巴菲特致股东的信1997226.docx

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1、BERKSHIRE HATHAWAY INC. 1997 Chairmans Letter To the Shareholders of Berkshire Hathaway Inc.: OOur gaiin iin nnet worrth durringg 19997 wass $88.0 billlioon, whiich inccreaasedd thhe pper-shaare boook vvaluue oof bbothh ouur CClasss AA annd CClasss BB sttockk byy 344.1%. OOverr thhe llastt 333 yeear

2、ss (tthatt iss, ssincce ppressentt maanaggemeent toook ooverr) pper-shaare boook vvaluue hhas groown froom $19 to $255,4888, a rratee off 244.1% coompooundded annnuallly.(1) 1. AAll figgurees uusedd inn thhis repportt appplyy too Beerksshirress A shaaress, tthe succcesssorr too thhe oonlyy sttockk t

3、hhat thee coompaany hadd ouutsttanddingg bbefoore 19996. Thhe BB shharees hhavee ann ecconoomicc innterrestt eqquall too 1/30tth tthatt off thhe AA. GGiveen oour gaiin oof 334.11%, it is temmptiing to decclarre vvicttoryy annd mmovee onn. BBut lasst yyearrs perrforrmannce wass noo grreatt trriummph:

4、 Anny iinveestoor ccan chaalk up larrge retturnns wwhenn sttockks ssoarr, aas ttheyy diid iin 119977. IIn aa buull marrkett, oone musst aavoiid tthe errror of thee prreenningg duuck thaat qquaccks boaastffullly aafteer aa toorreentiial raiinsttormm, tthinnkinng tthatt itts ppadddlinng sskillls havve

5、 ccaussed it to risse iin tthe worrld. A rigght-thiinkiing ducck wwoulld iinstteadd coompaare itss poosittionn affterr thhe ddownnpouur tto tthatt off thhe ootheer dduckks oon tthe ponnd. SSo wwhatts ourr duuck rattingg foor 119977? TThe tabble on thee faacinng ppagee shhowss thhat thooughh wee paad

6、dlled furriouuslyy laast yeaar, passsivve dduckks tthatt siimplly iinveesteed iin tthe S&PP Inndexx roose almmostt ass faast as we didd. OOur apppraiisall off 19997s pperfformmancce, theen: Quaack. WWhenn thhe mmarkket boooms, wee teend to suffferr inn coompaarisson witth tthe S&PP Inndexx. TThe Ind

7、dex beaars no taxx coostss, nnor do muttuall fuundss, ssincce ttheyy paass thrrouggh aall taxx liiabiilittiess too thheirr owwnerrs. Lasst yyearr, oon tthe othher hannd, Berrkshhiree paaid or acccrueed $4.22 biilliion forr feederral inccomee taax, or aboout 18% off ouur bbegiinniing nett woorthh. BB

8、erkkshiire willl aalwaays havve ccorpporaate taxxes to payy, wwhicch mmeanns iit nneedds tto ooverrcomme ttheiir ddragg inn orrderr too juustiify itss exxisttencce. Obvviouuslyy, CCharrliee Muungeer, Berrkshhirees Vicce CChaiirmaan aand my parrtneer, andd I wonnt be ablle tto llickk thhat hanndiccap

9、 eveery yeaar. Butt wee exxpecct ooverr tiime to maiintaain a mmodeest advvanttagee ovver thee Inndexx, aand thaat iis tthe yarrdsttickk aggainnst whiich youu shhoulld mmeassuree uss. WWe wwilll noot aask youu too addoptt thhe pphillosoophyy off thhe CChiccagoo Cuubs fann whho rreacctedd too a strri

10、ngg off laackllustter seaasonns bby ssayiing, WWhy gett uppsett? EEverryonne hhas a bbad cennturry nnow andd thhen. GGainns iin bbookk vaaluee arre, of couursee, nnot thee boottoom llinee att Beerksshirre. Whaat ttrully ccounnts aree gaainss inn peer-ssharre iintrrinssic bussineess vallue. Orrdinnar

11、iily, thhouggh, thee twwo mmeassurees ttendd too moove rouughlly iin ttanddem, annd iin 119977 thhat wass thhe ccasee: LLed by a bbloww-ouut pperfformmancce aat GGEICCO, Berrkshhirees inttrinnsicc vaaluee (wwhicch ffar excceedds bbookk vaaluee) ggreww att neearlly tthe samme ppacee ass boook vallue.

12、 FFor morre eexpllanaatioon oof tthe terrm, inttrinnsicc vaaluee, yyou mayy wiish to reffer to ourr Owwnerrs Mannuall, rreprrintted on pagges 62 to 71. Thhis mannuall seets forrth ourr owwnerr-reelatted bussineess priinciiplees, infformmatiion thaat iis iimpoortaant to alll off Beerksshirress shhare

13、ehollderrs. IIn oour lasst ttwo annnuall reeporrts, wee fuurniisheed yyou a ttablle tthatt Chharllie andd I bellievve iis ccenttrall too esstimmatiing Berrkshhirees inttrinnsicc vaaluee. IIn tthe upddateed vverssionn off thhat tabble, whhichh foolloows, wee trracee ouur ttwo keyy coompoonennts of va

14、llue. Thhe ffirsst ccoluumn lissts ourr peer-ssharre oowneershhip of invvesttmennts (inncluudinng ccashh annd eequiivallentts) andd thhe ssecoond collumnn shhowss ouur pper-shaare earrninngs froom BBerkkshiires ooperratiing bussineessees bbefoore taxxes andd puurchhasee-acccouuntiing adjjusttmennts

15、(diiscuusseed oon ppagees 669 aand 70), bbut aftter alll innterrestt annd ccorpporaate exppensses. Thhe ssecoond collumnn exxcluudess alll ddiviidennds, innterrestt annd ccapiitall gaainss thhat we reaalizzed froom tthe invvesttmennts preesenntedd inn thhe ffirsst ccoluumn. Inn efffecct, thee coolum

16、mns shoow wwhatt Beerksshirre wwoulld llookk liike werre iit sspliit iintoo twwo ppartts, witth oone enttityy hooldiing ourr innvesstmeentss annd tthe othher opeerattingg alll oof oour bussineessees aand beaarinng aall corrporratee coostss. PPre-taxx Eaarniingss Peer SSharre IInveestmmentts EExcllud

17、iing Alll Inncomme ffromm YYearr Peer SSharre IInveestmmentts 119677 $ 41 $ 1.009 119777 3372 112.444 119877 3,9910 1008.114 119977 338,0043 7117.882 PPundditss whho iignoore whaat oour 38,0000 emmplooyeees cconttribbutee too thhe ccomppanyy, aand inssteaad ssimpply vieew BBerkkshiire as a dde ffact

18、to iinveestmmentt coompaany, shhoulld sstuddy tthe figgurees iin tthe seccondd coolummn. We madde oour firrst bussineess acqquissitiion in 19667, andd siincee thhen ourr prre-ttax opeerattingg eaarniingss haave groown froom $1 mmilllionn too $8888 milllioon. Furrtheermoore, ass nootedd, iin tthiss e

19、xxerccisee wee haave asssignned alll off Beerksshirress coorpooratte eexpeensees - ooverrheaad oof $6.66 miilliion, innterrestt off $666.99 miilliion andd shhareehollderr coontrribuutioons of $155.4 milllioon - tto oour bussineess opeerattionns, eveen tthouugh a pporttionn off thhesee coouldd juust

20、as welll hhavee beeen asssignned to thee innvesstmeent sidde. HHeree arre tthe groowthh raatess off thhe ttwo seggmennts by deccadee: Pree-taax EEarnninggs PPer Shaare Invvesttmennts Exccluddingg Alll IIncoome froom Deccadee Enndinng Peer SSharre Innvesstmeentss 19977 24.6% 277.6% 19987 26.5% 244.1%

21、 19997 25.5% 200.8% Annuual Groowthh Ratte, 19667-119977 25.6% 244.2% DDuriing 19997, botth ppartts oof oour bussineess greew aat aa saatissfacctorry rratee, wwithh innvesstmeentss inncreeasiing by $9,5433 peer ssharre, or 33.5%, annd ooperratiing earrninngs groowinng bby $2966.433 peer ssharre, or

22、70.3%. Onne iimpoortaant cavveatt: BBecaausee wee weere luccky in ourr suuperr-caat iinsuurannce bussineess (too bee diiscuusseed llateer) andd beecauuse GEIICOs uundeerwrritiing gaiin wwas welll aabovve wwhatt wee caan eexpeect in mosst yyearrs, ourr 19997 opeerattingg eaarniingss weere mucch bbett

23、ter thaan wwe aantiicippateed aand alsso mmoree thhan we exppectt foor 119988. OOur ratte oof pproggresss iin bbothh innvesstmeentss annd ooperratiionss iss ceertaain to falll iin tthe futturee. FFor anyyonee deeplooyinng ccapiitall, nnothhingg reeceddes likke ssucccesss. MMy oown hisstorry mmakees

24、tthe poiint: Baack in 19551, wheen II waas aatteendiing Benn Grrahaamss cllasss att Coolummbiaa, aan iideaa giivinng mme aa $110,0000 gaiin iimprroveed mmy iinveestmmentt peerfoormaancee foor tthe yeaar bby aa fuull 1000 peerceentaage poiintss. TTodaay, an ideea pprodduciing a $5000 miilliion pree-t

25、aax pproffit forr Beerksshirre aaddss onne pperccenttagee poointt too ouur pperfformmancce. Its nno wwondder thaat mmy aannuual ressultts iin tthe 19550s werre bbettter by neaarlyy thhirtty pperccenttagee poointts tthann myy annnuaal ggainns iin aany subbseqquennt ddecaade. Chharllies eexpeerieencee

26、 waas ssimiilarr. WWe wwereentt smmartter theen, jusst ssmalllerr. AAt oour preesennt ssizee, aany perrforrmannce supperiioriity we achhievve wwilll bee miinorr. WWe wwilll bee heelpeed, howweveer, by thee faact thaat tthe bussineessees tto wwhicch wwe hhavee allreaady alllocaatedd caapittal - botth

27、 ooperratiing subbsiddiarriess annd ccomppaniies in whiich we aree paassiive invvesttorss - haave spllenddid lonng-ttermm prrosppectts. We aree allso bleesseed wwithh a mannageeriaal ccorpps tthatt iss unnsurrpasssedd inn abbiliity andd foocuss. MMostt off thhesee exxecuutivves aree weealtthy andd d

28、oo noot nneedd thhe ppay theey rreceeivee frrom Berrkshhiree too maainttainn thheirr waay oof llifee. TTheyy arre mmotiivatted by thee jooy oof aaccoompllishhmennt, nott byy faame or forrtunne. TThouugh we aree deeligghteed wwithh whhat we ownn, wwe aare nott plleassed witth oour proospeectss foor c

29、commmitttingg inncommingg fuundss. PPricces aree hiigh forr booth bussineessees aand stoockss. TThatt dooes nott meean thaat tthe priicess off eiitheer wwilll faall - we havve aabsooluttelyy noo viiew on thaat mmattter - butt itt dooes meaan tthatt wee geet rrelaativvelyy liittlle iin pprosspecctivv

30、e eearnninggs wwhenn wee coommiit ffressh mmoneey. UUndeer tthesse ccirccumsstanncess, wwe ttry to exeert a TTed Willliaams kinnd oof ddisccipllinee. IIn hhis boook TThe Sciiencce oof HHitttingg, TTed expplaiins thaat hhe ccarvved thee sttrikke zzonee innto 77 cellls, eaach thee siize of a bbaseebal

31、ll. Swiingiing onlly aat bballls iin hhis beest ceell, hee knnew, woouldd allloww hiim tto bbat .4000; reaachiing forr baallss inn hiis worrst sppot, thhe llow outtsidde ccornner of thee sttrikke zzonee, wwoulld rreduuce himm too .2230. Inn ottherr woordss, wwaittingg foor tthe fatt piitchh woouldd

32、meean a ttripp too thhe HHalll off Faame; swwinggingg inndisscriiminnateely wouuld meaan aa tiickeet tto tthe minnorss. IIf ttheyy arre iin tthe strrikee zoone at alll, tthe bussineess piitchhes wee noow ssee aree juust cattchiing thee loowerr ouutsiide corrnerr. IIf wwe sswinng, we willl bbe llockk

33、ed intto llow retturnns. Butt iff wee leet aall of toddays bballls ggo bby, theere cann bee noo asssurrancce tthatt thhe nnextt onnes we seee wiill be morre tto oour likkingg. PPerhhapss thhe aattrracttivee prricees oof tthe passt wweree thhe aaberrrattionns, nott thhe ffulll prricees oof ttodaay. U

34、nllikee Teed, we cannt be callledd ouut iif wwe rresiist thrree pittchees tthatt arre bbareely in thee sttrikke zzonee; nneveerthheleess, juust staandiing theere, daay aafteer dday, wiith my batt onn myy shhoullderr iss noot mmy iideaa off fuun. Unconnvenntioonall Coommiitmeentss WWhenn wee caantt f

35、iind ourr faavorritee coommiitmeent - a wwelll-ruun aand sennsibbly-priicedd buusinnesss wiith finne eeconnomiics - we usuuallly oopt to putt neew mmoneey iintoo veery shoort-terrm iinsttrummentts oof tthe higghesst qquallityy. SSomeetimmes, hoowevver, wee veentuure elssewhheree. OObviioussly we bel

36、lievve tthatt thhe aalteernaativve ccommmitmmentts wwe mmakee arre mmoree liikelly tto rresuult in proofitt thhan losss. Butt wee allso reaalizze tthatt thhey do nott offferr thhe ccerttainnty of proofitt thhat exiistss inn a wonnderrfull buusinnesss seecurred at an atttracctivve ppricce. Finndinng

37、tthatt kiind of oppporttuniity, wee knnow thaat wwe aare goiing to makke mmoneey - tthe onlly qquesstioon bbeinng wwhenn. WWithh allterrnattivee innvesstmeentss, wwe tthinnk tthatt wee arre ggoinng tto mmakee mooneyy. BBut we alsso rrecoogniize thaat wwe wwilll soomettimees rreallizee loossees, occc

38、asiionaallyy off suubsttanttiall siize. WWe hhad thrree nonn-trradiitioonall poosittionns aat yyearrendd. TThe firrst wass deerivvatiive conntraactss foor 114.00 miilliion barrrells oof ooil, thhat beiing whaat wwas theen lleftt off a 45.7 mmilllionn baarreel pposiitioon wwe eestaabliisheed iin 1199

39、44-955. CConttraccts forr 311.7 milllioon bbarrrelss weere setttleed iin 119955-977, aand theese supppliied us witth aa prre-ttax gaiin oof aabouut $61.9 mmilllionn. OOur remmainningg coontrractts eexpiire durringg 19998 andd 19999. Inn thhesee, wwe hhad an unrreallizeed ggainn off $111.66 miilliion

40、 at yeaarennd. Acccounntinng rrulees rrequuiree thhat commmoddityy poosittionns bbe ccarrriedd att maarkeet vvaluue. Theerefforee, bbothh ouur aannuual andd quuartterlly ffinaanciial staatemmentts rrefllectt anny uunreealiizedd gaain or losss iin tthesse cconttraccts. Whhen we esttabllishhed ourr co

41、ontrractts, oill foor ffutuure delliveery seeemedd moodesstlyy unnderrpriicedd. TTodaay, thooughh, wwe hhavee noo oppiniion as to itss atttraactiivennesss. OOur seccondd noon-ttradditiionaal ccommmitmmentt iss inn siilveer. Lasst yyearr, wwe ppurcchassed 1111.2 milllioon oouncces. Maarkeed tto mmark

42、ket, thhat possitiion prooducced a ppre-taxx gaain of $977.4 milllioon ffor us in 19997. In a wway, thhis is a rretuurn to thee paast forr mee: TThirrty yeaars agoo, II booughht ssilvver beccausse II annticcipaatedd itts ddemoonettizaatioon bby tthe U.SS. GGoveernmmentt. EEverr siincee, II haave fol

43、llowwed thee meetalls funndammenttalss buut nnot ownned it. Inn reecennt yyearrs, bulllioon iinveentooriees hhavee faalleen mmateeriaallyy, aand lasst ssummmer Chaarliie aand I cconccludded thaat aa hiigheer ppricce wwoulld bbe nneedded to esttabllishh eqquillibrriumm beetweeen suppplyy annd ddemaand. Innflaatioon eexpeectaatioons, itt shhoulld bbe nnoteed, plaay nno ppartt inn ouur ccalcculaatioon oof ssilvvers vvaluue. FFinaallyy, oour larrgesst nnon-traadittionnal possitiion at