BERKSHIRE HATHAWAY INC.
波克夏海瑟崴股份有限公司
To the Shareholders of Berkshire Hathaway Inc.:
致所有股東:
Our gain in net worth during 1989 was $1.515 billion, or
44.4%. Over the last 25 years (that is, since present management
took over) our per-share book value has grown from $19.46 to
$4,296.01, or at a rate of 23.8% compounded annually.
本公司1989年的淨值增加了15億1千5百萬美元，較去年增加了44.4%，
過去25年以來(也就是自從現有經營階層接手後)，每股淨值從19元成長到現
在的4,296美元，年複合成長率約為23.8%。
What counts, however, is intrinsic value - the figure
indicating what all of our constituent businesses are rationally
worth. With perfect foresight, this number can be calculated by
taking all future cash flows of a business - in and out - and
discounting them at prevailing interest rates. So valued, all
businesses, from manufacturers of buggy whips to operators of
cellular phones, become economic equals.
然而真正重要的還是實質價值-這個數字代表組合我們企業所有份子合理的價
值，根據精準的遠見，這個數字可由企業未來預計的現金流量(包含流進與流
出)，並以現行的利率予以折現，不管是馬鞭的製造公司或是行動電話的業者都
可以在同等的地位上，據以評估其經濟價值。
Back when Berkshire's book value was $19.46, intrinsic
value was somewhat less because the book value was entirely tied
up in a textile business not worth the figure at which it was
carried. Now most of our businesses are worth far more than their
carrying values. This agreeable evolution from a discount to a
premium means that Berkshire's intrinsic business value has
compounded at a rate that somewhat exceeds our 23.8% annual
growth in book value.
當Berkshire的帳面價值是19.46美元之時，由於主要的資產多屬於紡織事業，
所以實質的價值大概比帳面價值要少一點，但時至今日我們企業的價值卻早已較
帳面價值多的多，這代表著Berkshire實質價值成長的速度要比帳面價值每年平
均23.8%的複合成長率還要再高一些。
The rear-view mirror is one thing; the windshield is
another. A large portion of our book value is represented by
equity securities that, with minor exceptions, are carried on our
balance sheet at current market values. At yearend these
securities were valued at higher prices, relative to their own
intrinsic business values, than has been the case in the past.
One reason is the buoyant 1989 stock market. More important, the
virtues of these businesses have been widely recognized. Whereas
once their stock prices were inappropriately low, they are not
now.
後照鏡是一回事，雨刷又是另外一回事，我們帳面價值大部分是反應我們所持有
的有價證券，而這些有價證券除了少數的例外，又大多以市價在資產負債表上列
示，在去年年底這些有價證券較之過去，又以比實質價值呈現更高的價格，一方
面當然是因為1989年股市的飆漲，另一方面則是這些有價證券的價值得到大家
的認同，也就是說過去他們的股價曾經相當的低，但這種情況如今已不復存在。
We will keep most of our major holdings, regardless of how
they are priced relative to intrinsic business value. This 'til-
death-do-us-part attitude, combined with the full prices these
holdings command, means that they cannot be expected to push up
Berkshire's value in the future as sharply as in the past. In
other words, our performance to date has benefited from a double-
dip: (1) the exceptional gains in intrinsic value that our
portfolio companies have achieved; (2) the additional bonus we
realized as the market appropriately "corrected" the prices of
these companies, raising their valuations in relation to those of
the average business. We will continue to benefit from good gains
in business value that we feel confident our portfolio companies
will make. But our "catch-up" rewards have been realized, which
means we'll have to settle for a single-dip in the future.
我們仍然會保有我們主要的持股，不管相較於實質價值，他們現在的市場價格是
多少，我們對於他們至死不分離的態度加上這些股份現在的價位，意味者他們在
未來可能無法再像先前那樣將Berkshire的淨值大幅向上推升，換句話說，我們
能有現在的表現主要受惠於兩方面(1)我們旗下的公司所創造出的實質價值增長
(2)由於市場對於這些公司的股價，相較於一般企業所做合理的修正所帶來的額
外紅利。
在未來我們有信心仍然可以享受公司所創造出來的價值，但是對於先前補漲的利
益則因為大都已實現，這意味著我們將來只能靠前者來受惠。
We face another obstacle: In a finite world, high growth
rates must self-destruct. If the base from which the growth is
taking place is tiny, this law may not operate for a time. But
when the base balloons, the party ends: A high growth rate
eventually forges its own anchor.
此外我們還面臨到另一項挑戰，在有限的世界裡，任何高成長的事物終將自我毀
滅，若是成長的基礎相對較小，則這項定律偶爾會被暫時打破，但是當基礎膨脹
到一定程度時，好戲就會結束，高成長終有一天會被自己所束縛。
Carl Sagan has entertainingly described this phenomenon,
musing about the destiny of bacteria that reproduce by dividing
into two every 15 minutes. Says Sagan: "That means four doublings
an hour, and 96 doublings a day. Although a bacterium weighs only
about a trillionth of a gram, its descendants, after a day of
wild asexual abandon, will collectively weigh as much as a
mountain...in two days, more than the sun - and before very long,
everything in the universe will be made of bacteria." Not to
worry, says Sagan: Some obstacle always impedes this kind of
exponential growth. "The bugs run out of food, or they poison
each other, or they are shy about reproducing in public."
Carl Sagan曾經開玩笑地解釋這種現象，假設有一種細菌每15分鐘可以分裂
一次，亦即代表每一小時複製四次，一天可複製96次，雖然單一個細菌其重量
只有一兆分之一公克重，但是只要經過一天無止盡的無性生殖，其重量可能會比
一座山還重，經過兩天後，甚至會比太陽還重，要不了多久所有的宇宙都將由這
種細菌所組成，不過Sagan又說，大家不必擔心，上天一定會安排障礙來阻止
其倍數成長，有可能他會耗盡食物，或是毒死自己，或是有可能羞於在大庭廣眾
之下複製。
Even on bad days, Charlie Munger (Berkshire's Vice Chairman
and my partner) and I do not think of Berkshire as a bacterium.
Nor, to our unending sorrow, have we found a way to double its
net worth every 15 minutes. Furthermore, we are not the least bit
shy about reproducing - financially - in public. Nevertheless,
Sagan's observations apply. From Berkshire's present base of $4.9
billion in net worth, we will find it much more difficult to
average 15% annual growth in book value than we did to average
23.8% from the $22 million we began with.
即使是在最壞的情況下，查理孟格(Berkshire的副主席兼主要合夥人)，與我都
不認為Berkshire會像細菌一樣無止盡地成長，當然更不可能像細菌那樣找到每
15分鐘就能夠複製一次的方法，雖然我們不會像細菌那般羞於在公開場合進行
複製，不過Sagan的觀察還是對的，相較於剛開始的2,200萬，以Berkshire
目前的49億美元的淨值基礎，我們實在很難像過去那樣每年以15%以上的成長
率增加。
Taxes
租稅
Our 1989 gain of $1.5 billion was achieved after we took a
charge of about $712 million for income taxes. In addition,
Berkshire's share of the income taxes paid by its five major
investees totaled about $175 million.
事實上，1989年Berkshire 15億美元的增加淨值還是已扣除7.12億美元估計
應付所得稅後的淨額，此外這還不包含其五個主要被投資公司合計已繳1.75億
美元的所得稅。
Of this year's tax charge, about $172 million will be paid
currently; the remainder, $540 million, is deferred. Almost all
of the deferred portion relates to the 1989 increase in
unrealized profits in our common stock holdings. Against this
increase, we have reserved a 34% tax.
在今年的所得稅費用中，大約有1.72億美元是馬上要支付的，剩下的5.4億則
可以記帳遞延處理，大部分是由於1989年我們持有的股票未實現利益，以34%
的預估稅率計算出來的數字。
We also carry reserves at that rate against all unrealized
profits generated in 1987 and 1988. But, as we explained last
year, the unrealized gains we amassed before 1987 - about $1.2
billion - carry reserves booked at the 28% tax rate that then
prevailed.
另外我們也1987年及1988年的未實現資本利得依照前項稅率補提準備，但如
同去年解釋過的，我們在1987年所累積的未實現利益約12億美元仍依照當時
28%的稅率提列準備。
A new accounting rule is likely to be adopted that will
require companies to reserve against all gains at the current tax
rate, whatever it may be. With the rate at 34%, such a rule would
increase our deferred tax liability, and decrease our net worth,
by about $71 million - the result of raising the reserve on our
pre-1987 gain by six percentage points. Because the proposed rule
has sparked widespread controversy and its final form is unclear,
we have not yet made this change.
新的會計原則有可能會要求公司將所有的利得以現行的稅率估算(不管實際可能
會是多少)，若以34%來計(等於將稅率提高6個百分點)，這樣的規則可能會大
幅增加我們帳列遞延所得稅的數字，並使我們的帳面淨值減少約7,100萬美元，
由於新提出的規定引發相當大的爭議，最後的結果尚難定論，所以目前公司帳上
尚未做此反應。
As you can see from our balance sheet on page 27, we would
owe taxes of more than $1.1 billion were we to sell all of our
securities at year-end market values. Is this $1.1 billion
liability equal, or even similar, to a $1.1 billion liability
payable to a trade creditor 15 days after the end of the year?
Obviously not - despite the fact that both items have exactly the
same effect on audited net worth, reducing it by $1.1 billion.
大家可以從資產負債表上看到，若是年底我們一口氣將所有的有價證券按市價全
部出清，則我們要支付的所得稅將高達11億美元，但這11億的負債真的就跟
15天後要付給廠商的貨款，一樣或是相近嗎? 很顯然的並非如此，雖然在財務
報表上計算的淨值的方式都一樣，只是很簡單地減掉11億美元。
On the other hand, is this liability for deferred taxes a
meaningless accounting fiction because its payment can be
triggered only by the sale of stocks that, in very large part, we
have no intention of selling? Again, the answer is no.
從另一個角度來看，難道這項估計所得稅負債，會因為我們從來沒有意願要把股
票賣掉，所以政府課不到所得稅，就表示它不具重大的意義嗎? 答案很顯然也不
是。
In economic terms, the liability resembles an interest-free
loan from the U.S. Treasury that comes due only at our election
(unless, of course, Congress moves to tax gains before they are
realized). This "loan" is peculiar in other respects as well: It
can be used only to finance the ownership of the particular,
appreciated stocks and it fluctuates in size - daily as market
prices change and periodically if tax rates change. In effect,
this deferred tax liability is equivalent to a very large
transfer tax that is payable only if we elect to move from one
asset to another. Indeed, we sold some relatively small holdings
in 1989, incurring about $76 million of "transfer" tax on $224
million of gains.
就經濟實質而言，這種所得稅負債就好像是美國國庫借給我們的無息貸款，且到
期日由我們自己來決定，(當然除非國會把課稅時點提早到未實現時)，這種貸款
還有一項很奇怪的特點，它只能被用來購買某些特定漲價的股票，而且額度會隨
時市場價格來變動，有時也會因為稅率變動而改變，事實上這種遞延所得稅其實
有點類似於資產移轉時所要繳交的交易稅，事實上我們在1989年只做了一小部
份的變動，總共產生了2.24億的資本利得，因此發生了7,600萬的交易稅。
Because of the way the tax law works, the Rip Van Winkle
style of investing that we favor - if successful - has an
important mathematical edge over a more frenzied approach. Let's
look at an extreme comparison.
由於稅法運作的方式，如果情況許可的話，我們偏愛李伯大夢式的投資，因為較
之瘋狂短線進出的方法，它有一個很重要的利基點，讓我們舉一個很極端的例子
來做說明。
Imagine that Berkshire had only $1, which we put in a
security that doubled by yearend and was then sold. Imagine
further that we used the after-tax proceeds to repeat this
process in each of the next 19 years, scoring a double each time.
At the end of the 20 years, the 34% capital gains tax that we
would have paid on the profits from each sale would have
delivered about $13,000 to the government and we would be left
with about $25,250. Not bad. If, however, we made a single
fantastic investment that itself doubled 20 times during the 20
years, our dollar would grow to $1,048,576. Were we then to cash
out, we would pay a 34% tax of roughly $356,500 and be left with
about $692,000.
假設Berkshire只有1塊美金的投資，但它每年卻可以有一倍的報酬，假設我
們將賣掉後所得的資金，用同樣的方式再重複19年，結果20年下來，依照34%
的稅率總共貢獻給國庫13,000美元，而我們自己則可以拿到25,250美元，看
起來還不錯，然而要是我們簡單一點，只做一項不變的投資，但是它同樣可以賺
每年一倍，則最後的金額卻高達1,048,576美元，在扣除34% 356,500的所
得稅之後，實得約692,000美元。
The sole reason for this staggering difference in results
would be the timing of tax payments. Interestingly, the
government would gain from Scenario 2 in exactly the same 27:1
ratio as we - taking in taxes of $356,500 vs. $13,000 - though,
admittedly, it would have to wait for its money.
之所以會有如此大的差異唯一的理由就是所得稅支付的時點，有趣的是政府從後
面那種情況所抽的稅金還比前者高，當然政府必須等到最後才能拿到這筆稅金。
We have not, we should stress, adopted our strategy
favoring long-term investment commitments because of these
mathematics. Indeed, it is possible we could earn greater after-
tax returns by moving rather frequently from one investment to
another. Many years ago, that's exactly what Charlie and I did.
必須強調的是我們並不是因為這種簡單的算術就傾向採用長期投資的態度，沒錯
經常性的變動有可能會使我們的稅後報酬高一些，事實上在幾年之前，查理跟我
就是這樣在做的。
Now we would rather stay put, even if that means slightly
lower returns. Our reason is simple: We have found splendid
business relationships to be so rare and so enjoyable that we
want to retain all we develop. This decision is particularly
easy for us because we feel that these relationships will produce
good - though perhaps not optimal - financial results.
Considering that, we think it makes little sense for us to give
up time with people we know to be interesting and admirable for
time with others we do not know and who are likely to have human
qualities far closer to average. That would be akin to marrying
for money - a mistake under most circumstances, insanity if one
is already rich.
但現在我們覺得一動不如一靜，雖然這樣的投資報酬看起來可能會少一點，其中
的理由很簡單，我們已經找到相當難得的商業合作關係，並珍惜我們彼此間所發
展出來的情感，做這種決定對我們來說一點都不困難，因為我們相信這樣的關係
一定會讓我們有一個滿意的投資成果，雖然它可能不是最佳的。也因此我們覺得
實在沒有意義要捨棄原來我們熟悉欣賞的人，而把時間浪費在我們不認識且人格
可能會在水準以下的人身上，那不等於一個有錢人竟然還為了金錢而結婚，這未
免有些精神錯亂。
Sources of Reported Earnings
帳列盈餘的來源
The table below shows the major sources of Berkshire's
reported earnings. In this presentation, amortization of Goodwill
and other major purchase-price accounting adjustments are not
charged against the specific businesses to which they apply, but
are instead aggregated and shown separately. This procedure lets
you view the earnings of our businesses as they would have been
reported had we not purchased them. I've explained in past
reports why this form of presentation seems to us to be more
useful to investors and managers than one utilizing generally
accepted accounting principles (GAAP), which require purchase-
price adjustments to be made on a business-by-business basis. The
total net earnings we show in the table are, of course, identical
to the GAAP total in our audited financial statements.
下表顯示Berkshire帳列盈餘的主要來源，在這張表中商譽的攤銷數與購買法會
計調整數會從個別被投資公司分離出來，單獨加總列示，之所以這樣做是為了讓
旗下各事業的盈餘狀況，不因我們的投資而有所影響，過去我一再地強調我們認
為這樣的表達方式，較之一般公認會計原則要求以個別企業基礎做調整，不管是
對投資者或是管理者來說，更有幫助，當然最後損益加總的數字仍然會與經會計
師查核的數字一致。
Further information about these businesses is given in the
Business Segment section on pages 37-39, and in the Management's
Discussion section on pages 40-44. In these sections you also
will find our segment earnings reported on a GAAP basis. For
information on Wesco's businesses, I urge you to read Charlie
Munger's letter, which starts on page 54. In addition, we have
reprinted on page 71 Charlie's May 30, 1989 letter to the U. S.
League of Savings Institutions, which conveyed our disgust with
its policies and our consequent decision to resign.
年報中還有企業個別部門的資訊，有關Wesco公司的資訊，我強烈建議大家可
以看看查理孟格所寫的年報，裡頭包含查理在1989年5月寫給美國儲貸聯盟
的一封公開信，信中傳達對於其推行政策的不滿並做出辭去在其組織中的職位。
(000s omitted)
----------------------------------------------
Berkshire's Share
of Net Earnings
(after taxes and
Pre-Tax Earnings minority interests)
---------------------- ----------------------
1989 1988 1989 1988
---------- ---------- ---------- ----------
Operating Earnings:
Insurance Group:
Underwriting ............ $(24,400) $(11,081) $(12,259) $ (1,045)
Net Investment Income ... 243,599 231,250 213,642 197,779
Buffalo News .............. 46,047 42,429 27,771 25,462
Fechheimer ................ 12,621 14,152 6,789 7,720
Kirby ..................... 26,114 26,891 16,803 17,842
Nebraska Furniture Mart ... 17,070 18,439 8,441 9,099
Scott Fetzer
Manufacturing Group .... 33,165 28,542 19,996 17,640
See's Candies ............. 34,235 32,473 20,626 19,671
Wesco - other than Insurance 13,008 16,133 9,810 10,650
World Book ................ 25,583 27,890 16,372 18,021
Amortization of Goodwill .. (3,387) (2,806) (3,372) (2,806)
Other Purchase-Price
Accounting Charges ........ (5,740) (6,342) (6,668) (7,340)
Interest Expense* ......... (42,389) (35,613) (27,098) (23,212)
Shareholder-Designated
Contributions .......... (5,867) (4,966) (3,814) (3,217)
Other ..................... 23,755 41,059 12,863 27,177
---------- ---------- ---------- ----------
Operating Earnings .......... 393,414 418,450 299,902 313,441
Sales of Securities ......... 223,810 131,671 147,575 85,829
---------- ---------- ---------- ----------
Total Earnings - All Entities $617,224 $550,121 $447,477 $399,270
*Excludes interest expense of Scott Fetzer Financial Group and
Mutual Savings & Loan.
*不包含史考特飛茲與聯合儲貸的利息費用
We refer you also to pages 45-51, where we have rearranged
Berkshire's financial data into four segments. These correspond
to the way Charlie and I think about the business and should help
you calculate Berkshire's intrinsic value. Shown on these pages
are balance sheets and earnings statements for: (1) our
insurance operations, with their major investment positions
itemized; (2) our manufacturing, publishing and retailing
businesses, leaving aside certain non-operating assets and
purchase-price accounting adjustments; (3) our subsidiaries
engaged in finance-type operations, which are Mutual Savings and
Scott Fetzer Financial; and (4) an all-other category that
includes the non-operating assets (primarily marketable
securities) held by the companies in segment (2), all purchase
price accounting adjustments, and various assets and debts of the
Wesco and Berkshire parent companies.
在後面我會提到重新將Berkshire的部門分類為四大項，這是查理跟我認為可以
幫助大家計算本公司實質價值的最好方式，以下的資產負債表與盈餘表就是依此
分類表示(1)保險事業，並將主要投資部位歸類(2)製造、出版與零售事業，扣除
非本業資產與購買法的會計調整(3)金融業的子公司-諸如聯合儲貸與史考特飛
茲財務公司(4)其他項目，包含前述非營業資產(主要是有價證券投資)與購買法調
整，還有Wesco與Berkshire母公司一些其他的資產與負債。
If you combine the earnings and net worths of these four
segments, you will derive totals matching those shown on our GAAP
statements. However, I want to emphasize that this four-category
presentation does not fall within the purview of our auditors,
who in no way bless it.
如果你將這四個部門的盈餘與淨值加總，會得到與經會計師依公認會計原則查核
的數字一致，然而我還是必須強調這種表達方式並未經過會計師的檢視，我想他
寧可選擇不要看的好。
In addition to our reported earnings, we also benefit from
significant earnings of investees that standard accounting rules
do not permit us to report. On page 15, we list five major
investees from which we received dividends in 1989 of about $45
million, after taxes. However, our share of the retained earnings
of these investees totaled about $212 million last year, not
counting large capital gains realized by GEICO and Coca-Cola. If
this $212 million had been distributed to us, our own operating
earnings, after the payment of additional taxes, would have been
close to $500 million rather than the $300 million shown in the
table.
除了帳列盈餘數字之外，實際上我們受惠於會計原則不能認列的盈餘，後面我烈
示出五家主要被投資公司在1989年收到的稅後現金股利收入合計是4,500萬
美元，然而若依照投資比例我們可以分得的稅後盈餘卻高達2.12億美元，這還
不包含我們在GEICO與Coca-Cola身上所獲得的資本利得，而若將這應得的
2.12億盈餘分給我們，則在扣除應付的所得稅之後，公司帳列的盈餘可能會大
幅增加為5億美元，而不是現在的3億美元。
The question you must decide is whether these undistributed
earnings are as valuable to us as those we report. We believe
they are - and even think they may be more valuable. The reason
for this a-bird-in-the-bush-may-be-worth-two-in-the-hand
conclusion is that earnings retained by these investees will
be deployed by talented, owner-oriented managers who
sometimes have better uses for these funds in their own
businesses than we would have in ours. I would not make such a
generous assessment of most managements, but it is appropriate in
these cases.
你應該判斷的關鍵在於這些未分配的盈餘與我們帳上已經列示的盈餘同樣的珍
貴，甚至我們相信他們以後可能還更有價值，這一鳥在林更是兩鳥在手的道理，
就像是與其把盈餘交到我們手中，還不如留給我們信任有才幹的經理人繼續運用
發揮，通常我對一般的經理人不會有這麼高的評價，但以這幾家公司來說，的確
是實至名歸。
In our view, Berkshire's fundamental earning power is best
measured by a "look-through" approach, in which we append our
share of the operating earnings retained by our investees to our
own reported operating earnings, excluding capital gains in both
instances. For our intrinsic business value to grow at an average
of 15% per year, our "look-through" earnings must grow at about
the same pace. We'll need plenty of help from our present
investees, and also need to add a new one from time to time, in
order to reach this 15% goal.
就我們的觀點，Berkshire的基本獲利能力可以用直接法來衡量，也就是我們將
被投資公司真正應分給我們的盈餘加到帳列的營業利益之上，同時扣除我們在這
些投資已實現的資本利得，所以如果說我們想要讓企業的實質價值每年平均以
15%的速度成長，我們的直接盈餘也必須要以同等的速度增加，因此我們相當需
要現有的被投資公司給予我們更多的支持，同時也需要時時增加新進的成員才有
辦法達到這15%的目標。
Non-Insurance Operations
非保險營運
In the past, we have labeled our major manufacturing,
publishing and retail operations "The Sainted Seven." With our
acquisition of Borsheim's early in 1989, the challenge was to
find a new title both alliterative and appropriate. We failed:
Let's call the group "The Sainted Seven Plus One."
在過去我們將主要的製造、出版與零售業暱稱為七個聖徒，在1989年波仙珠寶
加入後，馬上面臨的一個問題就是要找到一個貼切又好聽的名詞，但到目前為止
我們還沒有想到，現在姑且將他們稱作為「七加一個聖徒」吧。
This divine assemblage - Borsheim's, The Buffalo News,
Fechheimer Bros., Kirby, Nebraska Furniture Mart, Scott Fetzer
Manufacturing Group, See's Candies, World Book - is a collection
of businesses with economic characteristics that range from good
to superb. Its managers range from superb to superb.
這神聖的組合-波仙珠寶、水牛城日報、費區海默、寇比吸塵器、內布拉斯加傢
具、史考特費茲、喜斯糖果與世界百科全書等公司，可以說是模範企業的絕佳組
合，他們的管理人也可以說是好的不能再好了。
Most of these managers have no need to work for a living;
they show up at the ballpark because they like to hit home runs.
And that's exactly what they do. Their combined financial
statements (including those of some smaller operations), shown on
page 49, illustrate just how outstanding their performance is. On
an historical accounting basis, after-tax earnings of these
operations were 57% on average equity capital. Moreover, this
return was achieved with no net leverage: Cash equivalents have
matched funded debt. When I call off the names of our managers -
the Blumkin, Friedman and Heldman families, Chuck Huggins, Stan
Lipsey, and Ralph Schey - I feel the same glow that Miller
Huggins must have experienced when he announced the lineup of his
1927 New York Yankees.
大部分的管理人根本就不需要為了討生活而工作，他們參加球隊的原因只是為了
要擊出全壘打，事實上這正是他們常常有的表現，他們合併的財務報表(加上一
些較小的事業)，顯示他們的表現是如此的優異，以歷史投資成本做基準，他們
現在每年的稅後盈餘高達平均股東權益的57%，更甚者，他們並不靠舉債，帳
上所擁有的現金就足以清償所有的借款，當我唸到這些管理人的名字- the
Blumkin, Friedman, Heldman families, Chuck Huggins, Stan Lipsey 與
Ralph Schey，這感覺就好像是名教練Miller Huggins 在宣佈1927紐約洋基
隊的先發陣容一樣。
Let's take a look, business by business:
現在讓我們逐一來檢視。
o In its first year with Berkshire, Borsheim's met all
expectations. Sales rose significantly and are now considerably
better than twice what they were four years ago when the company
moved to its present location. In the six years prior to the
move, sales had also doubled. Ike Friedman, Borsheim's managing
genius - and I mean that - has only one speed: fast-forward.
在波仙珠寶加入Berkshire的第一年，它達到我們所有的預期目標，營業額大幅
成長，較四年前剛搬到現址的時候要好上一倍，事實上在搬來之的六年前，它的
業績早已成長了一倍，Ike Friedman 波仙珠寶的管理天才，只有一種速度，那
就是全速前進！
If you haven't been there, you've never seen a jewelry store
like Borsheim's. Because of the huge volume it does at one
location, the store can maintain an enormous selection across all
price ranges. For the same reason, it can hold its expense ratio
to about one-third that prevailing at jewelry stores offering
comparable merchandise. The store's tight control of expenses,
accompanied by its unusual buying power, enable it to offer
prices far lower than those of other jewelers. These prices, in
turn, generate even more volume, and so the circle goes 'round
and 'round. The end result is store traffic as high as 4,000
people on seasonally-busy days.
如果你還沒有到過那裡，你一定沒有看過有珠寶店像波仙那樣，由於銷量非常
大，所以在那裡你可以看到各式各樣、各種價格的種類，同樣的理由，它的營業
費用開銷大概只有一般同類型珠寶店的三分之一，對於費用的嚴格控管，加上優
異的採購能力，使得它所販售的商品要比其他珠寶店要來的便宜許多，而便宜的
價格又吸引更多的顧客上門，良性循環的結果，使得該店在忙季的單日人潮流量
高達四千人。
Ike Friedman is not only a superb businessman and a great
showman but also a man of integrity. We bought the business
without an audit, and all of our surprises have been on the plus
side. "If you don't know jewelry, know your jeweler" makes sense
whether you are buying the whole business or a tiny diamond.
Ike Friedman 不但是個優秀的商人、表演者，更是品格高尚的人，買下這家店
時，我們沒有查帳，事後所有的驚奇完全都是正面的，有句話說不懂珠寶沒有關
係，但你一定要有認識的珠寶商，這句話真的好有道理，不管是你要買一顆小小
的鑽石或是要買下一整家店都一樣。
A story will illustrate why I enjoy Ike so much: Every two
years I'm part of an informal group that gathers to have fun and
explore a few subjects. Last September, meeting at Bishop's Lodge
in Santa Fe, we asked Ike, his wife Roz, and his son Alan to come
by and educate us on jewels and the jewelry business.
有一段故事可以說明為何我個人如此喜愛Ike，每兩年我都會參加一個非正式的
聚會，大家一起同樂並探索新事物，去年九月，在聖塔菲與主教會面，我邀請Ike
跟他的太太與兒子為大家講解珠寶。
Ike decided to dazzle the group, so he brought from Omaha
about $20 million of particularly fancy merchandise. I was
somewhat apprehensive - Bishop's Lodge is no Fort Knox - and I
mentioned my concern to Ike at our opening party the evening
before his presentation. Ike took me aside. "See that safe?" he
said. "This afternoon we changed the combination and now even the
hotel management doesn't know what it is." I breathed easier. Ike
went on: "See those two big fellows with guns on their hips?
They'll be guarding the safe all night." I now was ready to
rejoin the party. But Ike leaned closer: "And besides, Warren,"
he confided, "the jewels aren't in the safe."
Ike為了加深大家的印象，所以特地從奧瑪哈帶了總值超過2,000萬美元的各式
珠寶，當時我個人有點擔心，因為主教的住所並非像福克斯堡那般堅固，所以當
晚在活動開始之前，我特別向Ike表達個人的關切，Ike把我拉到一旁說，看到
那保險箱沒?? 下午時我們早已掉過包，所以根本沒有人可能分得清真或假，聽
到這話，我放心多了，Ike接著又說，看到旁邊那兩個腰配槍枝的彪形大漢沒?? 他
們會整晚守護著這只保險箱，正當我舒口氣準備會到宴會中時，Ike小聲說到更
重要的，真正的珠寶並不在保險箱裡！
How can we miss with a fellow like that - particularly when
he comes equipped with a talented and energetic family, Alan,
Marvin Cohn, and Don Yale.
我們怎麼能夠錯過這樣一號人物呢?? 尤其是當他背後還有一個兼具才能與活力
的家族。
o At See's Candies we had an 8% increase in pounds sold, even
though 1988 was itself a record year. Included in the 1989
performance were excellent same-store poundage gains, our first
in many years.
喜斯糖果去年糖果的銷售磅數再創新高，比前一年度又增加了8%，而且單店的
平均銷售磅數經過好幾年來，首次呈現正成長。
Advertising played an important role in this outstanding
performance. We increased total advertising expenditures from $4
million to $5 million and also got copy from our agency, Hal
Riney & Partners, Inc., that was 100% on the money in conveying
the qualities that make See's special.
廣告在這家傑出的企業中扮演著很重要的角色，去年我們的廣告預算從原先的
400萬增加到500萬美元，透過我們的廣告代理商Hal Riney 將錢百分之百花
在傳達喜斯糖果之所以能夠如此特別的品質之上。
In our media businesses, such as the Buffalo News, we sell
advertising. In other businesses, such as See's, we are buyers.
When we buy, we practice exactly what we preach when we sell. At
See's, we more than tripled our expenditures on newspaper
advertising last year, to the highest percentage of sales that I
can remember. The payoff was terrific, and we thank both Hal
Riney and the power of well-directed newspaper advertising for
this result.
在我們的媒體事業，像是水牛城報紙，我們販售廣告，在其他的事業，像是喜斯
糖果，我們是廣告客戶，反而變成買主，然而當我們買廣告時，我們做事的方式
跟我們當初在賣廣告的訴求是一致的，去年喜斯糖果在報紙廣告上的花費增加了
有三倍之多，是我印象之中佔營業額的最高比例，不過所得到的回報卻更是驚人，對於能有這樣的成績，我們相當感謝Hal Riney與報紙的宣傳效果。
See's splendid performances have become routine. But there
is nothing routine about the management of Chuck Huggins: His
daily involvement with all aspects of production and sales
imparts a quality-and-service message to the thousands of
employees we need to produce and distribute over 27 million
pounds of candy annually. In a company with 225 shops and a
massive mail order and phone business, it is no small trick to
run things so that virtually every customer leaves happy. Chuck
makes it look easy.
喜斯傑出的表現好像變得很自然，但Chuck Huggins的管理卻絕對不是僥倖，
每天他都全心全意專注於生產與銷售各個環節，將品質與服務的觀念傳達給公司
上上下下幾千位員工，每年銷售超過2,700萬磅的糖果，在一家擁有225家店
面，再加上一個郵購與電話中心，要讓每個客戶都能夠滿心歡喜的離去，實在不
是一件簡單的事，不過這差事到了Chuck的手上，總是讓人感覺輕鬆自在。
o The Nebraska Furniture Mart had record sales and excellent
earnings in 1989, but there was one sad note. Mrs. B - Rose
Blumkin, who started the company 52 years ago with $500 - quit in
May, after disagreeing with other members of the Blumkin
family/management about the remodeling and operation of the
carpet department.
內布拉斯加傢具店的業績與盈餘在1989年又創新高，但是這伴隨著一項壞消
息，52年前以500美元創立這家店的B太太，由於與家族其他成員在內部改裝
與地毯部門的營運上意見不合，在五月決定離職。
Mrs. B probably has made more smart business decisions than
any living American, but in this particular case I believe the
other members of the family were entirely correct: Over the past
three years, while the store's other departments increased sales
by 24%, carpet sales declined by 17% (but not because of any lack
of sales ability by Mrs. B, who has always personally sold far
more merchandise than any other salesperson in the store).
B太太可能是現存美國人中最聰明的生意人，但在這件事上我卻必須站在家族其
他成員的這一邊，過去三年來，當店內其他部門營收平均成長24%之時，地毯
銷售卻減少17%，(這並不是代表B太太的銷售技巧退步，因為她個人賣的商品
絕對比店內其他營業員要多的多)。
You will be pleased to know that Mrs. B continues to make
Horatio Alger's heroes look like victims of tired blood. At age
96 she has started a new business selling - what else? - carpet
and furniture. And as always, she works seven days a week.
大家應該很高興B太太讓Horatio Alger筆下的英雄看起來像是浴血奮戰後的失
敗者，以96歲的高齡，她卻執意再另創新事業，而且還是一樣，賣傢具跟地毯，
同樣地，每個禮拜工作七天。
At the Mart Louie, Ron, and Irv Blumkin continue to propel
what is by far the largest and most successful home furnishings
store in the country. They are outstanding merchants, outstanding
managers, and a joy to be associated with. One reading on their
acumen: In the fourth quarter of 1989, the carpet department
registered a 75.3% consumer share in the Omaha market, up from
67.7% a year earlier and over six times that of its nearest
competitor.
在原來的傢具店，B太太的子孫們還是繼續支撐這家全美最大也最成功的傢具事
業，他們實在是相當優秀的生意人，管理者，跟他們一起相處實在是很愉快的一
件事。有一件事可以顯示他們的聰明才智，在1989年第四季，地毯部門在奧瑪
哈地區的市場佔有率從前一年度的67.7%增加到75.3%，相當於第二名競爭者
的六倍。
NFM and Borsheim's follow precisely the same formula for
success: (1) unparalleled depth and breadth of merchandise at one
location; (2) the lowest operating costs in the business; (3) the
shrewdest of buying, made possible in part by the huge volumes
purchased; (4) gross margins, and therefore prices, far below
competitors'; and (5) friendly personalized service with family
members on hand at all times.
NFM與波仙遵循的是相同的成功模式(1)商品種類齊全、應有盡有(2)營運成本極
低(3)大量採購進貨成本低(4)毛利高但售價因銷量壓低(5)親切的服務與家族式
的管理。
Another plug for newspapers: NFM increased its linage in the
local paper by over 20% in 1989 - off a record 1988 - and remains
the paper's largest ROP advertiser by far. (ROP advertising is
the kind printed in the paper, as opposed to that in preprinted
inserts.) To my knowledge, Omaha is the only city in which a home
furnishings store is the advertising leader. Many retailers cut
space purchases in 1989; our experience at See's and NFM would
indicate they made a major mistake.
另外提供一則新聞插播，NFM在1989年增加20%的報紙廣告量，依舊是當地
報紙的最大廣告客戶，(ROP是指印在報紙上的廣告，與事先印好的夾報有別)，
就我所知，奧瑪哈是唯一一個以傢具業者為最大報紙廣告客戶的地區，許多客戶
在1989年都大砍廣告量，但是就我們在喜斯糖果與NFM的經驗來說，這實在
是個天大的錯誤。
o The Buffalo News continued to star in 1989 in three
important ways: First, among major metropolitan papers, both
daily and Sunday, the News is number one in household penetration
- the percentage of local households that purchase it each day.
Second, in "news hole" - the portion of the paper devoted to news
- the paper stood at 50.1% in 1989 vs. 49.5% in 1988, a level
again making it more news-rich than any comparable American
paper. Third, in a year that saw profits slip at many major
papers, the News set its seventh consecutive profit record.
水牛城日報在1989年有三點特別值得一提，首先在所有主要的都會報紙中(不
管是平時或是假日)，水牛城的家庭滲透率是最高的(即當地家庭每天訂購報紙的
戶數)，第二是新聞比率(報紙所有版面中，新聞所佔的比率)，相較於1988年的
49.5%，1989年則是50.1%，這比率代表水牛城報紙的新聞內容要比其他同類
型的報紙要來的豐富許多，第三在同業獲利頻頻下滑之際，水牛城的獲利連續第
七年成長。
To some extent, these three factors are related, though
obviously a high-percentage news hole, by itself, reduces profits
significantly. A large and intelligently-utilized news hole,
however, attracts a wide spectrum of readers and thereby boosts
penetration. High penetration, in turn, makes a newspaper
particularly valuable to retailers since it allows them to talk
to the entire community through a single "megaphone." A low-
penetration paper is a far less compelling purchase for many
advertisers and will eventually suffer in both ad rates and
profits.
某種程度而言，這三個因素是相關的，雖然很明顯的高新聞比率會大幅減少獲
利，一個精彩豐富的新聞能夠吸引廣大的讀者，從而增加滲透率，而高的滲透率
回頭來又會使得報紙成為廣告商喜愛的對象，因為這等於讓他們可以透過一個單
一的管道，對整個社區進行宣傳，相對的一家滲透率低的報紙對於廣告商的吸引
力就大大的降低，到最後一定會使得廣告費收入與獲利節節下滑。
It should be emphasized that our excellent penetration is
neither an accident nor automatic. The population of Erie County,
home territory of the News, has been falling - from 1,113,000 in
1970 to 1,015,000 in 1980 to an estimated 966,000 in 1988.
Circulation figures tell a different story. In 1975, shortly
before we started our Sunday edition, the Courier-Express, a
long-established Buffalo paper, was selling 207,500 Sunday copies
in Erie County. Last year - with population at least 5% lower -
the News sold an average of 292,700 copies. I believe that in no
other major Sunday market has there been anything close to that
increase in penetration.
必須強調的是我們的滲透率並不是個意外抑或是自然而然的一件事，以水牛城報
紙的大本營Erie市來說，當地的人口數從1970年的111萬人一路減少到1980
年的101萬，乃至於1988年的96.6萬人，但報紙發行量的變化卻完全相反，
1975年在我們剛準備開始發行週日版之前，Courier-Express一家水牛城當地
相當悠久的報紙每週的發行量約為20萬份，去年在總人口比當初還少5%的情
況下，水牛城的發行份數卻將近有30萬份，我相信在美國沒有其他地區能夠像
我們這樣成長的。
When this kind of gain is made - and when a paper attains an
unequaled degree of acceptance in its home town - someone is
doing something right. In this case major credit clearly belongs
to Murray Light, our long-time editor who daily creates an
informative, useful, and interesting product. Credit should go
also to the Circulation and Production Departments: A paper that
is frequently late, because of production problems or
distribution weaknesses, will lose customers, no matter how
strong its editorial content.
當我們能夠如此成長同時又得到家鄉父老如此的支持，一定有人居功厥偉，我想
總編輯Murray Light應該是當之無愧，是他日復一日創造出如此發人深省、有
用且有趣的產品，當然發行與生產部門也一樣功不可沒，一家報紙若是因為印刷
或配送問題而時常誤點，不管他的內容有多精彩豐富，一定會影響客戶訂閱的意
願的。
Stan Lipsey, publisher of the News, has produced profits
fully up to the strength of our product. I believe Stan's
managerial skills deliver at least five extra percentage points
in profit margin compared to the earnings that would be achieved
by an average manager given the same circumstances. That is an
amazing performance, and one that could only be produced by a
talented manager who knows - and cares - about every nut and bolt
of the business.
Stan Lipsey報紙的發行人，利用獲利來加強我們的產品競爭力，我相信Stan
管理能力至少讓我們報紙的營業利益增加五個百分點以上，這真是令人讚嘆的表
現，這只有完全熟悉企業大大小小事物的優秀經理人才有辦法做到這樣的成績。
Stan's knowledge and talents, it should be emphasized,
extend to the editorial product. His early years in the business
were spent on the news side and he played a key role in
developing and editing a series of stories that in 1972 won a
Pulitzer Prize for the Sun Newspaper of Omaha. Stan and I have
worked together for over 20 years, through some bad times as well
as good, and I could not ask for a better partner.
Stan的知識與才能也延伸到編輯出版之上，早期他個人的生涯多花在新聞採訪
之上，曾經花了相當多的時間報導一系列的故事，並在1972年為奧瑪哈太陽報
贏得新聞界的最高榮譽-普立茲獎，Stan與我已經共事長達20年之久，一起經
歷各種風雨、患難與共，實在很難再找到像他這麼好的夥伴。
o At Fechheimer, the Heldman clan - Bob, George, Gary,
Roger and Fred - continue their extraordinary performance. Profits
in 1989 were down somewhat because of problems the business
experienced in integrating a major 1988 acquisition. These
problems will be ironed out in time. Meanwhile, return on invested
capital at Fechheimer remains splendid.
在費區海默，Heldman家族繼續他們不凡的表現，1989年的獲利因為1988
年的一件大的購併案出了點問題而略受影響，所幸問題及時獲得解決，所以費區
海默的投資報酬還是相當不錯。
Like all of our managers, the Heldmans have an exceptional
command of the details of their business. At last year's annual
meeting I mentioned that when a prisoner enters San Quentin, Bob
and George probably know his shirt size. That's only a slight
exaggeration: No matter what area of the country is being
discussed, they know exactly what is going on with major
customers and with the competition.
像我們其他的管理人，Heldmans家族對於其事業的了解鉅細靡遺，去年的年度
股東會時我曾經半開玩笑的說，只要犯人一進到監獄，Bob就可以馬上只到他的
身材Size是多少，不管你跟他們提到全美那一個地區，他們都相當清楚當地的
市場與競爭對手的狀況。
Though we purchased Fechheimer four years ago, Charlie and I
have never visited any of its plants or the home office in
Cincinnati. We're much like the lonesome Maytag repairman: The
Heldman managerial product is so good that a service call is
never needed.
雖然我們是在四年之前買下費區海默的，但查理跟我卻從來沒有去參觀過他們的
工廠或是位在辛辛那提的總部，我們有點像是無聊的Maytag維修工人，由
Heldman所管理的東西因為太好根本不會壞，以致於我們從來就沒有接過叫修
的電話。
o Ralph Schey continues to do a superb job in managing
our largest group - World Book, Kirby, and the Scott Fetzer
Manufacturing Companies. Aggregate earnings of these businesses
have increased every year since our purchase and returns on
invested capital continue to be exceptional. Ralph is running an
enterprise large enough, were it standing alone, to be on the
Fortune 500. And he's running it in a fashion that would put him
high in the top decile, measured by return on equity.
Ralph Schey還是繼續發揮他的長才，為我們管理-世界百科全書、寇比吸塵器
與史考特飛茲所組成的大集團，自從我們買下這些企業以來，他們的總盈餘年年
都成長，投資的報酬相當可觀，Ralph所領導的企業集團真是夠大，單單他旗下
事業加總起來就足以名列財星五百大，而若以投資報酬的角度來看，大概可以讓
他排在前十名。
For some years, World Book has operated out of a single
location in Chicago's Merchandise Mart. Anticipating the imminent
expiration of its lease, the business is now decentralizing into
four locations. The expenses of this transition are significant;
nevertheless profits in 1989 held up well. It will be another
year before costs of the move are fully behind us.
有好幾年，世界百科全書只在芝加哥的一個商業廣場集中營運，有鑑於租約即將
到期，未來它將分散成四個據點，搬遷的費用相當的龐大，不過盡管如此1989
年的獲利還是會增加，這項搬遷的費用要經過好幾年的時間才會慢慢地消化吸收
掉。
Kirby's business was particularly strong last year,
featuring large gains in export sales. International business has
more than doubled in the last two years and quintupled in the
past four; its share of unit sales has risen from 5% to 20%. Our
largest capital expenditures in 1989 were at Kirby, in
preparation for a major model change in 1990.
寇比的生意去年特別的旺，尤其是在外銷方面的成長驚人，近兩年來的業績已成
長了一倍，累計四年來成長了四倍，市場佔有率從5%增加到20%，我們1989
年最大的資本支出就花在寇比身上，預計在1990年會有一次大改款。
Ralph's operations contribute about 40% of the total
earnings of the non-insurance group whose results are shown on
page 49. When we bought Scott Fetzer at the start of 1986, our
acquisition of Ralph as a manager was fully as important as our
acquisition of the businesses. In addition to generating
extraordinary earnings, Ralph also manages capital extremely
well. These abilities have produced funds for Berkshire that, in
turn, have allowed us to make many other profitable commitments.
Ralph的事業部門所貢獻的盈餘大概佔非保險部門的四成左右，當我們在1986
年初買下史考特飛茲時，能將Ralph一併挖過來當經理人，跟我們當初買下這
家公司一樣地重要，除了貢獻可觀的盈餘之外，Ralph管理資金也是一把罩。這
些能力使得Berkshire能夠獲得源源不絕的資金，讓我們回頭可以再做更多更好
的投資。
And that completes our answer to the 1927 Yankees.
以上就是我們的職棒先發陣容!
Insurance Operations
保險事業營運
Shown below is an updated version of our usual table
presenting key figures for the property-casualty insurance
industry:
下表是產物意外險業的幾項重要的指數
Statutory
Yearly Change Combined Ratio Yearly Change Inflation Rate
in Premiums After Policyholder in Incurred Measured by
Written (%) Dividends Losses (%) GNP Deflator (%) ------------- ------------------ ------------- ----------------
1981 3.8 106.0 6.5 9.6
1982 3.7 109.6 8.4 6.5
1983 5.0 112.0 6.8 3.8
1984 8.5 118.0 16.9 3.8
1985 22.1 116.3 16.1 3.0
1986 22.2 108.0 13.5 2.6
1987 9.4 104.6 7.8 3.1
1988 4.4 105.4 5.5 3.3
1989 (Est.) 2.1 110.4 8.7 4.2
Source: A.M. Best Co.
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. When the investment income that an insurer
earns from holding policyholders' funds ("the float") is taken
into account, a combined ratio in the 107-111 range typically
produces an overall breakeven result, exclusive of earnings on
the funds provided by shareholders.
綜合比率代表保險的總成本(理賠損失加上費用)佔保費收入的比例，比率在100
以下代表有承保的損失，在100以上則代表有承保的獲利綜合比率代表的是保
險的總成本(損失加上費用)佔保費收入的比率，100以下代表會有承銷利益，100
以上代表會有承銷損失，若把持有保費收入浮存金(扣除股東權益部份所產生的
盈餘)所產生的投資收益列入考量，損益兩平的範圍大概是在107-111之間。
For the reasons laid out in previous reports, we expect the
industry's incurred losses to grow by about 10% annually, even in
years when general inflation runs considerably lower. (Actually,
over the last 25 years, incurred losses have grown at a still
faster rate, 11%.) If premium growth meanwhile materially lags
that 10% rate, underwriting losses will mount, though the
industry's tendency to underreserve when business turns bad may
obscure their size for a time.
基於前幾次年報所說明的理由，即使是通貨膨脹在這幾年來相對溫和，我們預期
保險業每年損失增加的比率約在10%左右，若是保費收入成長沒有到達10%以
上，損失一定會增加，(事實上過去25年以來，理賠損失係以11%的速度在成
長)，雖然保險公司在景氣不好時，會習慣性地將損失暫時隱藏起來。
Last year we said the climb in the combined ratio was
"almost certain to continue - and probably will accelerate - for
at least two more years." This year we will not predict
acceleration, but otherwise must repeat last year's forecast.
Premium growth is running far below the 10% required annually.
Remember also that a 10% rate would only stabilize the combined
ratio, not bring it down.
去年我們曾說若綜合比率八成會繼續上升，甚至在未來兩年內還會加速，今年我
們不再做加速的預期，不然的話還會再重複去年的預測，保費收入成長的幅度遠
低於每年最低10%成長的要求，而且大家要記住，10%只表示能抑止綜合比率
上升的情況，卻不能使它下降。
The increase in the combined ratio in 1989 was a little more
than we had expected because catastrophes (led by Hurricane Hugo)
were unusually severe. These abnormalities probably accounted for
about two points of the increase. If 1990 is more of a "normal"
year, the combined ratio should rise only minimally from the
catastrophe-swollen base of 1989. In 1991, though, the ratio is
apt to climb by a greater degree.
1989年的綜合比率增加的幅度略高於我們的預期，原因在於意外災害(主要是
Hugo颶風)特別嚴重，這部份造成的影響大約佔了2個百分點，假若1990年
能夠回到正常情況，相較於1989年略微膨脹的基礎，綜合比率可能只會增加一
點點，然後到了1991年可能又會提高增加的幅度。
Commentators frequently discuss the "underwriting cycle" and
speculate about its next turn. If that term is used to connote
rhythmic qualities, it is in our view a misnomer that leads to
faulty thinking about the industry's fundamental economics.
產業評論家常常會討論到承保循環並預測它下一次反轉的時點，若那個名詞是用
來暗示有節奏性的本質，則我們認為那他們就有點張冠李戴的把這個產業情況搞
錯了。
The term was appropriate some decades ago when the industry
and regulators cooperated to conduct the business in cartel
fashion. At that time, the combined ratio fluctuated
rhythmically for two reasons, both related to lags. First, data
from the past were analyzed and then used to set new "corrected"
rates, which were subsequently put into effect by virtually all
insurers. Second, the fact that almost all policies were then
issued for a one-to three-year term - which meant that it took a
considerable time for mispriced policies to expire - delayed the
impact of new rates on revenues. These two lagged responses made
combined ratios behave much like alternating current. Meanwhile,
the absence of significant price competition guaranteed that
industry profits, averaged out over the cycle, would be
satisfactory.
這個名詞在幾十年前當產業界與政府單位通力合作維持一個類似卡特爾組織時
或許還適用，在那個年代，綜合比率只因兩個原因上下變動，兩者都具有遞延性，
第一是過去的資訊會被分析然而據以訂定新的費率，一體適用於所有的保險業者
之上；第二所有的保單通常是一次以三年為期，這代表著一張有問題的保單通常
要花三年才能解決，所以新費率的實施影響有其遞延性，這兩個因素使得綜合比
率的變化有脈絡可循，同時沒有價格的競爭通常就保證可以有穩定的獲利，意味
著整個循環下來可以獲致滿意的報酬。
The cartel period is long gone. Now the industry has
hundreds of participants selling a commodity-like product at
independently-established prices. Such a configuration - whether
the product being sold is steel or insurance policies - is
certain to cause subnormal profitability in all circumstances but
one: a shortage of usable capacity. Just how often these periods
occur and how long they last determines the average profitability
of the industry in question.
不過卡特爾的年代早已過去，現在的產業有幾百家公司在銷售同一種商品，價格
各自獨立，在這種情況下，不管所賣的商品是鋼鐵或是保單，除了產能短缺的情
況之外，整體同業的獲利一定很可憐，不過卻須視所處產業的獲利情況來決定短
缺情況的發生時點與期間長短。
In most industries, capacity is described in physical terms.
In the insurance world, however, capacity is customarily
described in financial terms; that is, it's considered
appropriate for a company to write no more than X dollars of
business if it has Y dollars of net worth. In practice, however,
constraints of this sort have proven ineffective. Regulators,
insurance brokers, and customers are all slow to discipline
companies that strain their resources. They also acquiesce when
companies grossly overstate their true capital. Hence, a company
can write a great deal of business with very little capital if it
is so inclined. At bottom, therefore, the amount of industry
capacity at any particular moment primarily depends on the mental
state of insurance managers.
在大部分的產業，產能是以具體的事物來呈現，不過在保險的世界裡，產能所代
表的卻是指財務數字，亦即假設一家公司的淨值有Y，那麼他可以承接的保單大
概就只能有X，就實務而言，做這樣的限制其實效果相當有限，主管機關、保險
掮客與客戶對於其節制背後的保險公司的反應都很慢，而且就算真正的資本有被
誇大的情況，他們也給予姑息，因此一家資本額不大的保險公司若他們願意，照
樣可以接下一大堆保單，因此整個保險業的供給能量，主要還是視保險公司經理
人本身的心態而定。
All this understood, it is not very difficult to
prognosticate the industry's profits. Good profits will be
realized only when there is a shortage of capacity. Shortages
will occur only when insurers are frightened. That happens rarely
- and most assuredly is not happening now.
在了解內情之後，大家不難預知這個產業未來的獲利情況，獲利要好只有當供給
短缺時才有可能發生，而供給短缺只有當保險業者感到害怕時才有可能發生，而
偏偏這種情況又很少見，且可以確定短期之內不會出現。
Some analysts have argued that the more onerous taxes
recently imposed on the insurance industry and 1989's
catastrophes - Hurricane Hugo and the California earthquake -
will cause prices to strengthen significantly. We disagree. These
adversities have not destroyed the eagerness of insurers to write
business at present prices. Therefore, premium volume won't grow
by 10% in 1990, which means the negative underwriting trend will
not reverse.
有些分析師認為最近剛實施的保險業新稅法過於繁重，同時加上Hugo颶風與加
州的地震，將會是保險費率大幅提高，我們並不認同這樣的看法，因為這些負面
的因素並不會迫使同業不以現在的價格接受保單，因此1990年的保費收入應該
無法成長10%以上，也就是說整體的承保績效可能還會繼續惡化。
The industry will meantime say it needs higher prices to
achieve profitability matching that of the average American
business. Of course it does. So does the steel business. But
needs and desires have nothing to do with the long-term
profitability of industries. Instead, economic fundamentals
determine the outcome. Insurance profitability will improve only
when virtually all insurers are turning away business despite
higher prices. And we're a long way from that point.
業者同時也會宣稱保險業需要調高價格才能維持一般美國企業的獲利水平，當然
事實確是如此，鋼鐵業也一樣，但需要與想要與產業長期的獲利並無絕對相關，
反而是經濟實質現況才是決定結果的關鍵因素，保險業的獲利要改進，只有靠所
有業者通力合作，除非價格合理否則就不接生意，但現在離那樣的情況還很遠。
Berkshire's premium volume may drop to $150 million or so in
1990 (from a high of $1 billion in 1986), partly because our
traditional business continues to shrink and partly because the
contract under which we received 7% of the business of Fireman's
Fund expired last August. Whatever the size of the drop, it will
not disturb us. We have no interest in writing insurance that
carries a mathematical expectation of loss; we experience enough
disappointments doing transactions we believe to carry an
expectation of profit.
Berkshire 1990年的保費收入可能會降至1.5億美元左右，(相較於1986年的
10億美元高點)，一方面是因為我們傳統的業務持續在萎縮，一方面是消防人員
退休基金這項業務在去年八月已到期，但不管業務量減少多少，一點都不影響我
們，我們完全沒有興趣去接那種一看就會賠錢的保單，光是那些看起來有賺頭的
生意就夠我們受的了。
However, our appetite for appropriately-priced business is
ample, as one tale from 1989 will tell. It concerns "CAT covers,"
which are reinsurance contracts that primary insurance companies
(and also reinsurers themselves) buy to protect themselves
against a single catastrophe, such as a tornado or hurricane,
that produces losses from a large number of policies. In these
contracts, the primary insurer might retain the loss from a
single event up to a maximum of, say, $10 million, buying various
layers of reinsurance above that level. When losses exceed the
retained amount, the reinsurer typically pays 95% of the excess
up to its contractual limit, with the primary insurer paying the
remainder. (By requiring the primary insurer to keep 5% of each
layer, the reinsurer leaves him with a financial stake in each
loss settlement and guards against his throwing away the
reinsurer's money.)
然而我們對於價格合理的生意胃口卻很足夠，1989年有一件事可以說明，那就
是CAT防護，也就是一般保險公司(也包含再保公司本身)都會向再保公司簽約
買下再保合約，來免於承擔像是龍捲風或是颶風等單一意外事件所可能引發鉅額
損失的風險，在這些再保合約中，原始的保險公司可能會保留一個單一的損失上
限，例如1,000萬美金，然後在此之上買進好幾層的再保險，當損失超過自留
的部份時，再保公司依規定就要支付超過的部份，最高比例可達95%，(之所以
要求保險公司本身每層保留5%，是為了讓保險公司與再保公司站在同一陣線，
避免保險公司慷再保公司之凱)。
CAT covers are usually one-year policies that also provide
for one automatic reinstatement, which requires a primary insurer
whose coverage has been exhausted by a catastrophe to buy a
second cover for the balance of the year in question by paying
another premium. This provision protects the primary company from
being "bare" for even a brief period after a first catastrophic
event. The duration of "an event" is usually limited by contract
to any span of 72 hours designated by the primary company. Under
this definition, a wide-spread storm, causing damage for three
days, will be classified as a single event if it arises from a
single climatic cause. If the storm lasts four days, however, the
primary company will file a claim carving out the 72 consecutive
hours during which it suffered the greatest damage. Losses that
occurred outside that period will be treated as arising from a
separate event.
CAT防護的保單通常是一年期，一般可以自動延長一年，這樣的條款主要是保
護保險公司避免因為重大災害發生後，投保的空窗期，事件發生的持續期間通常
由合約限定在72小時以內，在這種定義之下，一場持續三天的大風暴所造成的
損害，可被歸類為單一事件。要是大風暴持續四天以上，則保險公司可以切割出
其受害最慘重的72小時，超過的部份則必須視為另一個獨立的事件。
In 1989, two unusual things happened. First, Hurricane Hugo
generated $4 billion or more of insured loss, at a pace, however,
that caused the vast damage in the Carolinas to occur slightly
more than 72 hours after the equally severe damage in the
Caribbean. Second, the California earthquake hit within weeks,
causing insured damage that was difficult to estimate, even well
after the event. Slammed by these two - or possibly three - major
catastrophes, some primary insurers, and also many reinsurers
that had themselves bought CAT protection, either used up their
automatic second cover or became uncertain as to whether they had
done so.
1989年有兩件特殊的事件發生，第一Hugo颶風造成40億美元的損失，不過
之後不久72小時，又在加勒比海發生相同規模的災害；第二加州大地震在幾個
禮拜內又接連發生，造成難以估計的損失，受到這兩個事件嚴重的打擊，或者應
該說是三個，許多有買CAT防身的保險公司及再保公司，立刻使用第二次投保
權。
At that point sellers of CAT policies had lost a huge amount
of money - perhaps twice because of the reinstatements - and not
taken in much in premiums. Depending upon many variables, a CAT
premium might generally have run 3% to 15% of the amount of
protection purchased. For some years, we've thought premiums of
that kind inadequate and have stayed away from the business.
在當時許多賣CAT保單的業者虧了一屁股，尤其是第二次投保部份，根本收不
到足夠的保費，由於有許多變數，保費通常會是在保額的3%到15%不等，有好
幾年，我們認為這種保費收入並不合理，所以沒有介入這個市場。
But because the 1989 disasters left many insurers either
actually or possibly bare, and also left most CAT writers licking
their wounds, there was an immediate shortage after the
earthquake of much-needed catastrophe coverage. Prices instantly
became attractive, particularly for the reinsurance that CAT
writers themselves buy. Just as instantly, Berkshire Hathaway
offered to write up to $250 million of catastrophe coverage,
advertising that proposition in trade publications. Though we did
not write all the business we sought, we did in a busy ten days
book a substantial amount.
但是1989年的大災害使得許多CAT業者窮於填補保險客戶的傷口，使得地震
災後保單供給發生短缺，保費價格很快地就回到相當吸引人的水準，尤其是再保
公司本身自己所買的保單，若有需要，Berkshire可以馬上就簽下2.5億美元以
上的保單，雖然並不是所有上門的生意都接，但忙個十天下來所簽的保單金額也
是相當可觀。
Our willingness to put such a huge sum on the line for a
loss that could occur tomorrow sets us apart from any reinsurer
in the world. There are, of course, companies that sometimes
write $250 million or even far more of catastrophe coverage. But
they do so only when they can, in turn, reinsure a large
percentage of the business with other companies. When they can't
"lay off" in size, they disappear from the market.
世界上再沒有其他再保公司會像我們一樣，願意一口氣接受如此大金額的投保，
當然也有保險公司偶爾會願意接下二億五美金的災害理賠保險，但是其提通常是
他們可以再向其他保險公司分保出去，當他們找不到分散風險的再保公司時，他
們會馬上退出市場。
Berkshire's policy, conversely, is to retain the business we
write rather than lay it off. When rates carry an expectation of
profit, we want to assume as much risk as is prudent. And in our
case, that's a lot.
相反地Berkshire的政策則是保留大部分的保額而不是把他們給分配掉，當保險
費率看起來有利可圖，我們很願意承擔更多的風險，以外界的標準而言，那應該
是個大數字。
We will accept more reinsurance risk for our own account
than any other company because of two factors: (1) by the
standards of regulatory accounting, we have a net worth in our
insurance companies of about $6 billion - the second highest
amount in the United States; and (2) we simply don't care what
earnings we report quarterly, or even annually, just as long as
the decisions leading to those earnings (or losses) were reached
intelligently.
我們之所以願意承擔比一般保險公司更多的風險，主要有兩個原因: (1)以會計原
則的規範標準，我們的保險公司淨值高達60億美金，位居全美第二(2)我們並不
在乎每季的短期盈餘數字，就算是每年也無所謂，只要長期而言，這些決策是基
於穩健獲利的立場所作的明智決定。
Obviously, if we write $250 million of catastrophe coverage
and retain it all ourselves, there is some probability that we
will lose the full $250 million in a single quarter. That
probability is low, but it is not zero. If we had a loss of that
magnitude, our after-tax cost would be about $165 million. Though
that is far more than Berkshire normally earns in a quarter, the
damage would be a blow only to our pride, not to our well-being.
很明顯地如此我們接下二億五的災害保險，並自留大部分的保額，很有可能我們
會在一夕之間損失這二億五，這種機率雖然很低，卻並不表示沒有可能，若真的
發生那樣的損失，我們的稅後損失大概會是1.65億，相較於Berkshire每季所
賺的盈餘來說，只能算是個小數字，雖然會我們會丟了面子，但還不至於失了裡
子。
This posture is one few insurance managements will assume.
Typically, they are willing to write scads of business on terms
that almost guarantee them mediocre returns on equity. But they
do not want to expose themselves to an embarrassing single-
quarter loss, even if the managerial strategy that causes the
loss promises, over time, to produce superior results. I can
understand their thinking: What is best for their owners is not
necessarily best for the managers. Fortunately Charlie and I have
both total job security and financial interests that are
identical with those of our shareholders. We are willing to look
foolish as long as we don't feel we have acted foolishly.
這種態度在保險業界來說實在是少之又少，通常一般的保險公司會願意接下很多
的保單以確定公司每年可以獲得一定的利益，但他們卻不願意公司在某一個單季
發生大額的損失，雖然這種短期損失可以獲致更長遠的利益；我想我能夠體諒他
們的立場，對股東最有利的事並一定對經理人最好，很幸運的查理跟我的工作保
障與身家利益與所有的股東皆一致，我們願意被人當作是傻子，只要我們自己知
道我們不是個傻子。
Our method of operation, incidentally, makes us a
stabilizing force in the industry. We add huge capacity when
capacity is short and we become less competitive only when
capacity is abundant. Of course, we don't follow this policy in
the interest of stabilization - we follow it because we believe
it to be the most sensible and profitable course of action.
Nevertheless, our behavior steadies the market. In this case,
Adam Smith's invisible hand works as advertised.
事實上我們這樣的經營策略讓我們成為市場上的穩定力量，當供給短缺時，我們
可以馬上進場滿足大家的需求，而當市場過於飽和時，我們又會立即退出市場觀
望，當然我們這樣的做法並不只是為了達到市場的穩定而已，我們之所以會這樣
做是因為我們認為這樣才是最合理、對大家最有利的做法，當然這樣的做法間接
達到穩定市場的效果，也符合亞當．史密斯所提市場有一隻看不見的手的說法。
Currently, we hold an exceptional amount of float compared
to premium volume. This circumstance should produce quite
favorable insurance results for us during the next few years as
it did in 1989. Our underwriting losses should be tolerable and
our investment income from policyholder funds large. This
pleasant situation, however, will gradually deteriorate as our
float runs off.
現階段相較於保費收入，我們自留的大部分的浮存金，這樣的情形應該可以讓我
們往後幾年的獲利像1989年那樣不錯的結果，承保損失應該還可以接受，相較
之下我們靠投資所賺得的利益卻更為驚人，只是這種好現象可能會隨著浮存金的
流失而漸漸光芒不再。
At some point, however, there will be an opportunity for us
to write large amounts of profitable business. Mike Goldberg and
his management team of Rod Eldred, Dinos Iordanou, Ajit Jain,
Phil Urban, and Don Wurster continue to position us well for this
eventuality.
不過在其他方面，還是有機會能夠讓我們找到大額且有利可圖的生意，Mike
Goldberg與其經營團隊，長期而言可以為我們創造有利的地位。
Marketable Securities
有價證券投資
In selecting marketable securities for our insurance
companies, we generally choose among five major categories: (1)
long-term common stock investments, (2) medium-term fixed income
securities, (3) long-term fixed income securities, (4) short-term
cash equivalents, and (5) short-term arbitrage commitments.
在為我們的保險事業選擇有價證券投資之時，我們主要有五種選擇(1)長期股票
投資(2)長期固定收益債券(3)中期固定收益債券(4)短期約當現金(5)短期套利交
易。
We have no particular bias when it comes to choosing from
these categories; we just continuously search among them for the
highest after-tax returns as measured by "mathematical
expectation," limiting ourselves always to investment
alternatives we think we understand. Our criteria have nothing to
do with maximizing immediately reportable earnings; our goal,
rather, is to maximize eventual net worth.
對於這五種類型的交易，我們沒有特別的偏好，我們只是持續不斷地尋找最高的
稅後報酬預計的數學期望值，且僅限於我們自認為了解熟悉的投資，我們無意讓
與短期的帳面盈餘好看，我們的目標是讓長期的淨值極大化。
o Below we list our common stock holdings having a value
of over $100 million. A small portion of these investments belongs
to subsidiaries of which Berkshire owns less than 100%.
下表是我們超過一億美元以上的普通股投資，一部份的投資係屬於Berkshire關
係企業所持有)。
12/31/89
Shares Company Cost Market
------ ------- ---------- ----------
(000s omitted)
3,000,000 Capital Cities/ABC, Inc. ......... .......... $ 517,500 $1,692,375
23,350,000 The Coca-Cola Co. ................. ........ 1,023,920 1,803,787
2,400,000 Federal Home Loan Mortgage Cor..... 71,729 161,100
6,850,000 GEICO Corp. .................. .. ... ........... 45,713 1,044,625
1,727,765 The Washington Post Company ......... 9,731 486,366
This list of companies is the same as last year's and in
only one case has the number of shares changed: Our holdings of
Coca-Cola increased from 14,172,500 shares at the end of 1988 to
23,350,000.
表上的投資組合與去年幾乎相同，只有一項投資的持股有變動，我們將可口可樂
的持股數由去年的1,417萬股提高到今年的2,335萬股。
This Coca-Cola investment provides yet another example of
the incredible speed with which your Chairman responds to
investment opportunities, no matter how obscure or well-disguised
they may be. I believe I had my first Coca-Cola in either 1935 or
1936. Of a certainty, it was in 1936 that I started buying Cokes
at the rate of six for 25 cents from Buffett & Son, the family
grocery store, to sell around the neighborhood for 5 cents each.
In this excursion into high-margin retailing, I duly observed
the extraordinary consumer attractiveness and commercial
possibilities of the product.
這次的可口可樂投資，提供了一個機會來證明你們的董事長快速反應投資機會，
不管這些機會是如何的不明確或是被隱藏，我記得我是在1935年或1936年第
一次喝到可口可樂的，不過可以確定的是，我從1936年開始以25分錢半打從
巴菲特兄弟雜貨店批貨後，在以每罐5分錢賣給鄰居街坊，作為我個人從事高
毛利零售業的開端，我也深深觀察到這項產品給消費者特殊的吸引力及背後所代
表龐大的商機。
I continued to note these qualities for the next 52 years as
Coke blanketed the world. During this period, however, I
carefully avoided buying even a single share, instead allocating
major portions of my net worth to street railway companies,
windmill manufacturers, anthracite producers, textile businesses,
trading-stamp issuers, and the like. (If you think I'm making
this up, I can supply the names.) Only in the summer of 1988 did
my brain finally establish contact with my eyes.
在往後的52年內當可口可樂席捲全世界的同時，我也持續地注意到這種特質，
然而在同一段期間，由於我個人過於小心謹慎以致於竟然連一股都沒有買，反而
將大部分的個人資產投注在街車公司、紡織公司、煤炭公司與郵票公司之類的股
票之上，(如果你認為這是我編造的笑話，我可以再告訴大家確實的公司名稱)，
終於到了1988年的夏天，我的大腦與眼睛完成了連線動作。
What I then perceived was both clear and fascinating. After
drifting somewhat in the 1970's, Coca-Cola had in 1981 become a
new company with the move of Roberto Goizueta to CEO. Roberto,
along with Don Keough, once my across-the-street neighbor in
Omaha, first rethought and focused the company's policies and
then energetically carried them out. What was already the world's
most ubiquitous product gained new momentum, with sales overseas
virtually exploding.
一時之間，我的觀感與眼界大開，在1970年代一度委靡不振之後，可口可樂在
1981年新任總裁古崔塔的帶領下，煥然一新，古崔塔加上Don Keough(曾經
是我在奧瑪哈的對街鄰居)，經過思考並釐清公司的政策後，切實地加以執行，
使得本來就已是全世界最獨一無二的產品又平添新動力，尤其是來自海外的營收
更呈現爆炸性的成長。
Through a truly rare blend of marketing and financial
skills, Roberto has maximized both the growth of his product and
the rewards that this growth brings to shareholders. Normally,
the CEO of a consumer products company, drawing on his natural
inclinations or experience, will cause either marketing or
finance to dominate the business at the expense of the other
discipline. With Roberto, the mesh of marketing and finance is
perfect and the result is a shareholder's dream.
利用其行銷與財務方面的兩把利刃，古崔塔將可口可樂產品的成長與股東的利益
極大化，通常一家消費性商品的CEO，基於個人過去的經驗與個性，會偏向公
司的行銷或財務任何一邊，但是古崔塔卻能夠將兩者調和到極致的境界，這樣的
結果實在是股東們前世修來的好福氣。
Of course, we should have started buying Coke much earlier,
soon after Roberto and Don began running things. In fact, if I
had been thinking straight I would have persuaded my grandfather
to sell the grocery store back in 1936 and put all of the
proceeds into Coca-Cola stock. I've learned my lesson: My
response time to the next glaringly attractive idea will be
slashed to well under 50 years.
當然我們應該在古崔塔與Don開始接掌公司時，就早點買進該公司的股票，事
實上，要是我有足夠的遠見，早在1936年我就應該說服我爺爺乾脆賣掉雜貨
店，然後將錢全部用來買進可口可樂的股票，這次我終於學到了教訓，不過照這
種情況看來，距離下一次我靈光一現的時間，可能要再等上個50年以上吧！
As I mentioned earlier, the yearend prices of our major
investees were much higher relative to their intrinsic values
than theretofore. While those prices may not yet cause
nosebleeds, they are clearly vulnerable to a general market
decline. A drop in their prices would not disturb us at all - it
might in fact work to our eventual benefit - but it would cause
at least a one-year reduction in Berkshire's net worth. We think
such a reduction is almost certain in at least one of the next
three years. Indeed, it would take only about a 10% year-to-year
decline in the aggregate value of our portfolio investments to
send Berkshire's net worth down.
就像是我上次所提到的，相較於過去，我們這些被投資公司的股價已高於其實質
價值，雖然目前以這種價位不會造成我們流鼻血，但難免會受到大盤波動的影響
，當然股價下挫一點都不會造成我們的困擾，甚至反而對我們有利，但不可避免
地可能會造成Berkshire年度淨值的減少，只要在未來的兩、三年間，我們的投
資組合市值平均每年減少10%，就有可能會發生這種狀況。
We continue to be blessed with extraordinary managers at our
portfolio companies. They are high-grade, talented, and
shareholder-oriented. The exceptional results we have achieved
while investing with them accurately reflect their exceptional
personal qualities.
我們持續受惠於這些被投資公司經理人，他們高品格、能力佳且設身處地為股東
著想，我們能夠有這麼好的投資績效，可以說是完全仰賴這些經理人不凡的人格
特質。
o We told you last year that we expected to do little in
arbitrage during 1989, and that's the way it turned out.
Arbitrage positions are a substitute for short-term cash
equivalents, and during part of the year we held relatively low
levels of cash. In the rest of the year we had a fairly good-
sized cash position and even so chose not to engage in arbitrage.
The main reason was corporate transactions that made no economic
sense to us; arbitraging such deals comes too close to playing
the greater-fool game. (As Wall Streeter Ray DeVoe says: "Fools
rush in where angels fear to trade.") We will engage in arbitrage
from time to time - sometimes on a large scale - but only when we
like the odds.
去年我曾向各位報告今年可能會減少在套利投資方面的活動，結果正是如此，套
利投資是短期資金的替代去處，有時我們手頭上沒有太多的現金，就算是有我們
也寧願選擇不參與套利，主要的原因是因為最近這些企業活動實在是沒有太大的
經濟意義，從事這類的套利交易就好像是在比誰比較笨，華爾街人士Ray DeVoe
所說天使迴避但傻瓜趨之若騖，我們三不五時會從事大型的套利交易，但只有當
我們覺得勝算頗大時，才會考慮進場。
o Leaving aside the three convertible preferreds discussed in
the next section, we substantially reduced our holdings in both
medium- and long-term fixed-income securities. In the long-terms,
just about our only holdings have been Washington Public Power
Supply Systems (WPPSS) bonds carrying coupons ranging from low to
high. During the year we sold a number of the low-coupon issues,
which we originally bought at very large discounts. Many of these
issues had approximately doubled in price since we purchased them
and in addition had paid us 15%-17% annually, tax-free. Our
prices upon sale were only slightly cheaper than typical high-
grade tax-exempts then commanded. We have kept all of our high-
coupon WPPSS issues. Some have been called for redemption in 1991
and 1992, and we expect the rest to be called in the early to
mid-1990s.
除了後面會提到的三項可轉換特別股投資之外，我們大幅減少在中長期的固定收
益債券部位，尤其是長期部份，大概就只剩下華盛頓公用電力系統債券，去年我
們處分了部份當初以相當低折價買進的低收益債券，處分價格與一般信用評等佳
的債券差不多，是原始投資成本的一倍，外加每年15%到17%的免稅利息，至
於高收益的債券則予以保留，有些即將在1991年或1992年到期，剩下的則會
在1990年中期到期贖回。
We also sold many of our medium-term tax-exempt bonds during
the year. When we bought these bonds we said we would be happy to
sell them - regardless of whether they were higher or lower than
at our time of purchase - if something we liked better came
along. Something did - and concurrently we unloaded most of these
issues at modest gains. Overall, our 1989 profit from the sale of
tax-exempt bonds was about $51 million pre-tax.
同時我們也賣了不少中期的免稅債券，當初買下這些債券時就曾說過，只要時機
成熟找到更好的投資標的，我們會很高興地把他們給處分掉，不管屆時的價格是
高或是低於我們的投資成本，如今時機確實成熟了，所以我們便將大部分的債券
出清，所得的報酬還算不錯，總結下來我們1989年從出售免稅債券所獲得的稅
前收益大概在5,100萬左右。
o The proceeds from our bond sales, along with our excess cash
at the beginning of the year and that generated later through
earnings, went into the purchase of three convertible preferred
stocks. In the first transaction, which took place in July, we
purchased $600 million of The Gillette Co. preferred with an 8
3/4% dividend, a mandatory redemption in ten years, and the right
to convert into common at $50 per share. We next purchased $358
million of USAir Group, Inc. preferred stock with mandatory
redemption in ten years, a dividend of 9 1/4%, and the right to
convert into common at $60 per share. Finally, late in the year
we purchased $300 million of Champion International Corp.
preferred with mandatory redemption in ten years, a 9 1/4%
dividend, and the right to convert into common at $38 per share.
我們將出售債券所得的收入連同期初帳上的現金與年中所賺取的盈餘，通通買進
三種可轉換特別股，第一種是在7月我們投資6億美金在吉列刮鬍刀年利率8
又3/4%十年強制贖回的可轉換特別股，轉換價格訂為50美元；之後我們又花
了3.58億美金投資美國航空年利率9又1/4%十年強制贖回的可轉換特別股，
轉換價格訂為60美元；最後我們在年底又以3億美金投資冠軍企業年利率9又
1/4%十年強制贖回的可轉換特別股，轉換價格訂為38美元。
Unlike standard convertible preferred stocks, the issues we
own are either non-salable or non-convertible for considerable
periods of time and there is consequently no way we can gain from
short-term price blips in the common stock. I have gone on the
board of Gillette, but I am not on the board of USAir or
Champion. (I thoroughly enjoy the boards I am on, but can't
handle any more.)
不像一般的可轉換特別股，這次我們所擁有的在限定時間內不得出售或轉換的，
所以短期間我們要靠普通股反轉而獲利的機會不大，我並且已經加入吉列的董事
會，至於美國航空或是Champion公司則沒有，(我很喜歡現有加入的董事會，
但可是由於分身乏術可能無法再加入其他公司的董事會)。
Gillette's business is very much the kind we like. Charlie
and I think we understand the company's economics and therefore
believe we can make a reasonably intelligent guess about its
future. (If you haven't tried Gillette's new Sensor razor, go
right out and get one.) However, we have no ability to forecast
the economics of the investment banking business (in which we
have a position through our 1987 purchase of Salomon convertible
preferred), the airline industry, or the paper industry. This
does not mean that we predict a negative future for these
industries: we're agnostics, not atheists. Our lack of strong
convictions about these businesses, however, means that we must
structure our investments in them differently from what we do
when we invest in a business appearing to have splendid economic
characteristics.
吉列這家公司與我們喜愛的類型非常相近，查理跟我都熟悉這個產業的環境，因
此我們相信可以對這家公司的未來做一個合理的預估，(若是沒有試過吉列新的
感應式刮鬍刀，趕緊去買一個來試試！)，但是我們就沒法子來預測投資銀行業、
航空業或是造紙業的未來前景，(我們在1987年買下所羅門公司的可轉換債
券) ，當然這並不表示他們的未來就是個負數，基本上我們是不可知論者，而不
是無神論者。所以由於我們在這些產業上缺乏強而有力的論點支持我們，因此我
們在這些產業上所採的投資方式就必須與那些顯而易見的好公司好產業有所不
同。
In one major respect, however, these purchases are not
different: We only want to link up with people whom we like,
admire, and trust. John Gutfreund at Salomon, Colman Mockler, Jr.
at Gillette, Ed Colodny at USAir, and Andy Sigler at Champion
meet this test in spades.
不過在另一方面，有一點還是很重要，我們只跟我們喜歡、欣賞且信任的人打交
道，像是所羅門的John Gutfreund、吉列的Colman Mockler二世、美國航空
的Ed Colodny與Champion企業的Andy Sigler都算是符合我們的標準。
They in turn have demonstrated some confidence in us,
insisting in each case that our preferreds have unrestricted
voting rights on a fully-converted basis, an arrangement that is
far from standard in corporate finance. In effect they are
trusting us to be intelligent owners, thinking about tomorrow
instead of today, just as we are trusting them to be intelligent
managers, thinking about tomorrow as well as today.
同時他們對我們也相當的信任，堅持給我們無限制的轉換權利，這在一般美國大
企業融資案裡頭並不多見，事實上他們相信我們是聰明的老闆，看的是未來而不
是現在，就像我們相信他們是聰明的經理人一樣，不但會看未來同時也會顧及現
在。
The preferred-stock structures we have negotiated will
provide a mediocre return for us if industry economics hinder the
performance of our investees, but will produce reasonably
attractive results for us if they can earn a return comparable to
that of American industry in general. We believe that Gillette,
under Colman's management, will far exceed that return and
believe that John, Ed, and Andy will reach it unless industry
conditions are harsh.
這種可轉換特別股的投資方式可以確保即便是我們的被投資公司面臨產業前景
不佳的環境時，仍能確保我們可以得到穩定的收益，同時若被投資公司表現不錯
時，我們又可以獲得比投資一般美國企業更好的報酬，我們相信吉列在Colman
的領導之下，一定會有不錯的表現，另外John與Andy即使是面臨產業不佳的
前景，應該也不會讓我們失望。
Under almost any conditions, we expect these preferreds to
return us our money plus dividends. If that is all we get,
though, the result will be disappointing, because we will have
given up flexibility and consequently will have missed some
significant opportunities that are bound to present themselves
during the decade. Under that scenario, we will have obtained
only a preferred-stock yield during a period when the typical
preferred stock will have held no appeal for us whatsoever. The
only way Berkshire can achieve satisfactory results from its four
preferred issues is to have the common stocks of the investee
companies do well.
不管在任何情況之下，我們預期這些可轉換特別股都可以讓我們收回本金加上股
利無虞，然而若是我們真的只能收回這些，那麼這樣的結果毋寧是相當令我們失
望的，因為我們必須被迫犧牲流動性，這友可能讓我們在往後的十年內錯失更好
的投資機會，在這種情況下，我們就只能獲得一般特別股所能獲得的利益，而後
者卻是我們根本就不會想要去投資的，所以唯一對Berkshire最有益處的是我們
的被投資公司本身的普通股也能有優異的表現。
Good management and at least tolerable industry conditions
will be needed if that is to happen. But we believe Berkshire's
investment will also help and that the other shareholders of each
investee will profit over the years ahead from our preferred-
stock purchase. The help will come from the fact that each
company now has a major, stable, and interested shareholder whose
Chairman and Vice Chairman have, through Berkshire's investments,
indirectly committed a very large amount of their own money to
these undertakings. In dealing with our investees, Charlie and I
will be supportive, analytical, and objective. We recognize that
we are working with experienced CEOs who are very much in command
of their own businesses but who nevertheless, at certain moments,
appreciate the chance to test their thinking on someone without
ties to their industry or to decisions of the past.
這需要靠好的經營團隊再加上可以忍受的產業環境，不過我們相信Berkshire本
身對這四家公司的資金挹注，也能夠對這些公司與其股東的長遠利益有所幫助，
這是由於他們可以確信現在這些公司的背後有一個穩定又關心公司的大股東在
默默地支持他們，再與我們被投資公司相處時，我們通常會採取支持、客觀並給
予分析建議的態度，我們了解這些公司的CEO對於其所處的產業都相當的清
楚，但我想他們應該有會很珍惜我們這些與產業背景完全不相關的客觀人士所給
他們的經驗交流。
As a group, these convertible preferreds will not produce
the returns we can achieve when we find a business with wonderful
economic prospects that is unappreciated by the market. Nor will
the returns be as attractive as those produced when we make our
favorite form of capital deployment, the acquisition of 80% or
more of a fine business with a fine management. But both
opportunities are rare, particularly in a size befitting our
present and anticipated resources.
這些可轉換特別股的報酬當然比不上那些具有經濟優勢卻還沒被市場發現的好
股票，或許也比不上那些我們可以買下80%以上股權的優良企業購併案，但大
家要知道後面這兩種投資機會相當的稀少，實在是可遇不可求，尤其是以我們現
在的資金規模，實在是很難找的到適合的投資標的。
In summation, Charlie and I feel that our preferred stock
investments should produce returns moderately above those
achieved by most fixed-income portfolios and that we can play a
minor but enjoyable and constructive role in the investee
companies.
總而言之，查理跟我認為這類的可轉換特別股投資應該可以讓我們獲得比一般固
定收益債券更好的投資利益，同時我們也可以在這些被投資公司扮演好具建設性
的少數關鍵角色。
Zero-Coupon Securities
零息債券
In September, Berkshire issued $902.6 million principal
amount of Zero-Coupon Convertible Subordinated Debentures, which
are now listed on the New York Stock Exchange. Salomon Brothers
handled the underwriting in superb fashion, providing us helpful
advice and a flawless execution.
去年九月，Berkshire發行了9億美元的零息可轉換次順位債券，目前並已在紐
約證券交易所掛牌交易，由所羅門公司負責本次的債券承銷工作，提供了我們寶
貴的建議與完美無缺的執行結果。
Most bonds, of course, require regular payments of interest,
usually semi-annually. A zero-coupon bond, conversely, requires
no current interest payments; instead, the investor receives his
yield by purchasing the security at a significant discount from
maturity value. The effective interest rate is determined by the
original issue price, the maturity value, and the amount of time
between issuance and maturity.
大部分的債券當然需要按時支付利息，通常是每半年一次，但是零息債券卻不須
要馬上支付利息，而是由投資人在以相當大的折價幅度在取得債券時預先扣除，
實質的利率則取決於發行的債券價格、到期面值與發行時間的長短而定。
In our case, the bonds were issued at 44.314% of maturity
value and are due in 15 years. For investors purchasing the
bonds, that is the mathematical equivalent of a 5.5% current
payment compounded semi-annually. Because we received only
44.31 cents on the dollar, our proceeds from this offering were
$400 million (less about $9.5 million of offering expenses).
以我們這次發行的債券來說，發行價是面額的44.314%，十五年到期，對於買
下這次債券的投資人，約可獲得相當於5.5%的年報酬率，因為我們只拿到44.31
每分，所以這次扣除950萬美元的發行費用，我們實得的款項是4億美元。
The bonds were issued in denominations of $10,000 and each
bond is convertible into .4515 shares of Berkshire Hathaway.
Because a $10,000 bond cost $4,431, this means that the
conversion price was $9,815 per Berkshire share, a 15% premium to
the market price then existing. Berkshire can call the bonds at
any time after September 28, 1992 at their accreted value (the
original issue price plus 5.5% compounded semi-annually) and on
two specified days, September 28 of 1994 and 1999, the
bondholders can require Berkshire to buy the securities at their
accreted value.
這次發行的債券面額是10,000美元，每張債券可以申請轉換為0.4515股的
Berkshire股份，因為每張債券的發行價大約是4,431美元，所以代表轉換為
Berkshire的價格大概是9,815美元，約為現在市價15%的溢價，同時Berkshire
有權在1992年9月28日以後加計利息(5.5%的年利率)贖回這些債券，至於債
券持有人也有權在1994年與1999年的9月28日要求公司加計利息買回其所
持有的債券。
For tax purposes, Berkshire is entitled to deduct the 5.5%
interest accrual each year, even though we make no payments to
the bondholders. Thus the net effect to us, resulting from the
reduced taxes, is positive cash flow. That is a very significant
benefit. Some unknowable variables prevent us from calculating
our exact effective rate of interest, but under all circumstances
it will be well below 5.5%. There is meanwhile a symmetry to the
tax law: Any taxable holder of the bonds must pay tax each year
on the 5.5% interest, even though he receives no cash.
就稅負的觀點而言，雖然沒有馬上支付利息，但Berkshire每年仍可享受5.5%
利息支出的所得稅扣抵，由於減少了稅負支出，所以就現金流量的角度而言，我
們每年還有現金淨流入，這是一項不錯的好處，當然一些不可知的變處，使我們
無法確定這次發行真正的資金成本，但不管怎樣，應該都低於5.5%，而相對的
債券持有人每年還是要支付5.5%的利息所得稅，雖然他們根本沒有收到任何的
現金利息收入。
Neither our bonds nor those of certain other companies that
issued similar bonds last year (notably Loews and Motorola)
resemble the great bulk of zero-coupon bonds that have been
issued in recent years. Of these, Charlie and I have been, and
will continue to be, outspoken critics. As I will later explain,
such bonds have often been used in the most deceptive of ways and
with deadly consequences to investors. But before we tackle that
subject, let's travel back to Eden, to a time when the apple had
not yet been bitten.
去年我們與其他公司所發行的類似債券(尤其是Loews與摩托羅拉公司)，與這
幾年盛行的零息債券有相當大的差異，對於後者，查理跟我一直有相當的意見，
後面我會再詳加說明，我們認為這些債券隱藏著欺騙行為，對買下他們的投資人
有相當不利的影響，不過在談論這個話題之前，讓我們回溯時光到亞當還未引誘
夏娃啃下蘋果之前的時代。
If you're my age you bought your first zero-coupon bonds
during World War II, by purchasing the famous Series E U. S.
Savings Bond, the most widely-sold bond issue in history. (After
the war, these bonds were held by one out of two U. S.
households.) Nobody, of course, called the Series E a zero-coupon
bond, a term in fact that I doubt had been invented. But that's
precisely what the Series E was.
如果你像我這樣的年紀曾在二次世界大戰期間第一次買進最有名的E系列美國
儲蓄零息債券，(這種廣為流傳的債券幾乎每兩個家庭最會有人持有)，當然在當
時沒有人會把它當作是零息債券的一種，因為這名詞根本就還未出現，但基本上
它就是一種零息債券。
These bonds came in denominations as small as $18.75. That
amount purchased a $25 obligation of the United States government
due in 10 years, terms that gave the buyer a compounded annual
return of 2.9%. At the time, this was an attractive offer: the
2.9% rate was higher than that generally available on Government
bonds and the holder faced no market-fluctuation risk, since he
could at any time cash in his bonds with only a minor reduction
in interest.
這種債券的面額最小的只有18.75美元，買下10年後美國政府必須償還25美
元，投資人大概可以獲得2.9%的年投資報酬率，在當時這是相當不錯的一項投
資，2.9%的年利率遠高於普通的政府債券利率，且持有人不必擔心利率波動的
風險，而且他可以隨時予以變現，利息不會被打折太多。
A second form of zero-coupon U. S. Treasury issue, also
benign and useful, surfaced in the last decade. One problem with
a normal bond is that even though it pays a given interest rate -
say 10% - the holder cannot be assured that a compounded 10%
return will be realized. For that rate to materialize, each semi-
annual coupon must be reinvested at 10% as it is received. If
current interest rates are, say, only 6% or 7% when these coupons
come due, the holder will be unable to compound his money over
the life of the bond at the advertised rate. For pension funds or
other investors with long-term liabilities, "reinvestment risk"
of this type can be a serious problem. Savings Bonds might have
solved it, except that they are issued only to individuals and
are unavailable in large denominations. What big buyers needed
was huge quantities of "Savings Bond Equivalents."
第二種形式的美國國庫零息債券出現在十幾年前，也相當的不錯，一般的債券有
一個很大的問題，那就是雖然它的票面是10%，但持有人卻不一定能夠保證就
能得到10%的報酬率，因為要能獲得10%的話就必須所收到的10%利息收入也
能再運用投資也能得到10%以上才行，若是所得的利息之後只能得到6%或7%
的報酬，則最後結算的報酬率可能沒有辦法達到10%的預定利率，這對於退休
基金或是其他具有長期負債的投資者來說，再投資所可能遇到的風險可能是一個
很嚴重的問題，儲蓄債券則可以解決這樣的問題，只可惜它只能發行給個人而且
面額都不大，對於大買家來說，它們需要的是類似這種儲蓄債券的替代品。
Enter some ingenious and, in this case, highly useful
investment bankers (led, I'm happy to say, by Salomon Brothers).
They created the instrument desired by "stripping" the semi-
annual coupons from standard Government issues. Each coupon, once
detached, takes on the essential character of a Savings Bond
since it represents a single sum due sometime in the future. For
example, if you strip the 40 semi-annual coupons from a U. S.
Government Bond due in the year 2010, you will have 40 zero-
coupon bonds, with maturities from six months to 20 years, each
of which can then be bundled with other coupons of like maturity
and marketed. If current interest rates are, say, 10% for all
maturities, the six-month issue will sell for 95.24% of maturity
value and the 20-year issue will sell for 14.20%. The purchaser
of any given maturity is thus guaranteed a compounded rate of 10%
for his entire holding period. Stripping of government bonds has
occurred on a large scale in recent years, as long-term
investors, ranging from pension funds to individual IRA accounts,
recognized these high-grade, zero-coupon issues to be well suited
to their needs.
這時創意十足的銀行家就適時出現了，(我很高興的向各位報告那就是所羅門兄
弟公司)，它們從標準的政府債券中，分拆出大家所想要的零息債券，每一張債
券都跟儲蓄債券一樣，在未來的某一天到期後可以拿回完整的一筆錢，舉例來說
如果你可以將20年期每半年付息的債券，分拆成40張到期日分別為半年到20
年不等的零息債券，之後再將到期日相同的債券併起來對外出售，假設現行的殖
利率為10%，半年期的價格大概是95.24%，20年期的則只有14.20%，如此
一來所有購買這種債券的投資者就可以明確的確保它可以獲得的報酬率，分拆債
券這幾年因符合長期的退休基金與個人的IRA帳戶投資者需求，廣受歡迎而大
量流行。
But as happens in Wall Street all too often, what the wise
do in the beginning, fools do in the end. In the last few years
zero-coupon bonds (and their functional equivalent, pay-in-kind
bonds, which distribute additional PIK bonds semi-annually as
interest instead of paying cash) have been issued in enormous
quantities by ever-junkier credits. To these issuers, zero (or
PIK) bonds offer one overwhelming advantage: It is impossible to
default on a promise to pay nothing. Indeed, if LDC governments
had issued no debt in the 1970's other than long-term zero-coupon
obligations, they would now have a spotless record as debtors.
但就像是華爾街經常會發生的，不管什麼好東西到最後都會變質，最近幾年來零
息債券(以及功能類似的pay-in-kind債券，只發放PIK債券取代現金)，有一大
部份是垃圾債券等級，對這些發行公司來說，零息債券有一個很大的好處，因為
在發行後直到到期日前根本就不必付出任何資金所以根本就不有無法償付的情
況，事實上，LDC政府在1970年後除了長期零息債券之外就沒有發行過其他
債券，所以就一個債務人來說，它們到現在還擁有完美無暇的記錄。
This principle at work - that you need not default for a
long time if you solemnly promise to pay nothing for a long time
- has not been lost on promoters and investment bankers seeking
to finance ever-shakier deals. But its acceptance by lenders took
a while: When the leveraged buy-out craze began some years back,
purchasers could borrow only on a reasonably sound basis, in
which conservatively-estimated free cash flow - that is,
operating earnings plus depreciation and amortization less
normalized capital expenditures - was adequate to cover both
interest and modest reductions in debt.
這原則實在是管用，你大可以正經八百的說你一定不會還不出錢，原因是因為你
有好長一段時間可以不必支付一毛錢，直到支持者與投資銀行家再發明出更刺激
的融資方式之前，不過債權人也要花好長一段時間才能支持這種做法，當融資購
併熱開始風行的幾年之前，投資者只能借到一點錢，因為債權人會保守地估計其
未來的現金流量，亦即營業收益加計折舊與攤銷再扣除資本支出，必須要能夠確
保未來的利息支出與本金的支付。
Later, as the adrenalin of deal-makers surged, businesses
began to be purchased at prices so high that all free cash flow
necessarily had to be allocated to the payment of interest. That
left nothing for the paydown of debt. In effect, a Scarlett
O'Hara "I'll think about it tomorrow" position in respect to
principal payments was taken by borrowers and accepted by a new
breed of lender, the buyer of original-issue junk bonds. Debt now
became something to be refinanced rather than repaid. The change
brings to mind a New Yorker cartoon in which the grateful
borrower rises to shake the hand of the bank's lending officer
and gushes: "I don't know how I'll ever repay you."
之後隨著腎上腺素升高，買價持續飆高使得所有的預估現金流量都必須被分配用
來支付利息，至於本金的部份根本就不在預計償付範圍之內，接著貸款者對於本
金償還的態度就變得像亂世佳人中的郝思佳一樣，「管他的，明天再說吧！」，
而更離譜的是偏偏就有借錢者願意吃這一套，那就是專門買垃圾債券的投資者，
債務從此以後只要再融資即可，根本就不用考慮要償還，這種心態的轉變在紐約
客卡通中描寫的罪貼切，一個貸款人痛哭零涕地握著銀行員的手說到，「我實在
不知道該如何”償還”你對我的恩情。」
Soon borrowers found even the new, lax standards intolerably
binding. To induce lenders to finance even sillier transactions,
they introduced an abomination, EBDIT - Earnings Before
Depreciation, Interest and Taxes - as the test of a company's
ability to pay interest. Using this sawed-off yardstick, the
borrower ignored depreciation as an expense on the theory that it
did not require a current cash outlay.
很快的其他借款人又找到更新、更寬鬆的約束方式，為了拐騙金主借錢來從事更
離譜的交易，這群人又引進了一個新名詞叫做扣除折舊、利息與稅負前的盈餘
EBDIT，來衡量一家公司償債的能力，利用這種較低的標準，借款人故意忽略了
折舊也是一種費用，雖然它不會馬上有現金的支出。
Such an attitude is clearly delusional. At 95% of American
businesses, capital expenditures that over time roughly
approximate depreciation are a necessity and are every bit as
real an expense as labor or utility costs. Even a high school
dropout knows that to finance a car he must have income that
covers not only interest and operating expenses, but also
realistically-calculated depreciation. He would be laughed out of
the bank if he started talking about EBDIT.
這樣的態度擺明了就是掩耳盜鈴，95%的美國企業，長期而言其資本支出大概與
平時提列的累積折舊費用相當，所花的每一分錢都與日常的勞工薪資或水電成本
一樣實在，即使是中學的中輟生也知道養一台車子不只是要負擔利息與日常油錢
保養費用而已，還必須精確地考量到每月實際攤銷的折舊，若是他跑到銀行擺出
EBDIT這一套說法，保證一下子就會被轟出來。
Capital outlays at a business can be skipped, of course, in
any given month, just as a human can skip a day or even a week of
eating. But if the skipping becomes routine and is not made up,
the body weakens and eventually dies. Furthermore, a start-and-
stop feeding policy will over time produce a less healthy
organism, human or corporate, than that produced by a steady
diet. As businessmen, Charlie and I relish having competitors who
are unable to fund capital expenditures.
在企業資本支出當然可以暫時不去考慮，就像是一個人可以一天或甚至一個禮拜
不吃東西，但若是這種情況便做是一種壞習慣的話，身體很快就會發生不適的狀
況，甚至有死亡的危險，更甚者，有一餐沒一餐的做法比起穩定的進食習慣，更
可能使得一個健康的人身體機能變差，不管是人體或是企業都是如此，身為一個
生意人，查理跟我對於競爭對手可能沒有資金進行資本支出來感到欣喜。
You might think that waving away a major expense such as
depreciation in an attempt to make a terrible deal look like a
good one hits the limits of Wall Street's ingenuity. If so, you
haven't been paying attention during the past few years.
Promoters needed to find a way to justify even pricier
acquisitions. Otherwise, they risked - heaven forbid! - losing
deals to other promoters with more "imagination."
或許你會認為排除一項主要的費用諸如折舊等使得原本一樁很爛的交易變成不
錯的交易，是華爾街聰明才智極致的表現，，那你可能是完全沒有注意到華爾街
過去幾年的發展，支持者必須再找到一個更有看頭的做法，來合理解釋價格更離
譜的購併案，不然的話，他們就必須冒犯最嚴重的天條-被其他更有”創意”的支
持者把生意搶走。
So, stepping through the Looking Glass, promoters and their
investment bankers proclaimed that EBDIT should now be measured
against cash interest only, which meant that interest accruing on
zero-coupon or PIK bonds could be ignored when the financial
feasibility of a transaction was being assessed. This approach
not only relegated depreciation expense to the let's-ignore-it
corner, but gave similar treatment to what was usually a
significant portion of interest expense. To their shame, many
professional investment managers went along with this nonsense,
though they usually were careful to do so only with clients'
money, not their own. (Calling these managers "professionals" is
actually too kind; they should be designated "promotees.")
所以穿過外面的那道玻璃，支持者與其投資銀行宣稱EBDIT應該可以只跟要付
的利息做比較就好，意思是說在評估一項投資案的時候，那些記帳不須馬上支付
的利息根本就可以不必納入考量，這樣的方式不但是把折舊丟到沒人注意的角落
邊，還將大部分的利息費用用同樣的方式對待，可恥的是，許多專業投資銀行家
竟然昧著良心附和，反正只要確定這是客戶而不是他們自己的錢就好，(稱呼這
群人為專業人士實在是太恭維他們了，他們應該被歸類為抬轎者)。
Under this new standard, a business earning, say, $100
million pre-tax and having debt on which $90 million of interest
must be paid currently, might use a zero-coupon or PIK issue to
incur another $60 million of annual interest that would accrue
and compound but not come due for some years. The rate on these
issues would typically be very high, which means that the
situation in year 2 might be $90 million cash interest plus $69
million accrued interest, and so on as the compounding proceeds.
Such high-rate reborrowing schemes, which a few years ago were
appropriately confined to the waterfront, soon became models of
modern finance at virtually all major investment banking houses.
在這種新的標準之下，一家公司假設稅前有1億美元的獲利，同時最近一年有9
千萬的利息支出，大可以運用零息債券或是PIK債券來額外負擔6千萬只要記
帳卻不須馬上支付利息與本金，而這種債券的利率通常非常高，到了第二年，公
司可能要承擔9千萬的付現息與6,900萬的記帳息，之後隨著複利記帳息持續
增加，而這種高利率的融資計畫，在剛開始幾年還能獲得有效控制，但不久之後
就變成所有大型投資銀行必備推薦給客戶的標準融資工具。
When they make these offerings, investment bankers display
their humorous side: They dispense income and balance sheet
projections extending five or more years into the future for
companies they barely had heard of a few months earlier. If you
are shown such schedules, I suggest that you join in the fun:
Ask the investment banker for the one-year budgets that his own
firm prepared as the last few years began and then compare these
with what actually happened.
當他們推出這樣的新案子時，投資銀行展現他們幽默的一面，他們將損益表與資
產負債表的預估展延為五年或甚至更長的一段期間，雖然在幾個月之前，他們可
能連這家公司的名字都沒聽過，我想如果你那天碰到這種預估表，我建議你可以
參與這樣的遊戲：跟這位投資銀行家要一份他們自己公司的過去幾年的年度預
算，然後跟他們實際的結果必較一下，你就知道是什麼回事了。
Some time ago Ken Galbraith, in his witty and insightful
The Great Crash, coined a new economic term: "the bezzle,"
defined as the current amount of undiscovered embezzlement. This
financial creature has a magical quality: The embezzlers are richer
by the amount of the bezzle, while the embezzlees do not yet feel
poorer.
許久以前Ken Galbraith在他的名著「大恐慌」中，發明了一個新的經濟名詞
-Bezzle，用來代表現有未被發現的貪污舞弊，這種財經現象有一個很奇特的特
質，那就是貪污舞弊者因為貪污舞弊而發大財，但問題是受害者卻一點也沒有被
剝奪變窮的感覺。
Professor Galbraith astutely pointed out that this sum
should be added to the National Wealth so that we might know the
Psychic National Wealth. Logically, a society that wanted to feel
enormously prosperous would both encourage its citizens to
embezzle and try not to detect the crime. By this means, "wealth"
would balloon though not an erg of productive work had been done.
Galbraith教授真知卓見地點出大家應該把這個數字統計一下，加進國民財富當
中，從而我們可以知道心理上的國民財富為多少，理論上一個社會若想要覺得自
己經濟繁榮發展就應該多多鼓勵人民去貪污舞弊，並試著不要去揭發它，透過這
種方式，一個國家的財富可以大幅地增長，雖然實際上它什麼有生產力的事都沒
做。
The satirical nonsense of the bezzle is dwarfed by the real-
world nonsense of the zero-coupon bond. With zeros, one party to
a contract can experience "income" without his opposite
experiencing the pain of expenditure. In our illustration, a
company capable of earning only $100 million dollars annually -
and therefore capable of paying only that much in interest -
magically creates "earnings" for bondholders of $150 million. As
long as major investors willingly don their Peter Pan wings and
repeatedly say "I believe," there is no limit to how much
"income" can be created by the zero-coupon bond.
但是這種不合理的貪污舞弊，在現實社會中卻被零息債券給比了下去，利用這些”
零”一家公司可以大大方方靠著這紙簽約，利用借款享受所帶來的收入，但另外
一方面卻不知承擔支付支出的痛苦，以我們先前提到的例子，一家每年可以賺1
億美元的公司，利用這種方法，在債券投資人的面前，卻可以把膨脹到1億5,000
萬美元，只要投資人願意充當彼得潘，不斷地說「我相信你」，只要你願意零息
債券所創造的收入是沒有上限的。
Wall Street welcomed this invention with the enthusiasm
less-enlightened folk might reserve for the wheel or the plow.
Here, finally, was an instrument that would let the Street make
deals at prices no longer limited by actual earning power. The
result, obviously, would be more transactions: Silly prices will
always attract sellers. And, as Jesse Unruh might have put it,
transactions are the mother's milk of finance.
華爾街以熱情擁抱這項新的發明，後知後覺的人可能就準備等著捲鋪蓋走路，終
於在這裡大家找到一個可以不必理會公司實際獲利能力的融資方法，結果很明
顯，當然就會有更多的生意上門，離譜的價格一定有賣家願意出，就像Jesse
Unruh可能會說的一句話，交易就像是金融世界的母奶。
The zero-coupon or PIK bond possesses one additional
attraction for the promoter and investment banker, which is that
the time elapsing between folly and failure can be stretched out.
This is no small benefit. If the period before all costs must be
faced is long, promoters can create a string of foolish deals -
and take in lots of fees - before any chickens come home to roost
from their earlier ventures.
此外零息與PIK債券還有一項特點使得支持者與銀行家更願意推行，就是東窗事
發的時間可以再延長，這點可是相當的重要，如果交易所衍生的後果要很長一段
時間才會浮現，那麼支持者就可以在這段期間做更多的交易，從中賺取更多的手
續費，直到事件東窗事發之前。
But in the end, alchemy, whether it is metallurgical or
financial, fails. A base business can not be transformed into a
golden business by tricks of accounting or capital structure. The
man claiming to be a financial alchemist may become rich. But
gullible investors rather than business achievements will usually
be the source of his wealth.
不過到最後，煉金術，不管是冶金的或是財務上的，終究是會落空，一個爛公司
不可能只靠著會計或財務技巧而搖身一變成為好公司，那個宣稱會煉金術的財務
專業人士或許會發大財，但他靠的卻是容易上當的投資人而不是企業經營。
Whatever their weaknesses, we should add, many zero-coupon
and PIK bonds will not default. We have in fact owned some and
may buy more if their market becomes sufficiently distressed.
(We've not, however, even considered buying a new issue from a
weak credit.) No financial instrument is evil per se; it's just
that some variations have far more potential for mischief than
others.
不過這些債券有多少缺點，但我們卻必須承認許多零息與PIK債券應該不會還不
出錢來，事實上我們自己也投資了一些，而且若是債券市場情況再變差一點，我
們可能還會買的更多，(當然我們從來就不會考慮去買那些新發行債信又差的垃
圾債券)，就本質而言，沒有一項財務工具是不對的，只是有一些含有相當高程
度的可能傷害在裡面。
The blue ribbon for mischief-making should go to the zero-
coupon issuer unable to make its interest payments on a current
basis. Our advice: Whenever an investment banker starts talking
about EBDIT - or whenever someone creates a capital structure
that does not allow all interest, both payable and accrued, to be
comfortably met out of current cash flow net of ample capital
expenditures - zip up your wallet. Turn the tables by suggesting
that the promoter and his high-priced entourage accept zero-
coupon fees, deferring their take until the zero-coupon bonds
have been paid in full. See then how much enthusiasm for the deal
endures.
所有的罪過應該歸咎於債券發行者沒有辦法在現在就立即支付利息，我們的建議
是當任何投資銀行家在開始提到EBDIT之前，或是任何人在對你提議一項可以
不必支付任何利息的金融工具時，為了你自己的現金流量著想，趕快把你的荷包
看緊，換個角度建議這些推銷者是否也能接受等這些零息債券真正償還本金之
後，再繳交手續費，看看這些人的熱情還能支撐多久。
Our comments about investment bankers may seem harsh. But
Charlie and I - in our hopelessly old-fashioned way - believe
that they should perform a gatekeeping role, guarding investors
against the promoter's propensity to indulge in excess.
Promoters, after all, have throughout time exercised the same
judgment and restraint in accepting money that alcoholics have
exercised in accepting liquor. At a minimum, therefore, the
banker's conduct should rise to that of a responsible bartender
who, when necessary, refuses the profit from the next drink to
avoid sending a drunk out on the highway. In recent years,
unfortunately, many leading investment firms have found bartender
morality to be an intolerably restrictive standard. Lately, those
who have traveled the high road in Wall Street have not
encountered heavy traffic.
我們對於這些投資銀行家的批判或許是激烈了一點，但查理跟我以我們這種無可
救藥的保守作風，相信他們確實應該要做好把關的工作，保護投資人免於這些推
銷者過度的引誘，因為推銷者對於佣金的饑渴就像是酗酒者對於酒精的沈溺一
樣，最低限度，投資銀行家也要肩負起吧台調酒師的角色，必要的時候，就算少
賺一杯酒錢，也要勸客戶少喝一點，不幸的是最近幾年來，許多大型的投資銀行
都認為這樣的基本道德規範是一項很嚴重的限制，因為其他很多大膽的業者，可
以更自由的大行其道。
One distressing footnote: The cost of the zero-coupon folly
will not be borne solely by the direct participants. Certain
savings and loan associations were heavy buyers of such bonds,
using cash that came from FSLIC-insured deposits. Straining to
show splendid earnings, these buyers recorded - but did not
receive - ultra-high interest income on these issues. Many of
these associations are now in major trouble. Had their loans to
shaky credits worked, the owners of the associations would have
pocketed the profits. In the many cases in which the loans will
fail, the taxpayer will pick up the bill. To paraphrase Jackie
Mason, at these associations it was the managers who should have
been wearing the ski masks.
最後還有一個令人不平的附帶說明，零息債券的代價並不只由直接參與者自己承
擔而已，一些儲貸機構由於是這些垃圾債券的大買家，利用由聯邦政府所保險的
人民儲蓄存款來投資，為了盡量美化帳面盈餘數字，這些單位將這些即使還沒有
收到的超高利息收入全部認列，許多儲貸機構現在卻因此面臨嚴重的問題，若是
他們那些債信不佳的債務人付出本金，當然狀況就可以順利解決，但問題是通常
他們都付不出本金，到最後還是必須由整體納稅義務人來買單，套句Jackie
Mason的話，應該是由這些儲貸機構的經理人來戴區棍球面罩。
Mistakes of the First Twenty-five Years (A Condensed Version)
頭25年所犯的錯誤(濃縮版)
To quote Robert Benchley, "Having a dog teaches a boy
fidelity, perseverance, and to turn around three times before
lying down." Such are the shortcomings of experience.
Nevertheless, it's a good idea to review past mistakes before
committing new ones. So let's take a quick look at the last 25
years.
套用Robert Benchley的名言：「要一隻狗教小孩子忠誠、忍耐，並此能夠滾
三圈再在地上躺好」，這就是經驗傳承的難處，不過不論如何，再犯下一錯誤之
前，最好能夠先反省一下以前的那些錯誤，所以讓我們花點時間回顧一下過去
25年的經驗。
o My first mistake, of course, was in buying control of
Berkshire. Though I knew its business - textile manufacturing -
to be unpromising, I was enticed to buy because the price looked
cheap. Stock purchases of that kind had proved reasonably
rewarding in my early years, though by the time Berkshire came
along in 1965 I was becoming aware that the strategy was not
ideal.
首先我所犯的第一個錯誤，當然就是買下Berkshire紡織的控制權，雖然我很清
楚紡織這個產業沒什麼前景，卻因為它的價格實在很便宜而受其所引誘，雖然在
早期投資這樣的股票確實讓我獲利頗豐，但在1965年投資Berkshire後，我就
開始發現這終究不是個理想的投資模式。
If you buy a stock at a sufficiently low price, there will
usually be some hiccup in the fortunes of the business that gives
you a chance to unload at a decent profit, even though the long-
term performance of the business may be terrible. I call this the
"cigar butt" approach to investing. A cigar butt found on the
street that has only one puff left in it may not offer much of a
smoke, but the "bargain purchase" will make that puff all profit.
如果你以很低的價格買進一家公司的股票，應該很容易有機會以不錯的獲利出脫
了結，雖然長期而言這家公司的經營結果可能很糟糕，我將這種投資方法稱之為
「煙屁股」投資法，在路邊隨地可見的香煙頭撿起來可能讓你吸一口，解一解煙
癮，但對於隱君子來說，也不過是舉手之勞而已。
Unless you are a liquidator, that kind of approach to buying
businesses is foolish. First, the original "bargain" price
probably will not turn out to be such a steal after all. In a
difficult business, no sooner is one problem solved than another
surfaces - never is there just one cockroach in the kitchen.
Second, any initial advantage you secure will be quickly eroded
by the low return that the business earns. For example, if you
buy a business for $8 million that can be sold or liquidated for
$10 million and promptly take either course, you can realize a
high return. But the investment will disappoint if the business
is sold for $10 million in ten years and in the interim has
annually earned and distributed only a few percent on cost. Time
is the friend of the wonderful business, the enemy of the
mediocre.
不過除非你是清算專家，否則買下這類公司實在是屬於傻瓜行徑，第一長期而
言，原來看起來划算的價格到最後可能一點都不值得，在經營艱困的企業中，通
常一個問題才剛解決不久，另外一個問題就又接踵而來，廚房裡的蟑螂絕對不會
只有你看到的那一隻而已，第二先前的價差優勢很快地就會被企業不佳的績效所
侵蝕，例如你用800萬美元買下一家清算價值達1,000萬美元的公司，若你能
馬上把這家公司給處理掉，不管是出售或是清算都好，換算下來你的報酬可能會
很可觀，但是若這家公司要花上你十年的時間才有辦法把它給處理掉，而在這之
前你只能拿回一點點可憐的股利的話，相信我時間雖然是好公司的朋友，但卻是
爛公司最大的敵人。
You might think this principle is obvious, but I had to
learn it the hard way - in fact, I had to learn it several times
over. Shortly after purchasing Berkshire, I acquired a Baltimore
department store, Hochschild Kohn, buying through a company
called Diversified Retailing that later merged with Berkshire. I
bought at a substantial discount from book value, the people were
first-class, and the deal included some extras - unrecorded real
estate values and a significant LIFO inventory cushion. How could
I miss? So-o-o - three years later I was lucky to sell the
business for about what I had paid. After ending our corporate
marriage to Hochschild Kohn, I had memories like those of the
husband in the country song, "My Wife Ran Away With My Best
Friend and I Still Miss Him a Lot."
或許你會認為這道理再簡單不過了，不過我卻必須經歷慘痛的教訓才真正的搞
懂，在買下Berkshire不久之後，我又買了巴爾的摩百貨公司、Hochschild Kohn
與一家叫多元零售公司(後來與Berkshire合併)，我以相當的折價幅度買下這些
公司，經營的人也屬一流，整個交易甚至還有額外的利益，包含未實現的房地產
增值利益與後進先出法的存貨會計原則，我到底還漏掉了什麼? 還好三年之後，
算我走狗運，能夠以成本價左右的價格脫身，在跟Hochschild Kohn公司結束
關係之後，我只有一個感想，就像一首鄉村歌曲的歌詞所述的，「我的老婆跟我
最要好的朋友跑了，我是多麼地懷念他!」
I could give you other personal examples of "bargain-
purchase" folly but I'm sure you get the picture: It's far
better to buy a wonderful company at a fair price than a fair
company at a wonderful price. Charlie understood this early; I
was a slow learner. But now, when buying companies or common
stocks, we look for first-class businesses accompanied by first-
class managements.
我可以給各位另外一個個人經驗，以合理的價格買下一家好公司要比用便宜的價
格買下一家普通的公司來的好的多，像查理老早就明白這個道理，我的反應則比
較慢，不過現在當我們投資公司或股票時，我們不但選擇最好的公司，同時這些
公司還要有好的經理人。
o That leads right into a related lesson: Good jockeys will
do well on good horses, but not on broken-down nags. Both
Berkshire's textile business and Hochschild, Kohn had able and
honest people running them. The same managers employed in a
business with good economic characteristics would have achieved
fine records. But they were never going to make any progress
while running in quicksand.
從這裡我們又學到了一課，好的馬還要搭配好騎師才能有好成績，像Berkshire
紡織與Hochschild, Kohn也都有才能兼具的人在管理，很不幸的他們所面臨的
是流沙般的困境，若能將這些人擺在體質更好的公司相信他們應該會有更好的成
績。
I've said many times that when a management with a
reputation for brilliance tackles a business with a reputation
for bad economics, it is the reputation of the business that
remains intact. I just wish I hadn't been so energetic in
creating examples. My behavior has matched that admitted by Mae
West: "I was Snow White, but I drifted."
我曾說過好幾次，當一個績效卓著的經理人遇到一家惡名昭彰的企業，通常會是
後者佔上風，但願我再也沒有那麼多精力來創造新的例子，我以前的行為就像是
Mae West曾說的︰「曾經我是個白雪公主，不過如今我已不再清白。」
o A further related lesson: Easy does it. After 25 years of
buying and supervising a great variety of businesses, Charlie and
I have not learned how to solve difficult business problems. What
we have learned is to avoid them. To the extent we have been
successful, it is because we concentrated on identifying one-foot
hurdles that we could step over rather than because we acquired
any ability to clear seven-footers.
另外還學到一個教訓，在經歷25年企業管理與經營各種不同事業的歲月之後，
查理跟我還是沒能學會如此去解決難題，不過我們倒學會如何去避免他們，在這
點我們倒做的相當成功，我們專挑那種一呎的低欄，而避免碰到七呎的跳高。
The finding may seem unfair, but in both business and
investments it is usually far more profitable to simply stick
with the easy and obvious than it is to resolve the difficult. On
occasion, tough problems must be tackled as was the case when we
started our Sunday paper in Buffalo. In other instances, a great
investment opportunity occurs when a marvelous business
encounters a one-time huge, but solvable, problem as was the case
many years back at both American Express and GEICO. Overall,
however, we've done better by avoiding dragons than by slaying
them.
這項發現看起來似乎是不太公平，不管是在經營企業或是投資通長堅持在容易又
明顯的好公司會比死守在有問題的公司要來的好，當然有時困難的問題也有被解
決的機會，像是我們剛開始在經營水牛城報紙一樣，或是有時一家好公司也會有
暫時的難關，像是以前美國運通與GEICO都曾經一度發生狀況，不過總的來說，
我們盡量做到迴避妖龍，而不是冒險去屠龍。
o My most surprising discovery: the overwhelming importance in
business of an unseen force that we might call "the institutional
imperative." In business school, I was given no hint of the
imperative's existence and I did not intuitively understand it
when I entered the business world. I thought then that decent,
intelligent, and experienced managers would automatically make
rational business decisions. But I learned over time that isn't
so. Instead, rationality frequently wilts when the institutional
imperative comes into play.
我最意外的發現是企業一種看不到的巨大影響力，我們稱之為"系統規範"，在學
校時沒有人告訴我這種規範的存在，而我也不是一開始進入商業世界就知道有這
回事，我以為任何正當、聰明有經驗的經理人都會很自動的做這樣的決策，但慢
慢地我發現完全就不是這麼一回事，相反的理性的態度在系統規範的影響下都會
慢慢地變質。
For example: (1) As if governed by Newton's First Law of
Motion, an institution will resist any change in its current
direction; (2) Just as work expands to fill available time,
corporate projects or acquisitions will materialize to soak up
available funds; (3) Any business craving of the leader, however
foolish, will be quickly supported by detailed rate-of-return and
strategic studies prepared by his troops; and (4) The behavior of
peer companies, whether they are expanding, acquiring, setting
executive compensation or whatever, will be mindlessly imitated.
舉例來說(1)就好像是受牛頓第一運動定律所規範，任何一個組織機構都會抵抗
對現有方向做任何的改變(2)就像擁有會有工作來填滿所有的時間，企業的計畫
或購併案永遠有足夠的理由將資金耗盡(3)任何一個崇拜領導者的組織，不管有
多離譜，他的追隨者永遠可以找到可以支持其理論的投資評估分析報告(4)同業
的舉動，不管是做擴張、購併或是訂定經理人待遇等都會在無意間彼此模仿。
Institutional dynamics, not venality or stupidity, set
businesses on these courses, which are too often misguided. After
making some expensive mistakes because I ignored the power of the
imperative, I have tried to organize and manage Berkshire in ways
that minimize its influence. Furthermore, Charlie and I have
attempted to concentrate our investments in companies that appear
alert to the problem.
是組織的動力而非腐敗或愚蠢，誤導他們走上這些路子，也因為我忽略了這種規
律的力量，使我為這些所犯的錯誤付出高昂的代價，之後我便試圖組織管理
Berkshire盡量讓這種規律降低其影響程度，同時查理跟我也試著將我們的投資
集中在對於這種問題有相當警覺的公司之上。
o After some other mistakes, I learned to go into business
only with people whom I like, trust, and admire. As I noted
before, this policy of itself will not ensure success: A second-
class textile or department-store company won't prosper simply
because its managers are men that you would be pleased to see
your daughter marry. However, an owner - or investor - can
accomplish wonders if he manages to associate himself with such
people in businesses that possess decent economic
characteristics. Conversely, we do not wish to join with managers
who lack admirable qualities, no matter how attractive the
prospects of their business. We've never succeeded in making a
good deal with a bad person.
再犯下其他幾個錯誤之後，我試著盡量只與我們所欣賞喜愛與信任的人往來，就
像是我之前曾提到的，這種原則本身不會保證你一定成功，二流的紡織工廠或是
百貨公司不會只因為管理人員是那種你會想把女兒嫁給他的人就會成功的，然而
公司的老闆或是投資人卻可以因為與那些真正具有商業頭腦的人打交道而獲益
良多，相反地我們不會希望跟那些不具令人尊敬的特質為伍，不管他的公司有多
吸引人都一樣，我們永遠不會靠著與壞人打交道而成功。
o Some of my worst mistakes were not publicly visible. These
were stock and business purchases whose virtues I understood and
yet didn't make. It's no sin to miss a great opportunity outside
one's area of competence. But I have passed on a couple of really
big purchases that were served up to me on a platter and that I
was fully capable of understanding. For Berkshire's shareholders,
myself included, the cost of this thumb-sucking has been huge.
其實有些更嚴重的錯誤大家根本就看不到，那是一些明明我很熟悉了解的股票或
公司，但卻因故沒有能完成投資，錯失一些能力之外的大好機會當然沒有罪，但
是我卻白白錯過一些自動送上門，應該把握卻沒有好好把握的好買賣，對於
Berkshire的股東，當然包括我自己本身在內，這種損失是難以估計的。
o Our consistently-conservative financial policies may appear
to have been a mistake, but in my view were not. In retrospect,
it is clear that significantly higher, though still conventional,
leverage ratios at Berkshire would have produced considerably
better returns on equity than the 23.8% we have actually
averaged. Even in 1965, perhaps we could have judged there to be
a 99% probability that higher leverage would lead to nothing but
good. Correspondingly, we might have seen only a 1% chance that
some shock factor, external or internal, would cause a
conventional debt ratio to produce a result falling somewhere
between temporary anguish and default.
另外我們一貫保守財務政策可能也是一種錯誤，不過就我個人的看法卻不認為如
此，回想起來，很明顯的我們只要能夠再多用一點財務槓桿操作(雖然較之他人
還是很保守)，就可以得到遠比現在每年平均23.8%還要高的投資報酬率，即使
是在1965年我們也可以百分之九十九地確定高一點的財務槓桿絕對只有好處
沒有壞處，但同時我們可能也會有百分之一的機會，不管是從內部或是外部所引
發令人異想不到的因素，使得我們負債比率提高到介於一時衝高到負債倒閉之
間。
We wouldn't have liked those 99:1 odds - and never will. A
small chance of distress or disgrace cannot, in our view, be
offset by a large chance of extra returns. If your actions are
sensible, you are certain to get good results; in most such
cases, leverage just moves things along faster. Charlie and I
have never been in a big hurry: We enjoy the process far more
than the proceeds - though we have learned to live with those
also.
我們一點都不會想要有那種99比1的可能性，以後也不會，一點挫敗或是侮辱
小小的可能性永遠沒有辦法可以用很有可能大撈一筆的大好機會來彌補，只要你
的行為合理，你就一定能夠得到好的結果，在大部分的狀況下，融資槓桿頂多只
會讓你移動的更快，查理跟我從來都不會著急，我們享受過程更甚於結果，雖然
我們也必須學會去承擔後者。
* * * * * * * * * * * *
We hope in another 25 years to report on the mistakes of the
first 50. If we are around in 2015 to do that, you can count on
this section occupying many more pages than it does here.
我們希望25年後還能向各位報告Berkshire頭50年所犯的錯誤，我想西元
2015年的年報，大家應該可以確定這一部份將佔據更多的版面。
Miscellaneous
其他事項
We hope to buy more businesses that are similar to the ones
we have, and we can use some help. If you have a business that
fits the following criteria, call me or, preferably, write.
我們希望能夠買進更多像我們現在擁有一樣的企業，當然我們可以透過大家的協
助，如果你擁有符合以下條件的企業，記得打電話或者是寫信告訴我。
Here's what we're looking for:
(1) Large purchases (at least $10 million of after-tax
earnings),
(2) demonstrated consistent earning power (future
projections are of little interest to us, nor are
"turnaround" situations),
(3) businesses earning good returns on equity while
employing little or no debt,
(4) management in place (we can't supply it),
(5) simple businesses (if there's lots of technology, we
won't understand it),
(6) an offering price (we don't want to waste our time or
that of the seller by talking, even preliminarily,
about a transaction when price is unknown).
We will not engage in unfriendly takeovers. We can promise
complete confidentiality and a very fast answer - customarily
within five minutes - as to whether we're interested. We prefer
to buy for cash, but will consider issuing stock when we receive
as much in intrinsic business value as we give.
Our favorite form of purchase is one fitting the Blumkin-
Friedman-Heldman mold. In cases like these, the company's owner-
managers wish to generate significant amounts of cash, sometimes
for themselves, but often for their families or inactive
shareholders. At the same time, these managers wish to remain
significant owners who continue to run their companies just as
they have in the past. We think we offer a particularly good fit
for owners with such objectives. We invite potential sellers to
check us out by contacting people with whom we have done business
in the past.
我們想要找的企業條件
(1)鉅額交易(每年稅後盈餘至少有一千萬美元)
(2)持續穩定獲利(我們對有遠景或具轉機的公司沒興趣)
(3)高股東報酬率(並且甚少舉債)
(4)具備管理階層(我們無法提供)
(5)簡單的企業(若牽涉到太多高科技，我們弄不懂)
(6)合理的價格(在價格不確定前，我們不希望浪費自己與對方太多時間)
我們不會進行敵意的購併，並承諾完全保密並儘快答覆是否感興趣(通常不超過
五分鐘) ，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。
我們最喜歡的交易對象之一是像B太太- Heldman家族那樣，公司經營者希望
能馬上有一大筆現金，不管是給自己、家人或是其他股東，最好這些經營者如往
常一樣能夠繼續留在公司，我想我們可以提供具有以上想法的經營者，一個滿意
的方式，我們也歡迎可能的賣方與那些過去與我們合作過的對象打聽。
Charlie and I frequently get approached about acquisitions
that don't come close to meeting our tests: We've found that if
you advertise an interest in buying collies, a lot of people will
call hoping to sell you their cocker spaniels. Our interest in
new ventures, turnarounds, or auction-like sales can best be
expressed by a Goldwynism: "Please include me out."
另一方面查理跟我也常常接到一些不符合我們條件的詢問，包括新事業、轉機
股、拍賣案以及最常見的仲介案。我們發現如果你登廣告要買牧羊犬，結果卻有
一大堆人打電話來要賣你長耳獵犬，在此重申我們對這些交易，只有高德溫的另
一句話可以形容，請把我排除在外。
Besides being interested in the purchase of businesses as
described above, we are also interested in the negotiated
purchase of large, but not controlling, blocks of stock
comparable to those we hold in Capital Cities, Salomon, Gillette,
USAir and Champion. Last year we said we had a special interest
in large purchases of convertible preferreds. We still have an
appetite of that kind, but it is limited since we now are close
to the maximum position we feel appropriate for this category of
investment.
除了以上買下整家公司的購併案外，我們也會考慮買進一大部份不具控制權的股
份，就像我們在資本城、所羅門、吉列、美國航空與冠軍企業這幾個Case一樣
的公司，去年我曾告訴各位我們對於買進大筆金額的可轉換特別股相當有興趣，
到現在這種態度還是沒改變，只不過由於目前這部份的部位已經接近我們認為適
當的水位。
* * * * * * * * * * * *
Two years ago, I told you about Harry Bottle, who in 1962
quickly cured a major business mess at the first industrial
company I controlled, Dempster Mill Manufacturing (one of my
"bargain" purchases) and who 24 years later had reappeared to
again rescue me, this time from problems at K&W Products, a small
Berkshire subsidiary that produces automotive compounds. As I
reported, in short order Harry reduced capital employed at K&W,
rationalized production, cut costs, and quadrupled profits. You
might think he would then have paused for breath. But last year
Harry, now 70, attended a bankruptcy auction and, for a pittance,
acquired a product line that is a natural for K&W. That company's
profitability may well be increased 50% by this coup. Watch this
space for future bulletins on Harry's triumphs.
兩年前，我曾跟各位提到Harry Bottle這個人，他在1962年曾幫我解決我個
人所控制的第一家公司Dempster紡織製造公司(又是一個便宜貨)，一個大難
題，接著在24年後又重出江湖來拯救我，那次換做K&W一家Berkshire所屬
專門生產自動組件的小公司，就像我曾提到的，Harry很快地就有效地降低K&W
的資金負擔、大砍成本使獲利倍增，你或許認為任務完成後，他鐵定要休息一下
喘口氣，但是去年高齡70歲的他，又參與一家破產公司的拍賣，以極少數的資
金取得符合K&W使用的產品線，經過這次斬獲，公司的獲利又因此將增加50%
以上，請大家好好拭目以待，這個專門替Harry準備的專欄。
* * * * * * * * * * * *
With more than a year behind him of trading Berkshire's
stock on the New York Stock Exchange, our specialist, Jim Maguire
of Henderson Brothers, Inc. ("HBI"), continues his outstanding
performance. Before we listed, dealer spreads often were 3% or
more of market price. Jim has maintained the spread at 50 points
or less, which at current prices is well under 1%. Shareholders
who buy or sell benefit significantly from this reduction in
transaction costs.
Henderson 兄弟公司的Jim Maguire是紐約證交所專門幫我們買賣Berkshire
股票的交易員，一年下來他的表現相當稱職，在Berkshire上市掛牌之前，公司
股份買賣的價差多在3%甚至以上，但Jim卻能將價差維持在50點以下，這使
得股東在買賣本公司股份的交易成本降到1%以下。
Because we are delighted by our experience with Jim, HBI and
the NYSE, I said as much in ads that have been run in a series
placed by the NYSE. Normally I shun testimonials, but I was
pleased in this instance to publicly compliment the Exchange.
因為我們與Jim、NYSE與紐約證交所這次合作愉快的經驗，使我儘可能在紐約
證交所安排的活動中免費幫他們打廣告，通常我種場合我是能免則免，但這次我
很高興能夠公開地讚揚交易所的表現。
* * * * * * * * * * * *
Last summer we sold the corporate jet that we purchased for
$850,000 three years ago and bought another used jet for $6.7
million. Those of you who recall the mathematics of the
multiplying bacteria on page 5 will understandably panic: If our
net worth continues to increase at current rates, and the cost of
replacing planes also continues to rise at the now-established
rate of 100% compounded annually, it will not be long before
Berkshire's entire net worth is consumed by its jet.
去年夏天我們把三年前以85萬美元買的公司專機給賣掉，另外又以670萬美
元買了一架二手飛機，大家只要想到先前我提過的細胞複製的數字遊戲就會覺得
很驚訝，如果我們公司的淨值持續以相同速度增長，而更換飛機的成本同樣也以
每年100%的速度上升，大家會發現，Berkshire龐大的淨值很快就會被這架飛
機給吃光光。
Charlie doesn't like it when I equate the jet with bacteria;
he feels it's degrading to the bacteria. His idea of traveling in
style is an air-conditioned bus, a luxury he steps up to only
when bargain fares are in effect. My own attitude toward the jet
can be summarized by the prayer attributed, apocryphally I'm
sure, to St. Augustine as he contemplated leaving a life of
secular pleasures to become a priest. Battling the conflict
between intellect and glands, he pled: "Help me, Oh Lord, to
become chaste - but not yet."
查理對於我將飛機比喻成細菌的做法不太高興，他認為這樣豈不污辱了細菌，他
個人最理想的旅行方式是坐有空調冷氣的巴士，這還是當車票有打折時才有的奢
侈做法。對於這架專機我個人一貫的態度是聖奧古斯丁當初想要脫離世俗的富裕
生活出家去到教士一樣，在理智與榮耀的中間天人交戰，他乞求上天，救救我吧，
讓我成為一個聖潔的人，不過不是現在！
Naming the plane has not been easy. I initially suggested
"The Charles T. Munger." Charlie countered with "The Aberration."
We finally settled on "The Indefensible."
替這架飛機命名可不是一件簡單的事，一開始我建議取名叫做查理孟格號，查理
反擊說應該叫神經有問題號，最後雙方妥協決定稱它為「無可辯解號」。
* * * * * * * * * * * *
About 96.9% of all eligible shares participated in
Berkshire's 1989 shareholder-designated contributions program.
Contributions made through the program were $5.9 million, and
2,550 charities were recipients.
大約有96.9%的有效股權參與1989年的股東指定捐贈計劃，總計約590萬美
元捐出的款項分配給2,550家慈善機構。
We urge new shareholders to read the description of our
shareholder-designated contributions program that appears on
pages 52-53. If you wish to participate in future programs, we
strongly urge that you immediately make sure your shares are
registered in the name of the actual owner, not in the nominee
name of a broker, bank or depository. Shares not so registered on
August 31, 1990 will be ineligible for the 1990 program.
我們敦促新加入的股東，仔細閱讀年報上有關股東捐贈計畫的詳細內容，如果在
未來年度內，你想要參加這類的計畫，我們強烈建議你將股份登記在自己而不是
受託人的名下，必須在1990年8月31日之前完成登記，才有權利參與1990
年的計畫。
* * * * * * * * * * * *
The annual meeting this year will take place at 9:30 a.m. on
Monday, April 30, 1990. Attendance grew last year to about 1,000,
very close to the seating capacity of the Witherspoon Hall at
Joslyn Museum. So this year's meeting will be moved to the
Orpheum Theatre, which is in downtown Omaha, about one-quarter of
a mile from the Red Lion Hotel. The Radisson-Redick Tower, a much
smaller but nice hotel, is located across the street from the
Orpheum. Or you may wish to stay at the Marriott, which is in
west Omaha, about 100 yards from Borsheim's. We will have buses
at the Marriott that will leave at 8:30 and 8:45 for the meeting
and return after it ends.
今年的股東會預計在1990年4月30日，星期一早上9點30分舉行，去年股
東會參加人數突破一萬人，差點超過開會場地的座位容量，所以今年的會場將會
移到奧瑪哈市中心的Orpheum中心，對街有一家不錯的旅館叫
Radisson-Redick，另外距離紅獅旅館約有1英理遠，當然你也可以選擇離波
仙珠寶店100公尺遠的Marriott，屆時將會有巴士接送大家往返股東會會場。
Charlie and I always enjoy the meeting, and we hope you can
make it. The quality of our shareholders is reflected in the
quality of the questions we get: We have never attended an annual
meeting anywhere that features such a consistently high level of
intelligent, owner-related questions.
查理跟我一直都很喜歡開股東會，我也希望大家能夠來參加，我們股東的素質可
由大家所提出的問題看得出來，我們參加過很多股東會，但從來沒有別的公司的
股東像Berkshire的股東一樣由高智慧水準與經營者榮枯與共的股東組合。
An attachment to our proxy material explains how you can
obtain the card you will need for admission to the meeting.
Because weekday parking can be tight around the Orpheum, we have
lined up a number of nearby lots for our shareholders to use. The
attachment also contains information about them.
後面附有股東會開會投票的相關資料，跟各位解釋如何拿到入場所許的識別證，
因為開會當天會場不好停車，我們特地為大家預留了一些位置，附件也有相關說
明供大家參考。
As usual, we will have buses to take you to Nebraska
Furniture Mart and Borsheim's after the meeting and to take you
to downtown hotels or to the airport later. I hope that you will
allow plenty of time to fully explore the attractions of both
stores. Those of you arriving early can visit the Furniture Mart
any day of the week; it is open from 10 a.m. to 5:30 p.m. on
Saturdays, and from noon to 5:30 p.m. on Sundays.
一如往常，會後我們備有巴士帶大家到內布拉斯加傢具店與波仙珠寶店或是到飯
店與機場，我希望大家能有多一點的時間好好探索這兩家店的奧妙，當然早幾天
到的股東也可利用假日逛逛傢具店，星期六從早上10點到下午5點30分，星
期日則從中午開到下午5點30分。
Borsheim's normally is closed on Sunday, but we will open
for shareholders and their guests from noon to 6 p.m. on Sunday,
April 29th. Ike likes to put on a show, and you can rely on him
to produce something very special for our shareholders.
波仙星期天通常不開門營業，但在股東會期間特別破例，4月29日星期天從中
午開到下午6點，Ike特地為股東們準備了一場秀，相信他一定可以讓大家見識
到一些特別的東西。
In this letter we've had a lot to say about rates of
compounding. If you can bear having your own rate turn negative
for a day - not a pretty thought, I admit - visit Ike on the
29th.
今年我們提到很多次有關複利的事，若是你能忍受個人淨值暫時倒退一天的話，
雖然不建議常常這樣做，記得在29號去看看Ike的秀吧！
Warren E. Buffett
March 2, 1990 Chairman of the Board
華倫．巴菲特
董事會主席
1990年3月2日
原文載自：http://stasis.pixnet.net/blog/post/22779079
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