rough indication of the cost of funds generated by insurance
operations. A low cost of funds signifies a good business; a high cost
translates into a poor business.
这种损失/浮存金比率跟其它保险业常用的绩效衡量统计数字一样，必须要有一
段相当长的时间才有意义，单季或甚至是单一年度的数字，会因为估计的成份太
浓而无参考价值，但是只要时间一拉长，这个比率就可以告诉我们保险营运所产
生浮存金的资金成本，若资金成本低就代表这是一家好公司，相反地就是一家烂
公司。
On the next page we show the underwriting loss, if any, of our
insurance group in each year since we entered the business and relate
that bottom line to the average float we have held during the year.
From this data we have computed a "cost of funds developed from
insurance."
下一页是我们进入保险业后，每年的承保损失统计(若有的话)，以及每年平均持
有的浮存金数量，从这个表我们可以很轻易地算出保险事业所产生的浮存金其资
金成本是多少。
(1) (2) Yearend Yield
Underwriting Approximate on Long-Term
Loss Average Float Cost of Funds Govt. Bonds
---------- ------------- --------------- -----------
(In $ Millions) (Ratio of 1 to 2)
1967 ......... profit $17.3 less than zero 5.50%
1968 ......... profit 19.9 less than zero 5.90%
1969 ......... profit 23.4 less than zero 6.79%
1970 ......... $0.37 32.4 1.14% 6.25%
1971 ......... profit 52.5 less than zero 5.81%
1972 ......... profit 69.5 less than zero 5.82%
1973 ......... profit 73.3 less than zero 7.27%
1974 ......... 7.36 79.1 9.30% 8.13%
1975 ......... 11.35 87.6 12.96% 8.03%
1976 ......... profit 102.6 less than zero 7.30%
1977 ......... profit 139.0 less than zero 7.97%
1978 ......... profit 190.4 less than zero 8.93%
1979 ......... profit 227.3 less than zero 10.08%
1980 ......... profit 237.0 less than zero 11.94%
1981 ......... profit 228.4 less than zero 13.61%
1982 ......... 21.56 220.6 9.77% 10.64%
1983 ......... 33.87 231.3 14.64% 11.84%
1984 ......... 48.06 253.2 18.98% 11.58%
1985 ......... 44.23 390.2 11.34% 9.34%
1986 ......... 55.84 797.5 7.00% 7.60%
1987 ......... 55.43 1,266.7 4.38% 8.95%
1988 ......... 11.08 1,497.7 0.74% 9.00%
1989 ......... 24.40 1,541.3 1.58% 7.97%
1990 ......... 26.65 1,637.3 1.63% 8.24%
The float figures are derived from the total of loss reserves, loss
adjustment expense reserves and unearned premium reserves minus
agents' balances, prepaid acquisition costs and deferred charges
applicable to assumed reinsurance. At some insurers other items
should enter into the calculation, but in our case these are
unimportant and have been ignored.
浮存金的数字是将所有的损失准备、损失费用调整准备与未赚取保费加总后，再
扣除应付佣金、预付购并成本及相关再保递延费用，若是别的保险业者可能还有
其它项目需要列入做计算，但因为这些科目在Berkshire并不重要，所以予以省
略。
During 1990 we held about $1.6 billion of float slated eventually
to find its way into the hands of others. The underwriting loss we
sustained during the year was $27 million and thus our insurance
operation produced funds for us at a cost of about 1.6%. As the table
shows, we managed in some years to underwrite at a profit and in
those instances our cost of funds was less than zero. In other years,
such as 1984, we paid a very high price for float. In 19 years out of the
24 we have been in insurance, though, we have developed funds at a
cost below that paid by the government.
在1990年我们大概持有16亿美元的浮存金，这些钱会慢慢地流到其它人的手
中，当年度的承保损失约为2,600万美元，因此我们从保险营运所获得的资金，
其成本约为1.6%，而就如同这张表所显示的，有些年度我们有承保获利，所以
我们的资金成本甚至低于零，但是也有些年度，像1984年我们必须为浮存金支
付相当高的成本，但是总计至今24个年度当中有19个年度，我们负担的资金
成本甚至比美国政府发行债券的成本还低。
There are two important qualifications to this calculation. First, the
fat lady has yet to gargle, let alone sing, and we won't know our true
1967 - 1990 cost of funds until all losses from this period have been
settled many decades from now. Second, the value of the float to
shareholders is somewhat undercut by the fact that they must put up
their own funds to support the insurance operation and are subject to
double taxation on the investment income these funds earn. Direct
investments would be more tax-efficient.
这项计算式有两个重要的要求，首先胖女人漱口都很难听了，更何况还要她唱
歌，除非等到这时间所发生的损失都已确定解决，否则我们不能确定1967年
-1990年的资金成本到底是多少，第二浮存金对于股东的价值有点打折，因为
股东们还必须投入相对的资金来支持保险事业的营运，同时这些资金所赚取的投
资收益又必须面临双重的课税，相较之下直接投资的税负就少多了。
The tax penalty that indirect investments impose on shareholders
is in fact substantial. Though the calculation is necessarily imprecise, I
would estimate that the owners of the average insurance company
would find the tax penalty adds about one percentage point to their
cost of float. I also think that approximates the correct figure for
Berkshire.
间接投资加诸在股东身上的租税惩罚事实上是相当重的，虽然计算公式铁定没办
法做的很精确，但我估计对于这些保险事业的所有者来说，租税惩罚至少让他们
增加一个百分点以上的资金成本，我想这个数字也适用于Berkshire之上。
Figuring a cost of funds for an insurance business allows anyone
analyzing it to determine whether the operation has a positive or
negative value for shareholders. If this cost (including the tax penalty)
is higher than that applying to alternative sources of funds, the value
is negative. If the cost is lower, the value is positive - and if the cost is
significantly lower, the insurance business qualifies as a very valuable
asset.
分析保险事业的资金成本使得任何人都可以据此判断这家公司的营运对于股东
到底是正面的还是负面的，若是这项成本(包含租税惩罚)高于其它替代性的资金
来源，其价值就是负的，若是成本更低，那么对股东便能产生正面的价值，而若
是成本远低于一般水准，那么这个事业就是一项相当有价值的资产。
So far Berkshire has fallen into the significantly-lower camp. Even
more dramatic are the numbers at GEICO, in which our ownership
interest is now 48% and which customarily operates at an underwriting
profit. GEICO's growth has generated an ever-larger amount of funds
for investment that have an effective cost of considerably less than
zero. Essentially, GEICO's policyholders, in aggregate, pay the
company interest on the float rather than the other way around. (But
handsome is as handsome does: GEICO's unusual profitability results
from its extraordinary operating efficiency and its careful classification
of risks, a package that in turn allows rock-bottom prices for
policyholders.)
到目前为止，Berkshire算是资金成本相当低的那类，虽然我们拥有48%股权的
GEICO的比率更好，且通常每年都享有承保获利，GEICO藉由不断地成长提供
越来越多的资金以供投资，而且它的资金成本还远低于零成本以下，意思是说
GEICO的保单持有人不但要先付保费给公司而且还要支付利息，(但就像有人又
帅又有才干，GEICO非凡的获利能力导因于公司经营的效率与对风险的严格分
类，如此使得保户也可享受超低价格的保单)。
Many well-known insurance companies, on the other hand, incur
an underwriting loss/float cost that, combined with the tax penalty,
produces negative results for owners. In addition, these companies,
like all others in the industry, are vulnerable to catastrophe losses that
could exceed their reinsurance protection and take their cost of float
right off the chart. Unless these companies can materially improve
their underwriting performance - and history indicates that is an
almost impossible task - their shareholders will experience results
similar to those borne by the owners of a bank that pays a higher rate
of interest on deposits than it receives on loans.
在另外一方面，许多知名的保险公司，在考量承保损失/浮存金成本，再加上租
税惩罚之后，事实上让股东产生负的报酬，此外这些公司像其它业者一样，相当
容易受到大型灾害的伤害，在扣除再保部份所得到的保护之后，资金成本率还是
有可能升高到无以复加的地步，而除非这些公司能够大幅改善其承保的成绩，历
史的经验显示这是项不可能的任务，这些股东很可能会和吸收较高的存款利息支
出，却只能收到较低的借款利息收入的银行股东一样的下场。
All in all, the insurance business has treated us very well. We have
expanded our float at a cost that on the average is reasonable, and we
have further prospered because we have earned good returns on these
low-cost funds. Our shareholders, true, have incurred extra taxes, but
they have been more than compensated for this cost (so far) by the
benefits produced by the float.
总的来说，保险营运给我们的回报算是相当不错的了，我们的保险浮存金以合理
的资金成本率持续增加，而靠着这些低成本的资金赚取更高的投资报酬使我们的
事业蒸蒸日上，确实我们的股东必须负担额外的税负，但大家从这样低的资金成
本所获得的利益却补回更多(至少到目前为止是如此)。
A particularly encouraging point about our record is that it was
achieved despite some colossal mistakes made by your Chairman prior
to Mike Goldberg's arrival. Insurance offers a host of opportunities for
error, and when opportunity knocked, too often I answered. Many
years later, the bills keep arriving for these mistakes: In the insurance
business, there is no statute of limitations on stupidity.
尤其有更令人振奋的一点，这些记录还包含本人之前所犯下一些重大的错误，在
Mike Goldberg接手后，应该会有更好的成绩，保险往往会有一大堆让你发生
错误的机会，而通常在这些机会敲门时，我都会响应，以致于经过那么多年之后，
到现在我们还必须为我以前所犯的那些错误付出代价，在保险业愚蠢的程度是没
有上限的。
The intrinsic value of our insurance business will always be far
more difficult to calculate than the value of, say, our candy or
newspaper companies. By any measure, however, the business is
worth far more than its carrying value. Furthermore, despite the
problems this operation periodically hands us, it is the one - among
all the fine businesses we own - that has the greatest potential.
我们保险事业的实际价值永远比其它事业如糖果或是报纸事业难以估计，但是不
管用任何计算方法，保险事业的价值一定远高于其帐面价值，更重要的是虽然保
险业让我们三不五时会出状况，但这行业却是我们现在所有不错的事业当中，最
有成长潜力的。
Marketable Securities
有价证券投资
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)。
12/31/90
Shares Company Cost Market
------ ------- ---------- ----------
(000s omitted)
3,000,000 Capital Cities/ABC, Inc. ............ $ 517,500 $1,377,375
46,700,000 The Coca-Cola Co. ................... 1,023,920 2,171,550
2,400,000 Federal Home Loan Mortgage Corp. ... 71,729 117,000
6,850,000 GEICO Corp. ......................... 45,713 1,110,556
1,727,765 The Washington Post Company ......... 9,731 342,097
5,000,000 Wells Fargo & Company ............... 289,431 289,375
Lethargy bordering on sloth remains the cornerstone of our
investment style: This year we neither bought nor sold a share of five
of our six major holdings. The exception was Wells Fargo, a
superbly-managed, high-return banking operation in which we
increased our ownership to just under 10%, the most we can own
without the approval of the Federal Reserve Board. About one-sixth of
our position was bought in 1989, the rest in 1990.
树濑天生特有的懒散正代表着我们的投资模式，今年我们没有增加也没有处分任
何持股，除了Wells Fargo这家拥有良好的经营团队，并享有相当高的股东权益
报酬率的银行，所以我们将持股比率增加到10%左右，这是我们可以不必向联
准会申报的最高上限，其中六分之一是在1989年买进，剩下的部份则是在1990
年增加。
The banking business is no favorite of ours. When assets are
twenty times equity - a common ratio in this industry - mistakes that
involve only a small portion of assets can destroy a major portion of
equity. And mistakes have been the rule rather than the exception at
many major banks. Most have resulted from a managerial failing that
we described last year when discussing the "institutional imperative:"
the tendency of executives to mindlessly imitate the behavior of their
peers, no matter how foolish it may be to do so. In their lending, many
bankers played follow-the-leader with lemming-like zeal; now they
are experiencing a lemming-like fate.
银行业并不是我们的最爱，因为这个行业的特性是资产约为股权的20倍，这代
表只要资产发生一点问题就有可能把股东权益亏光光，而偏偏大银行出问题早已
变成是常态而非特例，许多情况是管理当局的疏失，就像是去年度我们曾提到的
系统规范-也就是经营主管会不自主的模仿其它同业的做法，不管这些行为有多
愚蠢，在从事放款业务时，许多银行业者也都有旅鼠那种追随领导者的行为倾
向，所以现在他们也必须承担像旅鼠一样的命运。
Because leverage of 20:1 magnifies the effects of managerial
strengths and weaknesses, we have no interest in purchasing shares of
a poorly-managed bank at a "cheap" price. Instead, our only interest is
in buying into well-managed banks at fair prices.
因为20比1的比率，使得所有的优势与缺点所造成的影响对会被放大，我们对
于用便宜的价格买下经营不善的银行一点兴趣都没有，相反地我们希望能够以合
理的价格买进一些经营良好的银行。
With Wells Fargo, we think we have obtained the best managers
in the business, Carl Reichardt and Paul Hazen. In many ways the
combination of Carl and Paul reminds me of another - Tom Murphy
and Dan Burke at Capital Cities/ABC. First, each pair is stronger than
the sum of its parts because each partner understands, trusts and
admires the other. Second, both managerial teams pay able people
well, but abhor having a bigger head count than is needed. Third, both
attack costs as vigorously when profits are at record levels as when
they are under pressure. Finally, both stick with what they understand
and let their abilities, not their egos, determine what they attempt.
(Thomas J. Watson Sr. of IBM followed the same rule: "I'm no genius,"
he said. "I'm smart in spots - but I stay around those spots.")
在Wells Fargo，我想我们找到银行界最好的经理人Carl Reichardt与Paul
Hazen，在许多方面这两个人的组合使我联想到另外一对搭档，那就是资本城
/ABC的Tom Murphy与Dan Burke，首先两个人加起来的力量都大于个别单
打独斗，因为每个人都了解、信任并尊敬对方，其次他们对于有才能的人从不吝
啬，但也同时厌恶冗员过多，第三尽管公司获利再好，他们控制成本的努力不曾
稍减，最后两者都坚持自己所熟悉的，让他们的能力而非自尊来决定成败，就像
IBM的Thomas Watson曾说:「我不是天才，我只是有点小聪明，不过我却充
分运用这些小聪明。」
Our purchases of Wells Fargo in 1990 were helped by a chaotic
market in bank stocks. The disarray was appropriate: Month by month
the foolish loan decisions of once well-regarded banks were put on
public display. As one huge loss after another was unveiled - often on
the heels of managerial assurances that all was well - investors
understandably concluded that no bank's numbers were to be trusted.
Aided by their flight from bank stocks, we purchased our 10% interest
in Wells Fargo for $290 million, less than five times after-tax earnings,
and less than three times pre-tax earnings.
我们是在1990年银行股一片混乱之间买进Wells Fargo的股份的，这种失序的
现象是很合理的，几个月来有些原本经营名声不错的银行，其错误的贷款决定却
一一被媒体揭露，随着一次又一次庞大的损失数字被公布，银行业的诚信与保证
也一次又一次地被践踏，渐渐地投资人越来越不敢相信银行的财务报表数字，趁
着大家出脱银行股之际，我们却逆势以2.9亿美元，五倍不到的本益比(若是以
税前获利计算，则本益比甚至不到三倍)，买进Wells Fargo 10%的股份。
Wells Fargo is big - it has $56 billion in assets - and has been
earning more than 20% on equity and 1.25% on assets. Our purchase
of one-tenth of the bank may be thought of as roughly equivalent to
our buying 100% of a $5 billion bank with identical financial
characteristics. But were we to make such a purchase, we would have
to pay about twice the $290 million we paid for Wells Fargo. Moreover,
that $5 billion bank, commanding a premium price, would present us
with another problem: We would not be able to find a Carl Reichardt to
run it. In recent years, Wells Fargo executives have been more avidly
recruited than any others in the banking business; no one, however,
