"grandfathered" under the Tax Reform Act of 1986, which means
they are fully tax-exempt. Bonds currently purchased by
insurance companies are not.
当作短期约当现金的替代品，中期免税债券的表现还算不错，他们贡献了不少
额外的投资报酬，且目前的价值也略高于我们当初投资的成本，但不管之后
他们的市价高或低，只要我们找到更好的投资机会，我们随时都有可能把他们给处分掉。
As an alternative to short-term cash equivalents, our
medium-term tax-exempts have - so far served us well. They have
produced substantial extra income for us and are currently worth
a bit above our cost. Regardless of their market price, we are
ready to dispose of our bonds whenever something better comes
along.
我们持续避免去碰长期债券(也有可能因为没有对中期免税债券保持距离而犯下大错)，
债券没有比他们表彰的货币来得好，在过去十年以即可预见的未来，
我们看不出我们会对美国债券有太大的兴趣。
o We continue to have an aversion to long-term bonds (and may
be making a serious mistake by not disliking medium-term bonds as
well). Bonds are no better than the currency in which they are
denominated, and nothing we have seen in the past year - or past
decade - makes us enthusiastic about the long-term future of U.S.
currency.
我们钜额的贸易逆差，使得我们必须面临许多不同形式的支票帐单，
这包含外国人持有的美国政府与企业公债、银行存款等，以惊人的速度累积成长，
一开始我们的政府所采取的方式，就像是欲望街车的角色布兰奇所说的，
我总是依赖陌生人的同情心而活，当然本案的陌生人依靠的主要是债务人的可靠性，
虽然贬值的美元也让他们必须付出高昂的代价。
Our enormous trade deficit is causing various forms of
"claim checks" - U.S. government and corporate bonds, bank
deposits, etc. - to pile up in the hands of foreigners at a
distressing rate. By default, our government has adopted an
approach to its finances patterned on that of Blanche DuBois, of
A Streetcar Named Desire, who said, "I have always depended on
the kindness of strangers." In this case, of course, the
"strangers" are relying on the integrity of our claim checks
although the plunging dollar has already made that proposition
expensive for them.
外国人对我们的信心可能有点所托非人，因为当要付的支票帐单持续的增加，
而债务人又能够无限制地主导自己的购买能力时，美钞发行人增加流通货币
来稀释其货币价值的情况铁定会发生，对于债务国政府来说，通货膨胀这项武器
就好象是经济战争中威力强大的氢弹一样，很少有国家可以让全世界充斥着
以自己货币计价的债券，不过由于我们国家过去不错的财政记录，使得我们能够
打破这项限制，只是这样的宽容使得我们通膨的压力只会增加不会减少，
而一旦我们屈服于这样的压力，不只是持有美国债权的外国人遭殃，
连带的我们也会受到影响。
The faith that foreigners are placing in us may be
misfounded. When the claim checks outstanding grow sufficiently
numerous and when the issuing party can unilaterally determine
their purchasing power, the pressure on the issuer to dilute
their value by inflating the currency becomes almost
irresistible. For the debtor government, the weapon of inflation
is the economic equivalent of the "H" bomb, and that is why very
few countries have been allowed to swamp the world with debt
denominated in their own currency. Our past, relatively good
record for fiscal integrity has let us break this rule, but the
generosity accorded us is likely to intensify, rather than
relieve, the eventual pressure on us to inflate. If we do
succumb to that pressure, it won't be just the foreign holders of
our claim checks who will suffer. It will be all of us as well.
当然在债务问题失控之前，美国政府也会试着采取一些方法来抑制贸易逆差，
(有关于这点，下滑的美元汇率或许会有帮助，只是同样地它又会造成另一种伤害)，
目前我们政府的做法跟乱世佳人里郝思佳的态度差不多一样，「明天再想办法吧!」，
而几乎无可避免的对于财政问题的处理耽搁将会造成通货膨胀的后果。
Of course, the U.S. may take steps to stem our trade deficit
well before our position as a net debtor gets out of hand. (In
that respect, the falling dollar will help, though unfortunately
it will hurt in other ways.) Nevertheless, our government's
behavior in this test of its mettle is apt to be consistent with
its Scarlett O'Hara approach generally: "I'll think about it
tomorrow." And, almost inevitably, procrastination in facing up
to fiscal problems will have inflationary consequences.
只是这些后果发生的时点与影响我们实在无从去预测，不过无法去量化
或是锁定这种风险不代表我们就可以忽视它的存在，当然我们的推论也许会不准确，
目前的利率水准或可弥补通货膨胀所带来的损失，只是我们对于长期的债券
仍报以持续的戒心。
Both the timing and the sweep of those consequences are
unpredictable. But our inability to quantify or time the risk
does not mean we should ignore it. While recognizing the
possibility that we may be wrong and that present interest rates
may adequately compensate for the inflationary risk, we retain a
general fear of long-term bonds.
然而我们仍愿意把一部份资金摆在这上头，如果在某些特定的有价证券上有特殊的利益，
就像是我在1984年年报中曾经提到我们在华盛顿公用电力系统债券上的投资，
在1987年我们又持续加码投资，总计到年底我们持有的这类帐面未摊销成本为2.4亿美元债券，
市价约为3.16亿美元，还外加每年三千四百万美元的免税利息收入。
We are, however, willing to invest a moderate portion of our
funds in this category if we think we have a significant edge in
a specific security. That willingness explains our holdings of
the Washington Public Power Supply Systems #1, #2 and #3 issues,
discussed in our 1984 report. We added to our WPPSS position
during 1987. At yearend, we had holdings with an amortized cost
of $240 million and a market value of $316 million, paying us
tax-exempt income of $34 million annually.
o We continued to do well in arbitrage last year, though - or
perhaps because - we operated on a very limited scale. We enter
into only a few arbitrage commitments each year and restrict
ourselves to large transactions that have been publicly
announced. We do not participate in situations in which greenmailers
are attempting to put a target company "in play."
我们持续在短期套利交易上有所斩获，虽然我们从事的规模有限，每年我们限制
自己只专注在几个少数已公开信息的大型交易案，我们不介入那些已被投机套利客锁定的个案。
We have practiced arbitrage on an opportunistic basis for
decades and, to date, our results have been quite good. Though
we've never made an exact calculation, I believe that overall we
have averaged annual pre-tax returns of at least 25% from
arbitrage. I'm quite sure we did better than that in 1987. But
it should be emphasized that a really bad experience or two -
such as many arbitrage operations suffered in late 1987 - could
change the figures dramatically.
我们从事机率套利已有好几十年的经验，到目前为止，我们的成果还算不错，
虽然我们从来没有仔细去算过，我相信我们在套利投资方面的税前年报酬率应该有25%左右，
我确信1987年的成绩甚至比以前好的多，但必须强调的是只要发生一、两次
像今年其它几个套利惨痛的经验，就可能使得整个结果猪羊变色。
Our only $50 million-plus arbitrage position at yearend 1987
was 1,096,200 shares of Allegis, with a cost of $76 million and a
market value of $78 million.
今年我们新增5,000万美元以上的套利案只有斥资7,600万美元投资100万股Allegis，
目前的市价约为7,800万美元。
o We had two other large holdings at yearend that do not fit
precisely into any of our five categories. One was various
Texaco, Inc. bonds with short maturities, all purchased after
Texaco went into bankruptcy. Were it not for the extraordinarily
strong capital position of our insurance companies, it would be
inappropriate for us to buy defaulted bonds. At prices
prevailing after Texaco's bankruptcy filing, however, we regarded
these issues as by far the most attractive bond investment
available to us.
我们在年底还有其它二个主要的投资组合不在前述五个范围之内，一项是Texaco短期债券，
全都是在它破产之后才买进，要不是因为我们旗下保险公司的财务实力雄厚，
我们实在不太适合去买这种已发生问题的债券，不过以这些债券在Texaco倒闭后的低廉价格，
这是目前我们可以找得到最吸引我们的投资标的。
On a worst-case basis with respect to the Pennzoil
litigation, we felt the bonds were likely to be worth about what
we paid for them. Given a sensible settlement, which seemed
likely, we expected the bonds to be worth considerably more. At
yearend our Texaco bonds were carried on our books at $104
million and had a market value of $119 million.
考量其所牵涉的诉讼案件，在最坏的情况之下，我们认为应该还是可以将投资成本回收，
而若是官司可以和解收场，我们预期债券的价值将会更高，截至年底Texaco债券
在我们帐面上的成本约为一亿美元，目前的市值则约为1.2亿美元。
By far our largest - and most publicized - investment in
1987 was a $700 million purchase of Salomon Inc 9% preferred
stock. This preferred is convertible after three years into
Salomon common stock at $38 per share and, if not converted, will
be redeemed ratably over five years beginning October 31, 1995.
From most standpoints, this commitment fits into the medium-term
fixed-income securities category. In addition, we have an
interesting conversion possibility.
在投资银行业，我们当然没有特殊的远见能够预知其未来发展的方向与获利能力，
就产业特性而言，投资银行业比起我们其它主要投资的行业更难预测，
这也是为什么我们选择以可转换特别股的方式投资。
We, of course, have no special insights regarding the
direction or future profitability of investment banking. By
their nature, the economics of this industry are far less
predictable than those of most other industries in which we have
major Commitments. This unpredictability is one of the reasons
why our participation is in the form of a convertible preferred.
当然我们对于所罗门公司的CEO -John Gutfreund的能力与品格有不错的印象，
查理与我都很尊崇且信赖他，我们是在1976年开始认识他，
当时他在协助GEICO汽车保险免于破产的命运时出了不少力，
之后我们看到他好几次引导客户免于愚蠢的交易，虽然这使得所罗门
因此损失许多顾问费收入，这种以客户服务至上的表现在华尔街并不多见。
What we do have a strong feeling about is the ability and
integrity of John Gutfreund, CEO of Salomon Inc. Charlie and I
like, admire and trust John. We first got to know him in 1976
when he played a key role in GEICO's escape from near-bankruptcy.
Several times since, we have seen John steer clients away from
transactions that would have been unwise, but that the client
clearly wanted to make - even though his advice provided no fee
to Salomon and acquiescence would have delivered a large fee.
Such service-above-self behavior is far from automatic in Wall
Street.
如同查理在50页上所陈述的理由，截至年底我们将在所罗门公司的投资价值
定在面额的98%，大约比我们的投资成本少1,400万，
不过我们仍然相信这家公司在高品质资本筹募与市场创造营运，
将可为我们的投资创造不错的盈余，若果真如此，我们可转换为股权的权利将会非常有价值。
For the reasons Charlie outlines on page 50, at yearend we
valued our Salomon investment at 98% of par, $14 million less
than our cost. However, we believe there is a reasonable
likelihood that a leading, high-quality capital-raising and
market-making operation can average good returns on equity. If
so, our conversion right will eventually prove to be valuable.
最后关于我们有价证券的投资再补充两点，第一照例我还是给诸位一个提醒，
相较于去年底的持股内容，我们现在的投资组合又有变动，
而且在没有知会大家的情况下，还会继续变动。
Two further comments about our investments in marketable
securities are appropriate. First, we give you our usual
warning: Our holdings have changed since yearend and will
continue to do so without notice.
这二点跟前面也有相关，跟前几年一样，在1987年媒体不时在猜测我们进出的投资标的，
这些报导有时是真的，有时是半真半假，有时根本就不是事实，
有趣的是，我发现媒体的规模与声誉和报导的真实性一点相关都没有，
曾经有一家全美举足轻重的媒体杂志刊登一项完全错误的谣言，
另外一家出版业者则将一桩短期的套利投资误当做是一项长期的投资，
(之所以没有公布名字，是因为古有名训，遇到整桶整桶买墨水的人，
最好不要跟他发生争吵)
The second comment is related: During 1987, as in some
earlier years, there was speculation in the press from time to
time about our purchase or sale of various securities. These
stories were sometimes true, sometimes partially true, and other
times completely untrue. Interestingly, there has been no
correlation between the size and prestige of the publication and
the accuracy of the report. One dead-wrong rumor was given
considerable prominence by a major national magazine, and another
leading publication misled its readers by writing about an
arbitrage position as if it were a long-term investment
commitment. (In not naming names, I am observing the old warning
that it's not wise to pick fights with people who buy ink by the
barrel.)
You should understand that we simply don't comment in any
way on rumors, whether they are true or false. If we were to
deny the incorrect reports and refuse comment on the correct
ones, we would in effect be commenting on all.
大家应该知道我们从来不会对任何的谣言加以评论，不管是真或是假，
因为若是我们否认不实的报导，或是拒绝对真实的事件发表评论，
都等于间接表达了我们的立场。
In a world in which big investment ideas are both limited
and valuable, we have no interest in telling potential
competitors what we are doing except to the extent required by
law. We certainly don't expect others to tell us of their
investment ideas. Nor would we expect a media company to
disclose news of acquisitions it was privately pursuing or a
journalist to tell his competitors about stories on which he is
working or sources he is using.
在现在这个社会，大型的投资机会相当的稀少且弥足珍贵，
除非法令特别要求，我们不可能向潜在的竞争对手透露我们的动向，
就像我们也不可能期待对手告诉我们他的想法，同样地我们也不期待
媒体能够揭露他们独家采访得到的购并消息，就像是一个记者不可能
向他的同业透露他正在努力追踪的独家新闻。
I find it uncomfortable when friends or acquaintances
mention that they are buying X because it has been reported -
incorrectly - that Berkshire is a buyer. However, I do not set
them straight. If they want to participate in whatever Berkshire
actually is buying, they can always purchase Berkshire stock.
But perhaps that is too simple. Usually, I suspect, they find it
more exciting to buy what is being talked about. Whether that
strategy is more profitable is another question.
我特别觉得很不高兴，当我的朋友或是旧识告诉我说他们买进X公司的股票，
因为报纸错误地报导说Berkshire已经买进这家公司的股票，
不过后来我发现事情没有那么单纯，他们会买的原因主要是因为这些股票实在太热门，
至于是否能够真正获利则是另外一回事。
Financing
财务方面
Shortly after yearend, Berkshire sold two issues of
debentures, totaling $250 million. Both issues mature in 2018
and will be retired at an even pace through sinking fund
operations that begin in 1999. Our overall interest cost, after
allowing for expenses of issuance, is slightly over 10%. Salomon
was our investment banker, and its service was excellent.
在年度结束后不久，Berkshire发行了两期的债券，总共的金额是2.5亿美元，
到期日皆为2018年并且会从1999年开始慢慢分期由偿债基金赎回，
包含发行成本在内，平均的资金成本约在10%上下，
负责这次发行债券的投资银行就是所罗门，他们提供了绝佳的服务。
Despite our pessimistic views about inflation, our taste for
debt is quite limited. To be sure, it is likely that Berkshire
could improve its return on equity by moving to a much higher,
though still conventional, debt-to-business-value ratio. It's
even more likely that we could handle such a ratio, without
problems, under economic conditions far worse than any that have
prevailed since the early 1930s.
尽管我们对于通货膨胀抱持悲观的看法，我们对于举债的兴趣还是相当有限，
虽然可以肯定的是Berkshire可以靠提高举债来增加投资报酬，
即使这样做我们的负债比例还是相当的保守，
且就算如此我们很有信心应该可以应付比1930经济大萧条更坏的经济环境。
But we do not wish it to be only likely that we can meet our
obligations; we wish that to be certain. Thus we adhere to
policies - both in regard to debt and all other matters - that
will allow us to achieve acceptable long-term results under
extraordinarily adverse conditions, rather than optimal results
under a normal range of conditions.
但我们还是不愿意这种大概没有问题的做法，我们要的是百分之百的确定，
因此我们坚持一项政策，那就是不管是举债或是其它任何方面，
我们希望是能够在最坏的情况下得到合理的结果，而不是预期在乐观的情况下，
