尽管(也或许正因为如此)我们的保单量少，可以预期的我们的获利情况在未来几
年内也会比同业来的出色，相较于保单量我们有高比例的浮存金，通常这代表着
获利，在1989与1990这两年内，我们的浮存金/保费收入比例至少会是同业
水准的三倍以上，Mike Goldberg在Ajit Jain等人的协助下，加上国家产险的
经营团队使我们站在相当有利的位置。
At some point - we don. know when - we will be deluged with
insurance business. The cause will probably be some major
physical or financial catastrophe. But we could also experience
an explosion in business, as we did in 1985, because large and
increasing underwriting losses at other companies coincide with
their recognition that they are far underreserved. in the
meantime, we will retain our talented professionals, protect our
capital, and try not to make major mistakes.
有一点我们不知道什么时候，我们会被保险事业拖垮，有可能会是一些重大的天
然或是经济上的意外，但我们也有可能会遇到像1985年一样爆炸性的成长，因
为当其它同业因长期杀价抢单，一夕之间损失突然爆发，才发现损失提列准备远
远不足，在那种情况下，我们一定会稳固好我们的专业人员与资本并尽量避免犯
下重大的错误。
Marketable Securities
有价证券投资
In selecting marketable securities for our insurance
companies, we can choose among five major categories: (1) longterm
common stock investments, (2) medium-term fixed-income
securities, (3) long-term fixed-income securities, (4) short-term
cash equivalents, and (5) short-term arbitrage commitments.
在为我们的保险事业选择有价证券投资之时，我们主要有五种选择(1)长期股票
投资(2)长期固定收益债券(3)中期固定收益债券(4)短期约当现金(5)短期套利交
易
We have no particular bias when it comes to choosing from
these categories. We just continuously search among them for the
highest after-tax returns as measured by athematical
expectation,?limiting ourselves always to investment
alternatives we think we understand. Our criteria have nothing
to do with maximizing immediately reportable earnings; our goal,
rather, is to maximize eventual net worth.
对于这五种类型的交易，我们没有特别的偏好，我们只是持续不断地寻找最高的
税后报酬预计的数学期望值，且仅限于我们认为了解熟悉的投资，我们无意让与
短期的帐面盈余好看，我们的目标是让长期的净值极大化。
o Below we list our common stock holdings having a value over
$100 million, not including arbitrage commitments, which will be
discussed later. A small portion of these investments belongs to
subsidiaries of which Berkshire owns less than 100%.
下表是我们超过一亿美元以上的普通股投资，(不包含套利交易，这部份我们后
面会再谈)，一部份的投资系属于Berkshire关系企业所持有
Shares Company Cost Market
------ ------- ---------- ----------
(000s omitted)
3,000,000 Capital Cities/ABC, Inc. .............. $517,500 $1,086,750
14,172,500 The Coca-Cola Company ........... 592,540 632,448
2,400,000 Federal Home Loan Mortgage
Corporation Preferred* ............ 71,729 121,200
6,850,000 GEICO Corporation ..................... 45,713 849,400
1,727,765 The Washington Post Company ... 9,731 364,126
*Although nominally a preferred stock, this security is
financially equivalent to a common stock.
Our permanent holdings - Capital Cities/ABC, Inc., GEICO
Corporation, and The Washington Post Company - remain unchanged.
Also unchanged is our unqualified admiration of their
managements: Tom Murphy and Dan Burke at Cap Cities, Bill Snyder
and Lou Simpson at GEICO, and Kay Graham and Dick Simmons at The
Washington Post. Charlie and I appreciate enormously the talent
and integrity these managers bring to their businesses.
我们永久的持股-资本城/ABC、GEICO汽车保险与华盛顿邮报依旧不变，同样
不变的是我们对于这些管理阶层无条件的敬仰，不管是资本城/ABC的Tom
Murphy 与 Dan Burke、GEICO汽车保险的Bill Snyder 与Lou Simpson，
还有华盛顿邮报的Kay Graham与 Dick Simmons，查理跟我对于他们所展现
的才能与品格同感敬佩。
Their performance, which we have observed at close range,
contrasts vividly with that of many CEOs, which we have
fortunately observed from a safe distance. Sometimes these CEOs
clearly do not belong in their jobs; their positions,
nevertheless, are usually secure. The supreme irony of business
management is that it is far easier for an inadequate CEO to keep
his job than it is for an inadequate subordinate.
他们的表现，就我们最近距离的观察，与许多公司的CEO截然不同，所幸我们
能与后者保持适当的距离，因为有时这些CEO实在是不适任，但却总是能够坐
稳其宝座，企业管理最讽刺的就是不适任的老板要比不适任的部属更容易保住其
位置。
If a secretary, say, is hired for a job that requires typing
ability of at least 80 words a minute and turns out to be capable
of only 50 words a minute, she will lose her job in no time.
There is a logical standard for this job; performance is easily
measured; and if you can. make the grade, youe out.
Similarly, if new sales people fail to generate sufficient
business quickly enough, they will be let go. Excuses will not
be accepted as a substitute for orders.
假设一位秘书在应征时被要求一分钟要能够打80个字，但录取之后被发现一分
钟只能打50个字，很快地她就可能会被炒鱿鱼，因为有一个相当客观的标准在
那里，其表现如何很容易可以衡量的出来；同样的，一个新进的业务，若是不能
马上创造足够业绩，可能立刻就要走路，为了维持纪律，很难允许有例外情形发
生。
However, a CEO who doesn. perform is frequently carried
indefinitely. One reason is that performance standards for his
job seldom exist. When they do, they are often fuzzy or they may
be waived or explained away, even when the performance shortfalls
are major and repeated. At too many companies, the boss shoots
the arrow of managerial performance and then hastily paints the
bullseye around the spot where it lands.
但是一个CEO表现不好，却可以无限期的撑下去，一个原因就是根本没有一套
可以衡量其表现的标准存在，就算真的有，也是写的很模糊，或是含混解释过去，
即便是错误与过失一再发生也是如此，有太多的公司是等老板射箭出去后，再到
墙上把准心描上去。
Another important, but seldom recognized, distinction
between the boss and the foot soldier is that the CEO has no
immediate superior whose performance is itself getting measured.
The sales manager who retains a bunch of lemons in his sales
force will soon be in hot water himself. It is in his immediate
self-interest to promptly weed out his hiring mistakes.
Otherwise, he himself may be weeded out. An office manager who
has hired inept secretaries faces the same imperative.
另外一个很重要但却很少被提起老板与员工之间的差别是老板本身没有一个直
接可以衡量判断其表现的上司，业务经理不可能让一颗老鼠屎一直留在他那一锅
粥之内，他一定会很快地把它给挑出来，否则可能连他自己都会有问题，同样的
一个老板要是请到一位无能的秘书，也会有相同的动作。
But the CEO boss is a Board of Directors that seldom
measures itself and is infrequently held to account for
substandard corporate performance. If the Board makes a mistake
in hiring, and perpetuates that mistake, so what? Even if the
company is taken over because of the mistake, the deal will
probably bestow substantial benefits on the outgoing Board
members. (The bigger they are, the softer they fall.)
但CEO的上司也就是董事会却很少检视其绩效，并为企业表现不佳负责，就算
董事会选错了人，而且这个错误还持续存在又怎样？即使因为这样使得公司被接
收，通常交易也会确保被逐出的董事会成员有丰厚的利益(且通常公司越大，甜
头越多)
Finally, relations between the Board and the CEO are
expected to be congenial. At board meetings, criticism of the
CEO performance is often viewed as the social equivalent of
belching. No such inhibitions restrain the office manager from
critically evaluating the substandard typist.
最后董事会与CEO之间的关系应该是要能够意气相投，在董事会议当中，对于
CEO表现的批评就好象是在社交场合中打嗝一样不自然，但却没有一位经理人
会被禁止不准严格地审核打字员的绩效。
These points should not be interpreted as a blanket
condemnation of CEOs or Boards of Directors: Most are able and
hard-working, and a number are truly outstanding. But the
management failings that Charlie and I have seen make us thankful
that we are linked with the managers of our three permanent
holdings. They love their businesses, they think like owners,
and they exude integrity and ability.
以上几点不是要一杆子打翻一条船，大部分的CEO或是董事会都相当努力、能
干，有一小部份更是特别的杰出，但查理跟我在看过很多失败的例子之后，更加
对于我们能够与前面三家公司优秀的经理人共事感到非常幸运，他们热爱他们的
事业，想法跟老板一致，且散发出才气与品格。
o In 1988 we made major purchases of Federal Home Loan
Mortgage Pfd. (.reddie Mac? and Coca Cola. We expect to hold
these securities for a long time. In fact, when we own portions
of outstanding businesses with outstanding managements, our
favorite holding period is forever. We are just the opposite of
those who hurry to sell and book profits when companies perform
well but who tenaciously hang on to businesses that disappoint.
Peter Lynch aptly likens such behavior to cutting the flowers and
watering the weeds. Our holdings of Freddie Mac are the maximum
allowed by law, and are extensively described by Charlie in his
letter. In our consolidated balance sheet these shares are
carried at cost rather than market, since they are owned by
Mutual Savings and Loan, a non-insurance subsidiary.
1988年我们做出两项重大的决定，大笔买进联邦家庭贷款抵押公司(Freddie
Mac)与可口可乐，我们打算要持有这些股票很长的一段期间，事实上当我们发
现我们持有兼具杰出企业与杰出经理人的股权时，我们最长的投资期间是永久，
我们跟那些急着想要卖出表现不错的股票以实现获利却顽固地不肯出脱那些绩
效差的股份的那群人完全相反。彼得林区生动地将这种行为解释成砍除花朵来当
作野草的肥料，我们持有Freddie Mac的股份比例是法令规定的上限，这部份
查理在后面会详加为各位说明，因为他们是属于共同储贷-我们一家非保险的子
公司所投资，所以在我们的合并资产负债表当中，这些持股将以成本而非市价列
示。
We continue to concentrate our investments in a very few
companies that we try to understand well. There are only a
handful of businesses about which we have strong long-term
convictions. Therefore, when we find such a business, we want to
participate in a meaningful way. We agree with Mae West: .oo
much of a good thing can be wonderful.?
我们持续将投资集中在少数我们能够了解的公司之上，只有少部份是我们想要长
期投入的，因为当我们好不容易找到这样的公司时，我们会想要达到一定的参与
程度，我们同意Mae West的看法，好东西当然是多多益善。
o We reduced our holdings of medium-term tax-exempt bonds by
about $100 million last year. All of the bonds sold were
acquired after August 7, 1986. When such bonds are held by
property-casualty insurance companies, 15% of the .ax-exempt?
interest earned is subject to tax.
去年我们减少在中期免税债券约一亿美元的投资，所有卖出的债券都是在1986
年之后才取得的，当这些债券由产险公司所持有的时候，其中15%的利息收入
是要课税的。
The $800 million position we still hold consists almost
entirely of bonds .randfathered?under the Tax Reform Act of
1986, which means they are entirely tax-exempt. Our sales
produced a small profit and our remaining bonds, which have an
average maturity of about six years, are worth modestly more than
carrying value.
剩下我们仍持有约8亿美元的债券，都是属于适用1986年租税改革法案完全
免税的祖父级债券，出售的债券将有些许的获利，而继续持有的债券平均到期日
大概是六年，其市价大概略高于帐面价值。
Last year we described our holdings of short-term and
intermediate-term bonds of Texaco, which was then in bankruptcy.
During 1988, we sold practically all of these bonds at a pre-tax
profit of about $22 million. This sale explains close to $100
million of the reduction in fixed-income securities on our
balance sheet.
去年我们曾提及我们所持有的已破产的Texaco短期与中期公司债券，1988年
我们已经将所有的部位处分，获利约2,200万美元，此举将使得我们在固定收
益债券的投资部位减少1亿美元。
We also told you last year about our holdings of another
security whose predominant characteristics are those of an
intermediate fixed-income issue: our $700 million position in
Salomon Inc 9% convertible preferred. This preferred has a
sinking fund that will retire it in equal annual installments
from 1995 to 1999. Berkshire carries this holding at cost. For
reasons discussed by Charlie on page 69, the estimated market
value of our holding has improved from moderately under cost at
the end of last year to moderately over cost at 1988 year end.
去年我们还提到了另外一个深具固定收益特色的投资：亦即所罗门公司9%可转
换特别股，这种特别股特别要求公司提拨偿债基金，自1995年到1999年间分
批赎回，Berkshire将这些投资以成本列示在帐上，基于查理所提的原因，现在
的估计市价以从前一年度略低于成本，转变为1988年的略高于成本。
The close association we have had with John Gutfreund, CEO
of Salomon, during the past year has reinforced our admiration
for him. But we continue to have no great insights about the
near, intermediate or long-term economics of the investment
banking business: This is not an industry in which it is easy to
forecast future levels of profitability. We continue to believe
that our conversion privilege could well have important value
over the life of our preferred. However, the overwhelming
portion of the preferred value resides in its fixed-income
characteristics, not its equity characteristics.
我们与所罗门CEO- John Gutfreund之间良好的关系，随着几年来的合作日益
增进，但我们还是无法判断投资银行业的前景，不管是短期、中期或是长期皆然，
这是一个难以预估未来获利程度的产业，我们仍然相信我们所拥有的转换权利会
在其有效期间内，对我们产生相当大的贡献，然而这种特别股的价值主要还是来
自于其固定收益，而不是股权特性之上。
o We have not lost our aversion to long-term bonds. We will
become enthused about such securities only when we become
enthused about prospects for long-term stability in the
purchasing power of money. And that kind of stability isn. in
the cards: Both society and elected officials simply have too
many higher-ranking priorities that conflict with purchasingpower
stability. The only long-term bonds we hold are those of
Washington Public Power Supply Systems (WPPSS). A few of our
WPPSS bonds have short maturities and many others, because of
their high coupons, are likely to be refunded and paid off in a
few years. Overall, our WPPSS holdings are carried on our
balance sheet at $247 million and have a market value of about
$352 million.
我们对于长期债券的规避依旧不变，唯有当我们对于货币的长期购买力有信心
时，我们才会对这类的债券有兴趣，但这种稳定却根本没办法预期，因为不管是
社会或是选出来的官员实在是有太多的优先事项是与购买力的稳定性相冲突
的。所以目前我们唯一持有的长期债券就是WPPSS华盛顿功用电力供应系统，
其中有些属于短期，有一些则是分几年赎回的高票息，目前资产负债表上帐列成
本为2.47亿美元，目前市价约为3.52亿美元。
We explained the reasons for our WPPSS purchases in the 1983
annual report, and are pleased to tell you that this commitment
has worked out about as expected. At the time of purchase, most
of our bonds were yielding around 17% after taxes and carried no
ratings, which had been suspended. Recently, the bonds were
rated AA- by Standard & Poor. They now sell at levels only
slightly below those enjoyed by top-grade credits.
我们在1983年年报中曾经解释过购买WPPSS的理由，现在很高兴跟大家报告结果完全符合我们
当初的预期，在买进的时候，债券的评等被暂时取消，估计税后的投资报酬率约为17%，最近它
被史坦普评等机构评为AA-等级，目前的市价大概只有比最高等级债信的投资报酬好一点。
In the 1983 report, we compared the economics of our WPPSS
purchase to those involved in buying a business. As it turned
out, this purchase actually worked out better than did the
general run of business acquisitions made in 1983, assuming both
are measured on the basis of unleveraged, after tax returns
achieved through 1988.
在1983年的年报中，我们比较了投资WPPSS与一般企业的差异，结果显示这
次的投资要比当时同期间所从事购并案还要好，假设两者皆以为无财务杠杆的基
础下进行。
Our WPPSS experience, though pleasant, does nothing to alter
our negative opinion about long-term bonds. It only makes us
hope that we run into some other large stigmatized issue, whose
troubles have caused it to be significantly misappraised by the
market.
不过我们在WPPSS的愉快经验并未能改变我们对于长期债券的负面看法，除非
再让我们碰到暂时僵住的大案子，因为短暂的问题使得其市价严重的被低估。
Arbitrage
套利
In past reports we have told you that our insurance
subsidiaries sometimes engage in arbitrage as an alternative to
