BERKSHIRE HATHAWAY INC.
Berkshire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 1984 was $152.6 million, or $133 per
share. This sounds pretty good but actually it’s mediocre. Economic
gains must be evaluated by comparison with the capital that produces them.
Our twenty-year compounded annual gain in book value has been 22.1%
(from $19.46 in 1964 to $1108.77 in 1984), but our gain in 1984 was only
13.6%.
1984年Berkshire的淨值約增加了一億五千萬美金，每股約等於133美金，這個數
字看起來似乎還不錯，不過若考慮所投入的資金，事實上只能算普通，二十年來我們
的淨值約以22.1%年複合成長率增加(從1965年的19.46到1984年的
1,108.77) ，不過去年只有13.6%。
As we discussed last year, the gain in per-share intrinsic business
value is the economic measurement that really counts. But calculations of
intrinsic business value are subjective. In our case, book value serves as a
useful, although somewhat understated, proxy. In my judgment, intrinsic
business value and book value increased during 1984 at about the same
rate.
如同我們去年曾提過的，真正重要的是每股實質價值的成長率，不過由於這涉及太多
主觀的意見而難以計算，所以我們改以帳面價值當作代替(雖然通常是有點低估) ，我
個人認為在1984年實質價值與帳面價值增加的程度相當。
Using my academic voice, I have told you in the past of the drag that a
mushrooming capital base exerts upon rates of return. Unfortunately, my
academic voice is now giving way to a reportorial voice. Our historical 22%
rate is just that - history. To earn even 15% annually over the next decade
(assuming we continue to follow our present dividend policy, about which
more will be said later in this letter) we would need profits aggregating
about $3.9 billion. Accomplishing this will require a few big ideas - small
ones just won’t do. Charlie Munger, my partner in general management,
and I do not have any such ideas at present, but our experience has been
that they pop up occasionally. (How’s that for a strategic plan?)
過去個人以學術角度曾跟各位提到暴增的資本將會拖累資本報酬率，不幸的是今年我
將改用報導新聞的方式跟各位報告，過去動輒22%的成長率已成歷史，在往後十年我
們至少要賺到39億美金，每年才能以15%成長(假設我們仍維持目前的股利政策，後
面我會詳加討論)，想要順利達成目標，必需要有一些極棒的點子，可惜我跟我的執行
合夥人Charlie Munger目前並無任何夠棒點子，不過我們的經驗是有時它會突然冒
出來。(或許該擬定個策略方案了)
Sources of Reported Earnings
帳面盈餘報告
The table on the following page shows the sources of Berkshire’s
reported earnings. Berkshire’s net ownership interest in many of the
constituent businesses changed at midyear 1983 when the Blue Chip
merger took place. Because of these changes, the first two columns of the
table provide the best measure of underlying business performance.
下表顯示Berkshire帳列盈餘的來源，由於年中與Blue Chips合併致使我們在一些
長期投資的股權發生變動，由於這些轉變導致表中前兩欄所列的數字較能反應各個子
公司的表現。
All of the significant gains and losses attributable to unusual sales of
assets by any of the business entities are aggregated with securities
transactions on the line near the bottom of the table, and are not included
in operating earnings. (We regard any annual figure for realized capital
gains or losses as meaningless, but we regard the aggregate realized and
unrealized capital gains over a period of years as very important.)
而各個公司資本利得損失並不包含在內而是彙總於下表最後「已實現出售證券利得」
一欄(我們認為單一年度的出售證券利得並無太大意義，但每年加總累計的數字卻相當
重要)。
Furthermore, amortization of Goodwill is not charged against the
specific businesses but, for reasons outlined in the Appendix to my letter in
the 1983 annual report, is set forth as a separate item.
至於商譽的攤銷則以單一欄位另行列示，原因詳見1983年年報的附註。
(000s omitted)
----------------------------------------------------------
Net Earnings
Earnings Before Income Taxes After Tax
-------------------------------------- ------------------
Total Berkshire Share Berkshire Share
------------------ ------------------ ------------------
1984 1983 1984 1983 1984 1983
-------- -------- -------- -------- -------- --------
Operating Earnings:
Insurance Group:
Underwriting ............ $(48,060) $(33,872) $(48,060) $(33,872) $(25,955) $(18,400)
Net Investment Income ... 68,903 43,810 68,903 43,810 62,059 39,114
Buffalo News .............. 27,328 19,352 27,328 16,547 13,317 8,832
Nebraska Furniture Mart(1) 14,511 3,812 11,609 3,049 5,917 1,521
See’s Candies ............. 26,644 27,411 26,644 24,526 13,380 12,212
Associated Retail Stores .. (1,072) 697 (1,072) 697 (579) 355
Blue Chip Stamps(2) (1,843) (1,422) (1,843) (1,876) (899) (353)
Mutual Savings and Loan ... 1,456 (798) 1,166 (467) 3,151 1,917
Precision Steel ........... 4,092 3,241 3,278 2,102 1,696 1,136
Textiles .................. 418 (100) 418 (100) 226 (63)
Wesco Financial ........... 9,777 7,493 7,831 4,844 4,828 3,448
Amortization of Goodwill .. (1,434) (532) (1,434) (563) (1,434) (563)
Interest on Debt .......... (14,734) (15,104) (14,097) (13,844) (7,452) (7,346)
Shareholder-Designated
Contributions .......... (3,179) (3,066) (3,179) (3,066) (1,716) (1,656)
Other ..................... 4,932 10,121 4,529 9,623 3,476 8,490
-------- -------- -------- -------- -------- --------
Operating Earnings .......... 87,739 61,043 82,021 51,410 70,015 48,644
Special GEICO Distribution .. -- 19,575 -- 19,575 -- 18,224
Special Gen. Foods Distribution 8,111 -- 7,896 -- 7,294 --
Sales of securities and
unusual sales of assets .. 104,699 67,260 101,376 65,089 71,587 45,298
-------- -------- -------- -------- -------- --------
Total Earnings - all entities $200,549 $147,878 $191,293 $136,074 $148,896 $112,166
====== ====== ====== ====== ====== ======
(1) 1983 figures are those for October through December.
(2) 1984 and 1983 are not comparable; major assets were
transferred in the mid-year 1983 merger of Blue Chip Stamps.
Sharp-eyed shareholders will notice that the amount of the special
GEICO distribution and its location in the table have been changed from the
presentation of last year. Though they reclassify and reduce accounting
earnings, the changes are entirely of form, not of substance. The story
behind the changes, however, is interesting.
眼尖的股東可能會發現GEICO特別股利的金額與其分類的位置有變動，雖然損益數字
些微受到影響，但實質上並無太大差別，倒是背後的故事卻相當有趣。
As reported last year: (1) in mid-1983 GEICO made a tender offer to
buy its own shares; (2) at the same time, we agreed by written contract to
sell GEICO an amount of its shares that would be proportionately related to
the aggregate number of shares GEICO repurchased via the tender from all
other shareholders; (3) at completion of the tender, we delivered 350,000
shares to GEICO, received $21 million cash, and were left owning exactly
the same percentage of GEICO that we owned before the tender; (4) GEICO’s
transaction with us amounted to a proportionate redemption, an opinion
rendered us, without qualification, by a leading law firm; (5) the Tax Code
logically regards such proportionate redemptions as substantially
equivalent to dividends and, therefore, the $21 million we received was
taxed at only the 6.9% inter-corporate dividend rate; (6) importantly, that
$21 million was far less than the previously-undistributed earnings that
had inured to our ownership in GEICO and, thus, from the standpoint of
economic substance, was in our view equivalent to a dividend.
如同去年我報告過的：(1)1983年中GEICO 宣布實施庫藏股買回自家股票(2)同時我
們簽署協議同意GEICO 自我們手中買回等比例的股份(3)總結最後我們賣還給GEICO
35萬股，並收到2,100萬現金，而我們在GEICO的持股比例則維持不變(4)我們著
名的律師事務所認定這整件交易為減資(5)依稅法我們只要繳交6.9%的集團企業間股
利稅(6)最重要的是這2,100萬現金比我們未認列的未分配盈餘少得多，故就經濟實
質面而言，我們將之視為股利的分配。
Because it was material and unusual, we highlighted the GEICO
distribution last year to you, both in the applicable quarterly report and in
this section of the annual report. Additionally, we emphasized the
transaction to our auditors, Peat, Marwick, Mitchell & Co. Both the Omaha
office of Peat Marwick and the reviewing Chicago partner, without objection,
concurred with our dividend presentation.
但由於這種情況並不常見且金額又不小，所以在去年季報與年報中我們特別加以分別
列示，並且也經我們的本地簽證會計師PM認可同意。包含奧瑪哈當地的分所與位於
芝加哥的總部都已認可我們這樣的陳述。
In 1984, we had a virtually identical transaction with General Foods.
The only difference was that General Foods repurchased its stock over a
period of time in the open market, whereas GEICO had made a
団ne-shot?tender offer. In the General Foods case we sold to the company,
on each day that it repurchased shares, a quantity of shares that left our
ownership percentage precisely unchanged. Again our transaction was
pursuant to a written contract executed before repurchases began. And
again the money we received was far less than the retained earnings that
had inured to our ownership interest since our purchase. Overall we
received $21,843,601 in cash from General Foods, and our ownership
remained at exactly 8.75%.
而1984年General Foods也發生同樣的狀況，只是後者是直接自公開市場中買回，
所以我們每天賣出一點股份以使我們在該公司的持股比例維持不變，同樣的雙方在交
易之前已簽訂好協議，且我們收到的現金比我們在該公司未認列的未分配盈餘少得
多，總計我們收到2,100萬現金，而持股比例則維持在8.75%不變。
At this point the New York office of Peat Marwick came into the picture.
Late in 1984 it indicated that it disagreed with the conclusions of the firm’s
Omaha office and Chicago reviewing partner. The New York view was that
the GEICO and General Foods transactions should be treated as sales of
stock by Berkshire rather than as the receipt of dividends. Under this
accounting approach, a portion of the cost of our investment in the stock of
each company would be charged against the redemption payment and any
gain would be shown as a capital gain, not as dividend income. This is an
accounting approach only, having no bearing on taxes: Peat Marwick agrees
that the transactions were dividends for IRS purposes.
但這時簽證會計師PM的紐約總部卻跳出來講話，否決其分所所做的結論，認定我們
與GEICO 與General Foods之間的交易屬於股權買賣而非股利分配，在這種情況
下，我們所收到的現金被認定為出售股票收入，在扣除當初的原始投資成本後，應列
示為資本利得，當然這只是會計上的處理與稅務無關。PM還是認定稅務上屬於股利
分配。
We disagree with the New York position from both the viewpoint of
economic substance and proper accounting. But, to avoid a qualified
auditor’s opinion, we have adopted herein Peat Marwick’s 1984 view and
restated 1983 accordingly. None of this, however, has any effect on
intrinsic business value: our ownership interests in GEICO and General
Foods, our cash, our taxes, and the market value and tax basis of our
holdings all remain the same.
雖然我們並不認同紐約方面的看法，但為免會計師出具保留意見，我們仍勉強接收，
並重編1983年的報表，儘管如此，公司實質上未受任何影響，我們在這兩家公司的
權益、帳上的現金、所得稅與持有股權的市值皆維持不變。
This year we have again entered into a contract with General Foods
whereby we will sell them shares concurrently with open market purchases
that they make. The arrangement provides that our ownership interest will
remain unchanged at all times. By keeping it so, we will insure ourselves
dividend treatment for tax purposes. In our view also, the economic
substance of this transaction again is the creation of dividend income.
However, we will account for the redemptions as sales of stock rather than
dividend income unless accounting rules are adopted that speak directly to
this point. We will continue to prominently identify any such special
transactions in our reports to you.
而今年我們又與General Foods簽訂類似的協議，為了確保在稅法上得以認定為股利
分配，我們仍將在該公司維持持有的股權比例不變，不論如何，我們依舊認為這類交
易在實質上屬於股利的分配，但是除非會計原則做修正，我們還是會以股份賣回的方
式處理入帳，後續若還有類似的情況我們一定會跟所有的股東報告。
While we enjoy a low tax charge on these proportionate redemptions,
and have participated in several of them, we view such repurchases as at
least equally favorable for shareholders who do not sell. When companies
with outstanding businesses and comfortable financial positions find their
shares selling far below intrinsic value in the marketplace, no alternative
action can benefit shareholders as surely as repurchases.
而在參與過這麼多次類似的交易後，我們覺得這種作法對不賣出股份的股東同樣有
利，當一家經營績效良好且財務基礎健全的公司發現自家的股價遠低於其實質價值
時，買回自家股票是保障股東權益最好的方法了。
(Our endorsement of repurchases is limited to those dictated by
price/value relationships and does not extend to the greenmail’s
repurchase - a practice we find odious and repugnant. In these
transactions, two parties achieve their personal ends by exploitation of an
innocent and unconsulted third party. The players are: (1) the
shareholder’s extortionist who, even before the ink on his stock certificate
dries, delivers his your-money-or-your-life message to managers; (2) the
corporate insiders who quickly seek peace at any price - as long as the
price is paid by someone else; and (3) the shareholders whose money is
used by (2) to make (1) go away. As the dust settles, the mugging,
transient shareholder gives his speech on free enterprise the muggee
management gives its speech on the best interests of the company and the
innocent shareholder standing by mutely funds the payoff.)
但必須說明的是，我是指那些基於本益比角度的買回股份，而不包括那種不道德的
green-mail(在這類交易中，甲乙雙方為自身私利協議剝削不知情的丙方，甲方-是指
職業股東在剛買下股票後，便對公司經營階層發出要錢或是要命的勒索，而乙方-是
指息事寧人的公司經營階層，願意用高價買回，只要這個錢不要是他出的就好，丙方
-就這樣被犧牲，別人花錢他來買單，結果公司經營階層還信勢旦旦的說要維持公司
利益，而不知情的股東只能呆呆的被宰還不自知。
The companies in which we have our largest investments have all
engaged in significant stock repurhases at times when wide discrepancies
existed between price and value. As shareholders, we find this
encouraging and rewarding for two important reasons - one that is obvious,
and one that is subtle and not always understood. The obvious point
involves basic arithmetic: major repurchases at prices well below per-share
intrinsic business value immediately increase, in a highly significant way,
that value. When companies purchase their own stock, they often find it
easy to get $2 of present value for $1. Corporate acquisition programs
almost never do as well and, in a discouragingly large number of cases, fail
to get anything close to $1 of value for each $1 expended.
去年我們幾個投資部位較大的被投資公司只要其價格與價值差異頗大時，都努力買回
自家股份，而對於身為股東的我們而言，有兩點好處，第一點很明顯，是一個簡單的
數學問題，透過買回公司的股票，等於只要花一塊錢的代價便能夠獲得兩塊錢的價值，
所以每股的實質價值可大大的提高，這比花大錢去購併別人的公司的效果要好得多。
The other benefit of repurchases is less subject to precise
measurement but can be fully as important over time. By making
repurchases when a company’s market value is well below its business
value, management clearly demonstrates that it is given to actions that
enhance the wealth of shareholders, rather than to actions that expand
management’s domain but that do nothing for (or even harm) shareholders.
Seeing this, shareholders and potential shareholders increase their
estimates of future returns from the business. This upward revision, in
turn, produces market prices more in line with intrinsic business value.
These prices are entirely rational. Investors should pay more for a
business that is lodged in the hands of a manager with demonstrated
pro-shareholder leanings than for one in the hands of a self-interested
manager marching to a different drummer. (To make the point extreme,
how much would you pay to be a minority shareholder of a company
controlled by Robert Wesco?)
第二點較不明顯，且沒有什麼人知道，實際上也很難去衡量，但時間一長其效果越明
顯，那就是管理當局可透過買回自家的股票來對外宣示其重視股東權益的心而非一昧
地要擴張個人經營事業的版圖，因為後者往往不但對股東沒有幫助，甚至反而有害股
東的利益。如此一來，原有的股東與有興趣的投資人將會對公司的前景更具信心，而
股價便會向上反應而與其本身的價值更為接近。相對地那一些成天把維護股東權益的
口號掛在嘴邊，卻對買回自家股票的建議置之不理的人，很難說服大家他不是口是心
非，久而久之，他便會被市場投資人所離棄。(舉個極端的例子，換做是你，會願意花
多少錢成為Robert Wesco所掌管公司的小股東)
The key word is demonstrated. A manager who consistently turns his
back on repurchases, when these clearly are in the interests of owners,
reveals more than he knows of his motivations. No matter how often or
how eloquently he mouths some public relations-inspired phrase such as
maximizing shareholder wealth?(this season’s favorite), the market
correctly discounts assets lodged with him. His heart is not listening to his
mouth - and, after a while, neither will the market.
崮中關鍵再明顯也不過，當公司的經理人，擺明了不買回公司股份以捍衛股東權益，
其實就已經透露出其內心的想法，不管他嘴巴說得多好聽，無時無刻不把股東權益極
大化，這類目前最當紅的字眼，根本就是口是心非，而過不了多久，市場終會看穿，
以折價反應其所掌控的資產。
We have prospered in a very major way - as have other shareholders -
by the large share repurchases of GEICO, Washington Post, and General
Foods, our three largest holdings. (Exxon, in which we have our fourth
largest holding, has also wisely and aggressively repurchased shares but, in
this case, we have only recently established our position.) In each of these
companies, shareholders have had their interests in outstanding businesses
materially enhanced by repurchases made at bargain prices. We feel very
comfortable owning interests in businesses such as these that offer
excellent economics combined with shareholder-conscious managements.
最近我們靠前三大持股-GEICO、General Foods與華盛頓郵報大量買回自家股票(艾
克森-我們的第四大持股也積極買回股票，不過由於我們是最近才建立部位，所以影
響不大)，而大發利市，我們對於投資這種具競爭優勢同時又真正注重股東權益的管理
階層感到相當安心。
The following table shows our 1984 yearend net holdings in
marketable equities. All numbers exclude the interests attributable to
minority shareholders of Wesco and Nebraska Furniture Mart.
下表顯示我們在1984年底，主要的投資部位(所有數字已扣除Wesco及NFM公司的
少數股權部份)
No. of Shares Cost Market
------------- ---------- ----------
(000s omitted)
690,975 Affiliated Publications, Inc. ....... $ 3,516 $ 32,908
740,400 American Broadcasting Companies, Inc. 44,416 46,738
3,895,710 Exxon Corporation ................... 173,401 175,307
4,047,191 General Foods Corporation ........... 149,870 226,137
6,850,000 GEICO Corporation ................... 45,713 397,300
2,379,200 Handy & Harman ...................... 27,318 38,662
818,872 Interpublic Group of Companies, Inc. 2,570 28,149
555,949 Northwest Industries 26,581 27,242
2,553,488 Time, Inc. .......................... 89,327 109,162
1,868,600 The Washington Post Company ......... 10,628 149,955
---------- ----------
$573,340 $1,231,560
All Other Common Stockholdings 11,634 37,326
---------- ----------
Total Common Stocks $584,974 $1,268,886
========== ==========
It’s been over ten years since it has been as difficult as now to find
equity investments that meet both our qualitative standards and our
quantitative standards of value versus price. We try to avoid compromise
of these standards, although we find doing nothing the most difficult task
of all. (One English statesman attributed his country’s greatness in the
nineteenth century to a policy of 単asterly inactivity? This is a strategy that
is far easier for historians to commend than for participants to follow.)
最近十年來實在很難找得到同時能夠符合我們質/量(價格與價值的差距)標準的投資
標的，我們儘量避免降格以求，但你知道什麼事都不做才是最困難的一件事(有一位英
國政治家將該國十九世紀的偉大歸功於統治者的無為而治，但歷史學家可以隨隨便便
就提議，不過後繼統治者卻很難真正做得到)
In addition to the figures supplied at the beginning of this section,
information regarding the businesses we own appears in Management’s
Discussion on pages 42-47. An amplified discussion of Wesco’s
businesses appears in Charlie Munger’s report on pages 50-59. You will
find particularly interesting his comments about conditions in the thrift
industry. Our other major controlled businesses are Nebraska Furniture
Mart, See’s, Buffalo Evening News, and the Insurance Group, to which we
will give some special attention here.
除了先前曾提到的數字，有關Wesco的經營理念在Charlie Munger寫的報告中會詳
加描述。除此之外，其他我們實際掌控的企業，如Nebraska家具店、喜斯糖果、水
牛城日報與保險事業集團的經營，將在稍後加以說明。
Nebraska Furniture Mart
Nebraska家具店
Last year I introduced you to Mrs. B (Rose Blumkin) and her family. I
told you they were terrific, and I understated the case. After another year
of observing their remarkable talents and character, I can honestly say that I
never have seen a managerial group that either functions or behaves better
than the Blumkin family.
去年我曾介紹過B太太跟她的家族的優異表現，不過事實上我還低估他們的管理才能
與人格特質，經過一年的觀察，我可以肯定地跟各位報告B太太家族堪稱是最佳的經
營團隊。
Mrs. B, Chairman of the Board, is now 91, and recently was quoted in
the local newspaper as saying, 戦 come home to eat and sleep, and that’s
about it. I can急 wait until it gets daylight so I can get back to the business?
Mrs. B is at the store seven days a week, from opening to close, and
probably makes more decisions in a day than most CEOs do in a year
(better ones, too).
B太太身為公司的負責人，現年九十一歲，當地的報紙曾形容她每天工作完便回家吃
飯睡覺，每晚等不到天亮便急著要回店裏頭上班，每天從早到晚，每週工作七天，她
一天所決定的事情可能比一家大公司總裁一年內決定的事還多（當然是指好的決策）。
In May Mrs. B was granted an Honorary Doctorate in Commercial
Science by New York University. (She’s a fast track student: not one day in
her life was spent in a school room prior to her receipt of the doctorate.)
Previous recipients of honorary degrees in business from NYU include
Clifton Garvin, Jr., CEO of Exxon Corp.; Walter Wriston, then CEO of Citicorp;
Frank Cary, then CEO of IBM; Tom Murphy, then CEO of General Motors; and,
most recently, Paul Volcker. (They are in good company.)
今年五月B太太榮獲紐約大學頒贈榮譽博士學位，（她是個跳級生，在她獲得這個學
位之前，從來沒有到學校上過一天課），在她之前獲頒這項殊榮的包有括艾克森石油
總裁、花旗銀行總裁、IBM總裁與通用汽車總裁等傑出企業人士。
The Blumkin blood did not run thin. Louie, Mrs. B旧 son, and his three
boys, Ron, Irv, and Steve, all contribute in full measure to NFM’s amazing
success. The younger generation has attended the best business school of
them all - that conducted by Mrs. B and Louie - and their training is evident
in their performance.
而B家族有其母必有其子，由他們的表現可以得知，Louie-B太太的兒子跟他三個小
孩，皆遺傳到B太太的個性。
Last year NFM’s net sales increased by $14.3 million, bringing the total
to $115 million, all from the one store in Omaha. That is by far the largest
volume produced by a single home furnishings store in the United States.
In fact, the gain in sales last year was itself greater than the annual volume
of many good-sized successful stores. The business achieves this success
because it deserves this success. A few figures will tell you why.
去年NFM單店的營業額增加一千多萬美金，成為一億一千多萬，是全美單店業績最
高的一家家具量販店，事實上它的成功不是沒有道理的，以下數字說明一切。
In its fiscal 1984 10-K, the largest independent specialty retailer of
home furnishings in the country, Levitz Furniture, described its prices as
帯enerally lower than the prices charged by conventional furniture stores in
its trading area? Levitz, in that year, operated at a gross margin of 44.4%
(that is, on average, customers paid it $100 for merchandise that had cost
it $55.60 to buy). The gross margin at NFM is not much more than half of
that. NFM’s low mark-ups are possible because of its exceptional
efficiency: operating expenses (payroll, occupancy, advertising, etc.) are
about 16.5% of sales versus 35.6% at Levitz.
根據去年財報，全國最大的家具零售商－Levitz 自誇其所賣價格要比當地所有傳統家
具店要便宜許多，而該公司的毛利率卻高達44.4%(亦即消費者每付100元所買的貨
品，公司的成本只要55.6元)而NFM的毛利卻只有前者的一半，其所憑藉的便是優
異的效率（包含薪資、租金與廣告費等成本只佔營業額的16.5%）。
None of this is in criticism of Levitz, which has a well-managed
operation. But the NFM operation is simply extraordinary (and, remember,
it all comes from a $500 investment by Mrs. B in 1937). By unparalleled
efficiency and astute volume purchasing, NFM is able to earn excellent
returns on capital while saving its customers at least $30 million annually
from what, on average, it would cost them to buy the same merchandise at
stores maintaining typical mark-ups. Such savings enable NFM to
constantly widen its geographical reach and thus to enjoy growth well
beyond the natural growth of the Omaha market.
我們不是要批評Levitz，事實上該公司經營亦頗出色，只是NFM的表現實在是太好
了，（記著這一切的一切都是從B太太1937年的500塊本錢開始），靠著精打細算
與大量採購的成本優勢，NFM在供獻股東盈餘的同時，也替顧客節省了可觀的採購預
算，這一點也使得該公司的客戶分佈越來越廣。
I have been asked by a number of people just what secrets the
Blumkins bring to their business. These are not very esoteric. All
members of the family: (1) apply themselves with an enthusiasm and energy
that would make Ben Franklin and Horatio Alger look like dropouts; (2)
define with extraordinary realism their area of special competence and act
decisively on all matters within it; (3) ignore even the most enticing
propositions failing outside of that area of special competence; and, (4)
unfailingly behave in a high-grade manner with everyone they deal with.
(Mrs. B boils it down to 昼ell cheap and tell the truth?)
人們常常問我，B太太到底有什麼經營訣竅，而其實說穿了也不是什麼深奧的道理，
他們整個家族（1）對事業懷抱的熱情與衝勁會讓富蘭克林與Horatio Alger看起來
像輟學生（2）腳踏實地的去落實並果斷的決定要作的事情（3）不受外在對於公司競
爭力沒有幫助的誘惑（4）對待所有人皆能保持高尚的人格。
Our evaluation of the integrity of Mrs. B and her family was
demonstrated when we purchased 90% of the business: NFM had never had
an audit and we did not request one; we did not take an inventory nor verify
the receivables; we did not check property titles. We gave Mrs. B a check
for $55 million and she gave us her word. That made for an even
exchange.
我們對於B太太家族的人格的信任可從以下交易過程看出，NFM從來未找會計師查
核，我們也從未對存貨進行盤點或核對應收帳款或固定資產，我們便交給她一張五千
五百萬的支票，而她給我們的是一句口頭的承諾。
You and I are fortunate to be in partnership with the Blumkin family.
我們很榮幸能與B太太合夥作生意。
See’s Candy Shops, Inc.
喜斯糖果
Below is our usual recap of See’s performance since the time of
purchase by Blue Chip Stamps:
下表是該公司自從被Blue Chips買下後，對其表現的一段回顧:
52-53 Week Year Operating Number of Number of
Ended About Sales Profits Pounds of Stores Open
December 31 Revenues After Taxes Candy Sold at Year End
------------------- ------------ ----------- ---------- -----------
1984 .............. $135,946,000 $13,380,000 24,759,000 214
1983 (53 weeks) ... 133,531,000 13,699,000 24,651,000 207
1982 .............. 123,662,000 11,875,000 24,216,000 202
1981 .............. 112,578,000 10,779,000 24,052,000 199
1980 .............. 97,715,000 7,547,000 24,065,000 191
1979 .............. 87,314,000 6,330,000 23,985,000 188
1978 .............. 73,653,000 6,178,000 22,407,000 182
1977 .............. 62,886,000 6,154,000 20,921,000 179
1976 (53 weeks) ... 56,333,000 5,569,000 20,553,000 173
1975 .............. 50,492,000 5,132,000 19,134,000 172
1974 .............. 41,248,000 3,021,000 17,883,000 170
1973 .............. 35,050,000 1,940,000 17,813,000 169
1972 .............. 31,337,000 2,083,000 16,954,000 167
This performance has not been produced by a generally rising tide.
To the contrary, many well-known participants in the boxed-chocolate
industry either have lost money in this same period or have been marginally
profitable. To our knowledge, only one good-sized competitor has
achieved high profitability. The success of See’s reflects the combination
of an exceptional product and an exceptional manager, Chuck Huggins.
看得出其表現並非處於持續成長的狀態，事實上盒裝巧克力這行業的獲利情況並不一
定，有的品牌賠錢，但有的卻頗有賺頭，就我們所知只有一家競爭對手維持高獲利，
而喜斯的成功要歸功於優秀的產品與傑出的經營人才-Chuck Huggins.
During 1984 we increased prices considerably less than has been our
practice in recent years: per-pound realization was $5.49, up only 1.4%
from 1983. Fortunately, we made good progress on cost control, an area
that has caused us problems in recent years. Per-pound costs - other than
those for raw materials, a segment of expense largely outside of our control
- increased by only 2.2% last year.
儘管在1984年我們產品價格的漲幅不若以往，大約1.4%，所幸過去幾年一直困擾我
們的成本控制問題上大有進展，除了我們無法控制原料成本外，其它費用僅較去年增
加2.2%。
Our cost-control problem has been exacerbated by the problem of
modestly declining volume (measured by pounds, not dollars) on a
same-store basis. Total pounds sold through shops in recent years has
been maintained at a roughly constant level only by the net addition of a
few shops annually. This more-shops-to-get-the-same-volume situation
naturally puts heavy pressure on per-pound selling costs.
過去我們由於單店銷售數量(指重量，而非金額)略微下滑，使得成本問題惡化，整體
銷量只能靠增加門市來擴張，這種依賴展店來維持銷量的做法，當然使得單位銷售成
本惡化。
In 1984, same-store volume declined 1.1%. Total shop volume,
however, grew 0.6% because of an increase in stores. (Both percentages are
adjusted to compensate for a 53-week fiscal year in 1983.)
1984年單店銷量減少1.1%，但整體銷量因擴點的關係成長0.6%(兩者皆已將1983
年53週的因素列入考量)。
See’s business tends to get a bit more seasonal each year. In the four
weeks prior to Christmas, we do 40% of the year’s volume and earn about
75% of the year’s profits. We also earn significant sums in the Easter and
Valentine’s Day periods, but pretty much tread water the rest of the year.
In recent years, shop volume at Christmas has grown in relative importance,
and so have quantity orders and mail orders. The increased concentration
of business in the Christmas period produces a multitude of managerial
problems, all of which have been handled by Chuck and his associates with
exceptional skill and grace.
喜斯糖果的銷售受到季節因素的影響越來越大，在聖誕節到來的前四週，其業績與獲
利分別佔全年的四成與七成五，此外復活節與情人節期間的業績也特別好，至於平時
的生意表現則平平，不過也因為如此使得管理部門與員工在忙季特別辛苦，這有賴
Chuck及其團隊無比的耐性來處理大量的訂單。
Their solutions have in no way involved compromises in either quality
of service or quality of product. Most of our larger competitors could not
say the same. Though faced with somewhat less extreme peaks and
valleys in demand than we, they add preservatives or freeze the finished
product in order to smooth the production cycle and thereby lower unit
costs. We reject such techniques, opting, in effect, for production
headaches rather than product modification.
而即使如此服務態度與產品品質卻一點也沒有打折扣，至於其它同業我就不敢保證，
事實上有的為了降低成本增加保存期限而添加防腐劑或將成品加以冷凍，我們寧願大
家辛苦一點而拒絕這種捨本逐末的作法。
Our mall stores face a host of new food and snack vendors that
provide particularly strong competition at non-holiday periods. We need
new products to fight back and during 1984 we introduced six candy bars
that, overall, met with a good reception. Further product introductions are
planned.
此外我們的店在非假日期間遭遇到一些新式食物與零食店的競爭，所幸在1984年我
們推出六種新式糖果棒加以反擊，其效果頗佳廣為消費者所接受，目前我們正在研發
新產品預計在不久的未來推出上市。
In 1985 we will intensify our efforts to keep per-pound cost increases
below the rate of inflation. Continued success in these efforts, however,
will require gains in same-store poundage. Prices in 1985 should average
6% - 7% above those of 1984. Assuming no change in same-store volume,
profits should show a moderate gain.
展望明年我們期望把成本增加幅度壓得比通貨膨脹率低，當然這比必須要增加單店的
銷量來加以配合，預估平均售價將調漲6-7%，獲利將穩定成長。
Buffalo Evening News
水牛城晚報
Profits at the News in 1984 were considerably greater than we
expected. As at See’s, excellent progress was made in controlling costs.
Excluding hours worked in the newsroom, total hours worked decreased by
about 2.8%. With this productivity improvement, overall costs increased
only 4.9%. This performance by Stan Lipsey and his management team was
one of the best in the industry.
1984年該報的獲利超過我們的預期，與喜斯糖果控制成本一樣具成效，不包括編輯
室，整體的工作時數減少約2.8%，由於生產力的增進，使得整體成本減少約4.9%，
Stan Lipsey與其經營團隊的表現為業界之最。
However, we now face an acceleration in costs. In mid-1984 we
entered into new multi-year union contracts that provided for a large
属atch-up?wage increase. This catch-up is entirely appropriate: the
cooperative spirit of our unions during the unprofitable 1977-1982 period
was an important factor in our success in remaining cost competitive with
The Courier-Express. Had we not kept costs down, the outcome of that
struggle might well have been different.
但我們同時也面臨一項不利的因素，在年中我們與工會簽訂一項數年的工作合約，使
得工資大幅調漲，基於過去1977-1982年該報虧損時，工會與員工一致配合的態度，
是使我們戰勝Courier-express的關鍵因素，所以我們認為這種調整尚屬合理，若非
當時我們及時將成本降低，現在的結局可能完全相反。
Because our new union contracts took effect at varying dates, little of
the catch-up increase was reflected in our 1984 costs. But the increase
will be almost totally effective in 1985 and, therefore, our unit labor costs
will rise this year at a rate considerably greater than that of the industry.
We expect to mitigate this increase by continued small gains in productivity,
but we cannot avoid significantly higher wage costs this year. Newsprint
price trends also are less favorable now than they were in 1984. Primarily
because of these two factors, we expect at least a minor contraction in
margins at the News.
而由於這項調整案係分階段進行，所以對1984年的影響有限，但到明年此時便會全
數反應，雖然我們可以努力提高生產力作為因應，但不可避免的明年的單位勞動成本
將大幅增加，而新聞印刷成本預估也將增加，由於這兩項不利因素，明年毛利將略微
下滑。
Working in our favor at the News are two factors of major economic
importance:
但另外有兩點是對公司有利的:
(1) Our circulation is concentrated to an unusual degree
in the area of maximum utility to our advertisers.
壮egional?newspapers with wide-ranging circulation, on
the other hand, have a significant portion of their
circulation in areas that are of negligible utility to
most advertisers. A subscriber several hundred miles
away is not much of a prospect for the puppy you are
offering to sell via a classified ad - nor for the
grocer with stores only in the metropolitan area.
巣asted?circulation - as the advertisers call it -
hurts profitability: expenses of a newspaper are
determined largely by gross circulation while
advertising revenues (usually 70% - 80% of total
revenues) are responsive only to useful circulation;
(1)本報發行流通的範圍是一個廣告效用極高的地區，相對於一般地區性報紙對廣告主
的效益極為有限，一個幾百英哩遠的訂戶對於位在本地的雜貨店來說一點效用也沒
有，對於一家報社來說，其揩支主要取決於總發行量，而其廣告收入(約佔總營收的七
到八成)卻要依靠實際有效的發行量。
(2) Our penetration of the Buffalo retail market is
exceptional; advertisers can reach almost all of their
potential customers using only the News.
(2)水牛城報紙的零售業績特別突出，廣告主只要憑著這份報紙便能將資訊傳遞到所有
潛在的客戶手中。br />
Last year I told you about this unusual reader acceptance: among the
100 largest newspapers in the country, we were then number one, daily,
and number three, Sunday, in penetration. The most recent figures show
us number one in penetration on weekdays and number two on Sunday.
(Even so, the number of households in Buffalo has declined, so our current
weekday circulation is down slightly; on Sundays it is unchanged.)
去年我曾告訴各位該報優異的讀者接受度(在全美前一百大報紙中，我們在平日排名第
一、而假日則排第三) ，最新的資料顯示前者仍維持第一、而後者則躍居第二位(不過
我們水牛城的訂戶數卻減少，主要是在平日部份)。
I told you also that one of the major reasons for this unusual
acceptance by readers was the unusual quantity of news that we delivered
to them: a greater percentage of our paper is devoted to news than is the
case at any other dominant paper in our size range. In 1984 our 嘆ews
hole?ratio was 50.9%, (versus 50.4% in 1983), a level far above the typical
35% - 40%. We will continue to maintain this ratio in the 50% area. Also,
though we last year reduced total hours worked in other departments, we
maintained the level of employment in the newsroom and, again, will
continue to do so. Newsroom costs advanced 9.1% in 1984, a rise far
exceeding our overall cost increase of 4.9%.
而我們曾提到高接受度的原因是由於我們豐富的新聞內容(在相同規模的報紙中，我們
提供的新聞量是最多的) ，1984年的比率是50.9%(相較於去年的50.4%)，遠較一般
的35%-40%高出許多，而我們也會繼續維持在50%以上的比率，另外去年我們雖然
減少一般部門的工作時數，但編輯部門的編制卻維持不變，雖然編輯室的開支增加達
9.1%，遠較總成本增加4.9%為高。
Our news hole policy costs us significant extra money for newsprint.
As a result, our news costs (newsprint for the news hole plus payroll and
expenses of the newsroom) as a percentage of revenue run higher than
those of most dominant papers of our size. There is adequate room,
however, for our paper or any other dominant paper to sustain these costs:
the difference between high and low news costs at papers of comparable
size runs perhaps three percentage points while pre-tax profit margins are
often ten times that amount.
堅持豐富的新聞內容使得我們的成本居高不下(包含編輯部門的人事成本與相關開
支)，佔營收的比率比起規模相當的同業高出好幾個百分點，然而事實上，卻有此空間
可以承擔這些多出來的成本，因為雖然高成本與低成本的營運比率差異至少達到三個
百分點，但其所產生的稅前利益差異甚至達到十倍以上。
The economics of a dominant newspaper are excellent, among the
very best in the business world. Owners, naturally, would like to believe
that their wonderful profitability is achieved only because they unfailingly
turn out a wonderful product. That comfortable theory wilts before an
uncomfortable fact. While first-class newspapers make excellent profits,
the profits of third-rate papers are as good or better - as long as either
class of paper is dominant within its community. Of course, product
quality may have been crucial to the paper in achieving dominance. We
believe this was the case at the News, in very large part because of people
such as Alfred Kirchhofer who preceded us.
在商業社會中，一家強勢報紙的優勢是極為明顯的，老闆通常相信惟有努力地推出最
好的產品才能維持高獲利，但是這種令人信服的理論卻讓無法令人信服的事實打破，
當一流的報紙維持高獲利時，三流報紙所賺得的錢卻一點也不遜色有時甚至更多，只
要你的報紙在當地夠強勢，當然產品的品質對於一家報紙提高市場佔極為關鍵，而我
們也相信在水牛城也是如此，而且像Alfred這樣的人能領先我們的最主要原因亦是如
此。
Once dominant, the newspaper itself, not the marketplace, determines
just how good or how bad the paper will be. Good or bad, it will prosper.
That is not true of most businesses: inferior quality generally produces
inferior economics. But even a poor newspaper is a bargain to most
citizens simply because of its 臓ulletin board?value. Other things being
equal, a poor product will not achieve quite the level of readership achieved
by a first-class product. A poor product, however, will still remain
essential to most citizens, and what commands their attention will
command the attention of advertisers.
一旦主宰當地市場，報紙本身而非市場將會決定這份報紙是好還是壞，不過好或壞，
同樣都能大發利市，在一般行業卻不是這樣，不良品質的產品它的生意一定不好，但
即使是一份內容貧乏的報紙對一般民眾來說仍具有佈告欄的價值，其它條件相同時，
一份爛報當然無法像一份一流報紙擁有廣大的讀者，但對一般市民卻仍具用處，而間
接使得廣告主認同其存在的價值。
Since high standards are not imposed by the marketplace,
management must impose its own. Our commitment to an above-average
expenditure for news represents an important quantitative standard. We
have confidence that Stan Lipsey and Murray Light will continue to apply the
far-more important qualitative standards. Charlie and I believe that
newspapers are very special institutions in society. We are proud of the
News, and intend an even greater pride to be justified in the years ahead.
因為市場對於報紙品質的要求水準並不高，管理階層便須自我要求，我們的報紙在量
的方面具體地要求新聞成本須高於一般同業水準，而我們也有信心Stan Lipsey與
Murray Light會繼續在質的方面予以加強，Charlie與我皆相信報紙是社會中的一特
殊機構，我們相當引以為傲，也期待在往後的日子更將更上層樓。
Insurance Operations
保險事業營運
Shown below is an updated version of our usual table listing two key
figures for the insurance industry:
下表顯示的是保險業經營使用的兩項參考數字。
Yearly Change Combined Ratio
in Premiums after Policy-holder
Written (%) Dividends
------------- -------------------
1972 .............................. 10.2 96.2
1973 .............................. 8.0 99.2
1974 .............................. 6.2 105.4
1975 .............................. 11.0 107.9
1976 .............................. 21.9 102.4
1977 .............................. 19.8 97.2
1978 .............................. 12.8 97.5
1979 .............................. 10.3 100.6
1980 .............................. 6.0 103.1
1981 .............................. 3.9 106.0
1982 .............................. 4.4 109.7
1983 (Revised) .................... 4.5 111.9
1984 (Estimated) .................. 8.1 117.7
Source: Best’s Aggregates and Averages
Best’s data reflect the experience of practically the entire industry,
including stock, mutual, and reciprocal companies. The combined ratio
represents total insurance costs (losses incurred plus expenses) compared
to revenue from premiums; a ratio below 100 indicates an underwriting
profit, and one above 100 indicates a loss.
上表充份顯示出整個產險業所面臨到的狀況，Combined Ratio綜合比率代表保險總
成本(產生的損失與費用)佔保費收入的比率，當它低於一百時表示有承保利益，反之
則有承保損失。
For a number of years, we have told you that an annual increase by the
industry of about 10% per year in premiums written is necessary for the
combined ratio to remain roughly unchanged. We assumed in making that
assertion that expenses as a percentage of premium volume would stay
relatively stable and that losses would grow at about 10% annually because
of the combined influence of unit volume increases, inflation, and judicial
rulings that expand what is covered by the insurance policy.
過去幾年我一再強調公司每年惟有保持10%以上的保費成長速度方能確保此比率不
變，這是基於費用佔保費收入的比例不變，而理賠損失將因為單量、通膨與法院判決
擴大理賠範圍等原因，而每年成長百分之十的假設。
Our opinion is proving dismayingly accurate: a premium increase of
10% per year since 1979 would have produced an aggregate increase
through 1984 of 61% and a combined ratio in 1984 almost identical to the
100.6 of 1979. Instead, the industry had only a 30% increase in premiums
and a 1984 combined ratio of 117.7. Today, we continue to believe that the
key index to the trend of underwriting profitability is the year-to-year
percentage change in industry premium volume.
而不幸的是，實際情況真如我所預言，總計從1979-1984年間保費收入約增加
61%(平均年增率10%)，而綜合比率與1979年一樣皆是100.6，相較之下，同業保
費平均增加30%，而綜合比率則變成117.7，而到今天我們仍相信保費收入的年變動
率是承保獲利趨勢的最佳指標。
It now appears that premium volume in 1985 will grow well over 10%.
Therefore, assuming that catastrophes are at a normal level, we would
expect the combined ratio to begin easing downward toward the end of the
year. However, under our industry-wide loss assumptions (i.e., increases
of 10% annually), five years of 15%-per-year increases in premiums would
be required to get the combined ratio back to 100. This would mean a
doubling of industry volume by 1989, an outcome that seems highly
unlikely to us. Instead, we expect several years of premium gains
somewhat above the 10% level, followed by highly-competitive pricing that
generally will produce combined ratios in the 108-113 range.
目前顯示明年的保費年增率將超過10%，所以假設明年不會發生什麼特別大的災害，
我們預期綜合比率將往好的方向發展，然而若依照目前產業損失的估計(及年增率10%)
保費收入必須連徐續五年成長15%，才能將綜合比率降回到100，亦即代表到1989
年時保費須成長整整一倍，這似乎是不太可能的一件事，所以持平而言，我們預期保
費每年將成長約略超過10%，而綜合比率在產業競爭激烈的情況下，將維持在
108-113區間。
Our own combined ratio in 1984 was a humbling 134. (Here, as
throughout this report, we exclude structured settlements and the
assumption of loss reserves in reporting this ratio. Much additional detail,
including the effect of discontinued operations on the ratio, appears on
pages 42-43). This is the third year in a row that our underwriting
performance has been far poorer than that of the industry. We expect an
improvement in the combined ratio in 1985, and also expect our
improvement to be substantially greater than that of the industry. Mike
Goldberg has corrected many of the mistakes I made before he took over
insurance operations. Moreover, our business is concentrated in lines that
have experienced poorer-than-average results during the past several years,
and that circumstance has begun to subdue many of our competitors and
even eliminate some. With the competition shaken, we were able during
the last half of 1984 to raise prices significantly in certain important lines
with little loss of business.
我們自己在1984年的綜合比率是可憐的134(在這裏我不包括Structured
Settlement在內)這是連續三年我們的表現比同業水準差，我們預期明年綜合比率會
變好，而且也會比同業表現的好，Mike 自從從我手中接下保險業務後已改正了不少
先前我所犯下的錯誤，而且過去幾年我們的業務集中在一些表現不如預期的保單上，
這種情況將有助於與我們競爭的同業退縮甚至出局，而當競爭局勢打破後，我們就可
以提高保費而不怕失去客戶。
For some years I have told you that there could be a day coming when
our premier financial strength would make a real difference in the
competitive position of our insurance operation. That day may have
arrived. We are almost without question the strongest property/casualty
insurance operation in the country, with a capital position far superior to
that of well-known companies of much greater size.
過去幾年我一再告訴各位總有一天我們堅強的財務實力將有助於我們取得保險營運的
競爭優勢，而這一天終將來臨，無疑的我們是全美產險營運最佳，資金最雄厚的保險
公司(甚至比一些有名規模又大的公司還要好)。
Equally important, our corporate policy is to retain that superiority.
The buyer of insurance receives only a promise in exchange for his cash.
The value of that promise should be appraised against the possibility of
adversity, not prosperity. At a minimum, the promise should appear able
to withstand a prolonged combination of depressed financial markets and
exceptionally unfavorable underwriting results. Our insurance subsidiaries
are both willing and able to keep their promises in any such environment -
and not too many other companies clearly are.
同樣重要的是公司的政策便是要持續維持此優勢，保單購買者用錢所換到的只是一紙
承諾，而這紙承諾必須要經得起所有的逆境而非順境的考驗，最低限度，它必須要能
夠經得起低迷股市與特別不利的承保狀況等雙重考驗，我們的保險子公司有意願也有
能力確保其承諾在任何狀況下兌現，這是沒有多少家保險公司能做得到的。
Our financial strength is a particular asset in the business of
structured settlements and loss reserve assumptions that we reported on
last year. The claimant in a structured settlement and the insurance
company that has reinsured loss reserves need to be completely confident
that payments will be forthcoming for decades to come. Very few
companies in the property/casualty field can meet this test of unquestioned
long-term strength. (In fact, only a handful of companies exists with which
we will reinsure our own liabilities.)
我們的財務實力對於去年曾提過的Structured Settlement與損失準備提列業務上來
說是一項很好用的利器，Structured Settlement的理賠申請戶與申請再保的保險公
司必須要百分之百確定在往後的幾十年內能順利獲得支付，很少產險公司能夠符合這
種要求(事實上只有少數幾家公司能讓我們有信心將我們自己的風險再保出去)。
We have grown in these new lines of business: funds that we hold to
offset assumed liabilities grew from $16.2 million to $30.6 million during
the year. We expect growth to continue and perhaps to greatly accelerate.
To support this projected growth we have added substantially to the capital
of Columbia Insurance Company, our reinsurance unit specializing in
structured settlements and loss reserve assumptions. While these
businesses are very competitive, returns should be satisfactory.
而我們在這方面的業務大有成長，我們持有用以彌補可能的負債的資金從一千六百萬
成長至三千萬，我們預期這項業務將繼續成長且成長速度更快，為此我們特地為執行
該業務的哥倫比亞保險公司辦理增資，雖然競爭頗為激烈但獲利卻也令人滿意。
At GEICO the news, as usual, is mostly good. That company achieved
excellent unit growth in its primary insurance business during 1984, and
the performance of its investment portfolio continued to be extraordinary.
Though underwriting results deteriorated late in the year, they still remain
far better than those of the industry. Our ownership in GEICO at yearend
amounted to 36% and thus our interest in their direct property/casualty
volume of $885 million amounted to $320 million, or well over double our
own premium volume.
至於GEICO的消息與往常一樣大致上都不錯，這家公司1984年在其主要業務的投保
戶大幅增加，而其投資部們的表現一樣優異，雖然核保結果不儘理想，但仍較同業突
出，截至去年底我們擁有該公司36%的股權，若以其產險總保費收入億八千萬計，我
們的部份約有三億二千萬左右，大約是我們自己承保量的二倍。
I have reported to you in the past few years that the performance of
GEICO’s stock has considerably exceeded that company’s business
performance, brilliant as the latter has been. In those years, the carrying
value of our GEICO investment on our balance sheet grew at a rate greater
than the growth in GEICO’s intrinsic business value. I warned you that over
performance by the stock relative to the performance of the business
obviously could not occur every year, and that in some years the stock must
under perform the business. In 1984 that occurred and the carrying value
of our interest in GEICO changed hardly at all, while the intrinsic business
value of that interest increased substantially. Since 27% of Berkshire’s net
worth at the beginning of 1984 was represented by GEICO, its static market
value had a significant impact upon our rate of gain for the year. We are
not at all unhappy with such a result: we would far rather have the business
value of GEICO increase by X during the year, while market value decreases,
than have the intrinsic value increase by only 1/2 X with market value
soaring. In GEICO’s case, as in all of our investments, we look to business
performance, not market performance. If we are correct in expectations
regarding the business, the market eventually will follow along.
過去幾年我一再提醒各位GEICO的股價漲幅明顯超越其本業的表現，雖然後者一樣傑
出，GEICO在我們公司的帳面價值成長幅度大於該公司本身實質價值的成長幅度，而
我同時也警告各位這種情形不會年復一年地一再發生，總有一天其股價的表現將遜於
本業，而這句話在1984年應驗了，去年GEICO在Berkshire的帳面價值沒什麼變動，
不過其公司的實質價值卻大幅增加，而由於GEICO代表著Berkshire27%的淨值，當
其市場價值遲滯不前，直接便影響到Berkshire淨值成長的表現，但我們對這樣的結
果並不會覺得有什麼不好，我們寧願要GEICO的企業價值增加X倍而股價下跌，也
不要公司實質價值減半而股價高漲，以GEICO這個case，乃至於我們所有的投資，
我們看得是公司本質的表現而非其股價的表現，如果我們對公司的看法正確，市場終
將還它一個公道。
You, as shareholders of Berkshire, have benefited in enormous
measure from the talents of GEICO’s Jack Byrne, Bill Snyder, and Lou
Simpson. In its core business - low-cost auto and homeowners insurance
- GEICO has a major, sustainable competitive advantage. That is a rare
asset in business generally, and it’s almost non-existent in the field of
financial services. (GEICO, itself, illustrates this point: despite the
company’s excellent management, superior profitability has eluded GEICO
in all endeavors other than its core business.) In a large industry, a
competitive advantage such as GEICO’s provides the potential for unusual
economic rewards, and Jack and Bill continue to exhibit great skill in
realizing that potential.
所有的Berkshire股東皆由於GEICO的經營團隊，包括Jack Byrne、Bill Snyder與
Lou Simpson而獲益良多，在他們的核心事業-低成本的汽車與房屋住宅保險，GEICO
擁有顯著且持續的競爭優勢，這在一般業界並不多見，可謂投資人的稀世珍寶(GEICO
本身正說明的這一點，優秀的經營團隊將所有的重心放在核心事業以維持高獲利能
力)。
Most of the funds generated by GEICO’s core insurance operation are
made available to Lou for investment. Lou has the rare combination of
temperamental and intellectual characteristics that produce outstanding
long-term investment performance. Operating with below-average risk,
he has generated returns that have been by far the best in the insurance
industry. I applaud and appreciate the efforts and talents of these three
outstanding managers.
GEICO核心事業所產生的資金大部份皆交由Lou Simpson來投資，Lou是一個情緒
與理性兼具的罕見人才，這項人格特色使其在長期投資方面有傑出表現，即使承受的
較低的風險，其投資報酬卻較同業表現要好的許多，我對以上三位傑出經理人表達讚
賞與感謝之意。
Errors in Loss Reserving
損失準備提列不當
Any shareholder in a company with important interests in the
property/casualty insurance business should have some understanding of
the weaknesses inherent in the reporting of current earnings in that
industry. Phil Graham, when publisher of the Washington Post, described
the daily newspaper as first rough draft of history? Unfortunately, the
financial statements of a property/casualty insurer provide, at best, only a
first rough draft of earnings and financial condition.
我認為所有在產險業有重大投資的股東對於這行業每年盈餘報告的一項盲點要特別注
意，Phil Graham在擔任華盛頓郵報的發行人時曾說:「新聞日報是攥寫歷史的第一手
草稿」，而很不幸的，產險業者所提供的年度財務報告，也可稱得上是該公司財務與
經營狀況的第一手草稿。
The determination of costs is the main problem. Most of an insurer’s
costs result from losses on claims, and many of the losses that should be
charged against the current year’s revenue are exceptionally difficult to
estimate. Sometimes the extent of these losses, or even their existence, is
not known for decades.
主要的問題在於成本，保險業最主要的成本是保戶的理賠，而對於當年的收入會發生
多少損失實在是很難以去估計，有時損失的發生與其程度要在好幾十年之後才會明朗。
The loss expense charged in a property/casualty company’s current
income statement represents: (1) losses that occurred and were paid during
the year; (2) estimates for losses that occurred and were reported to the
insurer during the year, but which have yet to be settled; (3) estimates of
ultimate dollar costs for losses that occurred during the year but of which
the insurer is unaware (termed BNR incurred but not reported); and (4) the
net effect of revisions this year of similar estimates for (2) and (3) made in
past years.
一般來說，產險業當年度認列的損失主要包含有下列幾項: (1)當年發生且支付的損失
(2)對於已發生且提報但仍未合解案件的估計損失 (3) 對於已發生但尚未提報，亦即
保險業者尚不知情案件所作的損失估計數字(一般業界稱之為IBNR-發生了但尚未提
報) 以及 (4)對於以前年度對於前述(2)(3)項估計所作之調整。
Such revisions may be long delayed, but eventually any estimate of
losses that causes the income for year X to be misstated must be corrected,
whether it is in year X + 1, or X + 10. This, perforce, means that
earnings in the year of correction also are misstated. For example, assume
a claimant was injured by one of our insureds in 1979 and we thought a
settlement was likely to be made for $10,000. That year we would have
charged $10,000 to our earnings statement for the estimated cost of the
loss and, correspondingly, set up a liability reserve on the balance sheet for
that amount. If we settled the claim in 1984 for $100,000, we would
charge earnings with a loss cost of $90,000 in 1984, although that cost was
truly an expense of 1979. And if that piece of business was our only
activity in 1979, we would have badly misled ourselves as to costs, and you
as to earnings.
雖然上述的調整時間可能會拉得很長，但不管怎樣，先前在X年所估數字與實際的差
異，於以後年度不論是X+1 或是 X+10年，一定要修正回來，而這無可避免地，也
將使得以後年度的損益數字遭到誤導，舉例來說，假設我們的一位保戶在1979年受
傷，而當時估計的理賠金額為一萬美元，所以在當年度我們便會在帳上提列一萬美元
的損失與準備，又若後來到了1984年商雙方以十萬美元合解，結果我們必須還要於
1984年另行認列九萬美元的損失，雖然我們明知道該項損失係屬於1979年所發生
的，又再假設那是我們在1979年所接惟一的個案，則公司的損益與股東的權益將明
顯遭到誤導。
The necessarily-extensive use of estimates in assembling the figures
that appear in such deceptively precise form in the income statement of
property/casualty companies means that some error must seep in, no
matter how proper the intentions of management. In an attempt to
minimize error, most insurers use various statistical techniques to adjust
the thousands of individual loss evaluations (called case reserves) that
comprise the raw data for estimation of aggregate liabilities. The extra
reserves created by these adjustments are variously labeled bulk
development or supplemental reserves. The goal of the adjustments
should be a loss-reserve total that has a 50-50 chance of being proved
either slightly too high or slightly too low when all losses that occurred
prior to the date of the financial statement are ultimately paid.
不管管理當局的意圖如何地正當，由於需要廣泛地應用”估計”來組合產險業財務報表
上所有看似真確的損益數字，所以無可避免地其中一定隱含著某些錯誤。而為了減少
這類錯誤，大部份的保險人運用各種不同的統計方法來調整其對成千上萬的被保險人
之損失估算以作為加總估計所有應付義務的基礎資料，而除此之外另外提列的特別準
備則稱之為補充準備，而調整的目的是要使得損失在真正確定支付金額之前高估與低
估的機率儘量接近百分之五十。
At Berkshire, we have added what we thought were appropriate
supplemental reserves but in recent years they have not been adequate. It
is important that you understand the magnitude of the errors that have
been involved in our reserving. You can thus see for yourselves just how
imprecise the process is, and also judge whether we may have some
systemic bias that should make you wary of our current and future figures.
在Berkshire我們已另加一項我們認為合理的損失準備，然而近年來它們卻顯得不太
適當，而在此有必要讓各位知道牽涉到這項損失準備提列錯誤的嚴重性，如此大家便
可明瞭此提列過程是如何地不合理，從而判斷公司的財務報表是否存在某些系統性的
偏差。
The following table shows the results from insurance underwriting as
we have reported them to you in recent years, and also gives you
calculations a year later on an if-we-knew-then-what-we
think-we-know-now basis. I say that we think we know now because the
adjusted figures still include a great many estimates for losses that
occurred in the earlier years. However, many claims from the earlier years
have been settled so that our one-year-later estimate contains less guess
work than our earlier estimate:
下表顯示近年來我們跟各位報告的保險承銷成績，同時並提供一年之後以”若當時我們
知道則我們認為我們現在認為應該是如何”的基礎下的計算數字，而所謂地”我們認為
我們現在認為應該是如何”係因為這其中還包含許多對以前發生的損失所作的估計調
整，然而這些損失卻還沒有作最後的確定，只是因為一年的經過使得整個估計過程較
為準確而已。
Underwriting Results Corrected Figures
as Reported After One Year’s
Year to You Experience
---- -------------------- -----------------
1980 $ 6,738,000 $ 14,887,000
1981 1,478,000 (1,118,000)
1982 (21,462,000) (25,066,000)
1983 (33,192,000) (50,974,000)
1984 (45,413,000) ?
Our structured settlement and loss-reserve assumption
businesses are not included in this table. Important
additional information on loss reserve experience appears
on pages 43-45.
(Structured Settlement 與loss reserve assumption等保險業務不包括其中)
To help you understand this table, here is an explanation of the most
recent figures: 1984’s reported pre-tax underwriting loss of $45.4 million
consists of $27.6 million we estimate that we lost on 1984’s business, plus
the increased loss of $17.8 million reflected in the corrected figure for
1983.
為了讓各為近一步了解上表，讓我們以1984年的數字加以解釋，當年的稅前核保損
失為四千五百萬(這其中包括二千七百萬為當年度所發生的損失，加上前一年度一千七
百萬估計的差異數)
As you can see from reviewing the table, my errors in reporting to you
have been substantial and recently have always presented a better
underwriting picture than was truly the case. This is a source of particular
chagrin to me because: (1) I like for you to be able to count on what I say;
(2) our insurance managers and I undoubtedly acted with less urgency than
we would have had we understood the full extent of our losses; and (3) we
paid income taxes calculated on overstated earnings and thereby gave the
government money that we didn’t need to. (These overpayments
eventually correct themselves, but the delay is long and we don急 receive
interest on the amounts we overpaid.)
由此你可以發現，我跟各位報告的數字與實際所發生的數字有很大的出入，而且這幾
年的差異數越來越不利，這特別讓我覺得非常地懊惱，因為(1)我一向自認說話算話(2)
我和我的保險事業經理人若早發現事情的嚴重性一定不會坐視不管(3)我們少估計了
損失，等於是多付給國庫本來不需付的稅金(雖然早晚會修正回來，只是時間拉得越
長，我們損失的利息就越多)。
Because our business is weighted toward casualty and reinsurance
lines, we have more problems in estimating loss costs than companies that
specialize in property insurance. (When a building that you have insured
burns down, you get a much faster fix on your costs than you do when an
employer you have insured finds out that one of his retirees has contracted
a disease attributable to work he did decades earlier.) But I still find our
errors embarrassing. In our direct business, we have far underestimated
the mushrooming tendency of juries and courts to make the deep pocket
pay, regardless of the factual situation and the past precedents for
establishment of liability. We also have underestimated the contagious
effect that publicity regarding giant awards has on juries. In the
reinsurance area, where we have had our worst experience in under
reserving, our customer insurance companies have made the same
mistakes. Since we set reserves based on information they supply us, their
mistakes have become our mistakes.
而由於我們將整個重心擺在意外險與再保險事業，比起其它產險業者我們在估計損失
這上頭隱含更多問題，(當你承保的一棟建築物燒毀了，你可以很快地在損失成本上作
反應，比起一家向你投保的雇主發現他一名退休的員工在幾十年前因工作關係感染某
種疾病)即便如此，我仍對於所犯的錯誤感到不好意思，在直接投保部份，我們大大低
估了法院及陪審團不顧事實真相與過去判例對損害賠償的認定，而要求我們這些所謂
深口袋付錢的群起效應，我們也低估了一般大眾對於受傷者應獲得鉅額補償的傳染效
應。在再保險部份，既然我們自身已低估了應提列準備，向我們尋求再保的保險公司
也犯了相同的錯誤，由於我們的損失係依據對方所提供的資料提存，所以他們犯的錯
也等於是我們犯的錯一樣。
I heard a story recently that is applicable to our insurance accounting
problems: a man was traveling abroad when he received a call from his
sister informing him that their father had died unexpectedly. It was
physically impossible for the brother to get back home for the funeral, but
he told his sister to take care of the funeral arrangements and to send the
bill to him. After returning home he received a bill for several thousand
dollars, which he promptly paid. The following month another bill came
along for $15, and he paid that too. Another month followed, with a
similar bill. When, in the next month, a third bill for $15 was presented,
he called his sister to ask what was going on. Oh! she said. I forgot to
tell you. We buried Dad in a rented suit.
最近我聽到一則故事可以用來說明保險業目前所遇到的會計問題，有一位仁兄因公赴
海外出差，有一天接到他姐姐來電表示父親因意外身故，由於一時無法趕回國內參加
喪禮，他便交待姐姐處理一切喪葬事宜並允諾負責所有費用，之後當他回國後不久便
收到一張幾百塊美金的帳單，他馬上就把它給付掉，不過隔一陣子他又收到一張15
元的帳單，而他也付了，可是沒想到一個月過後他再度收到類似15元的帳單，他終
於忍不住打電話給他姐姐問一問是怎麼回事，只見他老姐在電話的另一頭淡淡地表示:
「噢! 沒什麼，忘了告訴你，那是因為爸爸身上穿的那套西裝是用租的」。
If you’re been in the insurance business in recent years - particularly the
reinsurance business - this story hurts. We have tried to include all of our
rented suit liabilities in our current financial statement, but our record of
past error should make us humble, and you suspicious. I will continue to
report to you the errors, plus or minus, that surface each year.
如果這幾年你是從事保險業-尤其是再保險事業的話，這段故事聽下來可能會讓你很
心痛，儘管我們已盡可能讓所有類似前述的西裝租金列入在當期的財務報表上，但過
去這幾年的結果卻令我們感到汗顏，也足以引起各位的懷疑，在往後的年報中我會持
續跟諸位報告每年浮現的差異，不論是有利或是不利的。
Not all reserving errors in the industry have been of the
innocent-but-dumb variety. With underwriting results as bad as they have
been in recent years - and with managements having as much discretion as
they do in the presentation of financial statements - some unattractive
aspects of human nature have manifested themselves. Companies that
would be out of business if they realistically appraised their loss costs have,
in some cases, simply preferred to take an extraordinarily optimistic view
about these yet-to-be-paid sums. Others have engaged in various
transactions to hide true current loss costs.
當然在產險業界，不是所有準備提列不當的錯誤都是無心之過，隨著核保績效持續惡
化，加上管理當局在損失準備提列乃至於財務報表表達上有很大的裁量權，所有人性
黑暗的一面便彰顯出來，有些公司若真正認真去評估其可能發生的損失成本的話，他
們可能早已不適合再繼續經營下去，在這種情況下，有些被迫往特別樂觀的方向去看
待那些還未支付的潛在賠償款，有些則從事一些可以將損失暫時隱藏起來的交易行為。
Both of these approaches can work for a considerable time: external
auditors cannot effectively police the financial statements of
property/casualty insurers. If liabilities of an insurer, correctly stated,
would exceed assets, it falls to the insurer to volunteer this morbid
information. In other words, the corpse is supposed to file the death
certificate. Under this honor system of mortality, the corpse sometimes
gives itself the benefit of the doubt.
當然這些行為或許可以撐過一陣子，外部獨立的會計師也很難有效地對這類行為加以
規範制止，當一家保險公司的實際上的負債大於資產時，通常必須由公司本身宣告自
己死亡，在這種強調自我誠信的制度下，死人本身通常會一再給自己翻案復活的機會。
In most businesses, of course, insolvent companies run out of cash.
Insurance is different: you can be broke but flush. Since cash comes in at
the inception of an insurance policy and losses are paid much later,
insolvent insurers don’t run out of cash until long after they have run out of
net worth. In fact, these talking dead often redouble their efforts to write
business, accepting almost any price or risk, simply to keep the cash
flowing in. With an attitude like that of an embezzler who has gambled
away his purloined funds, these companies hope that somehow they can
get lucky on the next batch of business and thereby cover up earlier
shortfalls. Even if they don’t get lucky, the penalty to managers is usually
no greater for a $100 million shortfall than one of $10 million; in the
meantime, while the losses mount, the managers keep their jobs and
perquisites.
在大部份的公司，倒閉的原因是因為現金週轉不靈，但保險公司的情況卻不是如此，
你掛掉時可能還腦滿腸肥，因為保費是從保戶一開始投保時便收到，但理賠款卻是在
損失發生之後許久才須支付，所以一家保險公司可能要在耗盡淨值之後許久才會真正
耗用完資金，而事實上這些所謂的活死人，通常更卯盡全力以任何價格承擔任何風險
來吸收保單，以使得現金持續流入，這種態度就好像一個虧空公款去賭博的職員，只
能被迫繼續污公司的錢再去賭，期望下一把能夠幸運的撈回本錢以彌補以前的虧空，
而即使不成功反正污一百萬是死罪，污一千萬也是死罪，只要在事情東窗事發之前，
他們還是能夠繼續保有原來的職位與待遇。
The loss-reserving errors of other property/casualty companies are of
more than academic interest to Berkshire. Not only does Berkshire suffer
from sell-at-any-price competition by the talking dead but we also suffer
when their insolvency is finally acknowledged. Through various state
guarantee funds that levy assessments, Berkshire ends up paying a portion
of the insolvent insurers asset deficiencies, swollen as they usually are by
the delayed detection that results from wrong reporting. There is even
some potential for cascading trouble. The insolvency of a few large
insurers and the assessments by state guarantee funds that would follow
could imperil weak-but-previously-solvent insurers. Such dangers can be
mitigated if state regulators become better at prompt identification and
termination of insolvent insurers, but progress on that front has been slow.
別的產險公司所犯的錯對Berkshire來說，不是只是聽聽而已，我們不但身受那些活
死人削價競爭之痛，當他們真得倒閉時，我們也要跟著倒霉，因為許多州政府設立的
償債基金係依照保險業經營狀況來徵收，Berkshire最後可能被迫要來分擔這些損
失，且由於通常要很晚才會發現，事件會遠比想像中嚴重，而原本體質較弱但不致倒
閉的公司可能因而倒閉，最後如滾雪球一般，一發不可收拾，當然如果管理當局發現
的早而及時加以防範，強制那些爛公司結束經營，當可防止問題進一步擴大。
Washington Public Power Supply System
華盛頓公用電力供應系統
From October, 1983 through June, 1984 Berkshire’s insurance
subsidiaries continuously purchased large quantities of bonds of Projects 1,
2, and 3 of Washington Public Power Supply System (巣PPSS?. This is the
same entity that, on July 1, 1983, defaulted on $2.2 billion of bonds issued
to finance partial construction of the now-abandoned Projects 4 and 5.
While there are material differences in the obligors, promises, and
properties underlying the two categories of bonds, the problems of Projects
4 and 5 have cast a major cloud over Projects 1, 2, and 3, and might
possibly cause serious problems for the latter issues. In addition, there
vhave been a multitude of problems related directly to Projects 1, 2, and 3
that could weaken or destroy an otherwise strong credit position arising
from guarantees by Bonneville Power Administration.
從1983年十月到1984年六月間，Berkshire的保險子公司持續買進大筆的華盛頓
公用電力供應系統的一、二、三期債券(WPPSS 就是那家在1983年七月因無法履約
償還當初發行二十二億美元債券用以興建四、五期電廠計劃(現已放棄)的公司，雖然
這兩種債券在義務人、承諾事項與抵押擔保品上有極大不同，但四、五期問題的發生
對於一、二、三期債券來說，已蒙上一層陰影，且有可能對後續發行債券產生重大問
題，此外一、二、三期本身的一些問題也可能摧毀Bonneville電力主管當局所提供原
先看起來頗具信用基礎的保證。
Despite these important negatives, Charlie and I judged the risks at
the time we purchased the bonds and at the prices Berkshire paid (much
lower than present prices) to be considerably more than compensated for
by prospects of profit.
儘管有這些負面因素，但Charlie跟我評估以我們當出買進時所承擔的風險與購買的
價格(遠低於現在的市價)來說，其預期報酬仍足以彌補所要承擔的風險。
As you know, we buy marketable stocks for our insurance companies
based upon the criteria we would apply in the purchase of an entire
business. This business-valuation approach is not widespread among
professional money managers and is scorned by many academics.
Nevertheless, it has served its followers well (to which the academics seem
to say, well, it may be all right in practice, but it will never work in theory.
Simply put, we feel that if we can buy small pieces of businesses with
satisfactory underlying economics at a fraction of the per-share value of the
entire business, something good is likely to happen to us - particularly if
we own a group of such securities.
如你所知我們為保險子公司買進上市公司股票的標準與我們買下整家企業的標準並無
二致，然而這種企業評價模式並未廣為基金經理人所應用，甚至還遭到學術人士批評，
儘管如此，對於那些追隨者來說卻頗為受用(對此有些學者會說，或許實際上真得可
行，但理論上一定行不通，簡單地說，若我們能以合理的價格買到代表一小部份優良
企業的經濟利益，且能累積一些這樣的投資組合的話，對我們來說也是一件不錯的事。
We extend this business-valuation approach even to bond purchases
such as WPPSS. We compare the $139 million cost of our yearend
investment in WPPSS to a similar $139 million investment in an operating
business. In the case of WPPSS, the business contractually earns $22.7
million after tax (via the interest paid on the bonds), and those earnings are
available to us currently in cash. We are unable to buy operating
businesses with economics close to these. Only a relatively few businesses
earn the 16.3% after tax on unleveraged capital that our WPPSS investment
does and those businesses, when available for purchase, sell at large
premiums to that capital. In the average negotiated business transaction,
unleveraged corporate earnings of $22.7 million after-tax (equivalent to
about $45 million pre-tax) might command a price of $250 - $300 million
(or sometimes far more). For a business we understand well and strongly
like, we will gladly pay that much. But it is double the price we paid to
realize the same earnings from WPPSS bonds.
而我們甚至把這種評價模式衍伸到像WPPSS這類的債券投資之上，我們比較在WPPSS
的一億四千萬期末投資成本與同樣金額的股權投資，前者可產生二千三百萬的稅後盈
餘(透過支付利息費用)且都是現金，只有少數企業每年可賺得16.3%的稅後資本報酬
率，就算有其股票價格也高得嚇人，以一般平均購併交易來說，一家無財務槓桿每年
可賺得二千三百萬的稅後盈餘(等於要稅前要賺四千五百萬)的公司，大約要價二億五
到三億美元(有時還更高)，當然對於那種我們了解且特別偏愛的公司，或許真的下得
了手，但那還是等於我們購買WPPSS價錢的兩倍。
However, in the case of WPPSS, there is what we view to be a very
slight risk that the business could be worth nothing within a year or two.
There also is the risk that interest payments might be interrupted for a
considerable period of time. Furthermore, the most that the business
could be worth is about the $205 million face value of the bonds that we
own, an amount only 48% higher than the price we paid.
然而在WPPSS這個Case，我們仍然認為存在有在一、二年內一文不值的些許潛在風
險，同時可能也會有暫時付不出利息的風險存在，更重要的是我們所持有二億美金面
值(大約比我們持有成本高出48%)的債券。
This ceiling on upside potential is an important minus. It should be
realized, however, that the great majority of operating businesses have a
limited upside potential also unless more capital is continuously invested in
them. That is so because most businesses are unable to significantly
improve their average returns on equity - even under inflationary
conditions, though these were once thought to automatically raise returns.
當然獲利具有上限也是一大缺點，但各位必須了解，大部份的事業投資除非持續投入
大量的資金，事實上所謂的獲利提升的空間極為有限，這是因為大部份的企業無法有
效地提高其股東權益報酬率-即使是原先一般認定可自動提高報酬率的高通膨環境也
是如此。
(Let’s push our bond-as-a-business example one notch further: if you
elect to retain the annual earnings of a 12% bond by using the proceeds
from coupons to buy more bonds, earnings of that bond business will grow
at a rate comparable to that of most operating businesses that similarly
reinvest all earnings. In the first instance, a 30-year, zero-coupon, 12%
bond purchased today for $10 million will be worth $300 million in 2015.
In the second, a $10 million business that regularly earns 12% on equity
and retains all earnings to grow, will also end up with $300 million of
capital in 2015. Both the business and the bond will earn over $32 million
in the final year.)
讓我們對這個把債券當作投資的個案進一步作說明，若你決定將每年12%報酬的債券
利息收入繼續買入更多的債券，它就好比你投資一些保留盈餘繼續再投資的一般企業
一樣，就前者而言，若今天你以一千萬投資30年票票面零利率的債券，則三十年後
即2015年你約可得到三億美元，至於後者，若你同樣投資一千萬，則三十年後一樣
公司市值可增加至三億美元，兩者在最後一年皆可賺得三千二百萬美元。
Our approach to bond investment - treating it as an unusual sort of
business with special advantages and disadvantages - may strike you as a
bit quirky. However, we believe that many staggering errors by investors
could have been avoided if they had viewed bond investment with a
businessman’s perspective. For example, in 1946, 20-year AAA
tax-exempt bonds traded at slightly below a 1% yield. In effect, the buyer
of those bonds at that time bought a business that earned about 1% on
book value (and that, moreover, could never earn a dime more than 1% on
book), and paid 100 cents on the dollar for that abominable business.
換句話說，我們投資債券就好像把它當成一種特殊的企業投資，它具備有利的特點，
也有不利的特點，但我們相信若你以一般投資的角度來看待債券的話，將可避免一些
頭痛的問題。例如在1946年二十年期AAA級的免稅債券其殖利率約1%不到，事實
上買進這些債券的投資人等於是投資一家每年賺不到一個百分點的爛企業。
If an investor had been business-minded enough to think in those
terms - and that was the precise reality of the bargain struck - he would
have laughed at the proposition and walked away. For, at the same time,
businesses with excellent future prospects could have been bought at, or
close to, book value while earning 10%, 12%, or 15% after tax on book.
Probably no business in America changed hands in 1946 at book value that
the buyer believed lacked the ability to earn more than 1% on book. But
investors with bond-buying habits eagerly made economic commitments
throughout the year on just that basis. Similar, although less extreme,
conditions prevailed for the next two decades as bond investors happily
signed up for twenty or thirty years on terms outrageously inadequate by
business standards. (In what I think is by far the best book on investing
ever written - the Intelligent Investor by Ben Graham - the last section of
the last chapter begins with, investment is most intelligent when it is most
businesslike. This section is called Final Word and it is appropriately titled.)
若這些投資人有一點商業頭腦，面對這樣的投資條件，他一定會大笑地搖頭走開，當
時有一些具有大好前景且每年可賺得稅後10%、12%甚至15%的公司，卻以帳面價值
進行交易，當時能以帳面價值交易的公司大概沒有人會懷疑它賺不到1%的報酬率，但
當時習慣買賣債券的投資人仍努力地在這樣的基準下進行交易，在往後的二十年間，
雖然情況沒有當初那麼誇張，債券投資人持續地以從商業角度來看完全不合理的條
件，簽下長達二、三十年的約定，(在至今我個人認為最佳的投資教材- 由葛拉罕所寫
的the intelligent investor書中最後一段提到，最佳的投資是以商業角度來看的投
資)。
We will emphasize again that there is unquestionably some risk in the
WPPSS commitment. It is also the sort of risk that is difficult to evaluate.
Were Charlie and I to deal with 50 similar evaluations over a lifetime, we
would expect our judgment to prove reasonably satisfactory. But we do
not get the chance to make 50 or even 5 such decisions in a single year.
Even though our long-term results may turn out fine, in any given year we
run a risk that we will look extraordinarily foolish. (That’s why all of these
sentences say Charlie and I or we)
我們必須再次強調投資WPPSS一定具有相當風險，且很難加以具體衡量，但Charlie
跟我一生若有五十次類似的投資機會，我想我們最後結算的成績應該不賴，但我想我
們一年大概遇不到五次以上相同的機會，雖然長期累積下來的成績鐵定會不錯，但也
難保有一年的結果會很慘(那也是為什麼前面所有的句子開頭不是Charlie跟我或是我
們的原因)。
Most managers have very little incentive to make the
intelligent-but-with-some-chance-of-looking-like-an-idiot decision.
Their personal gain/loss ratio is all too obvious: if an unconventional
decision works out well, they get a pat on the back and, if it works out
poorly, they get a pink slip. (Failing conventionally is the route to go; as a
group, lemmings may have a rotten image, but no individual lemming has
ever received bad press.)
大部份的經理人沒有太大的動機去作那些-聰明但有時可能會變成白癡的決策，他們
個人的得失利弊太明確不過了，若一個很棒的點子真的成功，上頭可能拍拍他的肩膀
以示鼓勵，但萬一要是失敗，卻可能要捲鋪蓋走路(依照老方法而失敗是一條可行之
路，就一整個團體而言，旅鼠可能身負臭名，但卻沒有一隻單獨的旅鼠會受到責難)。
Our equation is different. With 47% of Berkshire’s stock, Charlie and I
don’t worry about being fired, and we receive our rewards as owners, not
managers. Thus we behave with Berkshire’s money as we would with our
own. That frequently leads us to unconventional behavior both in
investments and general business management.
但在Berkshire卻不同，擁有47%的股權，Charlie跟我不怕被炒魷魚，我們是以老
闆而非夥計的身份支領報酬，所以我們把Berkshire的錢當作自己的錢一樣看待，這
常使得我們在投資行為與管理風格上不遵循老路。
We remain unconventional in the degree to which we concentrate the
investments of our insurance companies, including those in WPPSS bonds.
This concentration makes sense only because our insurance business is
conducted from a position of exceptional financial strength. For almost all
other insurers, a comparable degree of concentration (or anything close to
it) would be totally inappropriate. Their capital positions are not strong
enough to withstand a big error, no matter how attractive an investment
opportunity might appear when analyzed on the basis of probabilities.
我們不默守成規的作法表現在我們將保險事業的資金集中投資之上(包括WPPSS債券
投資) ，而這種作法之有當像我們一樣具備特別雄厚的財務實力方能成功，對其它保
險公司來說，相同程度的集中持股可能完完全全不適當，因為它們的資金實力可能無
法承受任何重大錯誤的發生，不管那個投資機會基於或然率的分析看起來多麼吸引人
都一樣。
With our financial strength we can own large blocks of a few securities
that we have thought hard about and bought at attractive prices. (Billy Rose
described the problem of over-diversification: if you have a harem of forty
women, you never get to know any of them very well. Over time our policy
of concentration should produce superior results, though these will be
tempered by our large size. When this policy produces a really bad year,
as it must, at least you will know that our money was committed on the
same basis as yours.
以我們的財務實力我們可以買下少數一大筆的我們想要買且用合理的價格投資的股票
(Bill Rose形容過度分散投資的麻煩，若你擁有四十位妻妾，你一定沒有辦法對每一
個女人認識透徹，長期下來我們集中持股的政策終會顯現出它的優勢，雖然多少會受
到規模太大的拖累，而就算某一年度它們表現得特別糟，至少你還能夠慶幸我們投入
的資金比各位還多。
We made the major part of our WPPSS investment at different prices
and under somewhat different factual circumstances than exist at present.
If we decide to change our position, we will not inform shareholders until
long after the change has been completed. (We may be buying or selling as
you read this.) The buying and selling of securities is a competitive
business, and even a modest amount of added competition on either side
can cost us a great deal of money. Our WPPSS purchases illustrate this
principle. From October, 1983 through June, 1984, we attempted to buy
almost all the bonds that we could of Projects 1, 2, and 3. Yet we purchased
less than 3% of the bonds outstanding. Had we faced even a few additional
well-heeled investors, stimulated to buy because they knew we were, we
could have ended up with a materially smaller amount of bonds, purchased
at a materially higher price. (A couple of coat-tail riders easily could have
cost us $5 million.) For this reason, we will not comment about our
activities in securities - neither to the press, nor shareholders, nor to
anyone else - unless legally required to do so.
我們在WPPSS的債券投資分幾個不同時點與價格買進，若我們決定要調節有關部份，
可能要在變動結束後許久才會知會各位，(在你看到這篇年報時，我們可能已賣出或加
碼相關部位) ，由於股票的買賣是屬於競爭激烈的零和遊戲，所以即使是因此加入一
點競爭到任何一方，也會大大影響我們的獲利，所以我們買進WPPSS的債券可以作為
最佳範例，從1983年十月到1984年六月間，我們試著買進所有第一、二、三期的
債券，但到最後我們只買到所有流通在外數量的百分之三，如果我們在碰到一個頭腦
清楚的投資人，知道我們要吃貨而跟著進場，結果可能是我們以更高的價格買到更少
的債券，(隨便一個跟風可能要讓我們多花五百萬美金)基於這項理由，我們並不透露
我們在股票市場上的進出，不論是對媒體，或是對股東，甚至對任何人，除非法令上
特別要求。
One final observation regarding our WPPSS purchases: we dislike the
purchase of most long-term bonds under most circumstances and have
bought very few in recent years. That’s because bonds are as sound as a
dollar - and we view the long-term outlook for dollars as dismal. We
believe substantial inflation lies ahead, although we have no idea what the
average rate will turn out to be. Furthermore, we think there is a small,
but not insignificant, chance of runaway inflation.
最後我們對WPPSS的債券的最後心得是大部份情況下，我們不喜愛購買長期的債券，
事實上近幾年來也很少買進，那是因為債券就像美元一樣穩固，而我們對於美元長期
的前景看淡，我們相信高通貨膨脹擺在眼前，雖然我們無法預測真正的數字，而且不
排除完全失控的可能性。
Such a possibility may seem absurd, considering the rate to which
inflation has dropped. But we believe that present fiscal policy - featuring
a huge deficit - is both extremely dangerous and difficult to reverse. (So far,
most politicians in both parties have followed Charlie Brown’s advice: No
problem is so big that it can’t be run away from. Without a reversal, high
rates of inflation may be delayed (perhaps for a long time), but will not be
avoided. If high rates materialize, they bring with them the potential for a
runaway upward spiral.
這聽起來不大可能會發生，考量到目前通膨已有下降的趨勢，但我們認為以目前的財
政政策(特別是預算赤字)相當危險且很難加以改善(到目前為止兩黨的政治人物多聽從
Charlie Brown的建議，沒有什麼問題是無法加以控制的)但若不能加以改善，高通膨
或許暫時不再發生(但卻無法完全擺脫) ，而且一旦成形，可能會加快速度向上飆漲。
While there is not much to choose between bonds and stocks (as a
class) when annual inflation is in the 5%-10% range, runaway inflation is a
different story. In that circumstance, a diversified stock portfolio would
almost surely suffer an enormous loss in real value. But bonds already
outstanding would suffer far more. Thus, we think an all-bond portfolio
carries a small but unacceptable 聴ipe out?risk, and we require any purchase
of long-term bonds to clear a special hurdle. Only when bond purchases
appear decidedly superior to other business opportunities will we engage in
them. Those occasions are likely to be few and far between.
當通膨維持在5%-10%之間，其實投資股票或債券並無太多分別，但在高通膨時代可
就完全不是那麼一回事了，在那種情況下，投資股票組合在實質上將會蒙受重大損失，
但已流通在外的債券卻可能更慘，所以我們認為所有目前流通在外的債券組合事實上
隱含著極大的風險，所以我們對於債券投資特別謹慎，只有當某項債券比起其它投資
機會明顯有利時我們才會考慮，而事實上這種情況少之又少。
Dividend Policy
股利政策
Dividend policy is often reported to shareholders, but seldom
explained. A company will say something like, our goal is to pay out 40%
to 50% of earnings and to increase dividends at a rate at least equal to the
rise in the CPI. And that’s it - no analysis will be supplied as to why that
particular policy is best for the owners of the business. Yet, allocation of
capital is crucial to business and investment management. Because it is,
we believe managers and owners should think hard about the
circumstances under which earnings should be retained and under which
they should be distributed.
一般公司都會跟股東報告股利政策，但通常不會詳加解釋，有的公司會說我們的目標
時發放40%-50%的盈餘，同時以消費者物價指數增加的比率發放股利，就這樣而已，
沒有任何分析解釋為何這類的政策會對股東有利，然而資金的配置對於企業與投資管
理來說是相當重要的一環，因此我們認為經理人與所有權人應該要好好想想在什麼情
況下，將盈餘保留或加以分配會是對股東最有利。
The first point to understand is that all earnings are not created equal.
In many businesses particularly those that have high asset/profit ratios -
inflation causes some or all of the reported earnings to become ersatz.
The ersatz portion - let’s call these earnings restricted - cannot, if the
business is to retain its economic position, be distributed as dividends.
Were these earnings to be paid out, the business would lose ground in one
or more of the following areas: its ability to maintain its unit volume of
sales, its long-term competitive position, its financial strength. No matter
how conservative its payout ratio, a company that consistently distributes
restricted earnings is destined for oblivion unless equity capital is otherwise
infused.
首先要了解的是，並非所有的盈餘都會產生同樣的成果，在許多企業尤其是那些資本
密集(資產/獲利比例高)的公司，通膨往往使得帳面盈餘變成人為的假象，這種受限制
的盈餘往往無法被當作真正的股利來發放而必須加以保留再投資以維持原有的經濟實
質，萬一要是勉強發放，將會使得公司在以下幾方面失去競爭力: (1)維持原有銷售數
量的能力(2)維持其長期競爭優勢(3)維持其原有財務實力，所以不論其股利發放比率是
如何保守，一家公司要是常此以往將會使得其注定面臨淘汰，除非你一再抑注更多資
金。
Restricted earnings are seldom valueless to owners, but they often
must be discounted heavily. In effect, they are conscripted by the business,
no matter how poor its economic potential. (This
retention-no-matter-how-unattractive-the-return situation was
communicated unwittingly in a marvelously ironic way by Consolidated
Edison a decade ago. At the time, a punitive regulatory policy was a major
factor causing the company’s stock to sell as low as one-fourth of book
value; i.e., every time a dollar of earnings was retained for reinvestment in
the business, that dollar was transformed into only 25 cents of market
value. But, despite this gold-into-lead process, most earnings were
reinvested in the business rather than paid to owners. Meanwhile, at
construction and maintenance sites throughout New York, signs proudly
proclaimed the corporate slogan, dig We Must?)
對公司老闆來說受限制的盈餘也並非毫無價值，但它們的折現值通常少得可憐，事實
上企業又非用它們不可，不管它們可產生的經濟效益有多差，(這種不管前景多麼不樂
觀一律保留的情況，在十年前由Consolidated Edison無意間所提出而後令人難以置
信的廣泛流傳著，在當時一項懲罰性的規範政策是使得公司的股價以遠低於帳面價值
的價格交易的主要原因，有時甚至以25%的帳面值交易，亦即當每一塊錢的盈餘被予
以保留再投資，市場預期其將來所可能產生的經濟效益只有25分錢，諷刺的是儘管
這種由金變成銅的現象一再發生，大部份的盈餘還是持續的被保留下來再投資。在此
同時，在紐約都會區的建築工地逐漸樹起了企業的標語寫到:「我們還要繼續挖下去
嗎?」
Restricted earnings need not concern us further in this dividend
discussion. Let’s turn to the much-more-valued unrestricted variety.
These earnings may, with equal feasibility, be retained or distributed. In
our opinion, management should choose whichever course makes greater
sense for the owners of the business.
對於受限制的盈餘我不再多談，讓我們將話題轉到更有價值的不受限制的部份，所謂
不受限制的盈餘顧名思義可以加以保留，也可以予以分配，我們認為分配與否主要取
決於管理當局判斷何者對公司股東較為有利。
This principle is not universally accepted. For a number of reasons
managers like to withhold unrestricted, readily distributable earnings from
shareholders - to expand the corporate empire over which the managers
rule, to operate from a position of exceptional financial comfort, etc. But
we believe there is only one valid reason for retention. Unrestricted
earnings should be retained only when there is a reasonable prospect -
backed preferably by historical evidence or, when appropriate, by a
thoughtful analysis of the future - that for every dollar retained by the
corporation, at least one dollar of market value will be created for owners.
This will happen only if the capital retained produces incremental earnings
equal to, or above, those generally available to investors.
當然這項原則並未廣為大家所接受，基於某些理由管理當局往往偏好將盈餘予以保留
以擴大個人的企業版圖，同時使公司的財務更為優渥，但我們仍然相信將盈餘保留只
有一個理由，亦即所保留的每一塊錢能發揮更有的效益，且必需要有過去的成績佐證
或是對未來有精譬的分析，確定要能夠產生大於一般股東自行運用所生的效益。
To illustrate, let’s assume that an investor owns a risk-free 10%
perpetual bond with one very unusual feature. Each year the investor can
elect either to take his 10% coupon in cash, or to reinvest the coupon in
more 10% bonds with identical terms; i.e., a perpetual life and coupons
offering the same cash-or-reinvest option. If, in any given year, the
prevailing interest rate on long-term, risk-free bonds is 5%, it would be
foolish for the investor to take his coupon in cash since the 10% bonds he
could instead choose would be worth considerably more than 100 cents on
the dollar. Under these circumstances, the investor wanting to get his
hands on cash should take his coupon in additional bonds and then
immediately sell them. By doing that, he would realize more cash than if
he had taken his coupon directly in cash. Assuming all bonds were held by
rational investors, no one would opt for cash in an era of 5% interest rates,
not even those bondholders needing cash for living purposes.
具體而言，假設有一位股東持有一種10%無風險永久債券，這種債券有一個特色，那
就是投資人每年有權可選擇領取10%的債息或將此10%繼續買進同類型的債券，假設
其中有一年當時長期無分險的殖利率為是5%，則投資人應當不會笨到選擇領取現金而
會將之繼續買進同類型的債券，因為後者能夠產生更高的價值，事實上若他真得需要
現金的話，他大可以在買進債券後在市場上以更高的價格拋售變現，換句話說若市場
上的投資人夠聰明的話，是沒有人會選擇直接領取現金債息的。
If, however, interest rates were 15%, no rational investor would want
his money invested for him at 10%. Instead, the investor would choose to
take his coupon in cash, even if his personal cash needs were nil. The
opposite course - reinvestment of the coupon - would give an investor
additional bonds with market value far less than the cash he could have
elected. If he should want 10% bonds, he can simply take the cash
received and buy them in the market, where they will be available at a large
discount.
相反的若當時市場的殖利率是15%，則情況將完全相反，沒有人會笨到要去投資10%
的債券，即使他手上的閒錢真得太多，他也會先選擇領取現金之後再到市場上以較低
的價格買進相同的債券。
An analysis similar to that made by our hypothetical bondholder is
appropriate for owners in thinking about whether a company’s unrestricted
earnings should be retained or paid out. Of course, the analysis is much
more difficult and subject to error because the rate earned on reinvested
earnings is not a contractual figure, as in our bond case, but rather a
fluctuating figure. Owners must guess as to what the rate will average
over the intermediate future. However, once an informed guess is made,
the rest of the analysis is simple: you should wish your earnings to be
reinvested if they can be expected to earn high returns, and you should
wish them paid to you if low returns are the likely outcome of reinvestment.
同樣的道理也可以運用在股東思考公司的盈餘是否應該發放的問題之上，當然這時候
的分析可能較為困難且容易出錯，因為再投資所能賺得的報酬率不像債券那個case
是白紙黑字的數字，反而可能會變動不一，股東必須去判斷在可見的未來其平均的報
酬率是多少，而一旦數字訂下來的話，之後的分析就簡單多了，若預期報酬率高便可
以再投資，反之則應要求加以分配。
Many corporate managers reason very much along these lines in
determining whether subsidiaries should distribute earnings to their parent
company. At that level,. the managers have no trouble thinking like
intelligent owners. But payout decisions at the parent company level often
are a different story. Here managers frequently have trouble putting
themselves in the shoes of their shareholder-owners.
許多企業的經理人很理智地運用上述標準對待旗下子公司，但到了自己所掌管的母公
司可就完全不是那麼一回事了，他們很少會站在股東的立場為大家想。
With this schizoid approach, the CEO of a multi-divisional company
will instruct Subsidiary A, whose earnings on incremental capital may be
expected to average 5%, to distribute all available earnings in order that
they may be invested in Subsidiary B, whose earnings on incremental capital
are expected to be 15%. The CEO’s business school oath will allow no
lesser behavior. But if his own long-term record with incremental capital is
5% - and market rates are 10% - he is likely to impose a dividend policy on
shareholders of the parent company that merely follows some historical or
industry-wide payout pattern. Furthermore, he will expect managers of
subsidiaries to give him a full account as to why it makes sense for earnings
to be retained in their operations rather than distributed to the
parent-owner. But seldom will he supply his owners with a similar analysis
pertaining to the whole company.
這種類似精神分裂症的經理人，一面要求每年只能產生5%報酬率的子公司甲將資金分
配回母公司，然後轉投資到每年可產生15%報酬率的子公司乙，這時他從不會忘記以
前在商學院所學到的校訓，但若母公司本身預期的報酬率只有5%(市場上的平均報酬
率是10%)，他頂多只會依循公司從前或同業平均的現金股利發放率來做而已，當他要
求旗下子公司提出報告對其保留盈餘的比例作出解釋的同時，他卻從來不會想到要對
他公司背後的股東提出任何說明。
In judging whether managers should retain earnings, shareholders
should not simply compare total incremental earnings in recent years to
total incremental capital because that relationship may be distorted by what
is going on in a core business. During an inflationary period, companies
with a core business characterized by extraordinary economics can use
small amounts of incremental capital in that business at very high rates of
return (as was discussed in last year’s section on Goodwill). But, unless
they are experiencing tremendous unit growth, outstanding businesses by
definition generate large amounts of excess cash. If a company sinks most
of this money in other businesses that earn low returns, the company’s
overall return on retained capital may nevertheless appear excellent
because of the extraordinary returns being earned by the portion of
earnings incrementally invested in the core business. The situation is
analogous to a Pro-Am golf event: even if all of the amateurs are hopeless
duffers, the team’s best-ball score will be respectable because of the
dominating skills of the professional.
在判斷是否應將盈餘保留在公司，股東不應該只是單純比較增加的資本所能增加的邊
際盈餘，因為這種關係會被核心事業的現況所扭曲，在高通膨的時代，某些具特殊競
爭力的核心事業能夠運用少量的資金創造極高的報酬率(如同去年我們曾提過的商
譽) ，除非是經歷銷售量的鉅幅成長，否則一家好的企業定義上應該是指那些可以產
生大量現金的公司，相對的如果一家公司將本來的資金投入低報酬的事業，那麼即使
它將增加的資本投入較高報酬的新事業，表面上看起來是不錯，但實際上卻不怎麼樣，
就好比在高爾夫球配對賽中，雖然大部份的業餘選手成績一蹋糊塗，但團體比賽只取
最好的成績卻由於部份職業選手的精湛球技而顯得出色。
Many corporations that consistently show good returns both on equity
and on overall incremental capital have, indeed, employed a large portion of
their retained earnings on an economically unattractive, even disastrous,
basis. Their marvelous core businesses, however, whose earnings grow
year after year, camouflage repeated failures in capital allocation elsewhere
(usually involving high-priced acquisitions of businesses that have
inherently mediocre economics). The managers at fault periodically report
on the lessons they have learned from the latest disappointment. They
then usually seek out future lessons. (Failure seems to go to their heads.)
許多表面上持續繳出好績效的公司事實上把大部份的資金投注在不具競爭力的事業之
上。只是前者掩蓋住後者慘不忍睹(通常是用高價購併平庸的企業)的失敗，而經營階
層也一再強調他們從前一次挫敗所學到的經驗，但同時馬上物色下一次失敗的機會。
In such cases, shareholders would be far better off if earnings were
retained only to expand the high-return business, with the balance paid in
dividends or used to repurchase stock (an action that increases the owners
interest in the exceptional business while sparing them participation in
subpar businesses). Managers of high-return businesses who consistently
employ much of the cash thrown off by those businesses in other ventures
with low returns should be held to account for those allocation decisions,
regardless of how profitable the overall enterprise is.
這種情況下，股東們最好把荷包看緊，只留下必要的資金以擴充高報酬的事業，剩下
的部份要嘛就發還給股東，要嘛就用來買回庫藏股(一種暨可以增加股東權益，又可以
避免公司亂搞的好方法)。
Nothing in this discussion is intended to argue for dividends that
bounce around from quarter to quarter with each wiggle in earnings or in
investment opportunities. Shareholders of public corporations
understandably prefer that dividends be consistent and predictable.
Payments, therefore, should reflect long-term expectations for both
earnings and returns on incremental capital. Since the long-term
corporate outlook changes only infrequently, dividend patterns should
change no more often. But over time distributable earnings that have been
withheld by managers should earn their keep. If earnings have been
unwisely retained, it is likely that managers, too, have been unwisely
retained.
以上的討論並不是指說公司的股利要隨著每季盈餘或投資機會的些微差異便要跟著變
來變去，上市公司的股東一般偏好公司有一貫穩定的股利政策，因此股利的發放應該
要能夠反應公司長期的盈餘預期，因為公司的前景通常不會常常變化，股利政策也應
該如此，但長期而言公司經營階層應該要確保留下的每一塊錢盈餘發揮效用，若一旦
發現盈餘保留下來是錯的，那麼同樣也代表現有經營階層留下來是錯的。
Let’s now turn to Berkshire Hathaway and examine how these dividend
principles apply to it. Historically, Berkshire has earned well over market
rates on retained earnings, thereby creating over one dollar of market value
for every dollar retained. Under such circumstances, any distribution
would have been contrary to the financial interest of shareholders, large or
small.
現在讓我們回過頭來檢視Berkshire本身的股利政策，過去記錄顯示Berkshire的保
留盈餘可賺得較市場更高的報酬率，亦即每保留一塊錢盈餘可創造大於一塊錢的價
值，在這種情況下，任何發放股利的動作可能都不利於所有Berkshire的大小股東。
In fact, significant distributions in the early years might have been
disastrous, as a review of our starting position will show you. Charlie and I
then controlled and managed three companies, Berkshire Hathaway Inc.,
Diversified Retailing Company, Inc., and Blue Chip Stamps (all now merged
into our present operation). Blue Chip paid only a small dividend,
Berkshire and DRC paid nothing. If, instead, the companies had paid out
their entire earnings, we almost certainly would have no earnings at all now
- and perhaps no capital as well. The three companies each originally
made their money from a single business: (1) textiles at Berkshire; (2)
department stores at Diversified; and (3) trading stamps at Blue Chip.
These cornerstone businesses (carefully chosen, it should be noted, by your
Chairman and Vice Chairman) have, respectively, (1) survived but earned
almost nothing, (2) shriveled in size while incurring large losses, and (3)
shrunk in sales volume to about 5% its size at the time of our entry. (Who
says you can急 lose 蟇m all?) Only by committing available funds to much
better businesses were we able to overcome these origins. (It’s been like
overcoming a misspent youth.) Clearly, diversification has served us well.
事實上，以我們過去剛開始經營事業的經驗顯示，在公司的草創初期發放大量的現金
股利並不是一件好的事情，當時Charlie跟我掌控三家企業-Berkshire、多元零售與
藍籌郵票公司(現在已合併為一家公司) ，藍籌郵票公司只發放一點股利而其餘兩家皆
未發放，相反的若當時我們把所賺的錢統統發掉，我們現在可能賺不到什麼錢，甚至
連一點資本也沒有，這三家公司當初各自靠一種事業起家(1) Berkshire的紡織(2) 多
元零售的百貨公司(3) 藍籌郵票的郵票買賣，這些基礎事業(特別要提到的是，那些我
跟Charlie再三斟酌敲定的一個形容詞)目前已(1)倖存下來但賺不到什麼錢(2)規模萎
縮並發生大幅虧損(3)只剩當初入主時，5%的營業額。所以只有將資金投入到更好的
事業，我們才能克服先天上的劣勢(就好像是在補救年輕時的荒誕)很明顯的，多角化
是對的。
We expect to continue to diversify while also supporting the growth of
current operations though, as we挙e pointed out, our returns from these
efforts will surely be below our historical returns. But as long as
prospective returns are above the rate required to produce a dollar of
market value per dollar retained, we will continue to retain all earnings.
Should our estimate of future returns fall below that point, we will
distribute all unrestricted earnings that we believe can not be effectively
used. In making that judgment, we will look at both our historical record
and our prospects. Because our year-to-year results are inherently volatile,
we believe a five-year rolling average to be appropriate for judging the
historical record.
我們將持續多角化並支持現有事業的成長，雖然我們一再強調，這些努力的報酬鐵定
比過去的成績遜色，但只要被保留下來的每一塊錢能夠創造更大的利益，我們便會持
續的這樣做，而一旦我們評估留下的盈餘無法達到前述的標準，我們一定會把所有多
餘的錢發還給股東，當然會同時權衡過去的記錄與未來的前景，當然單一年度的變化
頗大，基本上我們會以五年為期來作判斷。
Our present plan is to use our retained earnings to further build the
capital of our insurance companies. Most of our competitors are in
weakened financial condition and reluctant to expand substantially. Yet
large premium-volume gains for the industry are imminent, amounting
probably to well over $15 billion in 1985 versus less than $5 billion in 1983.
These circumstances could produce major amounts of profitable business
for us. Of course, this result is no sure thing, but prospects for it are far
better than they have been for many years.
我們現今的計劃是用保留的盈餘來擴充保險事業，我們大部份的競爭對手財務狀況比
我們差而不願大幅的擴充，但此刻正值保費收入大幅成長之際，比起1983年的50
億，預計1985年將成長至150億，這正是我們大撈一筆的難得良機，當然沒有什麼
事百分之百確定的。
Miscellaneous
其他事項
This is the spot where each year I run my small business wanted ad.
In 1984 John Loomis, one of our particularly knowledgeable and alert
shareholders, came up with a company that met all of our tests. We
immediately pursued this idea, and only a chance complication prevented a
deal. Since our ad is pulling, we will repeat it in precisely last year’s form:
又到了每年我刊登小廣告的時候了，去年我們一位特別有心的股東John Loomis，跟
我們提到一家完全符合我們標準的公司，我們馬上加以鎖定，只可惜最後因為一項無
解的問題而功虧一簣，以下是跟去年一模一樣的廣告:
We prefer:
(1) large purchases (at least $5 million of after-tax
earnings),
(2) demonstrated consistent earning power (future
projections are of little interest to us, nor are
turn-around situations),
(3) businesses earning good returns on equity while
employing little or no debt,
(4) management in place (we can’t supply it),
(5) simple businesses (if there’s lots of technology, we
won’t understand it),
(6) an offering price (we don’t want to waste our time or
that of the seller by talking, even preliminarily,
about a transaction when price is unknown).
我們偏愛
(1)鉅額交易(每年稅後盈餘至少有五百萬美元)
(2)持續穩定獲利(我們對有遠景或具轉機的公司沒興趣)
(3)高股東報酬率(並甚少舉債)
(4)具備管理階層(我們無法提供)
(5)簡單的企業(若牽涉到太多高科技，我們弄不懂)
(6)合理的價格(在價格不確定前，我們不希望浪費自己與對方太多時間)
We will not engage in unfriendly takeovers. We can promise complete
confidentiality and a very fast answer - customarily within five minutes - as
to whether we虐e interested. We prefer to buy for cash, but will consider
issuance of stock when we receive as much in intrinsic business value as we
give. We invite potential sellers to check us out by contacting people with
whom we have done business in the past. For the right business - and the
right people - we can provide a good home.
我們不會進行敵意購併，並承諾完全保密並儘快答覆是否感興趣(通常不超過五分
鐘) ，我們傾向採現金交易，除非我們所換得的內含價值跟我們付出的一樣多，否則
不考慮發行股份。我們歡迎可能的賣方與那些過去與我們合作過的對象打聽，對於那
些好的公司與好的經營階層，我們可以提供一個好的歸屬。
* * *
A record 97.2% of all eligible shares participated in Berkshire’s 1984
shareholder-designated contributions program. Total contributions made
through this program were $3,179,000, and 1,519 charities were recipients.
Our proxy material for the annual meeting will allow you to cast an advisory
vote expressing your views about this program - whether you think we
should continue it and, if so, at what per-share level. (You may be
interested to learn that we were unable to find a precedent for an advisory
vote in which management seeks the opinions of shareholders about
owner-related corporate policies. Managers who put their trust in
capitalism seem in no hurry to put their trust in capitalists.)
今年破記錄的有97.2%的有效股權參與1984年的股東指定捐贈計劃，總計約三百多
萬美元捐出的款項分配給1,519家慈善機構，股東會的資料包含一個可以讓你表達對
這項計劃的意見(例如應否繼續、每一股應捐贈多少等等)你可能會有興趣知道事實上
在此之前從未有一家公司是以股東的立場來決定公司捐款的去向，經理人在信任資本
主義的同時，好像不太相信資本家。
We urge new shareholders to read the description of our
shareholder-designated contributions program that appears on pages 60
and 61. If you wish to participate in future programs, we strongly urge
that you immediately make sure that your shares are registered in the name
of the actual owner, not in street name or nominee name. Shares not so
registered on September 30, 1985 will be ineligible for the 1985 program.
我們建議新股東趕快閱讀相關資訊，若你也想參加的話，我們強烈建議你趕快把股份
從經紀人那兒改登記於自己的名下。各位必須在1985年9月30日之前完成登記，
才有權利參與1985年的捐贈計畫。
* * *
Our annual meeting will be on May 21, 1985 in Omaha, and I hope
that you attend. Many annual meetings are a waste of time, both for
shareholders and for management. Sometimes that is true because
management is reluctant to open up on matters of business substance.
More often a nonproductive session is the fault of shareholder participants
who are more concerned about their own moment on stage than they are
about the affairs of the corporation. What should be a forum for business
discussion becomes a forum for theatrics, spleen-venting and advocacy of
issues. (The deal is irresistible: for the price of one share you get to tell a
captive audience your ideas as to how the world should be run.) Under such
circumstances, the quality of the meeting often deteriorates from year to
year as the antics of those interested in themselves discourage attendance
by those interested in the business.
Berkshire的股東年會預計於1985年五月二十一在奧瑪哈舉行，我希望各位屆時都
能參加，大部份的股東年會都是在浪費股東與經營階層的時間，有時是因為經營階層
不願深入討論公司的實質面，有時是因為有些股東只顧自己出鋒頭而未真正關心公司
的事務，本來應該是經營事業的討論會最後往往變成一場鬧劇(這是件再划算不過的主
意，只要買進一股，你就可以讓一大群人坐著聽你高談闊論) ，最後往往是劣幣驅逐
良幣，使得真正關心公司的股東避而遠之，剩下一堆愛現的小丑。
Berkshire’s meetings are a different story. The number of
shareholders attending grows a bit each year and we have yet to experience
a silly question or an ego-inspired commentary. Instead, we get a wide
variety of thoughtful questions about the business. Because the annual
vmeeting is the time and place for these, Charlie and I are happy to answer
them all, no matter how long it takes. (We cannot, however, respond to
written or phoned questions at other times of the year; one-person-at-a
time reporting is a poor use of management time in a company with 3000
shareholders.) The only business matters that are off limits at the annual
meeting are those about which candor might cost our company real money.
Our activities in securities would be the main example.
Berkshire的股東年會卻完全不是那麼一回事，雖然與會的股東一年比一年多，但至
今我們卻很少遇到什麼蠢問題或是以自我為中心的言論，相反的，大家提出的都是一
些有見地的商業問題，正因為大家開會的目的便是為此，因此不管要花多少時間我跟
Charlie很樂意為大家解答這類的問題，(然而很抱歉我們無法在其它的時候用書面或
電話回答問題，因為以一家擁有三千名股東的公司，若一一回答的話實在是太沒有效
率了) ，而我們惟一無法回答的商業問題是正直要花多少代價去證明，尤其是我們在
股票市場上的進出。
We always have bragged a bit on these pages about the quality of our
shareholder-partners. Come to the annual meeting and you will see why.
Out-of-towners should schedule a stop at Nebraska Furniture Mart. If you
make some purchases, you’ll save far more than enough to pay for your trip,
and you’ll enjoy the experience.
最後我通常要花一點時間來吹噓我們公司的管理幹部有多好，歡迎來參加年會，你就
曉得為什麼了，外地來的可以考慮到Nebraska家具店逛逛，若你決定買些東西，你
會發現你所省下的錢足夠支付你這趟的旅費，相信我你一定會覺得不虛此行的。
Warren E. Buffett
February 25, 1985 Chairman of the Board
華倫．巴菲特
董事會主席
1985年2月25日
Subsequent Event: On March 18, a week after copy for this report went
to the typographer but shortly before production, we agreed to purchase
three million shares of Capital Cities Communications, Inc. at $172.50 per
share. Our purchase is contingent upon the acquisition of American
Broadcasting Companies, Inc. by Capital Cities, and will close when that
transaction closes. At the earliest, that will be very late in 1985. Our
admiration for the management of Capital Cities, led by Tom Murphy and
Dan Burke, has been expressed several times in previous annual reports.
Quite simply, they are tops in both ability and integrity. We will have more
to say about this investment in next year’s report.
期後事項，三月十八在報告付梓的一週之後，我們協議以每股172.5美金買進三百萬
股資本城廣播Capital Cities Communications，其中有一項附帶要件是資本城必須
要能夠成功買下ABC美國廣播公司，否則合約無效，在前幾年的年度我們一再對資本
城的領導階層-包括Tom Murphy 與Dan Burke表示推崇，原因很簡單，因為他們
不管在能力與人格方面，皆是一時之選，明年的年報我將會詳加說明這項投資案的始
末。
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