- and most assuredly is not happening now.
在了解内情之后，大家不难预知这个产业未来的获利情况，获利要好只有当供给
短缺时才有可能发生，而供给短缺只有当保险业者感到害怕时才有可能发生，而
偏偏这种情况又很少见，且可以确定短期之内不会出现。
Some analysts have argued that the more onerous taxes
recently imposed on the insurance industry and 1989's
catastrophes - Hurricane Hugo and the California earthquake -
will cause prices to strengthen significantly. We disagree. These
adversities have not destroyed the eagerness of insurers to write
business at present prices. Therefore, premium volume won't grow
by 10% in 1990, which means the negative underwriting trend will
not reverse.
有些分析师认为最近刚实施的保险业新税法过于繁重，同时加上Hugo飓风与加
州的地震，将会是保险费率大幅提高，我们并不认同这样的看法，因为这些负面
的因素并不会迫使同业不以现在的价格接受保单，因此1990年的保费收入应该
无法成长10%以上，也就是说整体的承保绩效可能还会继续恶化。
The industry will meantime say it needs higher prices to
achieve profitability matching that of the average American
business. Of course it does. So does the steel business. But
needs and desires have nothing to do with the long-term
profitability of industries. Instead, economic fundamentals
determine the outcome. Insurance profitability will improve only
when virtually all insurers are turning away business despite
higher prices. And we're a long way from that point.
业者同时也会宣称保险业需要调高价格才能维持一般美国企业的获利水平，当然
事实确是如此，钢铁业也一样，但需要与想要与产业长期的获利并无绝对相关，
反而是经济实质现况才是决定结果的关键因素，保险业的获利要改进，只有靠所
有业者通力合作，除非价格合理否则就不接生意，但现在离那样的情况还很远。
Berkshire's premium volume may drop to $150 million or so in
1990 (from a high of $1 billion in 1986), partly because our
traditional business continues to shrink and partly because the
contract under which we received 7% of the business of Fireman's
Fund expired last August. Whatever the size of the drop, it will
not disturb us. We have no interest in writing insurance that
carries a mathematical expectation of loss; we experience enough
disappointments doing transactions we believe to carry an
expectation of profit.
Berkshire 1990年的保费收入可能会降至1.5亿美元左右，(相较于1986年的
10亿美元高点)，一方面是因为我们传统的业务持续在萎缩，一方面是消防人员
退休基金这项业务在去年八月已到期，但不管业务量减少多少，一点都不影响我
们，我们完全没有兴趣去接那种一看就会赔钱的保单，光是那些看起来有赚头的
生意就够我们受的了。
However, our appetite for appropriately-priced business is
ample, as one tale from 1989 will tell. It concerns "CAT covers,"
which are reinsurance contracts that primary insurance companies
(and also reinsurers themselves) buy to protect themselves
against a single catastrophe, such as a tornado or hurricane,
that produces losses from a large number of policies. In these
contracts, the primary insurer might retain the loss from a
single event up to a maximum of, say, $10 million, buying various
layers of reinsurance above that level. When losses exceed the
retained amount, the reinsurer typically pays 95% of the excess
up to its contractual limit, with the primary insurer paying the
remainder. (By requiring the primary insurer to keep 5% of each
layer, the reinsurer leaves him with a financial stake in each
loss settlement and guards against his throwing away the
reinsurer's money.)
然而我们对于价格合理的生意胃口却很足够，1989年有一件事可以说明，那就
是CAT防护，也就是一般保险公司(也包含再保公司本身)都会向再保公司签约
买下再保合约，来免于承担像是龙卷风或是飓风等单一意外事件所可能引发钜额
损失的风险，在这些再保合约中，原始的保险公司可能会保留一个单一的损失上
限，例如1,000万美金，然后在此之上买进好几层的再保险，当损失超过自留
的部份时，再保公司依规定就要支付超过的部份，最高比例可达95%，(之所以
要求保险公司本身每层保留5%，是为了让保险公司与再保公司站在同一阵线，
避免保险公司慷再保公司之凯)。
CAT covers are usually one-year policies that also provide
for one automatic reinstatement, which requires a primary insurer
whose coverage has been exhausted by a catastrophe to buy a
second cover for the balance of the year in question by paying
another premium. This provision protects the primary company from
being "bare" for even a brief period after a first catastrophic
event. The duration of "an event" is usually limited by contract
to any span of 72 hours designated by the primary company. Under
this definition, a wide-spread storm, causing damage for three
days, will be classified as a single event if it arises from a
single climatic cause. If the storm lasts four days, however, the
primary company will file a claim carving out the 72 consecutive
hours during which it suffered the greatest damage. Losses that
occurred outside that period will be treated as arising from a
separate event.
CAT防护的保单通常是一年期，一般可以自动延长一年，这样的条款主要是保
护保险公司避免因为重大灾害发生后，投保的空窗期，事件发生的持续期间通常
由合约限定在72小时以内，在这种定义之下，一场持续三天的大风暴所造成的
损害，可被归类为单一事件。要是大风暴持续四天以上，则保险公司可以切割出
其受害最惨重的72小时，超过的部份则必须视为另一个独立的事件。
In 1989, two unusual things happened. First, Hurricane Hugo
generated $4 billion or more of insured loss, at a pace, however,
that caused the vast damage in the Carolinas to occur slightly
more than 72 hours after the equally severe damage in the
Caribbean. Second, the California earthquake hit within weeks,
causing insured damage that was difficult to estimate, even well
after the event. Slammed by these two - or possibly three - major
catastrophes, some primary insurers, and also many reinsurers
that had themselves bought CAT protection, either used up their
automatic second cover or became uncertain as to whether they had
done so.
1989年有两件特殊的事件发生，第一Hugo飓风造成40亿美元的损失，不过
之后不久72小时，又在加勒比海发生相同规模的灾害；第二加州大地震在几个
礼拜内又接连发生，造成难以估计的损失，受到这两个事件严重的打击，或者应
该说是三个，许多有买CAT防身的保险公司及再保公司，立刻使用第二次投保
权。
At that point sellers of CAT policies had lost a huge amount
of money - perhaps twice because of the reinstatements - and not
taken in much in premiums. Depending upon many variables, a CAT
premium might generally have run 3% to 15% of the amount of
protection purchased. For some years, we've thought premiums of
that kind inadequate and have stayed away from the business.
在当时许多卖CAT保单的业者亏了一屁股，尤其是第二次投保部份，根本收不
到足够的保费，由于有许多变量，保费通常会是在保额的3%到15%不等，有好
几年，我们认为这种保费收入并不合理，所以没有介入这个市场。
But because the 1989 disasters left many insurers either
actually or possibly bare, and also left most CAT writers licking
their wounds, there was an immediate shortage after the
earthquake of much-needed catastrophe coverage. Prices instantly
became attractive, particularly for the reinsurance that CAT
writers themselves buy. Just as instantly, Berkshire Hathaway
offered to write up to $250 million of catastrophe coverage,
advertising that proposition in trade publications. Though we did
not write all the business we sought, we did in a busy ten days
book a substantial amount.
但是1989年的大灾害使得许多CAT业者穷于填补保险客户的伤口，使得地震
灾后保单供给发生短缺，保费价格很快地就回到相当吸引人的水准，尤其是再保
公司本身自己所买的保单，若有需要，Berkshire可以马上就签下2.5亿美元以
上的保单，虽然并不是所有上门的生意都接，但忙个十天下来所签的保单金额也
是相当可观。
Our willingness to put such a huge sum on the line for a
loss that could occur tomorrow sets us apart from any reinsurer
in the world. There are, of course, companies that sometimes
write $250 million or even far more of catastrophe coverage. But
they do so only when they can, in turn, reinsure a large
percentage of the business with other companies. When they can't
"lay off" in size, they disappear from the market.
世界上再没有其它再保公司会像我们一样，愿意一口气接受如此大金额的投保，
当然也有保险公司偶尔会愿意接下二亿五美金的灾害理赔保险，但是其提通常是
他们可以再向其它保险公司分保出去，当他们找不到分散风险的再保公司时，他
们会马上退出市场。
Berkshire's policy, conversely, is to retain the business we
write rather than lay it off. When rates carry an expectation of
profit, we want to assume as much risk as is prudent. And in our
case, that's a lot.
相反地Berkshire的政策则是保留大部分的保额而不是把他们给分配掉，当保险
费率看起来有利可图，我们很愿意承担更多的风险，以外界的标准而言，那应该
是个大数字。
We will accept more reinsurance risk for our own account
than any other company because of two factors: (1) by the
standards of regulatory accounting, we have a net worth in our
insurance companies of about $6 billion - the second highest
amount in the United States; and (2) we simply don't care what
earnings we report quarterly, or even annually, just as long as
the decisions leading to those earnings (or losses) were reached
intelligently.
我们之所以愿意承担比一般保险公司更多的风险，主要有两个原因: (1)以会计原
则的规范标准，我们的保险公司净值高达60亿美金，位居全美第二(2)我们并不
在乎每季的短期盈余数字，就算是每年也无所谓，只要长期而言，这些决策是基
于稳健获利的立场所作的明智决定。
Obviously, if we write $250 million of catastrophe coverage
and retain it all ourselves, there is some probability that we
will lose the full $250 million in a single quarter. That
probability is low, but it is not zero. If we had a loss of that
magnitude, our after-tax cost would be about $165 million. Though
that is far more than Berkshire normally earns in a quarter, the
damage would be a blow only to our pride, not to our well-being.
很明显地如此我们接下二亿五的灾害保险，并自留大部分的保额，很有可能我们
会在一夕之间损失这二亿五，这种机率虽然很低，却并不表示没有可能，若真的
发生那样的损失，我们的税后损失大概会是1.65亿，相较于Berkshire每季所
赚的盈余来说，只能算是个小数字，虽然会我们会丢了面子，但还不至于失了里
子。
This posture is one few insurance managements will assume.
Typically, they are willing to write scads of business on terms
that almost guarantee them mediocre returns on equity. But they
do not want to expose themselves to an embarrassing singlequarter
loss, even if the managerial strategy that causes the
loss promises, over time, to produce superior results. I can
understand their thinking: What is best for their owners is not
necessarily best for the managers. Fortunately Charlie and I have
both total job security and financial interests that are
identical with those of our shareholders. We are willing to look
foolish as long as we don't feel we have acted foolishly.
这种态度在保险业界来说实在是少之又少，通常一般的保险公司会愿意接下很多
的保单以确定公司每年可以获得一定的利益，但他们却不愿意公司在某一个单季
发生大额的损失，虽然这种短期损失可以获致更长远的利益；我想我能够体谅他
们的立场，对股东最有利的事并一定对经理人最好，很幸运的查理跟我的工作保
障与身家利益与所有的股东皆一致，我们愿意被人当作是傻子，只要我们自己知
道我们不是个傻子。
Our method of operation, incidentally, makes us a
stabilizing force in the industry. We add huge capacity when
capacity is short and we become less competitive only when
capacity is abundant. Of course, we don't follow this policy in
the interest of stabilization - we follow it because we believe
it to be the most sensible and profitable course of action.
Nevertheless, our behavior steadies the market. In this case,
Adam Smith's invisible hand works as advertised.
事实上我们这样的经营策略让我们成为市场上的稳定力量，当供给短缺时，我们
可以马上进场满足大家的需求，而当市场过于饱和时，我们又会立即退出市场观
望，当然我们这样的做法并不只是为了达到市场的稳定而已，我们之所以会这样
做是因为我们认为这样才是最合理、对大家最有利的做法，当然这样的做法间接
达到稳定市场的效果，也符合亚当．史密斯所提市场有一只看不见的手的说法。
Currently, we hold an exceptional amount of float compared
to premium volume. This circumstance should produce quite
favorable insurance results for us during the next few years as
it did in 1989. Our underwriting losses should be tolerable and
our investment income from policyholder funds large. This
pleasant situation, however, will gradually deteriorate as our
float runs off.
现阶段相较于保费收入，我们自留的大部分的浮存金，这样的情形应该可以让我
们往后几年的获利像1989年那样不错的结果，承保损失应该还可以接受，相较
之下我们靠投资所赚得的利益却更为惊人，只是这种好现象可能会随着浮存金的
流失而渐渐光芒不再。
At some point, however, there will be an opportunity for us
to write large amounts of profitable business. Mike Goldberg and
his management team of Rod Eldred, Dinos Iordanou, Ajit Jain,
Phil Urban, and Don Wurster continue to position us well for this
eventuality.
不过在其它方面，还是有机会能够让我们找到大额且有利可图的生意，Mike
Goldberg与其经营团队，长期而言可以为我们创造有利的地位。
Marketable Securities
有价证券投资
In selecting marketable securities for our insurance
companies, we generally choose among five major categories: (1)
long-term 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 "mathematical
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，且仅限于我们自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
of over $100 million. 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，一部份的投资系属于Berkshire关
系企业所持有)。
12/31/89
Shares Company Cost Market
------ ------- ---------- ----------
(000s omitted)
3,000,000 Capital Cities/ABC, Inc. ......... .......... $ 517,500 $1,692,375
23,350,000 The Coca-Cola Co. ................. ........ 1,023,920 1,803,787
2,400,000 Federal Home Loan Mortgage Cor..... 71,729 161,100
6,850,000 GEICO Corp. .................. .. ... ........... 45,713 1,044,625
1,727,765 The Washington Post Company ......... 9,731 486,366
This list of companies is the same as last year's and in
only one case has the number of shares changed: Our holdings of
Coca-Cola increased from 14,172,500 shares at the end of 1988 to
23,350,000.
表上的投资组合与去年几乎相同，只有一项投资的持股有变动，我们将可口可乐
的持股数由去年的1,417万股提高到今年的2,335万股。
This Coca-Cola investment provides yet another example of
the incredible speed with which your Chairman responds to
investment opportunities, no matter how obscure or well-disguised
they may be. I believe I had my first Coca-Cola in either 1935 or
1936. Of a certainty, it was in 1936 that I started buying Cokes
at the rate of six for 25 cents from Buffett & Son, the family
grocery store, to sell around the neighborhood for 5 cents each.
In this excursion into high-margin retailing, I duly observed
the extraordinary consumer attractiveness and commercial
possibilities of the product.
这次的可口可乐投资，提供了一个机会来证明你们的董事长快速反应投资机会，
不管这些机会是如何的不明确或是被隐藏，我记得我是在1935年或1936年第
一次喝到可口可乐的，不过可以确定的是，我从1936年开始以25分钱半打从
巴菲特兄弟杂货店批货后，在以每罐5分钱卖给邻居街坊，作为我个人从事高
毛利零售业的开端，我也深深观察到这项产品给消费者特殊的吸引力及背后所代
表庞大的商机。
I continued to note these qualities for the next 52 years as
