型的报纸要来的丰富许多，第三在同业获利频频下滑之际，水牛城的获利连续第
七年成长。
To some extent, these three factors are related, though
obviously a high-percentage news hole, by itself, reduces profits
significantly. A large and intelligently-utilized news hole,
however, attracts a wide spectrum of readers and thereby boosts
penetration. High penetration, in turn, makes a newspaper
particularly valuable to retailers since it allows them to talk
to the entire community through a single "megaphone." A lowpenetration
paper is a far less compelling purchase for many
advertisers and will eventually suffer in both ad rates and
profits.
某种程度而言，这三个因素是相关的，虽然很明显的高新闻比率会大幅减少获
利，一个精彩丰富的新闻能够吸引广大的读者，从而增加渗透率，而高的渗透率
回头来又会使得报纸成为广告商喜爱的对象，因为这等于让他们可以透过一个单
一的管道，对整个社区进行宣传，相对的一家渗透率低的报纸对于广告商的吸引
力就大大的降低，到最后一定会使得广告费收入与获利节节下滑。
It should be emphasized that our excellent penetration is
neither an accident nor automatic. The population of Erie County,
home territory of the News, has been falling - from 1,113,000 in
1970 to 1,015,000 in 1980 to an estimated 966,000 in 1988.
Circulation figures tell a different story. In 1975, shortly
before we started our Sunday edition, the Courier-Express, a
long-established Buffalo paper, was selling 207,500 Sunday copies
in Erie County. Last year - with population at least 5% lower -
the News sold an average of 292,700 copies. I believe that in no
other major Sunday market has there been anything close to that
increase in penetration.
必须强调的是我们的渗透率并不是个意外抑或是自然而然的一件事，以水牛城报
纸的大本营Erie市来说，当地的人口数从1970年的111万人一路减少到1980
年的101万，乃至于1988年的96.6万人，但报纸发行量的变化却完全相反，
1975年在我们刚准备开始发行周日版之前，Courier-Express一家水牛城当地
相当悠久的报纸每周的发行量约为20万份，去年在总人口比当初还少5%的情
况下，水牛城的发行份数却将近有30万份，我相信在美国没有其它地区能够像
我们这样成长的。
When this kind of gain is made - and when a paper attains an
unequaled degree of acceptance in its home town - someone is
doing something right. In this case major credit clearly belongs
to Murray Light, our long-time editor who daily creates an
informative, useful, and interesting product. Credit should go
also to the Circulation and Production Departments: A paper that
is frequently late, because of production problems or
distribution weaknesses, will lose customers, no matter how
strong its editorial content.
当我们能够如此成长同时又得到家乡父老如此的支持，一定有人居功厥伟，我想
总编辑Murray Light应该是当之无愧，是他日复一日创造出如此发人深省、有
用且有趣的产品，当然发行与生产部门也一样功不可没，一家报纸若是因为印刷
或配送问题而时常误点，不管他的内容有多精彩丰富，一定会影响客户订阅的意
愿的。
Stan Lipsey, publisher of the News, has produced profits
fully up to the strength of our product. I believe Stan's
managerial skills deliver at least five extra percentage points
in profit margin compared to the earnings that would be achieved
by an average manager given the same circumstances. That is an
amazing performance, and one that could only be produced by a
talented manager who knows - and cares - about every nut and bolt
of the business.
Stan Lipsey报纸的发行人，利用获利来加强我们的产品竞争力，我相信Stan
管理能力至少让我们报纸的营业利益增加五个百分点以上，这真是令人赞叹的表
现，这只有完全熟悉企业大大小小事物的优秀经理人才有办法做到这样的成绩。
Stan's knowledge and talents, it should be emphasized,
extend to the editorial product. His early years in the business
were spent on the news side and he played a key role in
developing and editing a series of stories that in 1972 won a
Pulitzer Prize for the Sun Newspaper of Omaha. Stan and I have
worked together for over 20 years, through some bad times as well
as good, and I could not ask for a better partner.
Stan的知识与才能也延伸到编辑出版之上，早期他个人的生涯多花在新闻采访
之上，曾经花了相当多的时间报导一系列的故事，并在1972年为奥玛哈太阳报
赢得新闻界的最高荣誉-普立兹奖，Stan与我已经共事长达20年之久，一起经
历各种风雨、患难与共，实在很难再找到像他这么好的伙伴。
o At Fechheimer, the Heldman clan - Bob, George, Gary,
Roger and Fred - continue their extraordinary performance. Profits
in 1989 were down somewhat because of problems the business
experienced in integrating a major 1988 acquisition. These
problems will be ironed out in time. Meanwhile, return on invested
capital at Fechheimer remains splendid.
在费区海默，Heldman家族继续他们不凡的表现，1989年的获利因为1988
年的一件大的购并案出了点问题而略受影响，所幸问题及时获得解决，所以费区
海默的投资报酬还是相当不错。
Like all of our managers, the Heldmans have an exceptional
command of the details of their business. At last year's annual
meeting I mentioned that when a prisoner enters San Quentin, Bob
and George probably know his shirt size. That's only a slight
exaggeration: No matter what area of the country is being
discussed, they know exactly what is going on with major
customers and with the competition.
像我们其它的管理人，Heldmans家族对于其事业的了解钜细靡遗，去年的年度
股东会时我曾经半开玩笑的说，只要犯人一进到监狱，Bob就可以马上只到他的
身材Size是多少，不管你跟他们提到全美那一个地区，他们都相当清楚当地的
市场与竞争对手的状况。
Though we purchased Fechheimer four years ago, Charlie and I
have never visited any of its plants or the home office in
Cincinnati. We're much like the lonesome Maytag repairman: The
Heldman managerial product is so good that a service call is
never needed.
虽然我们是在四年之前买下费区海默的，但查理跟我却从来没有去参观过他们的
工厂或是位在辛辛那提的总部，我们有点像是无聊的Maytag维修工人，由
Heldman所管理的东西因为太好根本不会坏，以致于我们从来就没有接过叫修
的电话。
o Ralph Schey continues to do a superb job in managing
our largest group - World Book, Kirby, and the Scott Fetzer
Manufacturing Companies. Aggregate earnings of these businesses
have increased every year since our purchase and returns on
invested capital continue to be exceptional. Ralph is running an
enterprise large enough, were it standing alone, to be on the
Fortune 500. And he's running it in a fashion that would put him
high in the top decile, measured by return on equity.
Ralph Schey还是继续发挥他的长才，为我们管理-世界百科全书、寇比吸尘器
与史考特飞兹所组成的大集团，自从我们买下这些企业以来，他们的总盈余年年
都成长，投资的报酬相当可观，Ralph所领导的企业集团真是够大，单单他旗下
事业加总起来就足以名列财星五百大，而若以投资报酬的角度来看，大概可以让
他排在前十名。
For some years, World Book has operated out of a single
location in Chicago's Merchandise Mart. Anticipating the imminent
expiration of its lease, the business is now decentralizing into
four locations. The expenses of this transition are significant;
nevertheless profits in 1989 held up well. It will be another
year before costs of the move are fully behind us.
有好几年，世界百科全书只在芝加哥的一个商业广场集中营运，有鉴于租约即将
到期，未来它将分散成四个据点，搬迁的费用相当的庞大，不过尽管如此1989
年的获利还是会增加，这项搬迁的费用要经过好几年的时间才会慢慢地消化吸收
掉。
Kirby's business was particularly strong last year,
featuring large gains in export sales. International business has
more than doubled in the last two years and quintupled in the
past four; its share of unit sales has risen from 5% to 20%. Our
largest capital expenditures in 1989 were at Kirby, in
preparation for a major model change in 1990.
寇比的生意去年特别的旺，尤其是在外销方面的成长惊人，近两年来的业绩已成
长了一倍，累计四年来成长了四倍，市场占有率从5%增加到20%，我们1989
年最大的资本支出就花在寇比身上，预计在1990年会有一次大改款。
Ralph's operations contribute about 40% of the total
earnings of the non-insurance group whose results are shown on
page 49. When we bought Scott Fetzer at the start of 1986, our
acquisition of Ralph as a manager was fully as important as our
acquisition of the businesses. In addition to generating
extraordinary earnings, Ralph also manages capital extremely
well. These abilities have produced funds for Berkshire that, in
turn, have allowed us to make many other profitable commitments.
Ralph的事业部门所贡献的盈余大概占非保险部门的四成左右，当我们在1986
年初买下史考特飞兹时，能将Ralph一并挖过来当经理人，跟我们当初买下这
家公司一样地重要，除了贡献可观的盈余之外，Ralph管理资金也是一把罩。这
些能力使得Berkshire能够获得源源不绝的资金，让我们回头可以再做更多更好
的投资。
And that completes our answer to the 1927 Yankees.
以上就是我们的职棒先发阵容!
Insurance Operations
保险事业营运
Shown below is an updated version of our usual table
presenting key figures for the property-casualty insurance
industry:
下表是产物意外险业的几项重要的指数
Statutory
Yearly Change Combined Ratio Yearly Change Inflation Rate
in Premiums After Policyholder in Incurred Measured by
Written (%) Dividends Losses (%) GNP Deflator (%) ------------- ------------------
------------- ----------------
1981 3.8 106.0 6.5 9.6
1982 3.7 109.6 8.4 6.5
1983 5.0 112.0 6.8 3.8
1984 8.5 118.0 16.9 3.8
1985 22.1 116.3 16.1 3.0
1986 22.2 108.0 13.5 2.6
1987 9.4 104.6 7.8 3.1
1988 4.4 105.4 5.5 3.3
1989 (Est.) 2.1 110.4 8.7 4.2
Source: A.M. Best Co.
The combined ratio represents total insurance costs (losses
incurred plus expenses) compared to revenue from premiums: A
ratio below 100 indicates an underwriting profit, and one above
100 indicates a loss. When the investment income that an insurer
earns from holding policyholders' funds ("the float") is taken
into account, a combined ratio in the 107-111 range typically
produces an overall breakeven result, exclusive of earnings on
the funds provided by shareholders.
综合比率代表保险的总成本(理赔损失加上费用)占保费收入的比例，比率在100
以下代表有承保的损失，在100以上则代表有承保的获利综合比率代表的是保
险的总成本(损失加上费用)占保费收入的比率，100以下代表会有承销利益，100
以上代表会有承销损失，若把持有保费收入浮存金(扣除股东权益部份所产生的
盈余)所产生的投资收益列入考量，损益两平的范围大概是在107-111之间。
For the reasons laid out in previous reports, we expect the
industry's incurred losses to grow by about 10% annually, even in
years when general inflation runs considerably lower. (Actually,
over the last 25 years, incurred losses have grown at a still
faster rate, 11%.) If premium growth meanwhile materially lags
that 10% rate, underwriting losses will mount, though the
industry's tendency to underreserve when business turns bad may
obscure their size for a time.
基于前几次年报所说明的理由，即使是通货膨胀在这几年来相对温和，我们预期
保险业每年损失增加的比率约在10%左右，若是保费收入成长没有到达10%以
上，损失一定会增加，(事实上过去25年以来，理赔损失系以11%的速度在成
长)，虽然保险公司在景气不好时，会习惯性地将损失暂时隐藏起来。
Last year we said the climb in the combined ratio was
"almost certain to continue - and probably will accelerate - for
at least two more years." This year we will not predict
acceleration, but otherwise must repeat last year's forecast.
Premium growth is running far below the 10% required annually.
Remember also that a 10% rate would only stabilize the combined
ratio, not bring it down.
去年我们曾说若综合比率八成会继续上升，甚至在未来两年内还会加速，今年我
们不再做加速的预期，不然的话还会再重复去年的预测，保费收入成长的幅度远
低于每年最低10%成长的要求，而且大家要记住，10%只表示能抑止综合比率
上升的情况，却不能使它下降。
The increase in the combined ratio in 1989 was a little more
than we had expected because catastrophes (led by Hurricane Hugo)
were unusually severe. These abnormalities probably accounted for
about two points of the increase. If 1990 is more of a "normal"
year, the combined ratio should rise only minimally from the
catastrophe-swollen base of 1989. In 1991, though, the ratio is
apt to climb by a greater degree.
1989年的综合比率增加的幅度略高于我们的预期，原因在于意外灾害(主要是
Hugo飓风)特别严重，这部份造成的影响大约占了2个百分点，假若1990年
能够回到正常情况，相较于1989年略微膨胀的基础，综合比率可能只会增加一
点点，然后到了1991年可能又会提高增加的幅度。
Commentators frequently discuss the "underwriting cycle" and
speculate about its next turn. If that term is used to connote
rhythmic qualities, it is in our view a misnomer that leads to
faulty thinking about the industry's fundamental economics.
产业评论家常常会讨论到承保循环并预测它下一次反转的时点，若那个名词是用
来暗示有节奏性的本质，则我们认为那他们就有点张冠李戴的把这个产业情况搞
错了。
The term was appropriate some decades ago when the industry
and regulators cooperated to conduct the business in cartel
fashion. At that time, the combined ratio fluctuated
rhythmically for two reasons, both related to lags. First, data
from the past were analyzed and then used to set new "corrected"
rates, which were subsequently put into effect by virtually all
insurers. Second, the fact that almost all policies were then
issued for a one-to three-year term - which meant that it took a
considerable time for mispriced policies to expire - delayed the
impact of new rates on revenues. These two lagged responses made
combined ratios behave much like alternating current. Meanwhile,
the absence of significant price competition guaranteed that
industry profits, averaged out over the cycle, would be
satisfactory.
这个名词在几十年前当产业界与政府单位通力合作维持一个类似卡特尔组织时
或许还适用，在那个年代，综合比率只因两个原因上下变动，两者都具有递延性，
第一是过去的信息会被分析然而据以订定新的费率，一体适用于所有的保险业者
之上；第二所有的保单通常是一次以三年为期，这代表着一张有问题的保单通常
要花三年才能解决，所以新费率的实施影响有其递延性，这两个因素使得综合比
率的变化有脉络可循，同时没有价格的竞争通常就保证可以有稳定的获利，意味
着整个循环下来可以获致满意的报酬。
The cartel period is long gone. Now the industry has
hundreds of participants selling a commodity-like product at
independently-established prices. Such a configuration - whether
the product being sold is steel or insurance policies - is
certain to cause subnormal profitability in all circumstances but
one: a shortage of usable capacity. Just how often these periods
occur and how long they last determines the average profitability
of the industry in question.
不过卡特尔的年代早已过去，现在的产业有几百家公司在销售同一种商品，价格
各自独立，在这种情况下，不管所卖的商品是钢铁或是保单，除了产能短缺的情
况之外，整体同业的获利一定很可怜，不过却须视所处产业的获利情况来决定短
缺情况的发生时点与期间长短。
In most industries, capacity is described in physical terms.
In the insurance world, however, capacity is customarily
described in financial terms; that is, it's considered
appropriate for a company to write no more than X dollars of
business if it has Y dollars of net worth. In practice, however,
constraints of this sort have proven ineffective. Regulators,
insurance brokers, and customers are all slow to discipline
companies that strain their resources. They also acquiesce when
companies grossly overstate their true capital. Hence, a company
can write a great deal of business with very little capital if it
is so inclined. At bottom, therefore, the amount of industry
capacity at any particular moment primarily depends on the mental
state of insurance managers.
在大部分的产业，产能是以具体的事物来呈现，不过在保险的世界里，产能所代
表的却是指财务数字，亦即假设一家公司的净值有Y，那么他可以承接的保单大
概就只能有X，就实务而言，做这样的限制其实效果相当有限，主管机关、保险
掮客与客户对于其节制背后的保险公司的反应都很慢，而且就算真正的资本有被
夸大的情况，他们也给予姑息，因此一家资本额不大的保险公司若他们愿意，照
样可以接下一大堆保单，因此整个保险业的供给能量，主要还是视保险公司经理
人本身的心态而定。
All this understood, it is not very difficult to
prognosticate the industry's profits. Good profits will be
realized only when there is a shortage of capacity. Shortages
will occur only when insurers are frightened. That happens rarely
