in dividends; (b)
$500,000 if X paid out 50%, or $5 million, in dividends; or (c) zero if X
reinvested all earnings.
最後若是持股比例低於20%，則依照會計原則，投資公司僅能認列被投資公司實際發
放的股利部份，至於保留而不發放的部份盈餘則不予理會，也因此假若我們持有一家
X 公司10%的股份，又假設X公司在1980 年共計賺了1,000萬美金，若X公司將
盈餘全部發放，則我們可認列100萬的利益，反之若X公司決定保留全部盈餘不予發
放，則我們連一毛錢都不能認列。
We impose this short - and over-simplified - course in accounting upon
you because Berkshire’s concentration of resources in the insurance field
produces a corresponding concentration of its assets in companies in that
third (less than 20% owned) category. Many of these companies pay out
relatively small proportions of their earnings in dividends. This means that
only a small proportion of their current earning power is recorded in our own
current operating earnings. But, while our reported operating earnings
reflect only the dividends received from such companies, our economic
well-being is determined by their earnings, not their dividends.
之所以強迫大家上了堂稍微簡單的會計課的原因在於，Berkshire將發展的重點集中
於保險事業，使得其資源大量集中投注於第三類的股權投資(亦即持股比例小於20%)
之上，這些被投資公司僅將它們所賺的盈餘分配一小部份以現金股利的方式分配給我
們，這代表其獲利能力僅有一小部份呈現在我們公司的帳上，但就經濟實質面來說，
那只是實際獲利的冰山一角而已
Our holdings in this third category of companies have increased
dramatically in recent years as our insurance business has prospered and as
securities markets have presented particularly attractive opportunities in the
common stock area. The large increase in such holdings, plus the growth of
earnings experienced by those partially-owned companies, has produced an
unusual result; the part of “our” earnings that these companies retained last
year (the part not paid to us in dividends) exceeded the total reported annual
operating earnings of Berkshire Hathaway. Thus, conventional accounting
only allows less than half of our earnings “iceberg” to appear above the
surface, in plain view. Within the corporate world such a result is quite rare;
in our case it is likely to be recurring.
這類投資近年來因為我們旗下保險事業蓬勃發展，同時也因為股票市場出現許多不錯
的投資機會而大幅增加，股票投資的大量增加再加上這些公司本身獲利能力的增長使
得我們實際獲得的成果相當可觀，以去年來說，光是保留在這些公司而未分配給
Berkshire的盈餘，便比Berkshire整年度的帳面盈餘還高，雖然這樣的情況在一般
企業界並不多見，但我們預期這種情況在Berkshire將會持續出現。
Our own analysis of earnings reality differs somewhat from generally
accepted accounting principles, particularly when those principles must be
applied in a world of high and uncertain rates of inflation. (But it’s much
easier to criticize than to improve such accounting rules. The inherent
problems are monumental.) We have owned 100% of businesses whose
reported earnings were not worth close to 100 cents on the dollar to us even
though, in an accounting sense, we totally controlled their disposition. (The
“control” was theoretical. Unless we reinvested all earnings, massive
deterioration in the value of assets already in place would occur. But those
reinvested earnings had no prospect of earning anything close to a market
return on capital.) We have also owned small fractions of businesses with
extraordinary reinvestment possibilities whose retained earnings had an
economic value to us far in excess of 100 cents on the dollar.
我們本身對投資盈餘如何認列的看法與一般公認會計原則並不儘相同，尤其是在目前
通貨膨漲高漲之際更是如此，(但話說回來批評要比修改這套原則要容易多了，有些問
題早已是根深蒂固了)，我們有些100%持股的轉投資公司帳面上所賺的錢，實質上並
不足那個數，即使依照會計原則我們可以完全地控制它，(就理論而言，我們對他具有
控制權，但實際上我們卻必須被迫把所賺到的每一分錢，繼續投注在更新資產設備，
以維持原有生產力，並賺取微薄的利潤)，相較之下，我們也有一些僅持有少數股份而
其所賺的盈餘遠超過帳面列示之數，甚至其所保留的資金還能為我們賺取更多的盈
餘。
The value to Berkshire Hathaway of retained earnings is not determined
by whether we own 100%, 50%, 20% or 1% of the businesses in which they
reside. Rather, the value of those retained earnings is determined by the
use to which they are put and the subsequent level of earnings produced by
that usage. This is true whether we determine the usage, or whether
managers we did not hire - but did elect to join - determine that usage. (It’s
the act that counts, not the actors.) And the value is in no way affected by the
inclusion or non-inclusion of those retained earnings in our own reported
operating earnings. If a tree grows in a forest partially owned by us, but we
don’t record the growth in our financial statements, we still own part of the
tree.
因此對Berkshire而言，對盈餘的認定並非取決於持股比例是100%、50%、20%、
5% 或是1%，盈餘的真正價值在於其將來再投資所能產生的效益，這與是否由我們自
己或是專業經理人來決定並不相關，也與我們認列或不認列利益不相關(重要的是劇本
而不是演員)。假設我們公司擁有一片山林，即使財務報表無法反映這些樹木的成長，
也無法掩蓋我們擁有這片成長中的山林這項事實。
Our view, we warn you, is non-conventional. But we would rather have
earnings for which we did not get accounting credit put to good use in a
10%-owned company by a management we did not personally hire, than have
earnings for which we did get credit put into projects of more dubious
potential by another management - even if we are that management.
我必須提醒諸位，這樣的論點是突破傳統的，我們寧願將所賺的盈餘能夠繼續交由不
受我們控制的人好好發揮，也不希望轉由我們自己來浪擲。
(We can’t resist pausing here for a short commercial. One usage of
retained earnings we often greet with special enthusiasm when practiced by
companies in which we have an investment interest is repurchase of their
own shares. The reasoning is simple: if a fine business is selling in the
market place for far less than intrinsic value, what more certain or more
profitable utilization of capital can there be than significant enlargement of
the interests of all owners at that bargain price? The competitive nature of
corporate acquisition activity almost guarantees the payment of a full -
frequently more than full price when a company buys the entire ownership of
another enterprise. But the auction nature of security markets often allows
finely-run companies the opportunity to purchase portions of their own
businesses at a price under 50% of that needed to acquire the same earning
power through the negotiated acquisition of another enterprise.)
(講到這理，忍不住休息一下順便來段廣告，若被投資公司將其所賺的盈餘用於買回自
家的股票，我們通常會報以熱烈的掌聲，理由很簡單:若一家好公司其股票價格遠低於
其實質價值，那麼還有什麼投資會比前者來的更穩當、更有賺頭、更能促進原有股東
權益的呢?企業購併的競爭性通常使得購併整家公司的實際價格遠高於取得企業的實
際價值，另一方面股票市場的拍賣特質，往往可以讓我們以相對低廉的價格取得一家
公司的部份股權。
Long-Term Corporate Results
企業長期績效
As we have noted, we evaluate single-year corporate performance by
comparing operating earnings to shareholders’ equity with securities valued
at cost. Our long-term yardstick of performance, however, includes all
capital gains or losses, realized or unrealized. We continue to achieve a
long-term return on equity that considerably exceeds the average of our
yearly returns. The major factor causing this pleasant result is a simple one:
the retained earnings of those non-controlled holdings we discussed earlier
have been translated into gains in market value.
如先前所提的，我們以營業利益除以股東權益(股權投資以原史成本計)來評估企業單
一年度的績效，至於長期評量的標準，則須加計所有已實現或未實現的資本利得或損
失，而一直以來，後者歷年來的平均數都比前者還要好，最主要的原因是前段所提那
些無控制權的公司盈餘持續累積，反映在其市值增加之上。
Of course, this translation of retained earnings into market price
appreciation is highly uneven (it goes in reverse some years), unpredictable
as to timing, and unlikely to materialize on a precise dollar-for-dollar basis.
And a silly purchase price for a block of stock in a corporation can negate the
effects of a decade of earnings retention by that corporation. But when
purchase prices are sensible, some long-term market recognition of the
accumulation of retained earnings almost certainly will occur. Periodically
you even will receive some frosting on the cake, with market appreciation far
exceeding post-purchase retained earnings.
當然市值的變化起起伏伏且無法預測，更無法真正量化到底數字是多少，有時一個高
價買進的錯誤，甚至可能把公司往後十幾年盈餘累積的效果都給抵銷掉，但是只要市
場回復理性，市價終究會反映公司累積盈餘的能力，甚至超過買進後累積的盈餘，這
等於是在蛋糕上多得到一點糖霜呢。
In the sixteen years since present management assumed responsibility
for Berkshire, book value per share with insurance-held equities valued at
market has increased from $19.46 to $400.80, or 20.5% compounded
annually. (You’ve done better: the value of the mineral content in the human
body compounded at 22% annually during the past decade.) It is
encouraging, moreover, to realize that our record was achieved despite many
mistakes. The list is too painful and lengthy to detail here. But it clearly
shows that a reasonably competitive corporate batting average can be
achieved in spite of a lot of managerial strikeouts.
在現有經營階層接掌Berkshire的十六年來，公司每股的帳面淨值(其中保險事業的股
權投資以市價計)已由原先的19.46美元成長至400.8美元，相當於年複合成長率
20.5% (事實上你「本身」作得也不錯，過去十年來人體內所含礦物質成份的價值以年
複合成長率22%增加)，值得慶幸的是，雖然我們也犯了不少錯，但還是能達到這樣的
記錄，儘管管理上時常糟到三振，但優異的企業體質仍然可以維持相當不錯的平均打
擊率。
Our insurance companies will continue to make large investments in
well-run, favorably-situated, non-controlled companies that very often will
pay out in dividends only small proportions of their earnings. Following this
policy, we would expect our long-term returns to continue to exceed the
returns derived annually from reported operating earnings. Our confidence
in this belief can easily be quantified: if we were to sell the equities that we
hold and replace them with long-term tax-free bonds, our reported
operating earnings would rise immediately by over $30 million annually.
Such a shift tempts us not at all.
我們旗下的保險事業將會持續地把資金投資在一些雖不具控制權但經營良好且保留大
部份盈餘的公司之上，按照這個策略，可預期的長期的投資報酬率將持續大於每年帳
面盈餘的報酬率，而我們對此理念的堅信不移是很容易用數字來說明的，雖然只要我
們願意，把手上的股權投資出清，然後轉進免稅的長期債券，公司每年帳面盈餘馬上
就能淨增加3,000萬美金，但我們從來就沒想過要那麼去作。
So much for the good news.
好消息真是不斷。
Results for Owners
股東權益報告
Unfortunately, earnings reported in corporate financial statements are
no longer the dominant variable that determines whether there are any real
earnings for you, the owner. For only gains in purchasing power represent
real earnings on investment. If you (a) forego ten hamburgers to purchase
an investment; (b) receive dividends which, after tax, buy two hamburgers;
and (c) receive, upon sale of your holdings, after-tax proceeds that will buy
eight hamburgers, then (d) you have had no real income from your
investment, no matter how much it appreciated in dollars. You may feel
richer, but you won’t eat richer.
很不幸的，公司財務報表所記載的盈餘已不再表示就是股東們實際上所賺的，只有當
購買力增加時，才表示投資獲得真正的盈餘。假設當初你放棄享受十個漢堡以進行投
資，期間公司分配的股利足夠讓你買兩個漢堡，而最後你處分投資後可換八個漢堡，
那麼你會發現事實上不管你拿到是多少錢，你的這項投資實際上並無所得，你可能覺
得更有錢，但不表示你可以吃的更飽。
High rates of inflation create a tax on capital that makes much
corporate investment unwise - at least if measured by the criterion of a
positive real investment return to owners. This “hurdle rate” the return on
equity that must be achieved by a corporation in order to produce any real
return for its individual owners - has increased dramatically in recent years.
The average tax-paying investor is now running up a down escalator whose
pace has accelerated to the point where his upward progress is nil.
高通貨膨漲率等於是對投入的資本額外課了一次稅，如此一來可能使得大部份的投資
變得有點愚蠢，而近幾年來這個基本門檻，即企業投資所須最基本的報酬率以使得整
件投資報酬為正的底限可說是日益提高，每個納”稅”人就好像是在一個向下滑的電扶
梯上拼命往上跑一樣，最後的結果卻是愈跑愈往後退。
For example, in a world of 12% inflation a business earning 20% on
equity (which very few manage consistently to do) and distributing it all to
individuals in the 50% bracket is chewing up their real capital, not enhancing
it. (Half of the 20% will go for income tax; the remaining 10% leaves the
owners of the business with only 98% of the purchasing power they
possessed at the start of the year - even though they have not spent a penny
of their “earnings”). The investors in this bracket would actually be better
off with a combination of stable prices and corporate earnings on equity
capital of only a few per cent.
舉例來說，假設一位投資人的年報酬率為20%(這已是一般人很難達到的成績了)而當
年度的通膨為12%，又若其不幸適用50% 高所得稅級距，則我們會發現該位投資人
在盈餘全數發放的情形下，其實質報酬率可能是負的，因為這20%的股利收入有一半
要歸公庫，剩下的10%全部被通貨膨漲吃光，不夠還要倒貼，這結局可能比在通膨溫
和時投資一家獲利平庸的公司還不如。
Explicit income taxes alone, unaccompanied by any implicit inflation
tax, never can turn a positive corporate return into a negative owner return.
(Even if there were 90% personal income tax rates on both dividends and
capital gains, some real income would be left for the owner at a zero inflation
rate.) But the inflation tax is not limited by reported income. Inflation rates
not far from those recently experienced can turn the level of positive returns
achieved by a majority of corporations into negative returns for all owners,
including those not required to pay explicit taxes. (For example, if inflation
reached 16%, owners of the 60% plus of corporate America earning less than
this rate of return would be realizing a negative real return - even if income
taxes on dividends and capital gains were eliminated.)
假設若只有外在的所得稅負而無隱性的通貨膨漲稅負，則不論如何，正的投資報酬永
遠不會變成負的(即使所得稅率高達90%也一樣)，但通貨膨漲卻不管公司帳面到底賺
不賺錢，只要像是最近這幾年的通膨，就會使得大部份公司的實質投資報酬由正轉為
負，即使有些公司不必繳所得稅也是一樣，舉例來說，如果通貨膨漲率達到16%，約
有六成的美國企業股東其投資報酬率變為負值，即使大家都不必繳資本利得與股利所
得稅也一樣。
Of course, the two forms of taxation co-exist and interact since explicit
taxes are levied on nominal, not real, income. Thus you pay income taxes
on what would be deficits if returns to stockholders were measured in
constant dollars.
當然這兩者租稅是交相存於在現實社會中的，因為外在的課稅係按照名目所得而非實
質所得，所以在支付所得稅後，股東的實質幣質將不增反減。
At present inflation rates, we believe individual owners in medium or
high tax brackets (as distinguished from tax-free entities such as pension
funds, eleemosynary institutions, etc.) should expect no real long-term
return from the average American corporation, even though these individuals
reinvest the entire after-tax proceeds from all dividends they receive. The
average return on equity of corporations is fully offset by the combination of
the implicit tax on capital levied by inflation and the explicit taxes levied both
on dividends and gains in value produced by retained earnings.
而以目前的通貨膨漲率來看，我們相信對適用中高級距所得稅率的投資人而言(除非你
是透過退休基金、慈善團體等免稅機構來投資)，將無法從投資一般美國企業獲得任何
實質的資本利得，即使他們把分配到的股利一再重複地投資下去也一樣，因為其獲利
早已被隱藏的通貨膨漲與檯面上的所得稅給吸收殆盡。
As we said last year, Berkshire has no corporate solution to the problem.
(We’ll say it again next year, too.) Inflation does not improve our return on
equity.
而如同去年我們所說的一樣，對於這個問題我們目前無解(明年我們的回答很可能也是
如此)，通貨膨漲對我們股權投資的報酬沒有任何一點幫助。
Indexing is the insulation that all seek against inflation. But the great
bulk (although there are important exceptions) of corporate capital is not
even partially indexed. Of course, earnings and dividends per share usually
will rise if significant earnings are “saved” by a corporation; i.e., reinvested
instead of paid as dividends. But that would be true without inflation. A
thrifty wage earner, likewise, could achieve regular annual increases in his
total income without ever getting a pay increase - if he were willing to take
only half of his paycheck in cash (his wage “dividend”) and consistently add
the other half (his “retained earnings”) to a savings account. Neither this
high-saving wage earner nor the stockholder in a high-saving corporation
whose annual dividend rate increases while its rate of return on equity
remains flat is truly indexed.
編製指數(Indexing)是一般認為對抗通膨的一種有效方法，但大部份的企業資本卻從
未這樣做，當然帳面每股盈餘與股利通常會漸漸增加，若公司把所賺的錢再投資下去，
即使是無通膨也是一樣，就像是一個勤儉的薪水階級，只要固定把他所賺薪水中的一
半存入銀行，就算是從來沒有獲得加薪，他每年的收入還是會慢慢的增加。
For capital to be truly indexed, return on equity must rise, i.e., business
earnings consistently must increase in proportion to the increase in the price
level without any need for the business to add to capital - including working
capital - employed. (Increased earnings produced by increased investment
don’t count.) Only a few businesses come close to exhibiting this ability.
And Berkshire Hathaway isn’t one of them.
理論上，企業盈餘(當然不包括由額外投入的資本所產生的盈餘)不必增加任何資金，
也能夠穩定地隨著物價指數持續增加，包含營運資金在內，但只有極少數的公司具有
此種能力，而Berkshire並不在其中。
We, of course, have a corporate policy of reinvesting earnings for
growth, diversity and strength, which has the incidental effect of minimizing
the current imposition of explicit taxes on our owners. However, on a day-
by-day basis, you will be subjected to the implicit inflation tax, and when you
wish to transfer your investment in Berkshire into another form of
investment, or into consumption, you also will face explicit taxes.
當然本公司在盈餘再投資以求成長、多角化、茁壯的企業政策下，碰巧也有為股東減
輕外在所得稅負的效果，那就是只要你不將目前所持有的Berkshire股份轉做其他投
資，就不會被課徵所得稅，但是隱藏的通貨膨漲稅，卻是每天你醒來就必須面對的問
題。
Sources of Earnings
盈餘報告
The table below shows the sources of Berkshire’s reported earnings.
Berkshire owns about 60% of Blue Chip Stamps, which in turn owns 80% of
Wesco Financial Corporation. The table shows aggregate earnings of the
various business entities, as well as Berkshire’s share of those earnings. All
of the significant capital gains and losses attributable to any of the business
entities are aggregated in the realized securities gains figure at the bottom of
the table, and are not included in operating earnings. Our calculation of
operating earnings also excludes the gain from sale of Mutual’s branch
offices. In this respect it differs from the presentation in our audited
financial statements that includes this item in the calculation of “Earnings
Before Realized Investment Gain”.
下表顯示Berkshire依照各個公司持股比例來列示帳面盈餘的主要來源，而各個公司
資本利得損失並不包含在內而是彙總於下表「已實現出售證券利得」一欄中，雖然本
表列示的方式與一般公認會計原則不儘相同，但最後的損益數字卻是一致的: 其中
Berkshire擁有Blue Chips Stamps 60%的股權，而後者又擁有 Wesco 財務公司
80% 的股權。此外，本期的帳面盈餘並不包括聯合儲貸處份分公司辦公室的利得，也
因此使得表中「未包括已實現投資利得前盈餘」與經會計師簽證的財務報表數字有所
不同。
Net Earnings
Earnings Before Income Taxes After Tax
------------------------------- ------------------
Total Berkshire Share Berkshire Share
----------------- --------------- ---------------
(in thousands of dollars) 1980 1979 1980 1979 1980 1979
------- ------- -------- -------- -------- --------
Total Earnings - all entities $ 85,945 $ 68,632 $ 70,146 $ 56,427 $ 53,122 $ 42,817
===== ====== ====== ====== ====== ======
Earnings from Operations:
Insurance Group:
Underwriting ............ $ 6,738 $ 3,742 $ 6,737 $ 3,741 $ 3,637 $ 2,214
Net Investment Income ..30,939 24,224 30,927 24,216 25,607 20,106
Berkshire-Waumbec Textiles (508) 1,723 (508) 1,723 202 848
Associated Retail Stores .. 2,440 2,775 2,440 2,775 1,169 1,280
See’s Candies ............. 15,031 12,785 8,958 7,598 4,212 3,448
Buffalo Evening News ...... (2,805) (4,617) (1,672) (2,744) (816) (1,333)
Blue Chip Stamps - Parent 7,699 2,397 4,588 1,425 3,060 1,624
Illinois National Bank .... 5,324 5,747 5,200 5,614 4,731 5,027
Wesco Financial - Parent .. 2,916 2,413 1,392 1,098 1,044 937
Mutual Savings and Loan ...5,814 10,447 2,775 4,751 1,974 3,261
Precision Steel ........... 2,833 3,254 1,352 1,480 656 723
Interest on Debt .......... (12,230) (8,248) (9,390) (5,860) (4,809) (2,900)
Other ..................... 2,170 1,342 1,590 996 1,255 753
-------- -------- -------- -------- -------- --------
Total Earnings from
Operations ........... $ 66,361 $ 57,984 $ 54,389 $ 46,813 $ 41,922 $ 35,988
Mutual Savings and Loan -
sale of branches ....... 5,873 -- 2,803 -- 1,293 --
Realized Securities Gain .... 13,711 10,648 12,954 9,614 9,907 6,829
-------- -------- -------- -------- -------- --------
Total Earnings - all entities$ 85,945 $ 68,632 $ 70,146 $ 56,427 $ 53,122 $ 42,817
====== ======= ====== ====== ====== ======
Blue Chip Stamps and Wesco are public companies with reporting
requirements of their own. On pages 40 to 53 of this report we have
reproduced the narrative reports of the principal executives of both
companies, in which they describe 1980 operations. We recommend a
careful reading, and suggest that you particularly note the superb job done
by Louie Vincenti and Charlie Munger in repositioning Mutual Savings and
Loan. A copy of the full annual report of either company will be mailed to
any Berkshire shareholder upon request to Mr. Robert H. Bird for Blue Chip
Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040, or to
Mrs. Bette Deckard for Wesco Financial Corporation, 315 East Colorado
Boulevard, Pasadena, California 91109.
Blue Chip 及Wesco 兩家公司因為本身是公開發行公司以規定編有自己的年報，我
建議大家仔細閱讀，尤其是有關Louie Vincenti和Charlie Munger對聯合儲貸業務
所作的改造，若有需要Berkshire的股東可向Mr. Robert(地址：加州洛杉磯5801
South Eastern Avenue)索取藍籌郵票的年報或向Mrs. Bette(地址：加州Pasadena
315 East Colorado Boulevard)索取Wesco的年報。
As indicated earlier, undistributed earnings in companies we do not
control are now fully as important as the reported operating earnings
detailed in the preceding table. The distributed portion, of course, finds its
way into the table primarily through the net investment income section of
Insurance Group earnings.
就像先前我們所提到的，那些不具控制權的股票投資其未分配的盈餘的的重要性已不
下於前面表列的帳面盈餘，至於那些已分配的部份則透過認列投資利列示在保險公司
投資收益項下。
We show below Berkshire’s proportional holdings in those non-
controlled businesses for which only distributed earnings (dividends) are
included in our own earnings.
我們將這些不具控制權的投資，依Berkshire持股比例所分得的盈餘(股利)入帳。
No. of Shares Cost Market
------------- ---------- ----------
(000s omitted)
434,550 (a) Affiliated Publications, Inc. ......... $ 2,821 $ 12,222
464,317 (a) Aluminum Company of America ........... 25,577 27,685
475,217 (b) Cleveland-Cliffs Iron Company ......... 12,942 15,894
1,983,812 (b) General Foods, Inc. ................... 62,507 59,889
7,200,000 (a) GEICO Corporation ..................... 47,138 105,300
2,015,000 (a) Handy & Harman ........................ 21,825 58,435
711,180 (a) Interpublic Group of Companies, Inc. .. 4,531 22,135
1,211,834 (a) Kaiser Aluminum & Chemical Corp. ...... 20,629 27,569
282,500 (a) Media General ......................... 4,545 8,334
247,039 (b) National Detroit Corporation .......... 5,930 6,299
881,500 (a) National Student Marketing ............ 5,128 5,895
391,400 (a) Ogilvy & Mather Int’l. Inc. ........... 3,709 9,981
370,088 (b) Pinkerton’s, Inc. ..................... 12,144 16,489
245,700 (b) R. J. Reynolds Industries ............. 8,702 11,228
1,250,525 (b) SAFECO Corporation .................... 32,062 45,177
151,104 (b) The Times Mirror Company .............. 4,447 6,271
1,868,600 (a) The Washington Post Company ........... 10,628 42,277
667,124 (b) E W Woolworth Company ................. 13,583 16,511
---------- ----------
$298,848 $497,591
All Other Common Stockholdings ........ 26,313 32,096
---------- ----------
Total Common Stocks ................... $325,161 $529,687
========= =========
(a) All owned by Berkshire or its insurance subsidiaries.
(b) Blue Chip and/or Wesco own shares of these companies. All numbers represent
Berkshire’s net interest in the larger gross holdings of the group.
(a) 代表全部股權由Berkshire及其子公司所持有
(b) 代表由Berkshire子公司Blue Chip與Wesco 所持有，依Berkshire持股比例換算得來
From this table, you can see that our sources of underlying earning
power are distributed far differently among industries than would
superficially seem the case. For example, our insurance subsidiaries own
approximately 3% of Kaiser Aluminum, and 1 1/4% of Alcoa. Our share of
the 1980 earnings of those companies amounts to about $13 million. (If
translated dollar for dollar into a combination of eventual market value gain
and dividends, this figure would have to be reduced by a significant, but not
precisely determinable, amount of tax; perhaps 25% would be a fair
assumption.) Thus, we have a much larger economic interest in the aluminum
business than in practically any of the operating businesses we control and
on which we report in more detail. If we maintain our holdings, our long-
term performance will be more affected by the future economics of the
aluminum industry than it will by direct operating decisions we make
concerning most companies over which we exercise managerial control.
從本表你會發現本公司背後所創造盈餘的動力係來自於各行各業，所以我們只能約略
地看個大概，譬如保險子公司約持有Kaiser Alumnium 3%和 Aloca 1.25%的股份，
在1980年我們光是從這些公司依持股比例可得約1,300萬美金(當然若將這些盈餘
實際轉為資本利得或股利，則大約會被課以25%的稅負)，因此單單在製鋁這門行業，
我們的經濟利益就大於其它那些我們可以直接控制且須詳盡報告的公司。如果我們的
持股不改變，則製鋁產業的景氣變動，將比那些我們具有實質控制權的產業，對本公
司長遠的績效表現更有影響力。
GEICO Corp.
GEICO保險公司
Our largest non-controlled holding is 7.2 million shares of GEICO Corp.,
equal to about a 33% equity interest. Normally, an interest of this
magnitude (over 20%) would qualify as an “investee” holding and would
require us to reflect a proportionate share of GEICO’s earnings in our own.
However, we purchased our GEICO stock pursuant to special orders of the
District of Columbia and New York Insurance Departments, which required
that the right to vote the stock be placed with an independent party. Absent
the vote, our 33% interest does not qualify for investee treatment. (Pinkerton’s is a similar situation.)
目前我們不具控制權的股權投資最大的部位就是持有33%股權，約720萬股的
GEIGO，通常若持有一家公司股權達到這樣的比例(超過20%)，便必須採用權益法每
年依比例認列其投資損益，但由於Berkshire當初係依照政府部門一特別命令購買該
公司股份，其中規定須將此投票權交由一公正第三人管理，所有失去投票權，意味
Berkshire對GEICO不具實質控制權。(Pinkerton也有類似的狀況)。
Of course, whether or not the undistributed earnings of GEICO are
picked up annually in our operating earnings figure has nothing to do with
their economic value to us, or to you as owners of Berkshire. The value of
these retained earnings will be determined by the skill with which they are
put to use by GEICO management.
當然認不認列損益對Berkshire及其股東而言，並不影響其實質的經濟利益，這些盈
餘的實際價值將取決於運用它們的GEIGO經營階層能力的高低。
On this score, we simply couldn’t feel better. GEICO represents the
best of all investment worlds - the coupling of a very important and very hard
to duplicate business advantage with an extraordinary management whose
skills in operations are matched by skills in capital allocation.
關於這一點，我們再滿意不過了，GEIGO可說是投資業界的最佳典範，它具有難以模
仿的產業優勢，同時加上高超的資金管理技巧。
As you can see, our holdings cost us $47 million, with about half of this
amount invested in 1976 and most of the remainder invested in 1980. At
the present dividend rate, our reported earnings from GEICO amount to a
little over $3 million annually. But we estimate our share of its earning
power is on the order of $20 million annually. Thus, undistributed earnings
applicable to this holding alone may amount to 40% of total reported
operating earnings of Berkshire.
如你所見到的，我們的持股成本約4,700萬美元，分別是在1976年與1980年分兩
次投入，依實際配息情況，我們每年約從GEIGO 認列300萬元的利益，但實際上每
年可分得的盈餘卻高達2,000萬元，換言之，我們光是在該公司未分配的盈餘就達
Berkshire帳面盈餘的四成左右。
We should emphasize that we feel as comfortable with GEICO
management retaining an estimated $17 million of earnings applicable to our
ownership as we would if that sum were in our own hands. In just the last
two years GEICO, through repurchases of its own stock, has reduced the
share equivalents it has outstanding from 34.2 million to 21.6 million,
dramatically enhancing the interests of shareholders in a business that
simply can’t be replicated. The owners could not have been better served.
另外我們必須強調的是我們完全贊同GEIGO經營階層將剩下屬於我們的1,700萬保
留起來未予分配的作法，因為在此同時，GEIGO 於近兩年內陸續買回自家股票，使得
該公司流通在外的股份由3,400萬股縮減至2,100萬股，大大增進了原有股東的權
益，如此對待股東的方式實在是無話可說。
We have written in past reports about the disappointments that usually
result from purchase and operation of “turnaround” businesses. Literally
hundreds of turnaround possibilities in dozens of industries have been
described to us over the years and, either as participants or as observers, we
have tracked performance against expectations. Our conclusion is that,
with few exceptions, when a management with a reputation for brilliance
tackles a business with a reputation for poor fundamental economics, it is
the reputation of the business that remains intact.
過去幾年我們一再提到買進那些具有轉機題材的產業令人大失所望的結果，這些年我
們大約接觸了數百家這樣的公司，最後不管是真正投入與否，我們都持續追蹤其後續
發展，在比較過預期以及實際的表現後，我們的結論是，除了少數的例外，當一個赫
赫有名的經營者遇到一個逐漸沒落的夕陽產業時，往往是後者佔了上風。
GEICO may appear to be an exception, having been turned around from
the very edge of bankruptcy in 1976. It certainly is true that managerial
brilliance was needed for its resuscitation, and that Jack Byrne, upon arrival in
that year, supplied that ingredient in abundance.
GEIGO或許是一個例外，自1976年幾乎破產的邊緣東山再起，從經營階層Jack Byrne
上任的第一天起優異的表現，正是它能獲得重生的最大因素。
But it also is true that the fundamental business advantage that GEICO
had enjoyed - an advantage that previously had produced staggering success
- was still intact within the company, although submerged in a sea of
financial and operating troubles.
當然即使身陷於財務與經營危機當中，GEIGO仍享有其最重要的產業競爭優勢也是重
要關鍵。
GEICO was designed to be the low-cost operation in an enormous
marketplace (auto insurance) populated largely by companies whose
marketing structures restricted adaptation. Run as designed, it could offer
unusual value to its customers while earning unusual returns for itself. For
decades it had been run in just this manner. Its troubles in the mid-70s
were not produced by any diminution or disappearance of this essential
economic advantage.
身處於廣大市場中(汽車保險)，不同於大部份行銷組織僵化的同業，一直以來GEIGO
將自己定位為低營運成本的公司，所以能夠在為客戶創造價值的同時，也為自己賺進
大把鈔票，幾十年來都是如此，而即使它在七0年代中期發生危機，也從未減損其在
此方面的經濟競爭優勢。
GEICO’s problems at that time put it in a position analogous to that of
American Express in 1964 following the salad oil scandal. Both were one-
of-a-kind companies, temporarily reeling from the effects of a fiscal blow
that did not destroy their exceptional underlying economics. The GEICO
and American Express situations, extraordinary business franchises with a
localized excisable cancer (needing, to be sure, a skilled surgeon), should be
distinguished from the true “turnaround” situation in which the managers
expect - and need - to pull off a corporate Pygmalion.
GEIGO的問題與1964年美國運通所爆發的沙拉油醜聞事件類似，兩家公司皆為一時
之選，一時的打擊並未毀掉其原本的經濟基礎，就像是一個身體健壯的人得到局部可
切除的腫瘤，只要遇到一位經驗豐富的醫生，就能化險為夷。
Whatever the appellation, we are delighted with our GEICO holding
which, as noted, cost us $47 million. To buy a similar $20 million of earning
power in a business with first-class economic characteristics and bright
prospects would cost a minimum of $200 million (much more in some
industries) if it had to be accomplished through negotiated purchase of an
entire company. A 100% interest of that kind gives the owner the options of
leveraging the purchase, changing managements, directing cash flow, and
selling the business. It may also provide some excitement around corporate
headquarters (less frequently mentioned).
不論怎麼說，我們還是很高興能夠以4,700萬美元的代價買到GEICO的持股，因為
透過談判購併方式想要買下一家類似具經濟特質與光明前景，且每年可創造2,000萬
盈餘的公司，至少得花上2億美金(有些產業的要價可能還更高)，雖然100%的持股
更可使所有權人得以掌握公司的生殺大權，同時也會企業總部帶來一些樂趣(這點通常
比較少人會提到)。
We find it perfectly satisfying that the nature of our insurance business
dictates we buy many minority portions of already well-run businesses (at
prices far below our share of the total value of the entire business) that do
not need management change, re-direction of cash flow, or sale. There
aren’t many Jack Byrnes in the managerial world, or GEICOs in the business
world. What could be better than buying into a partnership with both of
them?
對於保險業規定，我們只能取得績優企業的部份少數股權(以遠低於買下整家企業的價
格投資)，(這代表我們不能更換經營階層、無法對資金做重新配置甚至處份公司)，我
們從來就不會感到任何不妥，在企業經營的世界裡，Jack Byrnes或GEICO都算是少
數，能夠以夥伴的關係與它們共同合作有何不可呢?
Insurance Industry Conditions
保險產業現況
The insurance industry’s underwriting picture continues to unfold about
as we anticipated, with the combined ratio (see definition on page 37) rising
from 100.6 in 1979 to an estimated 103.5 in 1980. It is virtually certain that
this trend will continue and that industry underwriting losses will mount,
significantly and progressively, in 1981 and 1982. To understand why, we
recommend that you read the excellent analysis of property-casualty
competitive dynamics done by Barbara Stewart of Chubb Corp. in an October
1980 paper. (Chubb’s annual report consistently presents the most
insightful, candid and well-written discussion of industry conditions; you
should get on the company’s mailing list.) Mrs. Stewart’s analysis may not be
cheerful, but we think it is very likely to be accurate.
保險產業的情況持續依我們先前所預期般地發展，綜合比率(定義請參閱第37頁)從
1979年的100.6 升高到1980年估計的103.5，可預期的是1981到1982年這個
趨勢將繼續持續下去，業界的核保損失將向上攀升，想要了解箇中原因的人，我建議
你讀讀Chubb保險集團的年報，其對產險業競爭態勢所作的精譬分析，雖然報告不
見得令人振奮，但絕對中肯。
And, unfortunately, a largely unreported but particularly pernicious
problem may well prolong and intensify the coming industry agony. It is not
only likely to keep many insurers scrambling for business when underwriting
losses hit record levels - it is likely to cause them at such a time to redouble
their efforts.
而不幸的是，一個尚未浮現但卻非常棘手的問題使得保險業的陣痛將持續，它不但使
得保險公司因核保損失創下歷史新高而面臨經營的困境，更有可能讓業者苦心經營的
努力事倍功半。
This problem arises from the decline in bond prices and the insurance
accounting convention that allows companies to carry bonds at amortized
cost, regardless of market value. Many insurers own long-term bonds that,
at amortized cost, amount to two to three times net worth. If the level is
three times, of course, a one-third shrink from cost in bond prices - if it were
to be recognized on the books - would wipe out net worth. And shrink they
have. Some of the largest and best known property-casualty companies
currently find themselves with nominal, or even negative, net worth when
bond holdings are valued at market. Of course their bonds could rise in
price, thereby partially, or conceivably even fully, restoring the integrity of
stated net worth. Or they could fall further. (We believe that short-term
forecasts of stock or bond prices are useless. The forecasts may tell you a
great deal about the forecaster; they tell you nothing about the future.)
事情的起因在於債券價格下跌，而會計原則又允許保險業以攤銷成本而非市價列示其
帳面價值，結果導致許多業者以攤銷成本記錄的長期債券投資金額達到其淨值的二、
三倍之多，換言之，只要債券價格下跌超過三分之一，便很有可能把公司的淨值全部
吃光，這其中甚至包括好幾家知名的大公司在內，當然債券價格也有可能會回升，使
得其部份，甚至全部的淨值得以回復，但也沒有人敢保證債券價格不會繼續下跌。(我
們深信對股票或債券價格所作的短期預測根本是沒有用的，預測這件事或許能夠讓你
更了解預測者本身，但對於了解未來卻是一點幫助也沒有….)。
It might strike some as strange that an insurance company’s survival is
threatened when its stock portfolio falls sufficiently in price to reduce net
worth significantly, but that an even greater decline in bond prices produces
no reaction at all. The industry would respond by pointing out that, no
matter what the current price, the bonds will be paid in full at maturity,
thereby eventually eliminating any interim price decline. It may take twenty,
thirty, or even forty years, this argument says, but, as long as the bonds don’t
have to be sold, in the end they’ll all be worth face value. Of course, if they
are sold even if they are replaced with similar bonds offering better relative
value - the loss must be booked immediately. And, just as promptly,
published net worth must be adjusted downward by the amount of the loss.
有點吊詭的是，若持有的股票投資組合價格下跌會影響到保險業者的生存，但若換作
是債券價格下跌卻是一點事都沒有，保險業者所持的理由是不管現在的市價是多少，
反正只要到期日前不賣出，便能按照票面贖回，所以短期間價格的波動並無太大影響，
就算是二十年、三十年或甚至是四十年後到期，只要我不賣，等時間一到，就能夠比
票面金額收回，反倒是若我現在就出售這些債券，那麼就算是再買進同類型價值更高
的債券，我反而要立即認列相關損失，使得帳面淨值因而大幅縮水。
Under such circumstances, a great many investment options disappear,
perhaps for decades. For example, when large underwriting losses are in
prospect, it may make excellent business logic for some insurers to shift
from tax-exempt bonds into taxable bonds. Unwillingness to recognize
major bond losses may be the sole factor that prevents such a sensible move.
但真正的情況卻是，業者很可能為避免認列損失而一直不敢出售債券，其結果反而錯
失其它更好的投資機會。
But the full implications flowing from massive unrealized bond losses
are far more serious than just the immobilization of investment intellect.
For the source of funds to purchase and hold those bonds is a pool of money
derived from policyholders and claimants (with changing faces) - money
which, in effect, is temporarily on deposit with the insurer. As long as this
pool retains its size, no bonds must be sold. If the pool of funds shrinks -
which it will if the volume of business declines significantly - assets must be
sold to pay off the liabilities. And if those assets consist of bonds with big
unrealized losses, such losses will rapidly become realized, decimating net
worth in the process.
更嚴重的是，保險公司資金主要是來自於保戶所繳的保費，由於產險的投保期間較短，
一但保戶規模縮減，資金流動不足時，將被迫出售部份債券使得損失浮上檯面，保險
公司的淨值立即大幅縮水。
Thus, an insurance company with a bond market value shrinkage
approaching stated net worth (of which there are now many) and also faced
with inadequate rate levels that are sure to deteriorate further has two
options. One option for management is to tell the underwriters to keep
pricing according to the exposure involved - “be sure to get a dollar of
premium for every dollar of expense cost plus expectable loss cost”.
因此保險公司在面臨債券價格下跌，淨值大幅縮水 (目前確有許多業者是如此)，同時
市場費率又低到不合理時，通常有兩種選擇，一種是告訴核保部門，必須堅守費率底
限，保費絕對不可以低於預估損失成本加上營業費用。
The consequences of this directive are predictable: (a) with most
business both price sensitive and renewable annually, many policies
presently on the books will be lost to competitors in rather short order; (b) as
premium volume shrinks significantly, there will be a lagged but
corresponding decrease in liabilities (unearned premiums and claims
payable); (c) assets (bonds) must be sold to match the decrease in liabilities;
and (d) the formerly unrecognized disappearance of net worth will become
partially recognized (depending upon the extent of such sales) in the
insurer’s published financial statements.
這種選擇的結果相當明確: (a)由於大部份的業務都是每年更新且對價格都相當敏感，
所以很多保單在到期後都會流到競爭對手那邊(b)隨著保費收入大幅縮水，相對應的負
債科目也會慢慢減少(未到期保費及應付理賠款)(c)資產(債券)必須跟著出售，以因應負
債的減少(d)原先檯面下的未實現損失，將被迫認列在保險業者的財務報表之上(當然
要看出售的多寡)。
Variations of this depressing sequence involve a smaller penalty to
stated net worth. The reaction of some companies at (c) would be to sell
either stocks that are already carried at market values or recently purchased
bonds involving less severe losses. This ostrich-like behavior - selling the
better assets and keeping the biggest losers - while less painful in the short
term, is unlikely to be a winner in the long term.
此種令人沮喪的動作，對於淨值影響程度不一，有些公司在(c)階段的反應是出售成本
與市價相當的股票，或是新進投資損失較小的債券，出售好的投資，留下爛的部份的
這種駝鳥心態，短期間或許較不覺得痛，但對於公司與產業長遠的發展皆會產生重大
的傷害。
The second option is much simpler: just keep writing business
regardless of rate levels and whopping prospective underwriting losses,
thereby maintaining the present levels of premiums, assets and liabilities -
and then pray for a better day, either for underwriting or for bond prices.
There is much criticism in the trade press of “cash flow” underwriting; i.e.,
writing business regardless of prospective underwriting losses in order to
obtain funds to invest at current high interest rates. This second option
might properly be termed “asset maintenance” underwriting - the acceptance
of terrible business just to keep the assets you now have.
第二種選擇比較簡單，那就是不管保費水準有多低，將來要賠多少錢，都照單全收以
維持現有保費收入水準，然後暗地裡祈禱不要發生什麼重大意外，或是期待債券價格
早日回升，對於這樣的做法，外界一直有相當大的批評。
Of course you know which option will be selected. And it also is clear
that as long as many large insurers feel compelled to choose that second
option, there will be no better day for underwriting. For if much of the
industry feels it must maintain premium volume levels regardless of price
adequacy, all insurers will have to come close to meeting those prices. Right
behind having financial problems yourself, the next worst plight is to have a
large group of competitors with financial problems that they can defer by a
“sell-at-any-price” policy.
當然各位都曉得我們應該採取那一種做法，而且產業的趨勢也很明確，那就是只要大
部份的保險公司都被迫採取第二種做法，那麼保險市場就不會有好轉的一天，因為如
果大部份的業者，不論費率是否合理，都以微持保費收入水準為第一優先，那麼市場
價格就一定不會好轉，除了本身發生財務問題之外，我們最不願意見到的就是市場上
大部份的同業都因為財務問題而紛紛採取流血式的殺價競爭。
We mentioned earlier that companies that were unwilling - for any of a
number of reasons, including public reaction, institutional pride, or
protection of stated net worth - to sell bonds at price levels forcing
recognition of major losses might find themselves frozen in investment
posture for a decade or longer. But, as noted, that’s only half of the
problem. Companies that have made extensive commitments to long-term
bonds may have lost, for a considerable period of time, not only many of their
investment options, but many of their underwriting options as well.
我們之前也曾提到，任何一家保險公司因為種種理由，諸如顧及公眾反應、企業自尊
心或是怕傷害到淨值等原因，而不願認賠出售債券者，終將發現自己被債券長期套牢
而無法進行其它投資，而我們之前也提到，問題還不止於此，除了投資的選擇被迫犧
牲，甚至於連是否接受保單的選擇也都盪然無存。
Our own position in this respect is satisfactory. We believe our net
worth, valuing bonds of all insurers at amortized cost, is the strongest
relative to premium volume among all large property-casualty stockholder-
owned groups. When bonds are valued at market, our relative strength
becomes far more dramatic. (But lest we get too puffed up, we remind
ourselves that our asset and liability maturities still are far more mismatched
than we would wish and that we, too, lost important sums in bonds because
your Chairman was talking when he should have been acting.)
至於我們本身採取的立場就相當令人安心，我們相信自己的淨值相對於保費收入水
準，依所有業者債券採攤銷成本制，是所有大型產險業者中最強的，甚至當債券價值
以市價計時，我們的競爭優勢更加明顯，(當然在吹噓自誇的同時，我們還是必須提醒
自己資產與負債部位的到期日仍不相稱，而且本人也因為無法劍及履及的執行，而使
得我們在債券方面的投資損失了不少錢)。
Our abundant capital and investment flexibility will enable us to do
whatever we think makes the most sense during the prospective extended
period of inadequate pricing. But troubles for the industry mean troubles
for us. Our financial strength doesn’t remove us from the hostile pricing
environment now enveloping the entire property-casualty insurance
industry. It just gives us more staying power and more options.
Berkshire充足的資金與彈性的投資操作，將使得我們在面對市場不當定價的惡性競
爭環境時，還能游刃有餘，但是產業的問題就是我們的問題，我們堅強的財務實力，
依舊無法使我們免於產業的殺價競爭，我們只不過是多了些持久力以及可供選擇的空
間。
Insurance Operations
保險業營運
The National Indemnity managers, led by Phil Liesche with the usual
able assistance of Roland Miller and Bill Lyons, outdid themselves in 1980.
While volume was flat, underwriting margins relative to the industry were at
an all-time high. We expect decreased volume from this operation in 1981.
But its managers will hear no complaints from corporate headquarters, nor
will employment or salaries suffer. We enormously admire the National
Indemnity underwriting discipline - embedded from origin by the founder,
Jack Ringwalt - and know that this discipline, if suspended, probably could
not be fully regained.
今年由Phil Liesche 所領導的國家產險公司在核保部門Roland以及理賠部門Bill
Lyons的協助下，不斷地超越自我，雖然保費收入持平，但核保的利潤率卻創同業新
高，雖然我們預期明年保費收入將減少，但身為總部的我們不會有任何的抱怨而他們
的薪資考績也不會受影響，對於公司創辦人所定下的核保準則我們信奉不渝，而且相
當清楚一旦失去就永難再回復。
John Seward at Home and Auto continues to make good progress in
replacing a diminishing number of auto policies with volume from less
competitive lines, primarily small-premium general liability. Operations are
being slowly expanded, both geographically and by product line, as
warranted by underwriting results.
John Seward領導的家庭與汽車險公司則小有進展，我們將較不具競爭力的小額一般
責任險轉為金額較大的汽車保險，同時隨著核保績效的改進，營運規模，不論是在地
區或是產品線，也在緩步提升中。
The reinsurance business continues to reflect the excesses and
problems of the primary writers. Worse yet, it has the potential for
magnifying such excesses. Reinsurance is characterized by extreme ease of
entry, large premium payments in advance, and much-delayed loss reports
and loss payments. Initially, the morning mail brings lots of cash and few
claims. This state of affairs can produce a blissful, almost euphoric, feeling
akin to that experienced by an innocent upon receipt of his first credit card.
再保業務部份由於進入障礙較小，還是持續受到供過於求的局面，加上初級保險業者
面臨的問題，事前可先收取鉅額保費，但災害真正發生與理賠時程卻拉得很長，這種
感覺有點像青少年第一次擁有自己的信用卡一樣。
The magnetic lure of such cash-generating characteristics, currently
enhanced by the presence of high interest rates, is transforming the
reinsurance market into “amateur night”. Without a super catastrophe,
industry underwriting will be poor in the next few years. If we experience
such a catastrophe, there could be a bloodbath with some companies not
able to live up to contractual commitments. George Young continues to do
a first-class job for us in this business. Results, with investment income
included, have been reasonably profitable. We will retain an active
reinsurance presence but, for the foreseeable future, we expect no premium
growth from this activity.
致命的吸引力使得大筆的資金擁入這個行業，目前的高利率環境更加深這樣的現象，
導致的結果是若某一年未發生大災難，則往後幾年的核保績效便會變得很差，相反的，
若有大災難發生，則更大的災難將會降臨在保險公司身上，因為有些同業可能無法履
行與客戶當初簽訂的合約，而我們George Young 在這一行的表現一向是一流的，
在加計投資收益後，仍能微持合理的獲利，我們將繼續留在再保市場，但在可預見的
未來，保費收入將很難有大幅的成長。
We continue to have serious problems in the Homestate operation.
Floyd Taylor in Kansas has done an outstanding job but our underwriting
record elsewhere is considerably below average. Our poorest performer has
been Insurance Company of Iowa, at which large losses have been sustained
annually since its founding in 1973. Late in the fall we abandoned
underwriting in that state, and have merged the company into Cornhusker
Casualty. There is potential in the homestate concept, but much work needs
to be done in order to realize it.
在Homestate家計保險業務方面，我們持續面臨重大的問題，除了Kansas 的Floyd
Taylor 外，其餘的核保表現均在同業水準之下，其中Iowa保險，自1973年成立以
來，每年皆發生鉅額損失，直到去年我們決定結束該州的業務，並將之併入
Cornhusker產險，家計保險概念其實也很大的潛力，但還需要很多努力才有辦法實
現它。
Our Workers Compensation operation suffered a severe loss when Frank
DeNardo died last year at 37. Frank instinctively thought like an underwriter.
He was a superb technician and a fierce competitor; in short order he had
straightened out major problems at the California Workers Compensation
Division of National Indemnity. Dan Grossman, who originally brought
Frank to us, stepped in immediately after Frank’s death to continue that
operation, which now utilizes Redwood Fire and Casualty, another Berkshire
subsidiary, as the insuring vehicle.
我們的勞工退休金業務在去年痛失英才，37歲的Frank不幸去世，他天生就是個保
險專家，積極進取，努力上進，在短短時間內便改正在國家產業退休金業務部門的缺
失，當初介紹Frank加入的Dan立即接手其原有工作，並Berkshire以另一家子公
司Redwood火險為主體，承接業務。
Our major Workers Compensation operation, Cypress Insurance
Company, run by Milt Thornton, continues its outstanding record. Year
after year Milt, like Phil Liesche, runs an underwriting operation that far
outpaces his competition. In the industry he is admired and copied, but not
matched.
至於由Milt 所領導的Cypress 保險公司一直是我們在這項業務的主力，且表現一直
相當優異，與Phil Liesche一樣，廣為同業所仰慕與模仿，但其優秀的表現卻是同業
無法比擬的。
Overall, we look for a significant decline in insurance volume in 1981
along with a poorer underwriting result. We expect underwriting experience
somewhat superior to that of the industry but, of course, so does most of the
industry. There will be some disappointments.
總之保險業務量在1981年將大幅下滑，整體核保表現也不會太好，雖然我們預期自
己的績效應該會比同業好許多，但其他同業也都這樣認為，最後肯定有人會大失所望。
Textile and Retail Operations
紡織業及零售業營運
During the past year we have cut back the scope of our textile business.
Operations at Waumbec Mills have been terminated, reluctantly but
necessarily. Some equipment was transferred to New Bedford but most has
been sold, or will be, along with real estate. Your Chairman made a costly
mistake in not facing the realities of this situation sooner.
去年我們縮減在紡織業的營運規模，雖然不願意但卻不得不關閉Waumbec 工廠，除
了少數設備轉移至New Bedford外，其餘設備連同廠房都將處份掉，我本人由於無
法早日面對事實而犯了重大的錯誤。
At New Bedford we have reduced the number of looms operated by
about one-third, abandoning some high-volume lines in which product
differentiation was insignificant. Even assuming everything went right -
which it seldom did - these lines could not generate adequate returns related
to investment. And, over a full industry cycle, losses were the most likely
result.
而在New Bedford 我們也淘汰了將近三分之一的織布機，保留適合少量多樣型的機
台，而即使一切順利(這種情況很少)，這些生產線仍不具投資效益，就產業循環而言，
損失將無可避免。
Our remaining textile operation, still sizable, has been divided into a
manufacturing and a sales division, each free to do business independent of
the other. Thus, distribution strengths and mill capabilities will not be
wedded to each other. We have more than doubled capacity in our most
profitable textile segment through a recent purchase of used 130-inch
Saurer looms. Current conditions indicate another tough year in textiles,
but with substantially less capital employed in the operation.
剩下的紡織事業，規模還不算小，將劃分為製造與銷售兩部門，各自獨立運作，兩者
才不致於綁在一起，由於新購進中古130吋針式織布機，將使得我們目前最具獲利能
力產品線的產能增加一倍，情勢告訴我們紡織業又將面臨艱困的一年，所幸我們在這
一行所投入的資本已大幅減少。
Ben Rosner’s record at Associated Retail Stores continues to amaze us.
In a poor retailing year, Associated’s earnings continued excellent - and
those earnings all were translated into cash. On March 7, 1981 Associated
will celebrate its 50th birthday. Ben has run the business (along with Leo
Simon, his partner from 1931 to 1966) in each of those fifty years.
Ben在聯合零售商店的表現持續令我們驚豔，在零售業普遍慘淡的一年，該公司盈餘
表現仍佳，且大部份皆為現金收入，而明年聯合零售將邁入第五十個年頭，而連同前
任者Simon(1931-1966)，兩人合計經營這家公司整整有五十年了。
Disposition of Illinois National Bank and Trust of Rockford
伊利諾國家銀行及Rockford信託處分案
On December 31, 1980 we completed the exchange of 41,086 shares of
Rockford Bancorp Inc. (which owns 97.7% of Illinois National Bank) for a like
number of shares of Berkshire Hathaway Inc.
1980年底，我們終於完成了以Berkshire約當的股份交換41,086股Rockford
Bancorp(其持有97.7% 伊利諾國家銀行股份)的動作。
Our method of exchange allowed all Berkshire shareholders to maintain
their proportional interest in the Bank (except for me; I was permitted 80% of
my proportional share). They were thus guaranteed an ownership position
identical to that they would have attained had we followed a more
conventional spinoff approach. Twenty-four shareholders (of our
approximate 1300) chose this proportional exchange option.
交換的方式准許Berkshire股東維持各自在該銀行的權益(除了我本人僅能維持原來
的80%)，如此他們將可確保在該銀行的權益與傳統的分割方式一樣受到保障，總計有
24位股東(目前股東總人數為1,300人)選擇了這種對等方式。
We also allowed overexchanges, and thirty-nine additional
shareholders accepted this option, thereby increasing their ownership in the
Bank and decreasing their proportional ownership in Berkshire. All got the
full amount of Bancorp stock they requested, since the total shares desired
by these thirty-nine holders was just slightly less than the number left
available by the remaining 1200-plus holders of Berkshire who elected not to
part with any Berkshire shares at all. As the exchanger of last resort, I took
the small balance (3% of Bancorp’s stock). These shares, added to shares I
received from my basic exchange allotment (80% of normal), gave me a
slightly reduced proportional interest in the Bank and a slightly enlarged
proportional interest in Berkshire.
另外股東們也可要求增加其在該銀行的權益(相對地，其在Berkshire的權益將減少)，
所有提出此項要求的股東皆如願拿到股票，因為這39位股東需求的股份數量剛好略
低於其他1,200多位選擇全數保留Berkshire股份所釋出的銀行股份，剩下的中間差
額則由本人承受(約佔Bancorp 3%的股份)，在加計先前基本80%的分配額度後，最
後的結果，本人在銀行的權益稍微減少，而在Berkshire的權益則略微增加。
Management of the Bank is pleased with the outcome. Bancorp will
operate as an inexpensive and uncomplicated holding company owned by 65
shareholders. And all of those shareholders will have become Bancorp
owners through a conscious affirmative decision.
銀行的經營團隊對於這樣的結果感到滿意，Bancorp將成為一個只有65位股東，組
織單純且不複雜的控股公司。
Financing
財務
In August we sold $60 million of 12 3/4% notes due August 1, 2005,
with a sinking fund to begin in 1991.
8月份，我們發行了12.75%，25年期(2005年到期)，金額6,000萬美元的公司債，
依合約規定我們將於1991年開始提存備償基金。
The managing underwriters, Donaldson, Lufkin & Jenrette Securities
Corporation, represented by Bill Fisher, and Chiles, Heider & Company, Inc.,
represented by Charlie Heider, did an absolutely first-class job from start to
finish of the financing.
這項融資案的主要承銷商Donaldson自始至終皆提供我們一流的服務。
Unlike most businesses, Berkshire did not finance because of any
specific immediate needs. Rather, we borrowed because we think that, over
a period far shorter than the life of the loan, we will have many opportunities
to put the money to good use. The most attractive opportunities may
present themselves at a time when credit is extremely expensive - or even
unavailable. At such a time we want to have plenty of financial firepower.
不像大部份的公司，Berkshire並不會為了一些特定的短期資金需求而去融資，我們
借錢反而是因為當我們覺得在一定期間內(約略短於融資年限)將有許多好的投資機會
出現，最佳的投資機會大多是出現在市場銀根最緊的時候，那時候你一定希望擁有龐
大的火力。
Our acquisition preferences run toward businesses that generate cash,
not those that consume it. As inflation intensifies, more and more
companies find that they must spend all funds they generate internally just to
maintain their existing physical volume of business. There is a certain
mirage-like quality to such operations. However attractive the earnings
numbers, we remain leery of businesses that never seem able to convert such
pretty numbers into no-strings-attached cash.
對於購併的對象，我們偏愛那些會「產生現金」而非「消化現金」的公司。由於高通
貨膨漲的影響，越來越多的公司發現它們必須將所賺得的每一塊錢再投入才能維持其
原有的營運規模，就算這些公司帳面數字再好看，除非看到白花花的現金，我們對之
仍保持高度警戒。
Businesses meeting our standards are not easy to find. (Each year we
read of hundreds of corporate acquisitions; only a handful would have been
of interest to us.) And logical expansion of our present operations is not easy
to implement. But we’ll continue to utilize both avenues in our attempts to
further Berkshire’s growth.
符合我們標準的公司並不容易發現，(每年我們研就上百件的購併案，其中僅有少數能
引起我們的興趣)，所以要讓我們規模合理穩定擴充的想法並不容易落實，但我們仍將
持續多方嘗試以保持Berkshire的成長。
Under all circumstances we plan to operate with plenty of liquidity, with
debt that is moderate in size and properly structured, and with an abundance
of capital strength. Our return on equity is penalized somewhat by this
conservative approach, but it is the only one with which we feel comfortable.
無論如何，我們皆希望能夠保持適當的流動性，負債比例與結構適當並保留充裕的資
本實力，雖然這種保守的態度將使得我們的投資報酬率因此打了點折扣，但這也是惟
一能讓我們感到安心的一種方式。
* * * * * * * * * * * *
Gene Abegg, founder of our long-owned bank in Rockford, died on July
2, 1980 at the age of 82. As a friend, banker and citizen, he was
unsurpassed.
Gene Abegg 我們長期投資的Rockford銀行創辦人，於七月二日逝世，享年八十二
歲，身為一位摯友、銀行家與傑出公民，他是無可超越的。
You learn a great deal about a person when you purchase a business
from him and he then stays on to run it as an employee rather than as an
owner. Before the purchase the seller knows the business intimately,
whereas you start from scratch. The seller has dozens of opportunities to
mislead the buyer - through omissions, ambiguities, and misdirection.
After the check has changed hands, subtle (and not so subtle) changes of
attitude can occur and implicit understandings can evaporate. As in the
courtship-marriage sequence, disappointments are not infrequent.
當你向某個人買下一家公司時，你對這個人有了更多的了解，之後你又請他以夥計而
非老闆的身份繼續經營這家公司。在買賣開始前，他對這家公司瞭若指掌，而你卻一
無所知，賣方有太多機會可以欺騙買方，而當交易完成後，微妙(但又不那麼微妙)的
態度開始改變而模糊的認知也會發酵，就像是求婚的過程一般，失望總是難免的。
From the time we first met, Gene shot straight 100% of the time - the
only behavior pattern he had within him. At the outset of negotiations, he
laid all negative factors face up on the table; on the other hand, for years
after the transaction was completed he would tell me periodically of some
previously undiscussed items of value that had come with our purchase.
而當我們第一次碰面，Gene 百分之百坦誠，就像是其為人一般，談判的開始，他把
公司所有負面的因素攤開在桌上，另一方面，在交易完成數年後，他還會定期地告知
你當初交易時未討論到的地方。
Though he was already 71 years of age when he sold us the Bank, Gene
subsequently worked harder for us than he had for himself. He never
delayed reporting a problem for a minute, but problems were few with Gene.
What else would you expect from a man who, at the time of the bank holiday
in 1933, had enough cash on the premises to pay all depositors in full?
Gene never forgot he was handling other people’s money. Though this
fiduciary attitude was always dominant, his superb managerial skills enabled
the Bank to regularly achieve the top position nationally in profitability.
而就算是當他把銀行賣給我們時已高齡71歲，Gene 仍然興勤工作更甚於以往，雖
然極少發生問題，但一有問題便立刻報告毫不遲疑，你還能對這樣的人多要求些什麼
呢?(早在1933年該銀行所持有的現金便足以立即清償所有存款)，他永遠記得他是在
處理別人的錢財，雖然這種正直不阿的態度將永遠安息，但他傑出的管理能力將使銀
行在全美獲利能力的表現上繼續名列前茅。
Gene was in charge of the Illinois National for close to fifty years -
almost one-quarter of the lifetime of our country. George Mead, a wealthy
industrialist, brought him in from Chicago to open a new bank after a
number of other banks in Rockford had failed. Mr. Mead put up the money
and Gene ran the show. His talent for leadership soon put its stamp on
virtually every major civic activity in Rockford.
Gene負責伊利諾國家銀行的營運將近50年，約當美國歷史的四分之一，當初是一位
工業鉅子George Mead從芝加哥把他找來Rockford開設銀行，Mead先生負責出
錢，Gene則負責出力，他的領導才能立即在Rockford地區各種社交活動中展現出
來。
Dozens of Rockford citizens have told me over the years of help Gene
extended to them. In some cases this help was financial; in all cases it
involved much wisdom, empathy and friendship. He always offered the
same to me. Because of our respective ages and positions I was sometimes
the junior partner, sometimes the senior. Whichever the relationship, it
always was a special one, and I miss it.
許多Rockford的居民告訴我這些年來Gene 給予他們很多幫助，有時是金錢上的，
但更多時候包含的是智慧、同情與友誼，而我本身也從他身上獲得許多，因為個別年
紀與工作上的關係，我們益師益友，不論如何，這種關係相當特殊，我永遠懷念他。
Warren E. Buffett
Chairman of the Board
February 27, 1981
華倫．巴菲特
董事會主席
1981年2月27日
原文載自：http://stasis.pixnet.net/blog/post/22778767
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