巴菲特致股東函 2004

Note: The following table appears in the printed Annual Report on the facing page of the Chairman's Letter and is referred to in that letter.
Berkshire’s Corporate Performance vs. the S&P 500
Annual Percentage Change
in Per-Share in S&P 500 Book Value of Berkshire in S&P 500 with Dividends Included Relative Results
Year    (1) (2) (1)-(2) 
1965 23.80 10.00 13.8 
1966 20.30 (11.70)  32.0 
1967 11.00 30.90 (19.9) 
1968 19.00 11.00  8.0 
1969 16.20 (8.40)  24.6 
1970 12.00 3.90 8.1 
1971 16.40 14.60  1.8 
1972 21.70 18.90 2.8 
1973 4.70 (14.80)  19.5 
1974 5.50 (26.40) 31.90
1975 21.90 37.20 (15.30)
1976 59.30 23.60 35.70
 1977  31.90 (7.40) 39.3 
1978 24.00 6.40 17.6 
1979 35.70 18.20  17.5 
1980 19.30 32.30  (13.0) 
1981 31.40 (5.00)  36.4 
1982 40.00 21.40 18.6 
1983 32.30 22.40 9.9 
1984 13.60 6.10 7.50
1985 48.20 31.60  16.6 
1986 26.10 18.60  7.5 
1987 19.50 5.10 14.4 
1988 20.10 16.60  3.5 
1989 44.40 31.70 12.70
1990  7.40 (3.10)  10.5 
1991 39.60 30.50 9.10
1992  20.30 7.60 12.7 
1993 14.30 10.10 4.2 
1994 13.90 1.30 12.60
1995 43.10 37.60  5.5 
1996 31.80 23.00  8.8 
1997 34.10 33.40  .7 
1998 48.30 28.60 19.7 
1999 0.50 21.00 (20.50)
2000 6.50 (9.10) 15.6 
2001 (6.20) (11.90) 5.70
2002 10.00 (22.10) 32.10
2003 21.00 28.70 (7.70)
2004 10.50 10.90 (0.40)
Average Annual Gain — 1965-2004  21.90 10.40 11.50
Overall Gain — 1964-2004  286,865.00 5,318.00

Notes: Data are for calendar years with these exceptions: 1965 and 1966, year ended 9/30; 1967, 15 months ended 12/31. 

說明：1965和1966年的財年截止日期為9月30日，1967年有15個月，截止至12月31日，其他年份財年與日曆年截止日相同。

Starting in 1979, accounting rules required insurance companies to value the equity securities they hold at market rather than at the lower of cost or market, which was previously the requirement. In this table, Berkshire's results through 1978 have been restated to conform to the changed rules. In all other respects, the results are calculated using the numbers originally reported. 

1979年開始，會計準則要求保險公司以市值計算所持有的權益類證券賬面價值，而此前準則要求以市價和歷史成本價孰低計量。上表中，伯克希爾1978年前的數據已經追溯調整以符合準則的要求。除此之外，所有結果依據原始數據進行計算。

The S&P 500 numbers are pre-tax whereas the Berkshire numbers are after-tax. If a corporation such as Berkshire were simply to have owned the S&P 500 and accrued the appropriate taxes, its results would have lagged the S&P 500 in years when that index showed a positive return, but would have exceeded the S&P in years when the index showed a negative return. Over the years, the tax costs would have caused the aggregate lag to be substantial.

標普500指數的變動是稅前收益，而伯克希爾的數據是稅後收益。如果一個類似伯克希爾的公司擁有標普500指數的業績，並繳納相應稅收，在標普500回報為正的年份，其業績會落後於標普500，在標普500指數為負的年份，其回報會超過標普500指數。多年下來，稅收負擔將導致總體回報顯著落後於指數的變動。

BERKSHIRE HATHAWAY INC.
波克夏海瑟崴股份有限公司

To the Shareholders of Berkshire Hathaway Inc.:
致Berkshire公司全體股東:

Our gain in net worth during 2004 was $8.3 billion, which increased the per-share book value of both our Class A and Class B stock by 10.5%. Over the last 40 years (that is, since present management took over) book value has grown from $19 to $55,824, a rate of 21.9% compounded annually.*

經結算本公司2004年的淨值增加83億美元，A股或B股每股的帳面淨值增加10.5%，累計自現有經營階層接手之後的40年以來，每股淨值由當初的19元成長到目前的55,824美元，年複合成長率約為21.9%。

It’s per-share intrinsic value that counts, however, not book value. Here, the news is good: Between 1964 and 2004, Berkshire morphed from a struggling northern textile business whose intrinsic value was less than book into a diversified enterprise worth far more than book. Our 40-year gain in intrinsic value has therefore somewhat exceeded our 21.9% gain in book. (For an explanation of intrinsic value and the economic principles that guide Charlie Munger, my partner and Berkshire’s vice-chairman, and me in running Berkshire, please read our Owner’s Manual, beginning on page 73.)

真正重要的是實質價值，而不是帳面淨值，而好消息是，在1964年到2004年期間，Berkshire已經從一家原本搖搖欲墜的北方紡織公司，蛻變成一個跨足各個產業的大型集團，其實質價值大幅超越帳面淨值，可以這樣說，40年來實質價值的成長率甚至遠超過帳面淨值21.9%的成長率，(想要對實質價值以及本人與查理孟格經營Berkshire的原則有更多的瞭解的人，我建議大家閱讀73頁的股東手冊)。

Despite their shortcomings, yearly calculations of book value are useful at Berkshire as a slightly understated gauge for measuring the long-term rate of increase in our intrinsic value. The calculations are less relevant, however, than they once were in rating any single year’s performance versus the S&P 500 index (a comparison we display on the facing page). Our equity holdings (including convertible preferreds) have fallen considerably as a percentage of our net worth, from an average of 114% in the 1980s, for example, to less than 50% in recent years. Therefore, yearly movements in the stock market now affect a much smaller portion of our net worth than was once the case, a fact that will normally cause us to underperform in years when stocks rise substantially and overperform in years when they fall.

雖然帳面淨值並非完美，但仍不失為衡量實質價值長期成長率的有效工具，當然單一年度淨值的表現與S&P 500指數的比較(相關比較參閱首頁)，其意義已不若以往，主要原因在於我們股票投資部位，(含可轉換特別股在內)，占我們淨值的比重已大幅下降，從1980年代早期的114%，到近年50%不到，也因此股市波動對於我們淨值影響的程度也大不如前。

However the yearly comparisons work out, Berkshire’s long-term performance versus the S&P remains all-important. Our shareholders can buy the S&P through an index fund at very low cost. Unless we achieve gains in per-share intrinsic value in the future that outdo the S&P, Charlie and I will be adding nothing to what you can accomplish on your own.

不過即便如此，Berkshire相對於S&P長期的表現還是頂重要的，因為股東們現在可以非常低的手續費買到指數型基金，間接投資S&P，因此除非在往後我們能夠以高於S&P的速度累積每股實質價值，否則查理跟我就沒有存在的價值。

Last year, Berkshire’s book-value gain of 10.5% fell short of the index’s 10.9% return. Our lackluster performance was not due to any stumbles by the CEOs of our operating businesses: As always, they pulled more than their share of the load. My message to them is simple: Run your business as if it were the only asset your family will own over the next hundred years. Almost invariably they do just that and, after taking care of the needs of their business, send excess cash to Omaha for me to deploy.

去年Berkshire的帳面淨值僅增加了10.5%，略低於S&P 10.9%的報酬率，這種平庸的表現與我們旗下經理人完全無關，一如往常，他們已分擔了許多重擔，我給他們的指示相當簡單明確，以繼承自家百年老店的心來經營事業，而他們大多都照辦，並把多餘的資金送回奧瑪哈交由我運用。

I didn’t do that job very well last year. My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings to the many we already have. But I struck out. Additionally, I found very few attractive securities to buy. Berkshire therefore ended the year with $43 billion of cash equivalents, not a happy position. Charlie and I will work to translate some of this hoard into more interesting assets during 2005, though we can’t promise success.

去年是我沒有做好份內的工作，我本來希望能夠談成幾個數十億美元的購並案，好讓我們能夠再增加穩定的盈餘創造能力，可惜我一事無成，此外我也找不到什麼股票可以買，就這樣到年底Berkshire帳上累積的高達430億美元的約當現金，真傷腦筋，明年查理跟我會更努力地將這些閒置資金轉化為較吸引人的資產，不過我們實在是不敢打包票。

In one respect, 2004 was a remarkable year for the stock market, a fact buried in the maze of numbers on page 2. If you examine the 35 years since the 1960s ended, you will find that an investor’s return, including dividends, from owning the S&P has averaged 11.2% annually (well above what we expect future returns to be). But if you look for years with returns anywhere close to that 11.2% – say, between 8% and 14% – you will find only one before 2004. In other words, last year’s “normal” return is anything but.

從另一方面來說，2004年的股市表現確實不錯，如果你看看自六O年代以來的35年間，你會發現投資人的報酬率，含股利在內，年平均高達11.2%，(這遠高於未來我們預期可獲得的報酬率)，但如果看看最近幾年的報酬率，你會發現在2004年以前只有一年達到以前的水準，所以說去年看起來正常的報酬可以說是特例

*All figures used in this report apply to Berkshire’s A shares, the successor to the only stock that the company had outstanding before 1996. The B shares have an economic interest equal to 1/30th that of the A. Over the 35 years, American business has delivered terrific results. It should therefore have been easy for investors to earn juicy returns: All they had to do was piggyback Corporate America in a diversified, low-expense way. An index fund that they never touched would have done the job. Instead many investors have had experiences ranging from mediocre to disastrous.

過去35年來，美國企業創造出優異的成績單，按理說投資人也應該跟著獲得豐厚的回報，只要大家以分散且低成本的方式搭順風車即可，事實上指數型基金同樣可以達到這樣的目的，但為什麼實際上大多數投資人的績效卻慘不忍睹呢?

There have been three primary causes: first, high costs, usually because investors traded excessively or spent far too much on investment management; second, portfolio decisions based on tips and fads rather than on thoughtful, quantified evaluation of businesses; and third, a start-and-stop approach to the market marked by untimely entries (after an advance has been long underway) and exits (after periods of stagnation or decline). Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.

我認為這其中主要有三個原因，第一是交易成本太高，投資人的進出往往過於頻繁，或者是花太多費用在投資管理之上，第二、投資決策往往基於小道消息而非理性量化的企業評價，第三，潛嘗輒止的方法加上錯誤的介入時點，如在多頭上漲多時的高點才介入，或是經歷一陣子的盤底走勢後低檔退出，投資人必須謹記，過度興奮與過高的交易成本是其大敵，而如果大家一定要投資股票，我認為正確的心態應該是當別人貪婪時要感到害怕，當別人害怕時要感到貪婪。

Sector Results
部門績效

As managers, Charlie and I want to give our owners the financial information and commentary we would wish to receive if our roles were reversed. To do this with both clarity and reasonable brevity becomes more difficult as Berkshire’s scope widens. Some of our businesses have vastly different economic characteristics from others, which means that our consolidated statements, with their jumble of figures, make useful analysis almost impossible.

身為管理者，查理跟我設身處地的為大家著想，希望自己能夠提供給各位所有重要的財務資訊與看法，雖然隨著Berkshire的規模日益龐雜，要兼顧簡潔與明瞭的困難度大大提高，因為我們有些產業的性質截然不同，這代表將所有數字混在一起的大雜燴，對於分析一點用處都沒有。

On the following pages, therefore, we will present some balance sheet and earnings figures from our four major categories of businesses along with commentary about each. We particularly want you to understand the limited circumstances under which we will use debt, given that we typically shun it. We will not, however, inundate you with data that has no real value in estimating Berkshire’s intrinsic value. Doing so would tend to obfuscate the facts that count.

因此在接下來的報告中，我們將按產業別分類列示各產業的資產負債表、盈餘數字以及我們的看法，我必須讓各位瞭解除非在極少數的情況下，我們儘量避免對外舉債，同時我們也不會塞給你一大堆對於分析Berkshire實質價值沒有幫助的數字，因為這樣做反而會模糊了焦點。

Regulated Utility Businesses
受管制的公用事業

We have an 80.5% (fully diluted) interest in MidAmerican Energy Holdings, which owns a wide variety of utility operations. The largest of these are (1) Yorkshire Electricity and Northern Electric, whose 3.7 million electric customers make it the third largest distributor of electricity in the U.K.; (2) MidAmerican Energy, which serves 698,000 electric customers, primarily in Iowa; and (3) Kern River and Northern Natural pipelines, which carry 7.9% of the natural gas consumed in the U.S.

經由持股80.5%(按完全稀釋基礎計算)美中能源控股公司，我們擁有眾多公用事業的權益，其中主要的專案包括(1)擁有370萬用戶，英國第三大的電力公司約克夏電力以及北方電力(2)在愛荷華州擁有69.8萬用戶的美中能源公司(3)肯特河及北方天然等兩條天然氣輸送管線，約占全美7.9%的天然氣運能。

The remaining 19.5% of MidAmerican is owned by three partners of ours: Dave Sokol and Greg Abel, the brilliant managers of these businesses, and Walter Scott, a long-time friend of mine who introduced me to the company. Because MidAmerican is subject to the Public Utility Holding Company Act (“PUHCA”), Berkshire’s voting interest is limited to 9.9%. Voting control rests with Walter.

剩下的19.5%權益則由Berkshire三位合作夥伴所持有，他們分別是Dave Sokol及Greg Abel，他們是美中能源優秀的經理人，另外一位則是Walter Scott，他是我個人長期的好友，也是他引薦我投資這家公司的，由於美中能源公司受限於公用事業控股公司法(PUHCA)的規定，限制Berkshire的投票權最高只能達到9.9%，所以Walter他擁有絕對的控制權。

Our limited voting interest forces us to account for MidAmerican in an abbreviated manner. Instead of our fully incorporating the company’s assets, liabilities, revenues and expenses into Berkshire’s statements, we make one-line entries only in both our balance sheet and income account. It’s likely, though, that PUHCA will someday – perhaps soon – be repealed or that accounting rules will change. Berkshire’s consolidated figures would then incorporate all of MidAmerican, including the substantial debt it utilizes (though this debt is not now, nor will it ever be, an obligation of Berkshire).

受限制的投票權使得我們僅能以相當簡略的方式將美中能源的財務數位列入財務報表中，而無法將該公司所有的資產負債以及營收損益列入Berkshire報表，依照現行會計原則，我們只能按投資比例認列該公司的投資金額及損益，或許在不久的將來，PUHCA會被取消或是會計原則有重大變格，那麼屆時美中能源所有的財務數字就會被列入Berkshire的合併報表之中，當然也包含其大量的融資負債在內。

At yearend, $1.478 billion of MidAmerican’s junior debt was payable to Berkshire. This debt has allowed acquisitions to be financed without our partners needing to increase their already substantial investments in MidAmerican. By charging 11% interest, Berkshire is compensated fairly for putting up the funds needed for purchases, while our partners are spared dilution of their equity interests. Because MidAmerican made no large acquisitions last year, it paid down $100 million of what it owes us.

截至年底，Berkshire對於美中能源尚有14.78億美元的次順位借款，這筆借款將可使得美中能源在進行購並時，其他大股東不用再掏錢出來。此外藉由收取11%的利息， 一方面Berkshire可獲得合理的報酬，另一方面我們的合夥人則可避免持股權益遭到稀釋，但由於美中能源去年未進行任何重大的購並案，所以償還了1億美元的借款。

MidAmerican also owns a significant non-utility business, HomeServices of America, the second largest real estate broker in the country. Unlike our utility operations, this business is highly cyclical, but nevertheless one we view enthusiastically. We have an exceptional manager, Ron Peltier, who through both his acquisition and operational skills is building a brokerage powerhouse.

美中能源另外還擁有一項重要的非公用事業，那就是全美第二大不動產仲介商-美國居家服務，不同於公用事業，這行業的景氣波動相當的大，但我們仍然對其抱予熱烈的期待，我們擁有一位優異的經理人-Ron Peltier，透過其經營及購並長才，正逐漸建立起一個房屋仲介王國。

HomeServices participated in $59.8 billion of transactions in 2004, a gain of $11.2 billion from 2003. About 24% of the increase came from six acquisitions made during the year. Through our 17 brokerage firms – all of which retain their local identities – we employ more than 18,000 brokers in 18 states. HomeServices is almost certain to grow substantially in the next decade as we continue to acquire leading localized operations.

去年居家服務總計搓合了598億美元的交易案，較2003年又大大地成長了112億，其中24%的成長來自於六件新的購並案，經由全美各地17個仲介分支，他們全都保留原有公司名稱，我們在18個州聘雇了18,000位業務人員，在往後的十年內，居家服務仍將藉由購並的方式繼續大幅成長。

Last year MidAmerican wrote off a major investment in a zinc recovery project that was initiated in 1998 and became operational in 2002. Large quantities of zinc are present in the brine produced by our California geothermal operations, and we believed we could profitably extract the metal. For many months, it appeared that commercially-viable recoveries were imminent. But in mining, just as in oil exploration, prospects have a way of “teasing” their developers, and every time one problem was solved, another popped up. In September, we threw in the towel.

去年美中能源打銷掉一項鋅金屬回收的重大投資案，該計畫在1998年開始，並於2002年正式營運，由於地熱發電產生的鹵水含有大量的鋅，而我們相信回收這些金屬應該有利可圖，近幾個月來，回收運用在商業上似乎可行，但冶礦這行，就像是石油探勘一樣，希望往往一再戲弄開發商，每當一個問題解決了，另一個問題馬上又浮現，就這樣一直拖到九月，我們終於舉白旗投降。

Our failure here illustrates the importance of a guideline – stay with simple propositions – that we usually apply in investments as well as operations. If only one variable is key to a decision, and the variable has a 90% chance of going your way, the chance for a successful outcome is obviously 90%. But if ten independent variables need to break favorably for a successful result, and each has a 90% probability of success, the likelihood of having a winner is only 35%. In our zinc venture, we solved most of the problems. But one proved intractable, and that was one too many. Since a chain is no stronger than its weakest link, it makes sense to look for – if you’ll excuse an oxymoron – mono-linked chains.

我們的失敗再度突顯了一項原則的重要性，那就是別把事情搞得太複雜，儘量讓事情簡單化，這項原則廣泛運用於我們的投資以及事業經營之上，如果某項決策只有一個變數，而這變數有九成的成功機率，那麼很顯然你就會有九成的勝算，但如果你必須克服十項變數才能達到目標，那麼最後成功的機率將只有35%，在鋅金屬回收的這項合作案中，我們幾乎克服了所有的問題，但一項無法解決的難題卻讓我們吃不完兜著走，套句矛盾的修飾語法，單一環結的連鎖。

A breakdown of MidAmerican’s results follows. In 2004, the “other” category includes a $72.2 million profit from sale of an Enron receivable that was thrown in when we purchased Northern Natural two years earlier. Walter, Dave and I, as natives of Omaha, view this unanticipated gain as war reparations – partial compensation for the loss our city suffered in 1986 when Ken Lay moved Northern to Houston, after promising to leave the company here. (For details, see Berkshire’s 2002 annual report.)

下表系美中能源營運成績的明細表，2004年在其他項下有一筆7,220萬美元的出售安隆應收帳款利益，這是兩年前我們買下北方天然時連帶進來的款項，Walter、Dave及我本人身為奧瑪哈地區的子弟，把這筆意外之財視為戰爭賠款，以彌補當年Ken Lay違背承諾，硬將北方天然從奧瑪哈遷到休斯頓的部份損失(相關細節請參閱Berkshire 2002年的年報)。

Insurance
保險事業

Since Berkshire purchased National Indemnity (“NICO”) in 1967, property-casualty insurance has been our core business and the propellant of our growth. Insurance has provided a fountain of funds with which we’ve acquired the securities and businesses that now give us an ever-widening variety of earnings streams. So in this section, I will be spending a little time telling you how we got where we are.

自從Berkshire在1967年買下國家產險NICO之後，產物保險便成為我們的核心事業之一，更是促使不斷成長的動力來源，保險業使我們取得源源不絕的資金進行投資與購並，讓Berkshire的盈利來源更多更廣，所以在接下來的這一段中，我會花一點時間告訴大家我們是如何做到的。

The source of our insurance funds is “float,” which is money that doesn’t belong to us but that we temporarily hold. Most of our float arises because (1) premiums are paid upfront though the service we provide – insurance protection – is delivered over a period that usually covers a year and; (2) loss events that occur today do not always result in our immediately paying claims, because it sometimes takes many years for losses to be reported (asbestos losses would be an example), negotiated and settled. The $20 million of float that came with our 1967 purchase has now increased – both by way of internal growth and acquisitions – to $46.1 billion.

保險公司的資金來源在於浮存金，這筆資金雖然不屬於我們所有，但卻可暫時為我們所用，而我們的浮存金之所以增加系由於(1)保費通常在我們提供服務之前就先預繳，(2)今天發生的損失不代表我們立刻就要理賠，其原因在於損害有時要在發生後好幾年才會被發現，從而協調及合解(比如說石棉案就是很好的例子)，這筆金額從1967年最早的2,000萬美元，經由多年的內部成長及對外購並，累積增加至如今的461億美元之譜。

Float is wonderful – if it doesn’t come at a high price. Its cost is determined by underwriting results, meaning how the expenses and losses we will ultimately pay compare with the premiums we have received. When an underwriting profit is achieved – as has been the case at Berkshire in about half of the 38 years we have been in the insurance business – float is better than free. In such years, we are actually paid for holding other people’s money. For most insurers, however, life has been far more difficult: In aggregate, the property-casualty industry almost invariably operates at an underwriting loss. When that loss is large, float becomes expensive, sometimes devastatingly so.

浮存金固然不錯，但前提是取得成本要夠低，而其成本取決於核保的績效，也就是損失與費用占保費收入的比例，當核保有利益時，就像Berkshire過去38年來多數的情況一樣，此時浮存金甚至比免費還好，在這些年度，意謂著別人付費來請我們幫他們保管資金，然而對於其他大部份的保險同業來說，可就沒有那麼好過了，總的來說，產物意外險業通常都會有核保損失，當損失過大時，就代表浮存金的成本過高，有時甚至高得離譜。

Insurers have generally earned poor returns for a simple reason: They sell a commodity-like product. Policy forms are standard, and the product is available from many suppliers, some of whom are mutual companies (“owned” by policyholders rather than stockholders) with profit goals that are limited. Moreover, most insureds don’t care from whom they buy. Customers by the millions say “I need some Gillette blades” or “I’ll have a Coke” but we wait in vain for “I’d like a National Indemnity policy, please.” Consequently, price competition in insurance is usually fierce. Think airline seats.

保險業者的績效之所以不好的原因其實很簡單，他們的產品-保單多屬制式而且許多保險業者都提供相同的產品，有些甚至以合作社的方式經營(公司系由保戶而非股東所擁有)，所以利潤空間相當有限，以至於大部份的投保客戶根本就不在乎保單是向誰購買的，大部份的消費者或許會說”我要買吉列的刮胡刀” 、”我要買可口可樂” ，但絕對不會有人說”給我來份國家產險的保單”，也因此價格競爭在保險業界可說是相當的激烈的，看看航空公司就知道是怎麼回事了。

So, you may ask, how do Berkshire’s insurance operations overcome the dismal economics of the industry and achieve some measure of enduring competitive advantage? We’ve attacked that problem in several ways. Let’s look first at NICO’s strategy.

所以或許你會問，Berkshire是如何擺脫產業普遍存在的劣勢，同時保有持續的競爭優勢的，我們從許多方面來克服這個問題，首先讓我們來看看NICO的策略。

When we purchased the company – a specialist in commercial auto and general liability insurance – it did not appear to have any attributes that would overcome the industry’s chronic troubles. It was not well-known, had no informational advantage (the company has never had an actuary), was not a low-cost operator, and sold through general agents, a method many people thought outdated. Nevertheless, for almost all of the past 38 years, NICO has been a star performer. Indeed, had we not made this acquisition, Berkshire would be lucky to be worth half of what it is today

當我們買下該公司時，這是一家專門從事商用車險及一般責任險的公司，當時它顯然並未擁有得以克服同業沉苛的特點，它的名氣不夠響亮，也沒有任何資訊上的優勢(當時公司甚至沒有精算師) ，營運成本也不是最低的，保單透過一般的仲介銷售，這在當時被視為落伍的做法，儘管如此，在往後的38年內，NICO的表現卻極為優異，我們可以這樣說，當時要是我們沒沒吃下這家公司，Berkshire的價值可能不及現在的一半。

What we’ve had going for us is a managerial mindset that most insurers find impossible to replicate. Take a look at the facing page. Can you imagine any public company embracing a business model that would lead to the decline in revenue that we experienced from 1986 through 1999? That colossal slide, it should be emphasized, did not occur because business was unobtainable. Many billions of premium dollars were readily available to NICO had we only been willing to cut prices. But we instead consistently priced to make a profit, not to match our most optimistic competitor. We never left customers – but they left us.

我們所做的是一般保險業者絕對無法複製的一種管理思惟，請大家看一下年報的首頁，大家肯定沒有看過有公司可以忍受營收連續十多年(1986年-1999年)持續下滑的經營模式，我必須強調，那種大幅度下滑的原因並不是沒有生意可做，事實上只要我們願意降點價格，馬上就會有幾十億美金的保單上門，但NICO寧可維持利潤也不願與同業隨波逐流，我們從來不棄客戶于不顧，是客戶主動離開我們。

 Most American businesses harbor an “institutional imperative” that rejects extended decreases in volume. What CEO wants to report to his shareholders that not only did business contract last year but that it will continue to drop? In insurance, the urge to keep writing business is also intensified because the consequences of foolishly-priced policies may not become apparent for some time. If an insurer is optimistic in its reserving, reported earnings will be overstated, and years may pass before true loss costs are revealed (a form of self-deception that nearly destroyed GEICO in the early 1970s).

大部份的美國企業都不願看到營收大幅下滑，沒有公司的主管會願意跟股東報告去年的營收下滑，且看起來束手無策，這在保險公司尤其明顯，因為繼續簽發保單的愚昧的後果可能要等上好長一段時間才會被發現，如果保險業者對於準備提撥過於樂觀，那麼帳面的盈餘便可能高估，而隱含的損失可能要等好幾個年頭才會浮現，(就是這種自欺欺人的技倆讓GEICO在七零年代差點倒閉)。

Portrait of a Disciplined Underwriter National Indemnity Company
National Indemnity Company Underwriting Profit (Loss) as a Percentage of Premiums (Calculated as of year end 2004)*
Written Premium (In $ millions)  No. of Employees at Year-End  Ratio of Operating Expenses to Written Premium
Year
1980 $79.60 372 32.3% 8.2%
1981 59.9 353 36.1% -0.8%
1982 52.5 323 36.7% -15.3%
1983 58.2 308 35.6% -18.7%
1984 62.2 342 35.5% -17.0%
1985 160.7 380 28.0% 1.9%
1986 366.2 403 25.9% 30.7%
1987 232.3 368 29.5% 27.3%
1988 139.9 347 31.7% 24.8%
1989 98.4 320 35.9% 14.8%
1990 87.8 289 37.4% 7.0%
1991 88.3 284 35.7% 13.0%
1992 82.7 277 37.9% 5.2%
1993 86.8 279 36.1% 11.3%
1994 85.9 263 34.6% 4.6%
1995 78 258 36.6% 9.2%
1996 74 243 36.5% 6.8%
1997 65.3 240 40.4% 6.2%
1998 56.8 231 40.4% 9.4%
1999 54.5 222 41.2% 4.5%
2000 68.1 230 38.4% 2.9%
2001 161.3 254 28.8% -11.6%
2002 343.5 313 24.0% 16.8%
2003 594.5 337 22.2% 18.1%
2004 605.6 340 22.5% 5.1%

*It takes a long time to learn the true profitability of any given year. First, many claims are received after the end of the year, and we must estimate how many of these there will be and what they will cost. (In insurance jargon, these claims are termed IBNR – incurred but not reported.) Second, claims often take years, or even decades, to settle, which means there can be many surprises along the way.

特定年度的獲利情況通常需要很長一段時間以後才能知曉，其原因在於，首先，許多理賠申請通常要到年底才會提出，所以我們必須事先預估可能的數字，套句保險業的術語，這些理賠申請簡稱為IBNR-發生但尚未申訴的案件，其次，理賠申請可能要好幾年，有時甚至要好幾十年，才能合解，這意思是說其間可能橫生許多波折。

For these reasons, the results in this column simply represent our best estimate at the end of 2004 as to how we have done in prior years. Profit margins for the years through 1999 are probably close to correct because these years are “mature,” in the sense that they have few claims still outstanding. The more recent the year, the more guesswork is involved. In particular, the results shown for 2003 and 2004 are apt to change significantly.

基於以上幾個原因，上表的這些數字僅代表我們在2004年底所能估算的預估，如同以往年度一樣，截至1999年的數字應該比較不會出錯，因為那年以前的理賠申請案都已提出的差不多了，離現在越近的年度的數字，其估計的成份也就越大，尤其是最近兩年，也就是2003年及2004年，日後大幅變化的可能性最大。

Finally, there is a fear factor at work, in that a shrinking business usually leads to layoffs. To avoid pink slips, employees will rationalize inadequate pricing, telling themselves that poorly-priced business must be tolerated in order to keep the organization intact and the distribution system happy. If this course isn’t followed, these employees will argue, the company will not participate in the recovery that they invariably feel is just around the corner.

最後，有一項恐怖因數在其間作祟，業務萎縮通常會導致裁員，為了避免被炒魷魚，員工通常將不當訂價的原因合理化，告訴自己降價以保存組織完整是可以被忍受的，如此整個行銷系統都將皆大歡喜，如果不這樣做，員工們會聲稱，一旦景氣回春，公司將無法恭逢其盛。

To combat employees’ natural tendency to save their own skins, we have always promised NICO’s workforce that no one will be fired because of declining volume, however severe the contraction. (This is not Donald Trump’s sort of place.) NICO is not labor-intensive, and, as the table suggests, can live with excess overhead. It can’t live, however, with underpriced business and the breakdown in underwriting discipline that accompanies it. An insurance organization that doesn’t care deeply about underwriting at a profit this year is unlikely to care next year either.

為了抵檔員工保住自己飯碗的天性，我們總是一再承諾NICO的同仁不會因為業務萎縮而裁員，這兒可跟唐諾川普那裏不一樣，NICO不是勞力密集的公司，而如同上表所示的，我們可以忍受較寬鬆的人力配置，但卻絕對不能忍受不當的訂價，以及隨之而來的核保紀律，因為現在不在乎核保獲利的保險公司，以後也不可能會在乎。

Naturally, a business that follows a no-layoff policy must be especially careful to avoid overstaffing when times are good. Thirty years ago Tom Murphy, then CEO of Cap Cities, drove this point home to me with a hypothetical tale about an employee who asked his boss for permission to hire an assistant. The employee assumed that adding $20,000 to the annual payroll would be inconsequential. But his boss told him the proposal should be evaluated as a $3 million decision, given that an additional person would probably cost at least that amount over his lifetime, factoring in raises, benefits and other expenses (more people, more toilet paper). And unless the company fell on very hard times, the employee added would be unlikely to be dismissed, however marginal his contribution to the business.

當然採取不裁員態度的企業一定要避免在景氣好時，過度征人，三十年前當時資本城總裁湯姆莫菲讓我徹頭徹尾瞭解這點，當時他告訴我一個小故事，話說有位員工要求老闆新增一個人力，這位員工認為公司一年增加二萬美元的薪水開支沒什麼大不了，但他的老闆卻提醒他要把它當做像是一個三百萬美元的提案般慎重，因為考量其終身所得福利及其它開支(人越多，廁紙當然也用得越凶)，因為除非公司真的快經營不下去了，否則這位員工將很難會被解雇，不管他對公司的貢獻有多微薄。

It takes real fortitude – embedded deep within a company’s culture – to operate as NICO does. Anyone examining the table can scan the years from 1986 to 1999 quickly. But living day after day with dwindling volume – while competitors are boasting of growth and reaping Wall Street’s applause – is an experience few managers can tolerate. NICO, however, has had four CEOs since its formation in 1940 and none have bent. (It should be noted that only one of the four graduated from college. Our experience tells us that extraordinary business ability is largely innate.)

當然要讓像NICO這樣的文化深植在公司的企業文化之中，必須要耗費相當大的功夫，看過這張表的人可以特別注意1986年到1999年的數位，很少有經理人可以默默忍受業務日漸下滑，特別是當其他競爭同業因為業績大增而受到華爾街分析師的掌聲之時，然而NICO自1940年創立以來的四任總裁卻沒有一位屈服，特別要說明的是，這四位總裁只有一位擁有大學學歷，經驗告訴我們，生意頭腦大多是天生的。

 The current managerial star – make that superstar – at NICO is Don Wurster (yes, he’s “the graduate”), who has been running things since 1989. His slugging percentage is right up there with Barry Bonds’ because, like Barry, Don will accept a walk rather than swing at a bad pitch. Don has now amassed $950 million of float at NICO that over time is almost certain to be proved the negative-cost kind. Because insurance prices are falling, Don’s volume will soon decline very significantly and, as it does, Charlie and I will applaud him ever more loudly.

現任NICO的管理明星是Don Wurster，姑且稱他為超級巨星 (沒錯，擁有大學文憑的就是他)，自1989年起便接掌該公司，他的打擊率可以媲美Barry Bonds，因為跟Bonds一樣，Don寧願選擇保送也不會對著壞球揮棒，總計到現在他已為我們累積了9.5億美元的浮存金，而且幾乎可以說是不用成本的，而由於目前的保費水準有下滑的趨勢，所以NICO的業務很可能會再度大幅下滑，關於這點，查理跟我百分之百支持他。

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

Another way to prosper in a commodity-type business is to be the low-cost operator. Among auto insurers operating on a broad scale, GEICO holds that cherished title. For NICO, as we have seen, an ebband-flow business model makes sense. But a company holding a low-cost advantage must pursue an unrelenting foot-to-the-floor strategy. And that’s just what we do at GEICO.
  
商品化的企業另一項生存之道就是壓低成本，在眾多車險業者當中，GEICO無疑榮獲桂冠，至於NICO則是另外一種路遙知馬力類型，但追求低成本的企業必須努力不懈，徹頭徹尾的維持優勢，而GEICO正是如此。

A century ago, when autos first appeared, the property-casualty industry operated as a cartel. The major companies, most of which were based in the Northeast, established “bureau” rates and that was it. No one cut prices to attract business. Instead, insurers competed for strong, well-regarded agents, a focus that produced high commissions for agents and high prices for consumers.

一百年前，當汽車首次問世，產物意外險業便是個壟斷的行業，幾家最主要的公司，大多位於東北部，訂立了公訂的價位，且完全不二價，沒有人會殺價競爭，保險業者所競逐的是強勢的仲介商，此舉造成高傭金與高費率。

In 1922, State Farm was formed by George Mecherle, a farmer from Merna, Illinois, who aimed to take advantage of the pricing umbrella maintained by the high-cost giants of the industry. State Farm employed a “captive” agency force, a system keeping its acquisition costs lower than those incurred by the bureau insurers (whose “independent” agents successfully played off one company against another). With its low-cost structure, State Farm eventually captured about 25% of the personal lines (auto and homeowners) business, far outdistancing its once-mighty competitors. Allstate, formed in 1931, put a similar distribution system into place and soon became the runner-up in personal lines to State Farm. Capitalism had worked its magic, and these low-cost operations looked unstoppable.

1922年州農保險由伊利諾州Merna的農夫George Mecherle所創立，目標鎖定在打破業界掮客所樹立的高價保護傘，州農雇用專屬仲介人員，這套系統讓州農取得保單的成本遠低於一般保險同業，其獨立業務代表接二連三成功地搞倒其他業者，拜其低成本結構所賜，州農最終拮取25%的個人業務大餅，含車險及住宅險在內，遠遠超越昔日強大的競爭對手，而創立於1931年的Allstate也仿效設立類似的行銷通路，並一舉躍居第二，僅次於州農，資本主義再度發揮神奇的效用，而這種低成本的營運確已勢不可擋。

But a man named Leo Goodwin had an idea for an even more efficient auto insurer and, with a skimpy $200,000, started GEICO in 1936. Goodwin’s plan was to eliminate the agent entirely and to deal instead directly with the auto owner. Why, he asked himself, should there be any unnecessary and expensive links in the distribution mechanism when the product, auto insurance, was both mandatory and costly. Purchasers of business insurance, he reasoned, might well require professional advice, but most consumers knew what they needed in an auto policy. That was a powerful insight.

但此時有一個叫Leo Goodwin卻有一個更有效率的想法，他在1936年以區區的20萬美元創立GEICO，Goodwin計畫完全柄除掉仲介，而直接與車主接觸，他認為當客戶在投保汽車險所面對的保單大多是制式化且又昂貴不堪時，中間為什麼一定要有昂貴且不必要的銷售機制，他認為商業保險的客戶或許需要許多專業上的建議，但一般的顧客卻只知道他們需要的是一張車險保單，這在當時真是真知灼見。

Originally, GEICO mailed its low-cost message to a limited audience of government employees. Later, it widened its horizons and shifted its marketing emphasis to the phone, working inquiries that came from broadcast and print advertising. And today the Internet is coming on strong.

一開始，GEICO只是將其低價的訊息郵寄給少數的公務人員，之後又將範圍擴大，並把銷售重點擺在電話行銷、廣播及報章雜誌，而時至今日，網路更是來勢洶洶。

Between 1936 and 1975, GEICO grew from a standing start to a 4% market share, becoming the country’s fourth largest auto insurer. During most of this period, the company was superbly managed, achieving both excellent volume gains and high profits. It looked unstoppable. But after my friend and hero Lorimer Davidson retired as CEO in 1970, his successors soon made a huge mistake by underreserving for losses. This produced faulty cost information, which in turn produced inadequate pricing. By 1976, GEICO was on the brink of failure.

從1936到1975這40年間，GEICO從無到4%的市場佔有率，成為全美第四大的汽車保險公司，大部份的時候，公司的經營相當上軌道，營收與獲利同步成長，看起來勢不可擋，但直到該公司總裁，同時也是我的好朋友Davidson在1970年宣佈退休，情勢隨即起了變化，他的繼任者犯下損失準備提撥不足的大錯，此舉大大扭曲了成本結構，進而導致不當的訂價，1976年，GEICO已瀕臨倒閉。

Jack Byrne then joined GEICO as CEO and, almost single-handedly, saved the company by heroic efforts that included major price increases. Though GEICO’s survival required these, policyholders fled the company, and by 1980 its market share had fallen to 1.8%. Subsequently, the company embarked on some unwise diversification moves. This shift of emphasis away from its extraordinary core business stunted GEICO’s growth, and by 1993 its market share had grown only fractionally, to 1.9%. Then Tony Nicely took charge.

就在此時，Jack Byrne加入GEICO擔任總裁，靠著赤手空拳，包含大幅調漲保費在內的壯舉，雖然這絕對是GEICO繼續存活下去的必要之惡，客戶卻紛紛離去，到了1980年，市場佔有率劇降至1.8%，此時GEICO卻又做出多角化的不智之舉，這使得過去賴以成長的核心業務頓時失去了重心，1993年該公司的市占率僅微微增加到1.9%，一直到Tony Nicely接手後，事情才有了改觀。

And what a difference that’s made: In 2005 GEICO will probably secure a 6% market share. Better yet, Tony has matched growth with profitability. Indeed, GEICO delivers all of its constituents major benefits: In 2004 its customers saved $1 billion or so compared to what they would otherwise have paid for coverage, its associates earned a $191 million profit-sharing bonus that averaged 24.3% of salary, and its owner – that’s us – enjoyed excellent financial returns.

2005年GEICO拮取了6%的市占率，而且獲利也大幅成長，所有參與的成員皆同步受益，2004年GEICO總計為保戶節省了10億美元的保費，員工領取了1.91億美元的紅利，約等於三個月的獎金，至於股東們更獲得了可觀的投資回報。

There’s more good news. When Jack Byrne was rescuing the company in 1976, New Jersey refused to grant him the rates he needed to operate profitably. He therefore promptly – and properly – withdrew from the state. Subsequently, GEICO avoided both New Jersey and Massachusetts, recognizing them as two jurisdictions in which insurers were destined to struggle.

不僅如此，當他在1976年力圖挽救公司之際，紐澤西州拒絕其提高保險費率的提議，Jack二話不說立刻退出該州的營運，之後GEICO又退出了麻賽諸賽州，認定這兩州主管機關的態度不利於保險業者的經營。

In 2003, however, New Jersey took a new look at its chronic auto-insurance problems and enacted legislation that would curb fraud and allow insurers a fair playing field. Even so, one might have expected the state’s bureaucracy to make change slow and difficult.

一直到2003年紐澤西州終於開始正視其沉苛已久的車險市場，立法遏止保戶詐騙的行為，還給業者一個公平合理的經營環境，然即便如此，一般還是預期主管當局的改革緩不濟急困難重重。

But just the opposite occurred. Holly Bakke, the New Jersey insurance commissioner, who would be a success in any line of work, was determined to turn the law’s intent into reality. With her staff’s cooperation, GEICO ironed out the details for re-entering the state and was licensed last August. Since then, we’ve received a response from New Jersey drivers that is multiples of my expectations.

然有道是柳暗花明又一村，此時紐澤西州優秀的保險官員Holly Bakke，毅然決定從法律面扭轉現狀，在與其幕僚通力合作之下，GEICO研擬出重返紐澤西市場的細部計畫，並于去年八月順利取得營運執照，之後所獲得的保單數量遠遠超過我的預期。

We are now serving 140,000 policyholders – about 4% of the New Jersey market – and saving them substantial sums (as we do drivers everywhere). Word-of-mouth recommendations within the state are causing inquiries to pour in. And once we hear from a New Jersey prospect, our closure rate – the percentage of policies issued to inquiries received – is far higher in the state than it is nationally.

目前我們擁有14萬的保戶，約占該州市場4%，且一如其他州一樣，GEICO為他們節省了可觀的保費，口耳相傳的引薦使得詢問電話蜂擁而至，而且據報該州的結案成功率遠遠高於全美平均的水準。

We make no claim, of course, that we can save everyone money. Some companies, using rating systems that are different from ours, will offer certain classes of drivers a lower rate than we do. But we believe GEICO offers the lowest price more often than any other national company that serves all segments of the public. In addition, in most states, including New Jersey, Berkshire shareholders receive an 8% discount. So gamble fifteen minutes of your time and go to GEICO.com – or call 800-847-7536 – to see 9 whether you can save big money (which you might want to use, of course, to buy other Berkshire products).

當然我們無法保證所有人都可以在我們這裏拿到最低的保費，因為各家保險公司的計費標準不盡相同，但我敢保證在所有大型的保險公司當中，GEICO可以提供多數人最低廉的保費，此外，只要是Berkshire的股東，包含紐澤西在內，都可以享受8%的折扣，大家不妨花幾分鐘，上上GEICO的公司網站，或打電話到800-847-7536，問看看能不能省下一筆錢，(當然只要你喜歡，Berkshire還有許多商品，任君選擇)。

 * * * * * * * * * * * * 

Reinsurance – insurance sold to other insurers who wish to lay off part of the risks they have assumed – should not be a commodity product. At bottom, any insurance policy is simply a promise, and as everyone knows, promises vary enormously in their quality.

再保險-系保險業者分散自身承擔風險給同業的一項機制，說到底，保單只不過是一紙承諾，關鍵在於是誰所發出，所以承保人是何方神聖影響至關重大。

 At the primary insurance level, nevertheless, just who makes the promise is often of minor importance. In personal-lines insurance, for example, states levy assessments on solvent companies to pay the policyholders of companies that go broke. In the business-insurance field, the same arrangement applies to workers’ compensation policies. “Protected” policies of these types account for about 60% of the property-casualty industry’s volume. Prudently-run insurers are irritated by the need to subsidize poor or reckless management elsewhere, but that’s the way it is.

至於對初級市場來說，誰做承諾就沒有那麼緊要，以個人險種來說，政府平常會向業者徵收規費，用來支應倒閉業者付不出來的理賠金，至於商業險方面，勞工保險也有類似的機制，這類具防護機制的保險占所有產險保單六成以上，雖然經營穩健的業者對於要被迫補貼經營不善的業者非常反感，但這行的遊戲規則就是如此。

 Other forms of business insurance at the primary level involve promises that carry greater risks for the insured. When Reliance Insurance and Home Insurance were run into the ground, for example, their promises proved to be worthless. Consequently, many holders of their business policies (other than those covering workers’ compensation) suffered painful losses.

其他初級商業保險的形式包含讓保戶承擔更高的風險，當責任與住家險引進市場時，他們的承諾最後證實是空話，這使得許多保單持有者蒙受大量的損失。

The solvency risk in primary policies, however, pales in comparison to that lurking in reinsurance policies. When a reinsurer goes broke, staggering losses almost always strike the primary companies it has dealt with. This risk is far from minor: GEICO has suffered tens of millions in losses from its careless selection of reinsurers in the early 1980s.

但這些履約風險跟再保險保單比起來根本就算不了什麼，當再保險公司倒閉時，與其往來的保險公司將無一倖免糟受波及，這類的風險絕對不可等閒視之，GEICO在1980年代便曾因為選擇再保公司不慎而蒙受好幾千萬美元的損失。

Were a true mega-catastrophe to occur in the next decade or two – and that’s a real possibility – some reinsurers would not survive. The largest insured loss to date is the World Trade Center disaster, which cost the insurance industry an estimated $35 billion. Hurricane Andrew cost insurers about $15.5 billion in 1992 (though that loss would be far higher in today’s dollars). Both events rocked the insurance and reinsurance world. But a $100 billion event, or even a larger catastrophe, remains a possibility if either a particularly severe earthquake or hurricane hits just the wrong place. Four significant hurricanes struck Florida during 2004, causing an aggregate of $25 billion or so in insured losses. Two of these – Charley and Ivan – could have done at least three times the damage they did had they entered the U.S. not far from their actual landing points.

若是往後一、二十年內發生天大的災難，這不是沒有可能，可能會有一些再保公司不支倒地，目前有史以來最大的損害當屬911紐約世界貿易中心，總計全體保險公司支付了350億美元，1992年的安德魯颶風以155億美元居次，(雖然以今日的幣值應不只此數)，這兩起災害都曾撼動整個保險業界，但若好死不死在要命的地方發生超級大地震或是大颶風，1,000億美元以上的災害損失也不是沒有可能，2004年在佛羅里達發生的四起颶風合計就造成250億美元的經濟損失，其中兩起颶風差一點就登陸進入美國境內造成三倍以上的損失。

Many insurers regard a $100 billion industry loss as “unthinkable” and won’t even plan for it. But at Berkshire, we are fully prepared. Our share of the loss would probably be 3% to 5%, and earnings from our investments and other businesses would comfortably exceed that cost. When “the day after” arrives, Berkshire’s checks will clear.

許多保險業者認為1,000億美元以上的理賠損失根本就不可能發生，但在Berkshire，我們卻未雨綢繆，以我們平均3%到5%承擔損失比例來說，光是以我們每年從投資及其它事業所賺取的盈餘來支應就綽綽有餘，即便是當電影明天過後的事件真的發生，Berkshire所開出的支票依舊能兌現。

Though the hurricanes hit us with a $1.25 billion loss, our reinsurance operations did well last year. At General Re, Joe Brandon has restored a long-admired culture of underwriting discipline that, for a time, had lost its way. The excellent results he realized in 2004 on current business, however, were offset by adverse developments from the years before he took the helm. At NICO’s reinsurance operation, Ajit Jain continues to successfully underwrite huge risks that no other reinsurer is willing or able to accept. Ajit’s value to Berkshire is enormous

雖然我們為颶風損失了12.5億美元，但總的來說，去年的再保業務表現甚佳，以General Re來說，Joe Brandon也恢復往日的核保秩序，然而他在2004年繳出的成績，卻被他接手之前所埋下的惡果所抵銷，至於NICO的再保部份，Ajit Jain持續成功地接下別人不敢接的超大風險保單，Ajit可說是Berkshire的無價之寶。

 * * * * * * * * * * * * 

Our insurance managers, maximizing the competitive strengths I’ve mentioned in this section, again delivered first-class underwriting results last year. As a consequence, our float was better than costless. Here’s the scorecard:

我們的再保經理人使得我們的競爭優勢極大化，再度在去年繳出漂亮的成績單，我們的浮存金成本甚至低於零，以下是他們的成績單。
(in $ millions)
Underwriting Profit  Yearend Float
Insurance Operations 2004 2004 2003
General Re  $3 $23,120 $23,654
B-H Reinsurance  417 15,278 13,948
GEICO  970 5,960 5,287
Other Primary*  161 1,736 1,331
Total $1,551 $46,094 $44,220

*Includes, in addition to National Indemnity, a variety of other exceptional insurance businesses, run by Rod Eldred, John Kizer, Tom Nerney and Don Towle. 

Berkshire’s float increased $1.9 billion in 2004, even though a few insureds opted to commute (that is, unwind) certain reinsurance contracts. We agree to such commutations only when we believe the economics are favorable to us (after giving due weight to what we might earn in the future on the money we are returning).

2004年Berkshire的浮存金又增加了19億美元，雖然也有少數幾位元客戶在到期後傾向解約，但只有在對我們有利的情況之下，我們才接受解約，也就是必須先衡量我們將錢退回給客戶後，未來將因此少賺的報酬。

To summarize, last year we were paid more than $1.5 billion to hold an average of about $45.2 billion. In 2005 pricing will be less attractive than it has been. Nevertheless, absent a mega-catastrophe, we have a decent chance of achieving no-cost float again this year.

總言之，去年為了保管這452億美元，我們額外獲得了15億美元的報酬，展望2005年市場訂價較不吸引人，儘管如此，只要不發生什麼重大的天災地變，我們還是可以維持免成本的浮存金。

Finance and Finance Products 
金融相關產品

Last year in this section we discussed a potpourri of activities. In this report, we’ll skip over several that are now of lesser importance: Berkadia is down to tag ends; Value Capital has added other investors, negating our expectation that we would need to consolidate its financials into ours; and the trading operation that I run continues to shrink.

去年在這一部份，我們拉裏拉雜地講了一堆，今年我們將一些比較不重要的省略掉，Berkadia已接進尾聲，Value Capital也有新的投資者加入，降低其併入Berkshire報表的必要性，至於我個人負責操刀的交易業務也持續萎縮。

Both of Berkshire’s leasing operations rebounded last year. At CORT (office furniture), earnings remain inadequate, but are trending upward. XTRA disposed of its container and intermodal businesses in order to concentrate on trailer leasing, long its strong suit. Overhead has been reduced, asset utilization is up and decent profits are now being achieved under Bill Franz, the company’s new CEO.

Berkshire旗下兩項租賃業務則有所起色，辦公室傢俱租賃CORT的獲利情況雖依舊不佳，但已有好轉，XTRA處份掉貨櫃及整合運輸業務，以專注于貨櫃車租賃的強項，在現任總裁Bill Franz的領導下，刪減費用開支，資產運用效率提高，獲得不錯的利潤。

The wind-down of Gen Re Securities continues. We decided to exit this derivative operation three years ago, but getting out is easier said than done. Though derivative instruments are purported to be highly liquid – and though we have had the benefit of a benign market while liquidating ours – we still had 2,890 contracts outstanding at yearend, down from 23,218 at the peak. Like Hell, derivative trading is easy to enter but difficult to leave. (Other similarities come to mind as well.)
關閉Gen Re證券業務的動作仍在持續當中，我們在三年前決定退出這個市場，但要退出談何容易，雖然衍生性金融商品理論上流動性頗高，且以目前溫和的市場環境也有利於我們的退出，但截至年底，我們依然有2,890項合約纏身，(高峰時有23,218件合約)，就像是地獄一樣，衍生性金融商品市場易進難出，當然其他還有很多相似的地方，

 Gen Re’s derivative contracts have always been required to be marked to market, and I believe the company’s management conscientiously tried to make realistic “marks.” The market prices of derivatives, however, can be very fuzzy in a world in which settlement of a transaction is sometimes decades away and often involves multiple variables as well. In the interim the marks influence the managerial and trading bonuses that are paid annually. It’s small wonder that phantom profits are often recorded.

Gen Re證券的衍生性金融合約要求隨時以市價反應，而我也確信該公司的經營階層已盡力訂出反應真實的水準，但衍生性金融商品的市價卻由於真正結算的時點可能要落在幾十年以後，而使得市價很難估算，同時還須仰賴非常多個變數，但以此為基礎來計算的獎金卻是每年發放，這也難怪虛幻的獲利數字滿天亂飛。

 Investors should understand that in all types of financial institutions, rapid growth sometimes masks major underlying problems (and occasionally fraud). The real test of the earning power of a derivatives operation is what it achieves after operating for an extended period in a no-growth mode. You only learn who has been swimming naked when the tide goes out.
投資人必須瞭解在各種金融機構當中，快速成長通常蘊藏天大的問題，有時甚至於重大舞弊，要真正測試衍生性業務的獲利能力，必須是在無成長的狀態下，只有等浪退了才知道是誰在裸泳。

 After 40 years, we’ve finally generated a little synergy at Berkshire: Clayton Homes is doing well and that’s in part due to its association with Berkshire. The manufactured home industry continues to reside in the intensive care unit of Corporate America, having sold less than 135,000 new homes last year, about the same as in 2003. Volume in these years was the lowest since 1962, and it was also only about 40% of annual sales during the years 1995-99. That era, characterized by irresponsible financing and naïve funders, was a fool’s paradise for the industry.

歷經四十載之後，Berkshire終於展現出一點組織的綜效，Clayton表現的相當不錯，部份原因當然要歸功於Berkshire的加持，組合房屋業目前仍處於加護病房階段，去年售出的新屋不超過13萬5千戶，這數字僅與前一年度相當，創1962年來的新低，約當90年代高峰時的四成，當時在沒有良心業者的波助瀾下，達到前所未有的瘋狂地步。

Because one major lender after another has fled the field, financing continues to bedevil manufacturers, retailers and purchasers of manufactured homes. Here Berkshire’s support has proven valuable to Clayton. We stand ready to fund whatever makes sense, and last year Clayton’s management found much that qualified.

由於主要的金主一一撤離這個市場，使得財務問題一直困擾著組合房屋廠商、零售消費者，此時Berkshire的支援對Clayton來說，可謂久旱逢甘霖，只要合理，我們願意無限制提供資金，而一年下來，Clayton也不負我們所望。

 As we explained in our 2003 report, we believe in using borrowed money to support profitable, interest-bearing receivables. At the beginning of last year, we had borrowed $2 billion to relend to Clayton (at a one percentage-point markup) and by January 2005 the total was $7.35 billion. Most of the dollars added were borrowed by us on January 4, 2005, to finance a seasoned portfolio that Clayton purchased on December 30, 2004 from a bank exiting the business.

在2003年的年報中我就曾解釋過，我們相信借錢來支應可收取利息的應收款將有利可圖，去年初我們轉借20億美元給Clayton，並收取1%的利差，到2005年初，這筆借款增加為73.5億美元，主要是支應Clayton向退出該市場的銀行手中買下的應收款。

We now have two additional portfolio purchases in the works, totaling about $1.6 billion, but it’s quite unlikely that we will secure others of any significance. Therefore, Clayton’s receivables (in which originations will roughly offset payoffs) will probably hover around $9 billion for some time and should deliver steady earnings. This pattern will be far different from that of the past, in which Clayton, like all major players in its industry, “securitized” its receivables, causing earnings to be front-ended. In the last two years, the securitization market has dried up. The limited funds available today come only at higher cost and with harsh terms. Had Clayton remained independent in this period, it would have had mediocre earnings as it struggled with financing.

目前還有兩筆應收款洽談中，金額合計16億美元，不過這大概是最後一筆大額的交易，所以Clayton帳上的應收款將會一直停留在90億美元左右的水準，(新增的金額大約會被償還的帳款所抵消)，並持續貢獻穩定的盈餘，這景況與業者過去習慣將應收帳款證券化刻意讓盈餘提早實現的做法截然不同，過去兩年，應收帳款證券化的市場幾乎停擺，就算能取得資金，其利率與條件都相當嚴酷，如果Clayton依舊單打獨鬥，將只能維持慘澹的經營局面。

In April, Clayton completed the acquisition of Oakwood Homes and is now the industry’s largest producer and retailer of manufactured homes. We love putting more assets in the hands of Kevin Clayton, the company’s CEO. He is a prototype Berkshire manager. Today, Clayton has 11,837 employees, up from 7,136 when we purchased it, and Charlie and I are pleased that Berkshire has been useful in facilitating this growth.

去年四月份，Clayton順利買下Oakwood，一舉成為組合房屋業界最大的製造與銷售商，我們樂意將更多的資源交予該公司總裁Kevin，他是典型的Berkshire經理人，當初我們買下Clayton時，該公司擁有7千多名員工，目前則已增加到1萬1千多名，查理跟我很高興能與他們共同參與成長的過程。

 For simplicity’s sake, we include all of Clayton’s earnings in this sector, though a sizable portion of these are derived from areas other than consumer finance.

為了簡化起見，我們將Clayton所有的盈餘歸類到消費金融項下，雖然它還有一大部份的盈餘不屬於此項。
(in $ millions)
Pre-Tax Earnings  Interest-bearing Liabilities
2004 2003 2004 2003
Trading – Ordinary Income $264 $355 $5,751 $7,826
Gen Re Securities (44) (99) 5437*  8041* 
Life and annuity operation (57) 85 2,467 2,331
Value Capital 30 31  N/A N/A.
Berkadia  1 101 —  525
Leasing operations  92 34 391 482
Manufactured housing finance (Clayton)  220 37**
3,636 3,032
Other   78    75      N/A N/A
Income before capital gains   584 619
Trading – Capital Gains  1,750  1,215   
Total  $2,334 $1,834

* Includes all liabilities 
** From date of acquisition, August 7, 2003

Manufacturing, Service and Retailing Operations
製造，服務和零售業務

Our activities in this category cover the waterfront. But let’s look at a summary balance sheet and earnings statement consolidating the entire group.
製造業、服務業與零售業的營運報告以下所代表的營業項目可說是包山包海，讓我們直接來看所有的資產負債與盈餘的總和數字

Balance Sheet 12/31/04 (in $ millions)
Assets Liabilities and Equity
Cash and equivalents $899 Notes payable $1,143
Accounts and notes receivable  3,074 Other current liabilities      4,685
Inventory 3,842 Total current liabilities  5,828
Other current assets      254
Total current assets  8,069
Goodwill and other intangibles  8,362 Deferred taxes   248
Fixed assets   6,161  Term debt and other liabilities  1,968
Other assets      1,044  Equity     15,595
$23,636    $23,636


Earnings Statement (in $ millions)
2004 2003
Revenues $44,142 $32,106
Operating expenses (including depreciation of $605 in 2003 and $477 in 2002) 
41,604 29,885
Interest expense (net)        57      64
Pre-tax income  2,481 2,157
Income taxes      941     813
Net income $1,540 $1,344

This eclectic group, which sells products ranging from Dilly Bars to fractional interests in Boeing 737s, earned a very respectable 21.7% on average tangible net worth last year, compared to 20.7% in 2003. It’s noteworthy that these operations used only minor financial leverage in achieving these returns. Clearly, we own some very good businesses. We purchased many of them, however, at substantial premiums to net worth – a matter that is reflected in the goodwill item shown on the balance sheet – and that fact reduces the earnings on our average carrying value to 9.9%. 

這些精挑細選的組合，所販賣的產品從棒冰到波音737客機，應有盡有，去年股東權益報酬率高達21.7%，比起前一年的20.7%還要高，特別值得說明的是他們極少運用財務槓桿，他們無疑是最優秀的企業，當然由於我們大多以高於淨值相當大的幅度買下，因此帳上會出現大量的商譽，而商譽的攤銷也使得我們帳列成本的投資報酬率降為9.9%。

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

Pre-Tax Earnings (in $ millions)
2004 2003
Building Products $643 $559
Shaw Industries   466 436
Apparel  325 289
Retail Operations  215 224
Flight Services  191 72
McLane * 228         150*
Other businesses     413      427
$2,481 $2,157
* From date of acquisition, May 23, 2003.  

• In the building-products sector and at Shaw, we’ve experienced staggering cost increases for both rawmaterials and energy. By December, for example, steel costs at MiTek (whose primary business is connectors for roof trusses) were running 100% over a year earlier. And MiTek uses 665 million pounds of steel every year. Nevertheless, the company continues to be an outstanding performer.

在建材與地毯業務方面，面臨了原料成本與能源價格持續上漲的困境，舉例來說，光是去年12月，MiTek鋼材的進料成本就整整比去年高出一倍，(其主要的產品系屋簷)，該公司每年需耗用6.65億磅的鋼材，不過即便如此，該公司表現依然出色。

Since we purchased MiTek in 2001, Gene Toombs, its CEO, has made some brilliant “bolt-on” acquisitions and is on his way to creating a mini-Berkshire

打從我們在2001年買下MiTek後，該公司總裁Gene Toombs就創造出好幾件輝煌的購並案，逐漸打造出屬於自己的小型Berkshire。

Shaw fielded a barrage of price increases in its main fiber materials during the year, a hit that added more than $300 million to its costs. (When you walk on carpet you are, in effect, stepping on processed oil.) Though we followed these hikes in costs with price increases of our own, there was an inevitable lag. Therefore, margins narrowed as the year progressed and remain under pressure today. Despite these roadblocks, Shaw, led by Bob Shaw and Julian Saul, earned an outstanding 25.6% on tangible equity in 2004. The company is a powerhouse and has a bright future.

Shaw地毯在年中接到一個原料成本爆漲的大炸彈，這個重大的打擊使得其成本劇增三億美元，當你在地毯上行走，其實所踩的是經過處理的石油化學產品，雖然我們以調漲售價做為因應，但時間上還是有些落差，這使得毛利空間持續受到壓縮，但即便如此，在Bob與Julian的領導下，去年還是為我們賺取了25.6%的股東權益報酬，這家公司充滿動力，且深具潛力。

In apparel, Fruit of the Loom increased unit sales by 10 million dozen, or 14%, with shipments of intimate apparel for women and girls growing by 31%. Charlie, who is far more knowledgeable than I am on this subject, assures me that women are not wearing more underwear. With this expert input, I can only conclude that our market share in the women’s category must be growing rapidly. Thanks to John Holland, Fruit is on the move.

在服裝業方面，Fruit of Loom的內衣銷售增加了1千萬打，約當14%，其中女用內衣與少女內衣更成長了31%，這方面查理比我還懂得多，他跟我保證女性朋友目前穿得內衣還不夠多，這更讓我確信，我們在這方面的市場佔有率正急速增加中，多虧John Holland，Fruit of Loom又重新振作起來。

A smaller operation, Garan, also had an excellent year. Led by Seymour Lichtenstein and Jerry Kamiel, this company manufactures the popular Garanimals line for children. Next time you are in a Wal-Mart, check out this imaginative product.

另外一家公司Garan童裝，去年的表現也相當不錯，在Seymour及Lichtenstein的帶領之下，這家公司專門製造知名童裝品牌Garanimals，下次你去Wal-Mart逛時，記得順道去看看他們饒富創意的產品。

Among our retailers, Ben Bridge (jewelry) and R. C. Willey (home furnishings) were particular standouts last year.

在其他零售業者當中，Ben Bridge珠寶及R.C.Willey家俱，去年的表現也相當不錯。

At Ben Bridge same-store sales grew 11.4%, the best gain among the publicly-held jewelers whose reports I have seen. Additionally, the company’s profit margin widened. Last year was not a fluke: During the past decade, the same-store sales gains of the company have averaged 8.8%

在Ben Bridge單店營業額成長了11.4%，毛利也同步增長，這是所有上市珠寶商中表現最好的，去年的成績絕非僥倖，該公司過去十年平均成長率達到8.8%。

Ed and Jon Bridge are fourth-generation managers and run the business exactly as if it were their own – which it is in every respect except for Berkshire’s name on the stock certificates. The Bridges have expanded successfully by securing the right locations and, more importantly, by staffing these stores with enthusiastic and knowledgeable associates. We will move into Minneapolis-St. Paul this year.

Ed跟Jon是Bridge家族第四代的成員，並把公司當做是自家般在經營，除了股票上登記的名字改成Berkshire外，其它一切不變，靠著選址正確，Bridge成功地擴張據點，此外更重要的，每個據點的員工都充滿了熱情與專業知識，今年我們將進軍雙子城。

At Utah-based R. C. Willey, the gains from expansion have been even more dramatic, with 41.9% of 2004 sales coming from out-of-state stores that didn’t exist before 1999. The company also improved its profit margin in 2004, propelled by its two new stores in Las Vegas.

至於猶他州的R.C.Willey，其成長的態勢更加驚人，拜外地新店所賜，公司營業額成長了41.9%，毛利也有所改善，其中包含拉斯維加斯的兩家新店

I would like to tell you that these stores were my idea. In truth, I thought they were mistakes. I knew, of course, how brilliantly Bill Child had run the R. C. Willey operation in Utah, where its market share had long been huge. But I felt our closed-on-Sunday policy would prove disastrous away from home. Even our first out-of-state store in Boise, which was highly successful, left me unconvinced. I kept asking whether Las Vegas residents, conditioned to seven-day-a-week retailers, would adjust to us. Our first Las Vegas store, opened in 2001, answered this question in a resounding manner, immediately becoming our number one unit.

我要跟大家說，這些店事實上是我的主意，只是我本來以為它們做不起來，雖然我明明知道Bill Child跟R.C.Willey在猶他州的輝煌戰果，他們在當地耕耘已久，但我就是覺得這種星期天不開張的做法在外地肯定行不通，但結果證明我們在外地Boise的第一家店就一炮而紅，但我還是不相信，不斷質疑已經習慣沒有周休的拉斯維加斯居民是否也吃這一套，這種懷疑在我們當地的第一家店於2001年開張，徹底被粉碎，單店營業額居所有分店首位。

Bill and Scott Hymas, his successor as CEO, then proposed a second Las Vegas store, only about 20 minutes away. I felt this expansion would cannibalize the first unit, adding significant costs but only modest sales. The result? Each store is now doing about 26% more volume than any other store in the chain and is consistently showing large year-over-year gains.

Bill跟他的繼任者Scott Hymas，趁勝追擊在20分鐘車程遠的地方，開設第二家分店，當時我認為此舉將拖垮第一家店的營運，成本肯定不敷效益，結果呢? 兩家店的營業額比起其他分店都高出26%，且營業額年年成長。

 R. C. Willey will soon open in Reno. Before making this commitment, Bill and Scott again asked for my advice. Initially, I was pretty puffed up about the fact that they were consulting me. But then it dawned on me that the opinion of someone who is always wrong has its own special utility to decisionmakers

R.C.Willy很快就要在Reno開店，但在正式投入之前，Bill跟Scott禮貌性地徵詢我的意見，一開始，我對於他們向我請益感到頗為自豪，但最後證明，他們只是把我的看法，當做反向參考意見。

Earnings improved in flight services. At FlightSafety, the world’s leader in pilot training, profits rose as corporate aviation rebounded and our business with regional airlines increased. We now operate 283 simulators with an original cost of $1.2 billion. Pilots are trained one at a time on this expensive equipment. This means that as much as $3.50 of capital investment is required to produce $1 of annual revenue. With this level of capital intensity, FlightSafety requires very high operating margins in order to obtain reasonable returns on capital, which means that utilization rates are all-important. Last year, FlightSafety’s return on tangible equity improved to 15.1% from 8.4% in 2003.

航空服務的獲利也有所改善，在全世界最大的飛行員訓練公司-國際飛安方面，拜企業部門反彈及與區域性航空公司合作所賜，獲利增加，目前我們擁有283座仿真機，帳面成本12億美元，飛行員只能在這些昂貴的設備中逐一接受訓練，這意味著每三塊半的資本設備投資只能創造出一塊錢的年營業收入，在如此資本密集的情況下，惟有高毛利才足以獲得合理的投資回報，因此設備利用率便顯得相當重要，去年該公司的有形資產報酬率由8.4%提升至15.1%。

In another 2004 event, Al Ueltschi, who founded FlightSafety in 1951 with $10,000, turned over the CEO position to Bruce Whitman, a 43-year veteran at the company. (But Al’s not going anywhere; I won’t let him.) Bruce shares Al’s conviction that flying an aircraft is a privilege to be extended only to people who regularly receive the highest quality of training and are undeniably competent. A few years ago, Charlie was asked to intervene with Al on behalf of a tycoon friend whom FlightSafety had flunked. Al’s reply to Charlie: “Tell your pal he belongs in the back of the plane, not the cockpit.”

另外一件事是於1951年以一萬美元創立國際飛安的Al Ueltschi，在去年將總裁的位置交給Bruce Whitman，Bruce是公司43年的老臣，但相信我，我絕不會讓Al跑掉的，Bruce跟Al擁有相同的理念，認為惟有經常接受高品質訓練的人，才有資格駕禦航空飛行器，幾年前查理受企業朋友所托，向Al關說求情，結果Al冷酷地回答到，「告訴你的朋友，給我乖乖地待在後艙。」

FlightSafety’s number one customer is NetJets, our aircraft fractional-ownership subsidiary. Its 2,100 pilots spend an average of 18 days a year in training. Additionally, these pilots fly only one aircraft type whereas many flight operations juggle pilots among several types. NetJets’ high standards on both fronts are two of the reasons I signed up with the company years before Berkshire bought it.

國際飛安最大的客戶就是NetJets-我們飛機分時業務的子公司，旗下2,100位飛行員每年平均花18天在訓練之上，此外不像別人常常在不同機種間跳來跳去，我們的飛行員只專心飛固定的機型，NetJets在這兩方面高水準的要求，是為什麼我早在買下該公司以前，就成為它們客戶的主要原因。

Fully as important in my decisions to both use and buy NetJets, however, was the fact that the company was managed by Rich Santulli, the creator of the fractional-ownership industry and a fanatic about safety and service. I viewed the selection of a flight provider as akin to picking a brain surgeon: you simply want the best. (Let someone else experiment with the low bidder.)

另外我之所以會買下NetJets的原因還有，這家公司是由Rich Santulli所經營，他是飛機分時產業的創辦人，對於安全與服務的要求幾盡瘋狂，我認為挑選飛行員跟選擇腦部外科醫生一樣重要，要挑就要挑最好的，其他次等的人選就留給別人吧。

Last year NetJets again gained about 70% of the net new business (measured by dollar value) going to the four companies that dominate the industry. A portion of our growth came from the 25-hour card offered by Marquis Jet Partners. Marquis is not owned by NetJets, but is instead a customer that repackages the purchases it makes from us into smaller packages that it sells through its card. Marquis deals exclusively with NetJets, utilizing the power of our reputation in its marketing.

去年NetJets的營業額大幅成長70%，持續主宰整個市場，其中一部份系來自Marquis推出的25小時券，Marquis並非NetJets的關係企業，不過它向NetJets批發時數後，再包裝賣給終端消費者，Marquis只專作NetJets的生意，並以NetJets的卓越名聲做為行銷的重點。

 Our U.S. contracts, including Marquis customers, grew from 3,877 to 4,967 in 2004 (versus approximately 1,200 contracts when Berkshire bought NetJets in 1998). Some clients (including me) enter into multiple contracts because they wish to use more than one type of aircraft, selecting for any given trip whichever type best fits the mission at hand.

去年我們在美國的簽約件數，從3,877成長到4,967，(1999年當Berkshire買下該公司時，其客戶數為1,200)，有些客戶(包括我在內)為了使用不同的機型，會一次簽好幾項合約，以因應不同場合的需求。

NetJets earned a modest amount in the U.S. last year. But what we earned domestically was largely offset by losses in Europe. We are now, however, generating real momentum abroad. Contracts (including 25-hour cards that we ourselves market in Europe) increased from 364 to 693 during the year. We will again have a very significant European loss in 2005, but domestic earnings will likely put us in the black overall
NetJets去年在美國這邊的獲利還算不錯，但大部份的獲利卻被歐洲的虧損所侵蝕，不過目前國外的業務確有起色，包含剛剛提到的25小時券在內，合約數已從364件增加到693件，雖然2005年預估還會繼續發生龐大虧損，但美國本土的獲利還是能夠讓我們的帳面免於出現紅字。

Europe has been expensive for NetJets – far more expensive than I anticipated – but it is essential to building a flight operation that will forever be in a class by itself. Our U.S. owners already want a quality service wherever they travel and their wish for flight hours abroad is certain to grow dramatically in the decades ahead. Last year, U.S. owners made 2,003 flights in Europe, up 22% from the previous year and 137% from 2000. Just as important, our European owners made 1,067 flights in the U.S., up 65% from 2003 and 239% from 2000.
歐洲實在是讓我們付出重大的代價，且遠遠超過我當初的預期，但為了建立品質卻是不得不走的路，我們許多美國的客戶希望無論到世界上的那個地方，都能夠享受相同品質的服務，而跨國旅行的需求在未來肯定會大幅成長，去年美國客戶總計飛到歐洲2,003趟，成長了22%，在此同時，歐洲的客戶飛到美國，則有1,067趟，成長了65%。

Investments 
投資組合

We show below our common stock investments. Those that had a market value of more than $600 million at the end of 2004 are itemized.  
下表列示Berkshire 2004年市價超過6億美元以上的股票投資。
12/31/04
Shares  Company Percentage of Company Owned  Cost  Market
(dollars in millions)
151,610,700 American Express Company 12.1 $1,470 $8,546
200,000,000 The Coca-Cola Company 8.3 1,299 8,328
96,000,000 The Gillette Company 9.7 600 4,299
14,350,600 H&R Block, Inc. 8.7 223 703
6,708,760 M&T Bank 5.8 103 723
24,000,000 Moodyís Corporation 16.2 499 2,084
2,338,961,000 PetroChina Company Limited 1.3 488 1,249
1,727,765 The Washington Post Company 18.1 11 1,698
56,448,380 Wells Fargo & Company 3.3 463 3,508
1,724,200 White Mountains Insurance  16.0 369 1,114
Others 3,531 5,465
Total Common Stocks $9,056 $37,717

*This is our actual purchase price and also our tax basis; GAAP “cost” differs in a few cases because of write-ups or write-downs that have been required.
*此為我們實際取得的成本，也是按稅務基礎，至於依會計原則的成本則由於攤銷或調升而有所不同。

Some people may look at this table and view it as a list of stocks to be bought and sold based upon chart patterns, brokers’ opinions, or estimates of near-term earnings. Charlie and I ignore such distractions and instead view our holdings as fractional ownerships in businesses. This is an important distinction. Indeed, this thinking has been the cornerstone of my investment behavior since I was 19. At that time I read Ben Graham’s The Intelligent Investor, and the scales fell from my eyes. (Previously, I had been entranced by the stock market, but didn’t have a clue about how to invest.)

看過這張表的人或許會以為這些股票是根據線型圖、營業員的建議或是公司近期的獲利預估來進行買賣，其實查理跟我本人根本就不理會這些，而是以企業所有權人的角度看事情，這是非常大的區別，事實上，這正是我幾十年來投資行為的精髓所在，打從我十九歲時，讀到葛拉罕的智慧型投資人之後，我便茅塞頓開，在此之前，雖然我早已投入股市，但實際上對投資根本就沒有一點概念。

Let’s look at how the businesses of our “Big Four” – American Express, Coca-Cola, Gillette and Wells Fargo – have fared since we bought into these companies. As the table shows, we invested $3.83 billion in the four, by way of multiple transactions between May 1988 and October 2003. On a composite basis, our dollar-weighted purchase date is July 1992. By yearend 2004, therefore, we had held these “business interests,” on a weighted basis, about 12½ years

接下來看看我們的四大天王-美國運通、可口可樂、吉列及富國銀行的表現如何，如上表所示，我們在這四家公司的投資金額合計38.3億美元，分別在1988年到2003年間分批買進，總的來說，我們平均買進的日期是1992年7月，截止2004年底，我們平均持股的時間是12.5年。

In 2004, Berkshire’s share of the group’s earnings amounted to $1.2 billion. These earnings might legitimately be considered “normal.” True, they were swelled because Gillette and Wells Fargo omitted option costs in their presentation of earnings; but on the other hand they were reduced because Coke had a non-recurring write-off.

2004年依持股比例，Berkshire可分配到的盈餘高達12.2億美元，這個數字可以稱得上合理，雖然吉列與富國銀行因為選擇權成本隱含不計而高估，但同時可口可樂卻也提列了一筆非經常性的損失。

Our share of the earnings of these four companies has grown almost every year, and now amounts to about 31.3% of our cost. Their cash distributions to us have also grown consistently, totaling $434 million in 2004, or about 11.3% of cost. All in all, the Big Four have delivered us a satisfactory, though far from spectacular, business result.

我們從這四大天王所分得的盈餘幾乎每年都穩定的成長，累積至現在已占當初投資成本的31%，所分配的現金股利也同步成長，2004年達到4.34億美元，總的來說，這四大天王給了我們還算滿意的回報。

That’s true as well of our experience in the market with the group. Since our original purchases, valuation gains have somewhat exceeded earnings growth because price/earnings ratios have increased. On a year-to-year basis, however, the business and market performances have often diverged, sometimes to an extraordinary degree. During The Great Bubble, market-value gains far outstripped the performance of the businesses. In the aftermath of the Bubble, the reverse was true

在股價方面的感受也是如此，自我們買進以後，由於本益比提升緣故，股價的增幅還高於盈餘成長的幅度，就個別單一年度而言，股價與企業本身經營狀況往往有所分岐，在大泡沫期間，股價的漲幅遠遠超過本業的表現，至於泡沫破滅之後，其表現則恰恰相反。

Clearly, Berkshire’s results would have been far better if I had caught this swing of the pendulum. That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged. Our huge positions add to the difficulty of our nimbly dancing in and out of holdings as valuations swing.

當然，要是我能夠掌握其間變動的訣竅，Berkshire的績效應當會更好，這種事後諸葛的話人人會說，但只可惜投資人真正需要的是先見之明，無奈前方的景象暉暗不明，而我們龐大的投資部位更大大提高了靈活進出的困難度。

Nevertheless, I can properly be criticized for merely clucking about nose-bleed valuations during the Bubble rather than acting on my views. Though I said at the time that certain of the stocks we held were priced ahead of themselves, I underestimated just how severe the overvaluation was. I talked when I should have walked

在股市泡沫期間，我只不過老調重談價值投資理念，連動不來沒動就飽受批評，雖然那時我說我們部份的持股市價高於其應有的價值，但我低估其間的差異，坐而言不夠，還須起而行。

What Charlie and I would like is a little action now. We don’t enjoy sitting on $43 billion of cash equivalents that are earning paltry returns. Instead, we yearn to buy more fractional interests similar to those we now own or – better still – more large businesses outright. We will do either, however, only when purchases can be made at prices that offer us the prospect of a reasonable return on our investment.

查理跟我實在是應該起來活動活動了，手上這430億現金不能只靠微薄的利息過日子，目前可能會從市場上買進一些股票，當然若是能買斷整家公司會更好，不過價格也要合理。

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

We’ve repeatedly emphasized that the “realized” gains that we report quarterly or annually are meaningless for analytical purposes. We have a huge amount of unrealized gains on our books, and our thinking about when, and if, to cash them depends not at all on a desire to report earnings at one specific time or another. A further complication in our reported gains occurs because GAAP requires that foreign exchange contracts be marked to market, a stipulation that causes unrealized gains or losses in these holdings to flow through our published earnings as if we had sold our positions.

我們一再強調，單一會計期間所示的已實現利得不具任何意義，雖然帳上享有大量的未實現資本利得，但我們絕對不會為了讓帳面數字好看而去兌現，另外由於會計原則規定外匯投資每季必須按市價調整損益，這使得我們每季的盈餘波動幅度更為加劇。

Despite the problems enumerated, you may be interested in a breakdown of the gains we reported in 2003 and 2004. The data reflect actual sales except in the case of currency gains, which are a combination of sales and marks to market.

雖然多了以上幾項變量，大家可能還是想要了解帳列近兩年資本利得的明細，以下資料，除了外匯投資，其餘多屬已實現。

Category Pre-Tax Gain (in $ millions)
2004 2,003
Common Stocks  $870 $448
U.S. Government Bonds 104 1,485
Junk Bonds 730 1,138
Foreign Exchange Contracts   1839 825
Other       (47)      233
Total 3496 $4,129

The junk bond profits include a foreign exchange component. When we bought these bonds in 2001 and 2002, we focused first, of course, on the credit quality of the issuers, all of which were American corporations. Some of these companies, however, had issued bonds denominated in foreign currencies. Because of our views on the dollar, we favored these for purchase when they were available.
垃圾債券交易利得包含部份匯兌利益，幾年前我們買下這些債券時，首先考量的當然是發行人的債信，所以全數皆為美國本土的公司，其中部份系以外幣計價，由於我們認為美元長期走勢看貶，所以當初投資時乃以外幣計價為優先。

As an example, we bought €254 million of Level 3 bonds (10 ¾% of 2008) in 2001 at 51.7% of par, and sold these at 85% of par in December 2004. This issue was traded in Euros that cost us 88¢ at the time of purchase but that brought $1.29 when we sold. Thus, of our $163 million overall gain, about $85 million came from the market’s revised opinion about Level 3’s credit quality, with the remaining $78 million resulting from the appreciation of the Euro. (In addition, we received cash interest during our holding period that amounted to about 25% annually on our dollar cost.)
舉例來說，我們在2001年以51.7%的折價幅度買進Level 3面值2.54億歐元的債券(2008年到期;年息10.75%)，之後在2004年底以85%的折價幅度出脫，當初買進的時候，歐元對美元的匯率是1比0.88，等到我們賣出時，歐元對美元的匯率已漲升為1比1.29，所以在總計1.63億美元的資本利得當中，8,500萬美元系市場對於該公司債信的修正，另外7,800萬則是來自于歐元升值的貢獻，此外在持有期間我們每年還收到相當於投資成本25%的利息收入。

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

The media continue to report that “Buffett buys” this or that stock. Statements like these are almost always based on filings Berkshire makes with the SEC and are therefore wrong. As I’ve said before, the stories should say “Berkshire buys.”
不論我如何澄清，媒體還是一再報導，「巴菲特買進某些股票」，這些訊息主要的來源是Berkshire向證券主管機關申報的檔，這樣的說法其實並不正確，就像我一再強調的，他們應該要說，這是「Berkshire買進的」。

Portrait of a Disciplined Investor              Lou Simpson
Return from Year GEICO Equities
Year S&P Return Relative Results
1980 23.7% 32.3% -8.6%
1981 5.4% -5.0% 10.4%
1982 45.8% 21.4% 24.4%
1983 36.0% 22.4% 13.6%
1984 21.8% 6.1% 15.7%
1985 45.8% 31.6% 14.2%
1986 38.7% 18.6% 20.1%
1987 -10.0% 5.1% -15.1%
1988 30.0% 16.6% 13.4%
1989 36.1% 31.7% 4.4%
 1990  -9.9% -3.1% -6.8%
1991 56.5% 30.5% 26.0%
 1992  10.8% 7.6% 3.2%
1993 4.6% 10.1% -5.5%
1994 13.4% 1.3% 12.1%
1995 39.8% 37.6% 2.2%
1996 29.2% 23.0% 6.2%
1997 24.6% 33.4% -8.8%
1998 18.6% 28.6% 10.0%
1999 7.2% 21.0% 13.8%
2000 20.9% -9.1% 30.0%
2001 5.2% 11.9% 17.1%
2002 -8.1% 22.1% 14.0%
2003 38.3% 28.7% 9.6%
2004 16.9% 10.9% 6.0%
Average Annual Gain — 1980-2004  20.3% 13.5% 6.8%

Even then, it is typically not I who make the buying decisions. Lou Simpson manages about $2½ billion of equities that are held by GEICO, and it is his transactions that Berkshire is usually reporting. Customarily his purchases are in the $200-$300 million range and are in companies that are smaller than the ones I focus on. Take a look at the facing page to see why Lou is a cinch to be inducted into the investment Hall of Fame.

其實那些投資決策也並非由我所做出， Lou Simpson管理的GEICO投資組合規模約25億美元，Berkshire申報的交易大多指的是這一部份，一般而言，他買進的標的規模約在二、三億美元之間，比我鎖定的交易目標來得小，對照一下封面上的投資績效，你就知道Lou Simpson進入投資界的名人堂幾乎是十拿九穩的事。

You may be surprised to learn that Lou does not necessarily inform me about what he is doing. When Charlie and I assign responsibility, we truly hand over the baton – and we give it to Lou just as we do to our operating managers. Therefore, I typically learn of Lou’s transactions about ten days after the end of each month. Sometimes, it should be added, I silently disagree with his decisions. But he’s usually right.

大家或許不相信，Lou事前不須跟我報告他的進出動作，當查理跟我授權給部屬時，我們是真的交出指揮大棒，Lou是如此，其他旗下事業經理人也是如此，也因此我通常是在每個月結束後十天才知道Lou又從事了那些交易，雖然有時候老實說，我並不一定認同他的看法，不過事後證明他總是對的。

Foreign Currencies 
外匯投資

Berkshire owned about $21.4 billion of foreign exchange contracts at yearend, spread among 12 currencies. As I mentioned last year, holdings of this kind are a decided change for us. Before March 2002, neither Berkshire nor I had ever traded in currencies. But the evidence grows that our trade policies will put unremitting pressure on the dollar for many years to come – so since 2002 we’ve heeded that warning in setting our investment course. (As W.C. Fields once said when asked for a handout: “Sorry, son, all my money’s tied up in currency.”)

截至去年底，Berkshire總計持有214億美元的外匯部位，投資組合遍佈十二種外幣，去年我就曾說過，這類的投資對我們來說，也是頭一遭，直到2002年以前，Berkshire跟我本人從來就沒有買賣過外匯，但越來越多跡象顯示，目前我們的貿易政策，將為往後幾年的匯率不斷施加壓力，有鑒於此，自2002年起，我們開始調整投資方向以做為因應，就像老牌喜劇演員W.C.Fields所說的一樣，「抱歉小子，我的錢全部套牢在外匯上了。」

Be clear on one point: In no way does our thinking about currencies rest on doubts about America. We live in an extraordinarily rich country, the product of a system that values market economics, the rule of law and equality of opportunity. Our economy is far and away the strongest in the world and will continue to be. We are lucky to live here

大家一定要搞清楚一點，外匯上的投資不代表我們在唱衰美國，因為我們生活在一個極其富有的國度，這個系統相當重視市場經濟，尊重法制，每個人都有公平的機會，我們無疑是當今世上最強大的經濟體，而且以後也是，我們是何等的幸運。

 But as I argued in a November 10, 2003 article in Fortune, (available at berkshirehathaway.com), our country’s trade practices are weighing down the dollar. The decline in its value has already been substantial, but is nevertheless likely to continue. Without policy changes, currency markets could even become disorderly and generate spillover effects, both political and financial. No one knows whether these problems will materialize. But such a scenario is a far-from-remote possibility that policymakers should be considering now. Their bent, however, is to lean toward not-so-benign neglect: A 318-page Congressional study of the consequences of unremitting trade deficits was published in November 2000 and has been gathering dust ever since. The study was ordered after the deficit hit a then-alarming $263 billion in 1999; by last year it had risen to $618 billion

但就像我在2003年11月10日在財富雜誌發表的文章所提到的(大家可在Berkshire的官方網站berkshirehathaway.com上找到)，我們國家現今的貿易政策終將拖垮美元，美元價值目前已大幅下滑，且沒有任何好轉跡象，若政策不改，外匯市場脫序的情況將不斷發生，並在政治與金融面上產生連鎖效應，雖然沒有人保證影響的層面有多廣，政治人物卻不得不正視此問題的嚴重性，但政客們目前所采的態度卻是刻意的忽視，一項厚達318頁的貿易赤字評估報告在2000年11月國會發表時，曾引發渲然大波，當時美國一年的貿易赤字達到2,630億美元，去年貿易赤字卻已達6,180億美元的歷史新高。

Charlie and I, it should be emphasized, believe that true trade – that is, the exchange of goods and services with other countries – is enormously beneficial for both us and them. Last year we had $1.15 trillion of such honest-to-God trade and the more of this, the better. But, as noted, our country also purchased an additional $618 billion in goods and services from the rest of the world that was unreciprocated. That is a staggering figure and one that has important consequences.

當然必須強調的是，查理跟我都相信，真正的貿易，也就是與他國交換貨物與服務的行為，對於彼此都有相當大的益處，去年光是這類的貿易總額就達1.15兆美元，但除此之外，我們另外又向外國多採購了6,180億美元的產品與服務，這筆居高不下的數位將引發嚴重的後果。

The balancing item to this one-way pseudo-trade — in economics there is always an offset — is a transfer of wealth from the U.S. to the rest of the world. The transfer may materialize in the form of IOUs our private or governmental institutions give to foreigners, or by way of their assuming ownership of our assets, such as stocks and real estate. In either case, Americans end up owning a reduced portion of our country while non-Americans own a greater part. This force-feeding of American wealth to the rest of the world is now proceeding at the rate of $1.8 billion daily, an increase of 20% since I wrote you last year. Consequently, other countries and their citizens now own a net of about $3 trillion of the U.S. A decade ago their net ownership was negligible.

單一方向的虛擬交易，在經濟學上總有對價，維持均衡的結果就是以本國的財富移轉到國外，其型式有可能是由私人企業或政府部門所發出的借據，或者是出讓股票或房地產的所有權，不管怎樣，此舉將造成美國人擁有自家資產的比例逐漸下滑，平均每天以18億美元的速度流失中，這數位比去年同期又增加了兩成，目前外國人累積持有我國資產已達3兆美元，在十年前這項數字還微乎其微。

The mention of trillions numbs most brains. A further source of confusion is that the current account deficit (the sum of three items, the most important by far being the trade deficit) and our national budget deficit are often lumped as “twins.” They are anything but. They have different causes and different consequences.

上兆元對一般人來說或許是遙不可及的天文數字，更讓人容易搞混的是目前的「經常帳赤字」(由三個專案組成，其中最重要的專案就是貿易逆差)，這與我國的「預算赤字」，並稱為雙胞胎，但兩者的成因不同，造成的影響也不同。

A budget deficit in no way reduces the portion of the national pie that goes to Americans. As long as other countries and their citizens have no net ownership of the U.S., 100% of our country’s output belongs to our citizens under any budget scenario, even one involving a huge deficit.
預算赤字僅會造成本國內財富的重分配，別的國家與人民不會增加對我們資產的所有權，也就是說就算是赤字飆上天，國內所有的產出所得，仍將歸我國民所有。

As a rich “family” awash in goods, Americans will argue through their legislators as to how government should redistribute the national output – that is who pays taxes and who receives governmental benefits. If “entitlement” promises from an earlier day have to be reexamined, “family members” will angrily debate among themselves as to who feels the pain. Maybe taxes will go up; maybe promises will be modified; maybe more internal debt will be issued. But when the fight is finished, all of the family’s huge pie remains available for its members, however it is divided. No slice must be sent abroad.

當一個國家強盛富粟時，美國人民可透過國會議員來爭取如何分配國家產出，也就是誰必須付稅而誰可以得到政府的補助，如果開出的支票過於浮濫，家族成員便會激烈地爭辯誰將受累，或許會以調高稅賦因應，或許開出的承諾會做些調整，也或許會發更多的公債，但一旦紛爭結束，家中所有的餅不管怎麼分，依舊是由所有成員來分享，絕不會有外人進來分一杯羹。

Large and persisting current account deficits produce an entirely different result. As time passes, and as claims against us grow, we own less and less of what we produce. In effect, the rest of the world enjoys an ever-growing royalty on American output. Here, we are like a family that consistently overspends its income. As time passes, the family finds that it is working more and more for the “finance company” and less for itself.

但目前積重難返的經常帳赤字將改寫整個遊戲規則，隨著時間過去，債主將一一上門，將我們收入瓜分殆盡，其結果是世界上其他人從我們身上抽取的稅捐一天比一天高，而我們就像是一個入不敷出的家庭，而且慢慢會發現，辛苦的工作所得，將被債主吸得一乾二淨。

Should we continue to run current account deficits comparable to those now prevailing, the net ownership of the U.S. by other countries and their citizens a decade from now will amount to roughly $11 trillion. And, if foreign investors were to earn only 5% on that net holding, we would need to send a net of $.55 trillion of goods and services abroad every year merely to service the U.S. investments then held by foreigners. At that date, a decade out, our GDP would probably total about $18 trillion (assuming low inflation, which is far from a sure thing). Therefore, our U.S. “family” would then be delivering 3% of its annual output to the rest of the world simply as tribute for the overindulgences of the past. In this case, unlike that involving budget deficits, the sons would truly pay for the sins of their fathers.

若是我們讓經常帳赤字的情況繼續惡化下去，未來十年內外國人持有我國資產的數目將爆增到11兆美元，而若以平均5%的投資報酬率來計，我們每年還須額外支付5,500億美元的勞務與貨品給外國人，十年之後，我們的GDP預估不過是18兆美元(假設維持低通膨，雖然這還不是很確定)，屆時美國家庭，為了過去的揮霍無度，每年都要奉獻出3%的全年所得給外國人，在這種狀況下，真的就要變成所謂的父債子還了。

This annual royalty paid the world – which would not disappear unless the U.S. massively underconsumed and began to run consistent and large trade surpluses – would undoubtedly produce significant political unrest in the U.S. Americans would still be living very well, indeed better than now because of the growth in our economy. But they would chafe at the idea of perpetually paying tribute to their creditors and owners abroad. A country that is now aspiring to an “Ownership Society” will not find happiness in – and I’ll use hyperbole here for emphasis – a “Sharecropper’s Society.” But that’s precisely where our trade policies, supported by Republicans and Democrats alike, are taking us.

每年要支付給外國的年貢，除非是美國人從現在開始縮衣結食，同時持續地增加貿易順差，否則定將引起國內的政局紛擾，雖然在這種情況下，美國人依舊能夠維持不錯的生活水準，事實上拜經濟成長所賜，過得會比過去還好，但光想到每年定期要向外國朝貢，對於一個強調「所有權社會」的國家來說，可能就會引起國人一肚子氣，在這裏我必須誇張一點地講，「佃農經濟」，這正是共和黨與民主黨這些政客，準備帶領我們前進的方向。

Many prominent U.S. financial figures, both in and out of government, have stated that our current-account deficits cannot persist. For instance, the minutes of the Federal Reserve Open Market Committee of June 29-30, 2004 say: “The staff noted that outsized external deficits could not be sustained indefinitely.” But, despite the constant handwringing by luminaries, they offer no substantive suggestions to tame the burgeoning imbalance.

許多重量級的美國財經學者，不論是當政的或是在野的，都一再重申，目前的經常帳赤字絕非常態，舉例來說，美國聯邦準備公開市場操作委員會於2004年6月29-30日的會議記錄中便提到，幕僚群已注意到我們絕對無法負荷長期大量的外部赤字，儘管一些重量級人物不斷大聲疾呼，但實際上他們還是無法提出徹底解決貿易赤字的具體方案。

In the article I wrote for Fortune 16 months ago, I warned that “a gently declining dollar would not provide the answer.” And so far it hasn’t. Yet policymakers continue to hope for a “soft landing,” meanwhile counseling other countries to stimulate (read “inflate”) their economies and Americans to save more. In my view these admonitions miss the mark: There are deep-rooted structural problems that will cause America to continue to run a huge current-account deficit unless trade policies either change materially or the dollar declines by a degree that could prove unsettling to financial markets.

在我16個月以前于財富雜誌刊登的一篇文章當中，我就曾警告，持續貶值的美元並不能解決問題，到目前為止，確是如此，然而政府官員卻依然希望經濟能夠軟著路，同時敦促本國人省著點花用，其他國家刺激(應該說是膨脹)本國經濟，在我看來這些建言都沒有切中要點，除非貿易政策大幅改弦更張或是美元大幅貶值到驚天動地的程度，否則根深蒂固的結構性失衡問題仍將持續困擾金融市場的運作。

Proponents of the trade status quo are fond of quoting Adam Smith: “What is prudence in the conduct of every family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.”

贊成維持現狀的支持者喜歡引用亞當史密斯的話說，如果每個家庭的做法都正確無誤，那麼整個國家的方向就錯不了，如果外國人能夠生產出比我們自己還要便宜的東西，那當然是用我們自家產出較具競爭優勢的東西拿來做交換。

I agree. Note, however, that Mr. Smith’s statement refers to trade of product for product, not of wealth for product as our country is doing to the tune of $.6 trillion annually. Moreover, I am sure that he would never have suggested that “prudence” consisted of his “family” selling off part of its farm every day in order to finance its overconsumption. Yet that is just what the “great kingdom” called the United States is doing.
我同意這點，但是請注意，史密斯先生的說法，指的是以物易物，而不是拿家產來做交換，尤其是當我們一年要典當6,000億美元的資產，同時我相信他同樣也不贊同家人以變賣資產的方式來弭補過度消費的缺口，而很不幸的，這正是當今最偉大的國家-美利堅合眾國正在做的事。

If the U.S. was running a $.6 trillion current-account surplus, commentators worldwide would violently condemn our policy, viewing it as an extreme form of “mercantilism” – a long-discredited economic strategy under which countries fostered exports, discouraged imports, and piled up treasure. I would condemn such a policy as well. But, in effect if not in intent, the rest of the world is practicing mercantilism in respect to the U.S., an act made possible by our vast store of assets and our pristine credit history. Indeed, the world would never let any other country use a credit card denominated in its own currency to the insatiable extent we are employing ours. Presently, most foreign investors are sanguine: they may view us as spending junkies, but they know we are rich junkies as well.

換個角度來說，如果美國現在享有的是6,000億美元的貿易順差的話，其他國家一定會立刻跳出來譴責我們的貿易政策，將之視為重商主義，也就是長久以來，為人所垢病的鼓勵出口、壓抑進口、囤積財富的經濟政策，我對這種做法也期期以為不可，但事實上就算不是有意的，目前世界上其他國家確實正對美國實行重商主義，覬諛我國豐厚的資產以及深厚的家底，確實除了美國以外，世界上再也沒有其他國家可以享有幾乎無上限的信用額度，截至目前為止，大部份的外國人還是相當樂觀，他們認定我們是花錢如流水的敗家子，而且是極其富有的敗家子。

Our spendthrift behavior won’t, however, be tolerated indefinitely. And though it’s impossible to forecast just when and how the trade problem will be resolved, it’s improbable that the resolution will foster an increase in the value of our currency relative to that of our trading partners.

但我們這種揮金如土的行為，不可能無限制地持續下去，雖然很難預估這樣的貿易問題未來將如何收尾，但可以肯定的是，絕對不可能依靠美元對其他貨幣大幅升值的結局。

 We hope the U.S. adopts policies that will quickly and substantially reduce the current-account deficit. True, a prompt solution would likely cause Berkshire to record losses on its foreign-exchange contracts. But Berkshire’s resources remain heavily concentrated in dollar-based assets, and both a strong dollar and a low-inflation environment are very much in our interest.
我們很希望美國能夠提出一套立即解決貿易逆差的方案，雖然，這樣將使得Berkshire帳上立即產生大量的外匯交易損失，但由於Berkshire大部份的資產還是擺在以美元為計價的資產之上，強勢的美元以及低通膨的環境還是我們的最愛。

If you wish to keep abreast of trade and currency matters, read The Financial Times. This London-based paper has long been the leading source for daily international financial news and now has an excellent American edition. Both its reporting and commentary on trade are first-class.
如果你想要持續追蹤貿易與匯率問題，建議你看金融時報，這份倫敦地區發行的報紙長期引領國際金融訊息，同時還發行有美國版，它們在貿易方面的報導與社論都堪稱一流。

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

And, again, our usual caveat: macro-economics is a tough game in which few people, Charlie and I included, have demonstrated skill. We may well turn out to be wrong in our currency judgments. (Indeed, the fact that so many pundits now predict weakness for the dollar makes us uneasy.) If so, our mistake will be very public. The irony is that if we chose the opposite course, leaving all of Berkshire’s assets in dollars even as they declined significantly in value, no one would notice our mistake.

當然照例我還是要老調重談，總體經濟是沒有人搞得懂的玩意兒，我們在匯率上的判斷不一定對，事實上，近來也有很多份子跟著湊熱鬧，一起高喊美元弱勢的現象，反而讓我們覺得怪怪的，果真如此，那我們可就糗大了，諷刺的是，要是我們按兵不動，將Berkshire的資金擺在美元資產之上，就算其價值大幅下滑，反而沒有人會注意。

 John Maynard Keynes said in his masterful The General Theory: “Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.” (Or, to put it in less elegant terms, lemmings as a class may be derided but never does an individual lemming get criticized.) From a reputational standpoint, Charlie and I run a clear risk with our foreign-exchange commitment. But we believe in managing Berkshire as if we owned 100% of it ourselves. And, were that the case, we would not be following a dollar-only policy.
凱恩斯曾經提到他著名的通用理論，普世的智慧告訴我們，尋常的失敗可能比不尋常的成功更能搏取名聲，或者講得再通俗一點，旅鼠或許以愚蠢著稱，但卻沒有任何單一一隻旅鼠挨駡，若是為了面子，查理跟我在外匯上的作法，很可能讓自己的面子掛不住，但我們還是盡心盡力的經營Berkshire，這也是我們不獨鐘美元資產的根本原因。

Miscellaneous 
其他事項

Last year I told you about a group of University of Tennessee finance students who played a key role in our $1.7 billion acquisition of Clayton Homes. Earlier, they had been brought to Omaha by their professor, Al Auxier – he brings a class every year – to tour Nebraska Furniture Mart and Borsheim’s, eat at Gorat’s and have a Q&A session with me at Kiewit Plaza. These visitors, like those who come for our annual meeting, leave impressed by both the city and its friendly residents.

去年我告訴各位有一群田納西州財經系的學生，在一宗Clayton房屋17億美元的購並案扮演了關鍵性的角色，每年他們固定由Al Auxier教授帶到奧瑪哈，參觀NFM及波仙珠寶，到Gorat’s吃牛排，同時與我在Kiewit總部來一場問答，這群訪客，如同每年來參加股東年會的股東一樣，都對本市及其市民留下深刻的印象。

Other colleges and universities have now come calling. This school year we will have visiting classes, ranging in size from 30 to 100 students, from Chicago, Dartmouth (Tuck), Delaware State, Florida State, Indiana, Iowa, Iowa State, Maryland, Nebraska, Northwest Nazarene, Pennsylvania (Wharton), Stanford, Tennessee, Texas, Texas A&M, Toronto (Rotman), Union and Utah. Most of the students are MBA candidates, and I’ve been impressed by their quality. They are keenly interested in business and investments, but their questions indicate that they also have more on their minds than simply making money. I always feel good after meeting them.

之後其他大專院校的學生也開始陸續造訪，這一學年將會有來自芝加哥、Dartmouth、Delaware、佛羅里達、印地安納、愛荷華、馬里蘭、內布拉斯加、賓州、史丹佛、田納西、德州、多倫多、猶它州等地的學生，人數從30到100人不等，大部份都是MBA的學生，我對於他們的素質印象深刻，他們對於商業與投資深感興趣，但從所提的問題看得出他們不只是想賺錢而已，我總是很喜歡跟他們見面。

At our sessions, I tell the newcomers the story of the Tennessee group and its spotting of Clayton Homes. I do this in the spirit of the farmer who enters his hen house with an ostrich egg and admonishes the flock: “I don’t like to complain, girls, but this is just a small sample of what the competition is doing.” To date, our new scouts have not brought us deals. But their mission in life has been made clear to them.

在會面中，我告訴新來的訪客有關田納西州學生以及Clayton房屋的故事，我之所以這麼做，是想要像有位農夫巡雞舍，卻只看到一顆雞蛋時說到「其他母雞們可要努力一點啊!」，目前我們這些新同學還沒有為我們帶來新案子，不過我應該已經很清楚地告訴他們的任務了。

You should be aware of an accounting rule that mildly distorts our financial statements in a paintoday, gain-tomorrow manner. Berkshire purchases life insurance policies from individuals and corporations who would otherwise surrender them for cash. As the new holder of the policies, we pay any premiums that become due and ultimately – when the original holder dies – collect the face value of the policies.

大家要知道，一項會讓我們今天的財務報表難看的會計原則，明天肯定會給我們回報，Berkshire以現金向原本有意將保單貼現的個人及企業購買人壽保單，身為這些保單的新持有人，我們支付後續到期的保費，等到原保單持有人過世後，我們則向保險公司領取保險理賠金。

The original policyholder is usually in good health when we purchase the policy. Still, the price we pay for it is always well above its cash surrender value (“CSV”). Sometimes the original policyholder has borrowed against the CSV to make premium payments. In that case, the remaining CSV will be tiny and our purchase price will be a large multiple of what the original policyholder would have received, had he cashed out by surrendering it.

在買進保單之時，其原持有人的身體狀況一般都不錯，且我們買進的價格通常遠高於保單既有價值CSV，有時原持有人甚至已用CSV抵押來支付保費，在這種情況下，剩餘的保單價值並不高，所以賣給我們的價格可能是他們自行向保險公司貼現的好幾倍。

Under accounting rules, we must immediately charge as a realized capital loss the excess over CSV that we pay upon purchasing the policy. We also must make additional charges each year for the amount by which the premium we pay to keep the policy in force exceeds the increase in CSV. But obviously, we don’t think these bookkeeping charges represent economic losses. If we did, we wouldn’t buy the policies.

依照會計原則，我們在買進保單的同時，必須馬上就買進價格與貼現價值的差異，認列一筆已實現的資本損失，同時以後每年還必須就當年度支付保費與貼現價值的差異提列支出，當然我們很清楚這僅僅是帳面上的損失，因為殺頭的生意有人做，賠錢的生意沒人做。

During 2004, we recorded net “losses” from the purchase of policies (and from the premium payments required to maintain them) totaling $207 million, which was charged against realized investment gains in our earnings statement (included in “other” in the table on page 17). When the proceeds from these policies are received in the future, we will record as realized investment gain the excess over the then-CSV.

2004年，我們光是在這方面認列的損失就有2.07億美元，列為其他資本利得的減項，當然日後等我們拿到理賠金時，也必須就實際收取金額與保單貼現價值的差異認列資本利得。

Two post-bubble governance reforms have been particularly useful at Berkshire, and I fault myself for not putting them in place many years ago. The first involves regular meetings of directors without the CEO present. I’ve sat on 19 boards, and on many occasions this process would have led to dubious plans being examined more thoroughly. In a few cases, CEO changes that were needed would also have been made more promptly. There is no downside to this process, and there are many possible benefits.

有兩項泡沫化後政府提出的兩項方案對Berkshire特別受用，而我很後悔沒有早一點就付諸實施，第一項是推動總裁不得列席的董事會，我總計擔任十九家公司的董事，而通常的情況下，這個提案往往故意讓事情複雜化而束諸高閣，在某些總裁非撤換不可的情況下，將有助於加速相關程式的進行，這方案沒有任何壞處，同時還可帶來正面的助益。

 The second reform concerns the “whistleblower line,” an arrangement through which employees can send information to me and the board’s audit committee without fear of reprisal. Berkshire’s extreme decentralization makes this system particularly valuable both to me and the committee. (In a sprawling “city” of 180,000 – Berkshire’s current employee count – not every sparrow that falls will be noticed at headquarters.) Most of the complaints we have received are of “the guy next to me has bad breath” variety, but on occasion I have learned of important problems at our subsidiaries that I otherwise would have missed. The issues raised are usually not of a type discoverable by audit, but relate instead to personnel and business practices. Berkshire would be more valuable today if I had put in a whistleblower line decades ago.

第二項改革是有關檢舉專線，也就是公司所有員工都能夠有管道向我本人及董事會的積核委員會提供訊息，而不怕遭到申斥的管道，Berkshire極端的分權化，突顯這項制度的重要性，在龐大如Berkshire的帝國，員工人數已達18萬人，總部不可能知道所有事情，在我們收到的申訴中，大部份是「坐在我隔壁的人有口臭」之類的抱怨，但偶爾我也會收到本來不會被揭穿的子公司重大弊病，這些問題通常不容易經由正常的稽核管道發現，而是關於個人行為與企業常態，我想當初若是早一點實施，Berkshire將可以更加美好。

Charlie and I love the idea of shareholders thinking and behaving like owners. Sometimes that requires them to be pro-active. And in this arena large institutional owners should lead the way.

查理跟我一向推崇股東以老闆的想法做法自居，有時這需要他們主動一點，特別是大型機構投資人更應該身先士卒，

 So far, however, the moves made by institutions have been less than awe-inspiring. Usually, they’ve focused on minutiae and ignored the three questions that truly count. First, does the company have the right CEO? Second, is he/she overreaching in terms of compensation? Third, are proposed acquisitions more likely to create or destroy per-share value?

 可惜到目前為止，他們的舉措仍乏善可陳，通常他們過於重視細節，卻忘了最重要的三個關鍵問題，首先，公司總裁是否適任? 其次，他的報酬是否合理? 最後，其所提出的購並案，是否有損于原有股東權益?
On such questions, the interests of the CEO may well differ from those of the shareholders. Directors, moreover, sometimes lack the knowledge or gumption to overrule the CEO. Therefore, it’s vital that large owners focus on these three questions and speak up when necessary

關於這些問題，總裁的利益與股東並非完全一致，而董事們有時可能缺乏智慧或勇氣來反駁總裁的決定，也因此大股東對於這三個關鍵，同時大聲說出自己的看法，就顯得相當重要。

Instead many simply follow a “checklist” approach to the issue du jour. Last year I was on the receiving end of a judgment reached in that manner. Several institutional shareholders and their advisors decided I lacked “independence” in my role as a director of Coca-Cola. One group wanted me removed from the board and another simply wanted me booted from the audit committee.

結果有很多人只是把這當做例行公事，去年我僅能依此標準被動地接受大家的公評，其中有些大型機構投資人認定我擔任可口可樂的董事缺乏獨立性，其中有一個團體要求我退出該公司的董事會，另外一個好一點，只想把我趕出稽核委員會。

My first impulse was to secretly fund the group behind the second idea. Why anyone would wish to be on an audit committee is beyond me. But since directors must be assigned to one committee or another, and since no CEO wants me on his compensation committee, it’s often been my lot to get an audit committee assignment. As it turned out, the institutions that opposed me failed and I was re-elected to the audit job. (I fought off the urge to ask for a recount.)
我頭一個反應是，我或許該偷偷地捐款給第二個團體，我不知道到底是誰想要待在稽核委員會，通常董事通常會被分配到各個委員會，但由於沒有任何一位總裁希望我待在薪資委員會，所以一般我都會被排到稽核委員會，結果證明，這些團體的努力功敗垂成，我還是被分到稽核的任務，雖然我曾極力要求重新投票。

Some institutions questioned my “independence” because, among other things, McLane and Dairy Queen buy lots of Coke products. (Do they want us to favor Pepsi?) But independence is defined in Webster’s as “not subject to control by others.” I’m puzzled how anyone could conclude that our Coke purchases would “control” my decision-making when the counterweight is the wellbeing of $8 billion of Coke stock held by Berkshire. Assuming I’m even marginally rational, elementary arithmetic should make it clear that my heart and mind belong to the owners of Coke, not to its management.

有些團體因為Berkshire子公司McLane及乳品皇后與可口可樂有生意上的往來，而質疑我的獨立性，(難道為此我們就應該棄可口可樂而選擇百事可樂嗎?)，根據韋氏大辭典關於「獨立」的定義，指的是「不受他人所控制」，我實在搞不懂，怎麼會有人認為我會為了其間的蠅頭小利，而犧牲個人在可口可樂高達80億的股東權益，再退一步想，就算是小學生也應該知道，我的心到底是站在公司股東或經
營階層那一邊。

I can’t resist mentioning that Jesus understood the calibration of independence far more clearly than do the protesting institutions. In Matthew 6:21 He observed: “For where your treasure is, there will your heart be also.” Even to an institutional investor, $8 billion should qualify as “treasure” that dwarfs any profits Berkshire might earn on its routine transactions with Coke.

我忍不住要說，連耶穌基督都比這些抗議團體還要瞭解獨立性的真義，在馬修6:21章節中，他提到，「你的財富在那裏，你的心就在那裏」，我想即便對一個大型投資法人來說，80億美元也絕對是一筆不小的數目，相較於與可口可樂往來能賺取的蠅頭小利。

Measured by the biblical standard, the Berkshire board is a model: (a) every director is a member of a family owning at least $4 million of stock; (b) none of these shares were acquired from Berkshire via options or grants; (c) no directors receive committee, consulting or board fees from the company that are more than a tiny portion of their annual income; and (d) although we have a standard corporate indemnity arrangement, we carry no liability insurance for directors. At Berkshire, board members travel the same road as shareholders

根據聖經的標準，Berkshire的董事會堪稱典範，(a)每位董事至少將400萬美元以上的身家擺在Berkshire(b)沒有任何股份是靠選擇權或贈與取得(c)董事們領取的酬勞相較於自身的年所得都極其有限(d)雖然我們有一套企業賠償機制，但我們並沒有替董事們安排任何責任保險。

At Berkshire, board members travel the same road as shareholders.
在Berkshire，董事們與所有股東站在同一條船上。

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

Charlie and I have seen much behavior confirming the Bible’s “treasure” point. In our view, based on our considerable boardroom experience, the least independent directors are likely to be those who receive an important fraction of their annual income from the fees they receive for board service (and who hope as well to be recommended for election to other boards and thereby to boost their income further). Yet these are the very board members most often classed as “independent.”

查理跟我已看過很多符合聖經所說觀點的種種行為，根據多年的董事會經驗，最不獨立的董事當屬那些依賴董事酬勞過生活的人，(還有那些期待被邀請加入董事會的人士，好讓他們得以增加更多的外快)，更可笑的是，正是這些人被歸類為獨立的董事，

 Most directors of this type are decent people and do a first-class job. But they wouldn’t be human if they weren’t tempted to thwart actions that would threaten their livelihood. Some may go on to succumb to such temptations.

這類董事舉止大多彬彬有禮，且有一流的工作，但人的天性使得他們不得不反對可能危及其生計的任何方案，基於誘惑而繼續沉淪下去。

Let’s look at an example based upon circumstantial evidence. I have first-hand knowledge of a recent acquisition proposal (not from Berkshire) that was favored by management, blessed by the company’s investment banker and slated to go forward at a price above the level at which the stock had sold for some years (or now sells for). In addition, a number of directors favored the transaction and wanted it proposed to shareholders.

讓我們看看周遭現實的狀況為何，關於最近剛傳出的一件購並案(與Berkshire無關)，我有第一手的資料，管理階層相當青睞這件收購案，而投資銀行也覺得相當不錯，因為購並價格遠高於目前股票的市價，此外許多董事也相當贊同，並準備提案到股東會表決。

Several of their brethren, however, each of whom received board and committee fees totaling about $100,000 annually, scuttled the proposal, which meant that shareholders never learned of this multi-billion offer. Non-management directors owned little stock except for shares they had received from the company. Their open-market purchases in recent years had meanwhile been nominal, even though the stock had sold far below the acquisition price proposed. In other words, these directors didn’t want the shareholders to be offered X even though they had consistently declined the opportunity to buy stock for their own account at a fraction of X.

然而就在此時，有幾位董事會的同僚，每位每年平均都從公司領取超過十萬美元酬勞，卻跳出來大表反對，最後使得這件金額高達數十億美金的購並案胎死腹中，這些未參與公司實際經營的外部董事，僅持有極少數的股權，且多數為公司所贈與，且很奇怪的是，雖然目前的股價遠低於購並的提案價格，卻不見他們自己從市場買進多少股份，換言之，這些董事壓根就不希望股東們提出X價格的報價，同時自己卻也不願從市場上以X價格買進部份股權。

I don’t know which directors opposed letting shareholders see the offer. But I do know that $100,000 is an important portion of the annual income of some of those deemed “independent,” clearly meeting the Matthew 6:21 definition of “treasure.” If the deal had gone through, these fees would have ended.

我不知道到底是那幾位董事反對讓股東看到相關的提案，但我卻很清楚這十萬美元的酬勞，對這些被外界視為獨立的董事來說，至關緊要，絕對稱得上聖經上所說的財富，而萬一這件購並案要是談成了，他們每年固定可以領取的酬勞將因此泡湯。

Neither the shareholders nor I will ever know what motivated the dissenters. Indeed they themselves will not likely know, given that self-interest inevitably blurs introspection. We do know one thing, though: At the same meeting at which the deal was rejected, the board voted itself a significant increase in directors’ fees.

我想不論是我或是該公司的股東，永遠都不會知道是誰提出反對的議案，而基於私利，這群人也永遠不知道要如何反省，但至少我還知道一件事，那就是就在拒絕這項收購案的同一次董事會上，另一項大幅提高董事酬勞的提岸卻獲得通過。

While we are on the subject of self-interest, let’s turn again to the most important accounting mechanism still available to CEOs who wish to overstate earnings: the non-expensing of stock options. The accomplices in perpetuating this absurdity have been many members of Congress who have defied the arguments put forth by all Big Four auditors, all members of the Financial Accounting Standards Board and virtually all investment professionals.
既然我們提到自利的話題，就讓我們來聊聊最容易讓管理階層將盈餘灌水的會計手法，也就是免費用化的股票選擇權，參與這項荒謬鬧劇的共犯包含國會議員，他們公然蔑視四大會計師事務所以及會計準則委員會及眾多投資專家所提的建言。

I’m enclosing an op-ed piece I wrote for The Washington Post describing a truly breathtaking bill that was passed 312-111 by the House last summer. Thanks to Senator Richard Shelby, the Senate didn’t ratify the House’s foolishness. And, to his great credit, Bill Donaldson, the investorminded Chairman of the SEC, has stood firm against massive political pressure, generated by the check-waving CEOs who first muscled Congress in 1993 about the issue of option accounting and then repeated the tactic last year.

附件有一篇我曾在華盛頓郵報刊登的社論，文中提到去年夏天在眾議院以312票對111票通過的一項驚世駭俗的法案，多虧參議員Richard Shelby的阻擋，參議院最後並未批准眾議院的愚蠢行為，另外證管會主委Bill Donaldson以其一生清譽，堅定抵擋強大的政治壓力，大企業總裁們企圖利用政治獻金遊說國會議員，重施在1993年封殺選擇權會計原則實行的故技。

Because the attempts to obfuscate the stock-option issue continue, it’s worth pointing out that no one – neither the FASB, nor investors generally, nor I – are talking about restricting the use of options in any way. Indeed, my successor at Berkshire may well receive much of his pay via options, albeit logically-structured ones in respect to 1) an appropriate strike price, 2) an escalation in price that reflects the retention of earnings, and 3) a ban on his quickly disposing of any shares purchased through options. We cheer arrangements that motivate managers, whether these be cash bonuses or options. And if a company is truly receiving value for the options it issues, we see no reason why recording their cost should cut down on their use.

由於讓選擇權議題模糊化的力量毫不停歇，所以我還是要不厭其煩地再一次強調，包含財務會計準則委員會FASB，一般投資大眾以及我本人在內，從來就沒有人主張限制選擇權的使用，事實上，包含未來Berkshire的繼任者在內，都很有可能會經由選擇權獲得大量的報酬，只不過這種選擇權必須經過各方面的仔細核算，包含(1)適當的執行價格(2)將保留盈餘本身的增長能力考量在內(3)限制其在取得股份後不久就處份，我們贊成任何激勵管理階層的措施，不管是現金或者是選擇權，而若選擇權的發行真有助於公司價值的提升，我們看不出有任何理由只因為必須將其成本列為費用就棄而不用。

The simple fact is that certain CEOs know their own compensation would be far more rationally determined if options were expensed. They also suspect that their stock would sell at a lower price if realistic accounting were employed, meaning that they would reap less in the market when they unloaded their personal holdings. To these CEOs such unpleasant prospects are a fate to be fought with all the resources they have at hand – even though the funds they use in that fight normally don’t belong to them, but are instead put up by their shareholders.

真正的原因其實很簡單，那就是某些總裁明知一旦將選擇權費用化後，他們所獲取的酬勞突然間將被迫全部攤開在陽光底下，同時費用化也將影響其未來處份持股的價格，後者關乎其真正獲得的報酬，這使得他們必須傾全力悍衛自己的利益，諷刺的是，他們用的還是公司的錢，這全是股東們的血汗錢。

 Option-expensing is scheduled to become mandatory on June 15th. You can therefore expect intensified efforts to stall or emasculate this rule between now and then. Let your Congressman and Senators know what you think on this issue.

選擇權費用化將在今年6月15日起強制實行，大家可以預期此後將不斷有人企圖阻止或是廢除相關規定，去之而後快，務必讓你選區的議員知道你對於這項議題的立場。

The Annual Meeting
年度股東大會

There are two changes this year concerning the annual meeting. First, we have scheduled the meeting for the last Saturday in April (the 30th), rather than the usual first Saturday in May. This year Mother’s Day falls on May 8, and it would be unfair to ask the employees of Borsheim’s and Gorat’s to take care of us at that special time – so we’ve moved everything up a week. Next year we’ll return to our regular timing, holding the meeting on May 6, 2006.
關於股東年會今年有兩項變革，首先由於母親節緣故，股東會日期改為四月的最後一個星期六(也就是4/30)，而不是以往的五月第一個星期六，實在是不好意思要求波仙珠寶及Gorat’s牛排店在這個重要節日來為我們服務，因此我們決定提早一個星期舉行，明年我們就會回復以往慣例，在2006年5月6日召開。

Additionally, we are changing the sequence of events on meeting day, April 30. Just as always, the doors will open at the Qwest Center at 7 a.m. and the movie will be shown at 8:30. At 9:30, however, we will go directly to the question and answer period, which (allowing for lunch at the Qwest’s stands) will last until 3:00. Then, after a short recess, Charlie and I will convene the annual meeting at 3:15.

此外，我們也改變了開會當天的程式，Qwest中心的大門還是會在早上七點鐘準時開放、電影短片照例會在八點半播放，不過Q&A的時間會提早到九點半開始，(會場中午備有點心攤位)，一直到下午三點為止，然後在短暫的休息之後，在三點十五分開始召開正式會議，

We have made this change because a number of shareholders complained last year about the time consumed by two speakers who advocated proposals of limited interest to the majority of the audience – and who were no doubt relishing their chance to talk to a captive group of about 19,500. With our new procedure, those shareholders who wish to hear it all can stick around for the formal meeting and those who don’t can leave – or better yet shop.

之所以會這樣做，是因為有些股東抱怨去年有兩位股東提出兩項無關緊要的議題，浪費在座19,500位股東寶貴的時間，在改變程式之後，那些想要暢所欲言，全程參與的股東，可以一直待到會議結束，而沒有興趣浪費時間的股東也可提早離開去血拼。


There will be plenty of opportunity for that pastime in the vast exhibition hall that adjoins the meeting area. Kelly Muchemore, the Flo Ziegfeld of Berkshire, put on a magnificent shopping extravaganza last year, and she says that was just a warm-up for this year. (Kelly, I am delighted to report, is getting married in October. I’m giving her away and suggested that she make a little history by holding the wedding at the annual meeting. She balked, however, when Charlie insisted that he be the ringbearer.)

當天在會場旁邊的展場也會有許多娛興節目，Kelly-Berkshire的FloZiegfeld去年佈置了一件大型的展覽品，不過她說去年只是熱身而已，我很高興向大家報告，Kelly在去年十月結婚，我本來建議她選在股東大會舉行婚禮，可惜由於查理堅持要男儐相而作罷，
Again we will showcase a 2,100 square foot Clayton home (featuring Acme brick, Shaw carpet, Johns Manville insulation, MiTek fasteners, Carefree awnings and NFM furniture). Take a tour through the home. Better yet, buy it. 

再一次我們將在會場展示一個2,100平方英呎寬的組合屋，配備有Acme磚塊、Shaw地毯、Johns Manville隔熱材料、MiTek螺栓、Carefree屋簷及NFM傢俱，記得來參觀一下，最好順便買一套。
GEICO will have a booth staffed by a number of its top counselors from around the country, all of them ready to supply you with auto insurance quotes. In most cases, GEICO will be able to give you a special shareholder discount (usually 8%). This special offer is permitted by 45 of the 50 jurisdictions in which we operate. Bring the details of your existing insurance and check out whether we can save you money.
GEICO公司會再度派出各地區最頂尖的業務員，在會場設立攤位，隨時提供股東們汽車保單的報價，在大多數的情況下，GEICO都可以提供給你一個相當優惠的股東折扣(大約8%)，這個特別優惠在我們有營業據點的全美50州中的45州都有效，各位記得將自己現在的投保資料帶來，看看是否能幫自己省下一筆錢。

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

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

The Bookworm shop did a terrific business last year selling Berkshire-related books. Displaying 18 titles, they sold 2,920 copies for $61,000. Since we charge the shop no rent (I must be getting soft), it gives shareholders a 20% discount. This year I’ve asked The Bookworm to add Graham Allison’s Nuclear Terrorism: The Ultimate Preventable Catastrophe, a must-read for those concerned with the safety of our country. In addition, the shop will premiere Poor Charlie’s Almanack, a book compiled by Peter Kaufman. Scholars have for too long debated whether Charlie is the reincarnation of Ben Franklin. This book should settle the question.

去年書蟲書店在會場設攤販售Berkshire相關書籍，全部十八種，總計賣出2,920本，也因為攤位不收租金(我越來越好講話了)，所以股東買書都可以打八折，今年我特地要求書蟲增加Graham Allison所著的核子恐怖主義-最終可避免的大災難，這是所有關心國家安危必讀的書籍，此外當天也會舉行Peter Kaufman所著可憐查理的年鑒，一直以來許多學者都在爭論查理是否為佛蘭克林再世，我想這本書或可解決大家的疑問。

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

後面附有股東會開會投票的相關資料，向各位解釋如何拿到股東會入場及其它活動必須的識別證，至於有關機位、住宿、租車等預訂服務，我們很高興與美國運通(電話800-799-6634)再次簽約為您提供相關安排，每年他們都為大家提供非常好的服務，在此謹代表大家向他們說聲謝謝。

At Nebraska Furniture Mart, located on a 77-acre site on 72nd Street between Dodge and Pacific, we will again be having “Berkshire Weekend” pricing. We initiated this special event at NFM eight years ago, and sales during the “Weekend” grew from $5.3 million in 1997 to $25.1 million in 2004 (up 45% from a year earlier). Every year has set a new record, and on Saturday of last year, we had the largest single-day sales in NFM’s history – $6.1 million.

位於道奇街與太平洋街占地77英畝的內布拉斯加傢俱店NFM，再度會有Berkshire周特賣，我們在八年前首次推出這種促銷活動，營業額更一舉從1997年的530萬美元成長到2004年的2,510萬美元，每年的銷售成績持續創新高，去年股東會週末再度創下單日營業額新高610萬美元。

To get the discount, you must make your purchases between Thursday, April 28 and Monday, May 2 inclusive, and also present your meeting credential. The period’s special pricing will even apply to the products of several prestigious manufacturers that normally have ironclad rules against discounting but that, in the spirit of our shareholder weekend, have made an exception for you. We appreciate their cooperation. NFM is open from 10 a.m. to 9 p.m. Monday through Saturday, and 10 a.m. to 6 p.m. on Sunday. On Saturday this year, from 5:30 p.m. to 8 p.m. we are having a special affair for shareholders only. I’ll be there, eating barbeque and drinking Coke.

想要享有折扣記得在4/28星期四到5/2星期一間採購，並出示股東開會證明，在這期間的特賣活動也適用于許多原本從不打折的頂級品牌，這可是為了股東會才特別破例，我們很感謝他們的配合，NFM的營業時間平日從早上10點到下午9點，星期六及星期日則從早上10點到下午6點，在今年的星期六，我們將有一個股東會特賣會，時間從下午5點半到下午8點，我本人也將出席，順便吃點烤肉配配可樂。

Borsheim’s – the largest jewelry store in the country except for Tiffany’s Manhattan store – will have two shareholder-only events. The first will be a cocktail reception from 6 p.m. to 10 p.m. on Friday, April 29. The second, the main gala, will be from 9 a.m. to 4 p.m. on Sunday, May 1. On Saturday, we will be open until 6 p.m

波仙珠寶-全美單店營業額僅次於紐約曼哈頓蒂芬妮的珠寶店，在股東會期間將會有兩場專為股東舉辦的展覽會，第一場是在4/29星期五的雞尾酒會，時間從下午6點到晚上10點，第二場主秀則在5/1星期天舉行，從早上9點到下午4點，星期六則營業到下午6點。

We will have huge crowds at Borsheim’s throughout the weekend. For your convenience, therefore, shareholder prices will be available from Monday, April 25 through Saturday, May 7. During that period, just identify yourself as a shareholder through your meeting credentials or a brokerage statement

整個週末波仙都將人滿為患，從4/25星期一到5/7星期六的股東會期間，波仙都將提供股東特惠價，只要出示出席證或者是委託書表明股東的身分即可享有折扣，

Borsheim’s operates on a gross margin that is fully twenty percentage points below that of its major rivals, even before the shareholders’ discount. Last year, business over the weekend increased 73% from 2003, setting a record that will be tough to beat. Show me it can be done.

波仙的營業毛利要比其他主要競爭對手要低20個百分點以上，去年的營業額較前年又成長了73%，再度創下歷史的新高，讓我們努力把它打破。

In a tent outside of Borsheim’s, Patrick Wolff, twice U.S. chess champion, will take on all comers in groups of six – blindfolded. Additionally, we will have Bob Hamman and Sharon Osberg, two of the world’s top bridge experts, available to play with our shareholders on Sunday afternoon. They plan to keep their eyes open – but Bob never sorts his cards, even when playing for a national championship.
波仙外面所搭的棚子內，Patrick Wolff-美國棋兩度冠軍，也會再度在會場蒙著眼與所有挑戰者分六個一組分批對奕，此外兩位世界級橋牌頂尖高手Bob Hamman、Sharon Osberg也會在星期天下午與大家同樂，當然他們不會蒙眼，不過以Bob的習慣，他從來不整理牌組，就算是在參加全國橋牌大賽時，也是如此。

Gorat’s – my favorite steakhouse – will again be open exclusively for Berkshire shareholders on Sunday, May 1, and will be serving from 4 p.m. until 10 p.m. Please remember that to come to Gorat’s on that day, you must have a reservation. To make one, call 402-551-3733 on April 1 (but not before). If Sunday is sold out, try Gorat’s on one of the other evenings you will be in town. Enhance your reputation as an epicure by ordering, as I do, a rare T-bone with a double helping of hash browns.

我個人最愛的牛排館-Gorat's為了Berkshire股東年會破例在5/1星期天開門營業，從下午4點開始營業，一直到晚上10點，請記得星期天事先若沒有訂位的人請勿前往以免向隅，要預約請在4/1以後打電話(402-551-3733)，若訂不到星期天的位子，也可以試試其他晚上，記得跟我一樣，老練一點地點丁骨牛排加上雙份的牛肉丸。

We will again have a special reception from 4:00 to 5:30 on Saturday afternoon for shareholders who have come from outside of North America. Every year our meeting draws many people from around the globe, and Charlie and I want to be sure we personally greet those who have come so far. Last year we enjoyed meeting more than 400 of you including at least 100 from Australia. Any shareholder who comes from other than the U.S. or Canada will be given a special credential and instructions for attending this function.

星期六下午四點到五點半，我們也會為來自北美以外地區的股東舉行歡迎會，每年股東年會吸引了來自世界各地的人們參與，查理跟我希望能夠親自接待這些遠道而來的股東，去年人數達到四百位，其中至少有一百位是來自澳洲，任何來自美國與加拿大地區以外的股東事先都會拿到參與這項儀式的證明與注意事項。

 * * * * * * * * * * * *


Charlie and I are lucky. We have jobs that we love and are helped every day in a myriad of ways by talented and cheerful associates. No wonder we tap-dance to work. But nothing is more fun for us than getting together with our shareholder-partners at Berkshire’s annual meeting. So join us on April 30th at the Qwest for our annual Woodstock for Capitalists.

查理跟我真是幸運，每天能夠從事我們喜愛的工作，同時由這麼多有幹勁的同仁協助，也難怪我們每天都能夠邊跳舞上班，當然每年能夠與股東夥伴們同樂更是一大樂事，所以再次歡迎大家到Qwest中心參與資本主義家的伍斯達克年度音樂會。

Warren E. Buffett
Chairman of the Board
February 28, 2005

華倫．巴菲特
董事長
2005年2月28日
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