这场经典的赛事，甚至还用慢动作播放精彩的第四节，我们以今年封面的颜色表 .3
have, the number can be almost unlimited. We are lucky to have
Bill and Sheldon associated with us, and we hope that we can
acquire other businesses that bring with them managers of similar
caliber.
而在我们又新增旗下事业的同时，我被问及我一个人到底可以应付多少个经理人
同时向我报告，我的回答相当简单，要是我只管一个经理人，而他是一颗酸柠檬，
那么管一个人对我来说，实在是太多了，相反的，要是我所面对的是像我们现在
所拥有的经理人的话，那么这个数目将没有任何限制，很幸运的是，这回新加入
的是Bill跟Sheldon，而我们也很希望在不久的未来，还能有更多相同水准的经
理人加入我们的行列。
GEICO Corporation
盖可保险营运
Right after yearend, we completed the purchase of 100% of
GEICO, the seventh largest auto insurer in the United States,
with about 3.7 million cars insured. I've had a 45-year
association with GEICO, and though the story has been told
before, it's worth a short recap here.
就在去年底，我们完成买进盖可保险100%股权的动作，盖可是全美第七大的汽
车保险公司，约有370万辆汽车加保，我个人与盖可保险的关系长达45年以
上，虽然这段故事已经说过很多遍，我认为还是有必要在这里稍微复述一次。
I attended Columbia University's business school in 1950-51,
not because I cared about the degree it offered, but because I
wanted to study under Ben Graham, then teaching there. The time
I spent in Ben's classes was a personal high, and quickly induced
me to learn all I could about my hero. I turned first to Who's
Who in America, finding there, among other things, that Ben was
Chairman of Government Employees Insurance Company, to me an
unknown company in an unfamiliar industry.
我是在1950年-1951年间就读于哥伦比亚商学院，当时的目的倒不在于取得
学位，重点还在于我可以受教于当时在该校任教的班哲明．葛拉汉门下，上葛拉
汉的课实在是一种享受，很快的就让我从偶像哪里学习到许多东西，有一回我翻
开全美名人录，发现我的恩师葛拉汉是公务人员保险公司-GEICO的董事会主
席，对于当时的我而言，那完全是一家陌生产业的不知名公司。
A librarian next referred me to Best's Fire and Casualty
insurance manual, where I learned that GEICO was based in
Washington, DC. So on a Saturday in January, 1951, I took the
train to Washington and headed for GEICO's downtown headquarters.
To my dismay, the building was closed, but I pounded on the door
until a custodian appeared. I asked this puzzled fellow if there
was anyone in the office I could talk to, and he said he'd seen
one man working on the sixth floor.
一位好心的图书馆员，介绍我看看全美最佳火险与意外险公司手册，我发现
GEICO的总部位于华盛顿特区，所以在1951年一月的某个星期六，我搭乘火
车前往位于华盛顿的GEICO总部，一到当地，令人失望的是总部大门深锁，朝
着大门敲了半天，终于有位守卫前来应门，我向这位一脸疑惑的警卫先生问到，
公司是否有人可以跟我谈一谈，他老兄说六楼有人在加班，你可以去找他试一
试。
And thus I met Lorimer Davidson, Assistant to the President,
who was later to become CEO. Though my only credentials were
that I was a student of Graham's, "Davy" graciously spent four
hours or so showering me with both kindness and instruction. No
one has ever received a better half-day course in how the
insurance industry functions nor in the factors that enable one
company to excel over others. As Davy made clear, GEICO's method
of selling - direct marketing - gave it an enormous cost
advantage over competitors that sold through agents, a form of
distribution so ingrained in the business of these insurers that
it was impossible for them to give it up. After my session with
Davy, I was more excited about GEICO than I have ever been about
a stock.
就这样我遇到了当时还是副总裁的Lorimer Davidson，后来他成为GEICO的
总裁，虽然我唯一的经历背景只是葛拉汉的一名学生，大卫还是很好心的花了四
个小时左右的时间，好好地给我上了一课，我想大概没有人能够像我这样，可以
幸运地接受如何经营保险业的半天课程，大卫很坦白地告诉我，GEICO的竞争
优势在于-直接行销，这使得该公司相较于一般竞争同业必须透过传统的业务仲
介的经营方式所负担的成本要低得许多，后者受限传统无法摆脱行之有年的行销
网络，而在上过大卫的课之后，GEICO也成为我有生以来觉得最心动的一支股
票。
When I finished at Columbia some months later and returned
to Omaha to sell securities, I naturally focused almost
exclusively on GEICO. My first sales call - on my Aunt Alice,
who always supported me 100% - was successful. But I was then a
skinny, unpolished 20-year-old who looked about 17, and my pitch
usually failed. Undaunted, I wrote a short report late in 1951
about GEICO for "The Security I Like Best" column in The
Commercial and Financial Chronicle, a leading financial
publication of the time. More important, I bought stock for my
own account.
在我从哥伦比亚大学毕业的几个月后，我回到奥玛哈担任股票业务员，自然而然
的，我把重心全部摆在GEICO这只股票之上，我作成的第一笔生意就是把它介
绍给总是最支持我的阿姨Alice，不过当时的我只是个20岁初出茅庐的小伙子，
所以我的话总是没有人愿意相信，即便如此，我还是在1951年写了一篇最佳推
荐个股-GEICO并刊登在当时最大的金融时报专栏之上，当然最重要的是我自己
也买了这家公司的股票。
You may think this odd, but I have kept copies of every tax
return I filed, starting with the return for 1944. Checking
back, I find that I purchased GEICO shares on four occasions
during 1951, the last purchase being made on September 26. This
pattern of persistence suggests to me that my tendency toward
self-intoxication was developed early. I probably came back on
that September day from unsuccessfully trying to sell some
prospect and decided - despite my already having more than 50% of
my net worth in GEICO - to load up further. In any event, I
accumulated 350 shares of GEICO during the year, at a cost of
$10,282. At yearend, this holding was worth $13,125, more than
65% of my net worth.
你可能会觉得很奇怪，不过打从1944年开始报税到现在，我都保留每年个人报
税的资料，在将这些资料拿出来比对之后，我发现在1951年我总共分四次买进
GEICO股份，最后一次是在9月26日，这样的做法让我觉得自己很早就有自
我沉醉的倾向，印象中我那时是在向别人推销这批股票不成之后，决定自己吃下
这批股票，尽管在当时我已将个人50%以上的身家全都押在这支股票之上，而
在加码之后，我总共持有350股的GEICO股份，成本为10,282美元，到了年
底，这些股票的市值成为13,125美元，超过个人净值的65%。
You can see why GEICO was my first business love. Furthermore,
just to complete this stroll down memory lane, I should add
that I earned most of the funds I used to buy GEICO shares by
delivering The Washington Post, the chief product of a
company that much later made it possible for Berkshire to turn
$10 million into $500 million.
所以大家可以看出GEICO公司可以说是我投资生涯的初恋，还有一点也相当具
有纪念价值的，我买下GEICO大部分的资金是来自于派送华盛顿邮报的收入，
而后来经由Berkshire我靠着华盛顿邮报，将1,000万美元变成五亿美元。
Alas, I sold my entire GEICO position in 1952 for $15,259,
primarily to switch into Western Insurance Securities. This act
of infidelity can partially be excused by the fact that Western
was selling for slightly more than one times its current earnings,
a p/e ratio that for some reason caught my eye. But in the next
20 years, the GEICO stock I sold grew in value to about $1.3
million, which taught me a lesson about the inadvisability of
selling a stake in an identifiably-wonderful company.
可惜的是，在1952年我以15,259美元的价钱将全部的GEICO股份出清，然
后将所得资金投入到西方保险证券公司之上，这项变心的举动，一部份的原因是
因为西方保险证券当时的股价相当吸引人，本益比只有一倍左右，然而在往后的
二十年间，当时被我卖的的GEICO股份的价值却成长到1,300万美元，这样的
结局让我体会到绝对不能卖掉一家明显的好公司的原则。
In the early 1970's, after Davy retired, the executives
running GEICO made some serious errors in estimating their claims
costs, a mistake that led the company to underprice its policies
- and that almost caused it to go bankrupt. The company was
saved only because Jack Byrne came in as CEO in 1976 and took
drastic remedial measures.
1970年代初期，在大卫退休后不久，继任的管理阶层犯了一连串严重的错误，
他们低估了保险理赔的成本，使得公司对外销售保单的订价过低，此举导致公司
几乎面临倒闭的命运，所幸后来由Jack Byrne在1976年接掌公司，并采取紧
急的补救措施后，才使得公司幸免于难。
Because I believed both in Jack and in GEICO's fundamental
competitive strength, Berkshire purchased a large interest in the
company during the second half of 1976, and also made smaller
purchases later. By yearend 1980, we had put $45.7 million into
GEICO and owned 33.3% of its shares. During the next 15 years,
we did not make further purchases. Our interest in the company,
nonetheless, grew to about 50% because it was a big repurchaser
of its own shares.
由于我相信Jack以及该公司原本拥有的竞争优势，Berkshire在1976年下半
年买进大量的GEICO股份，之后又小幅加码，到了1980年底，我们总共投入
4,570万美元取得该公司33.3%的股权，然而在往后的15年内，我们并没有再
增加持股，不过由于该公司不断地购回自家公司的股份，使得我们在GEICO的
持股比例逐渐增加到50%左右。
Then, in 1995, we agreed to pay $2.3 billion for the half of
the company we didn't own. That is a steep price. But it gives
us full ownership of a growing enterprise whose business remains
exceptional for precisely the same reasons that prevailed in
1951. In addition, GEICO has two extraordinary managers: Tony
Nicely, who runs the insurance side of the operation, and Lou
Simpson, who runs investments.
然后到了1995年，我们同意以23亿美元买下另一半原来不属于我们的股份，
这是实在是天价，不过它让我们可以百分之百拥有一家深具成长潜力的企业，且
其竞争优势从1951年到现在一直都维持不变，更重要的是，GEICO拥有两位
相当优秀的经理人，一位是专门负责保险部门营运的Tony Nicely，一位是专门
负责投资部门营运的Lou Simpson。
Tony, 52, has been with GEICO for 34 years. There's no one
I would rather have managing GEICO's insurance operation. He has
brains, energy, integrity and focus. If we're lucky, he'll stay
another 34 years.
52岁的Tony在GEICO任职已有34年了，兼具智能、精力、品格与专注力，
他是我心目中经营GEICO保险部门的不二人选，如果我们够幸运的话，Tony
应该还能再为我们经营GEICO 34年以上。
Lou runs investments just as ably. Between 1980 and 1995,
the equities under Lou's management returned an average of 22.8%
annually vs. 15.7% for the S&P. Lou takes the same conservative,
concentrated approach to investments that we do at Berkshire, and
it is an enormous plus for us to have him on board. One point
that goes beyond Lou's GEICO work: His presence on the scene
assures us that Berkshire would have an extraordinary
professional immediately available to handle its investments if
something were to happen to Charlie and me.
另一方面，Lou在管理投资同样出色，从1980年到1995年的这段期间，GEICO
的投资在Lou的管理之下，年度平均投资报酬率高达22.8%，同期间S&P只有
15.7%，Lou在GEICO所采取谨慎保守、专注集中的投资方式与Berkshire一
致，有他在，对Berkshire来说绝对有相当大的帮助，而他的存在同时也使得
Berkshire可以确保查理跟我本人万一要是有任何突发状况时，能够有一位杰出
的专业人士可以立即接手我们的工作。
GEICO, of course, must continue both to attract good
policyholders and keep them happy. It must also reserve and
price properly. But the ultimate key to the company's success is
its rock-bottom operating costs, which virtually no competitor
can match. In 1995, moreover, Tony and his management team
pushed underwriting and loss adjustment expenses down further to
23.6% of premiums, nearly one percentage point below 1994's
ratio. In business, I look for economic castles protected by
unbreachable "moats." Thanks to Tony and his management team,
GEICO's moat widened in 1995.
GEICO如同过往一般，持续地吸引优良的保户前来，而GEICO的服务也确实令
他们满意，当然订价与提列准备必须适当，但是该公司能够成功的最重要关键，
还在于超低的成本结构，这实在是其它竞争同业远远比不上的，1995年在Tony
与其领导的经营阶层的努力之下，该公司的承保损失与营业费用比率进一步压低
到保费收入的23.6%，比起1994年又低了一个百分点，在商业的世界，我致
力于寻找拥有无可侵犯护城河所保护的企业堡垒，感谢Tony跟他的经营团队，
GEICO周围的护城河又更加宽了许多。
Finally, let me bring you up to date on Davy. He's now 93
and remains my friend and teacher. He continues to pay close
attention to GEICO and has always been there when the company's
CEOs - Jack Byrne, Bill Snyder and Tony - have needed him. Our
acquisition of 100% of GEICO caused Davy to incur a large tax.
Characteristically, he still warmly supported the transaction.
最后让我向各位报告一下大卫的近况，高龄93岁的他，对我而言亦师亦友，到
现在他还是一样关心GEICO的情况，而当公司现任的主管-Jack Byrne、Bill
Snnder与Tony有任何需要他的地方，他都会随时挺身相助，虽然这次的并购
案将使得大卫必须承担大笔的税负，但他还是一样支持这项交易。
Davy has been one of my heroes for the 45 years I've known
him, and he's never let me down. You should understand that
Berkshire would not be where it is today if Davy had not been so
generous with his time on a cold Saturday in 1951. I've often
thanked him privately, but it is fitting that I use this report
to thank him on behalf of Berkshire's shareholders.
自从我认识大卫后，45年以来他一直就是我崇拜的偶像之一，而他确实也从未
让我失望过，大家必须了解如果没有大卫在1951年那个寒冷的星期六慷慨解
说，Berkshire就绝对不可能会有今天的成就，多年来私底下，我已不知感谢他
多少次了，但是今天在这里我觉得应该借着今年的年报代替Berkshire所有的股
东向他致上深深的感谢之意。
Insurance Operations
保险事业营运
In addition to acquiring GEICO, we enjoyed other favorable
developments in insurance during 1995.
除了取得GEICO保险公司全部的股权，1995年我们其它保险事业也都有相当
不错的发展。
As we've explained in past reports, what counts in our
insurance business is, first, the amount of "float" we generate
and, second, its cost to us. Float is money we hold but don't
own. In an insurance operation, float arises because most
policies require that premiums be prepaid and, more importantly,
because it usually takes time for an insurer to hear about and
resolve loss claims.
就像我们在过去年报跟各位解释过的，保险事业最重要的关键，第一是保险浮存
金的数量，第二是它的成本，浮存金是我们持有并非我们所有，保险事业营运之
所以能有浮存金的原因在于大部分的保单都会要求保户必须预付保险费，另外更
重要的是保险公司在被知会并真正理赔之前，通常都要经过好长的一段时间。
Typically, the premiums that an insurer takes in do not
cover the losses and expenses it must pay. That leaves it
running an "underwriting loss" - and that loss is the cost of
float. An insurance business is profitable over time if its cost
of float is less than the cost the company would otherwise incur
to obtain funds. But the business has a negative value if the
cost of its float is higher than market rates for money.
通常保险公司实际上收到的保费并不足以支应实际发生的损失与费用，所以大多
会产生承保的损失，而这就是浮存金的成本，长期而言，保险公司的浮存金成本
若能低于其它资金管道所需的成本就算是获利，但是要是其浮存金成本高于货币
市场利率的话，其是否有存在的价值就有疑问。
As the numbers in the following table show, Berkshire's
insurance business has been a huge winner. For the table, we
have calculated our float - which we generate in exceptional
amounts relative to our premium volume - by adding loss reserves,
loss adjustment reserves, funds held under reinsurance assumed
and unearned premium reserves, and then subtracting agents'
balances, prepaid acquisition costs, prepaid taxes and deferred
charges applicable to assumed reinsurance. Our cost of float is
determined by our underwriting loss or profit. In those years
when we have had an underwriting profit, such as the last three,
our cost of float has been negative, which means we have
calculated our insurance earnings by adding underwriting profit
to float income.
如同下表中的数字所显示的，Berkshire的保险事业大获全胜，表中的浮存金，
系将所有的损失准备、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，相对于我们的保费收入总额，我们的浮
存金部位算是相当大的，至于浮存金的成本则决定于所发生的承保损失或利益而
定，在某些年度由于我们有承保利益，所以换句话说，我们的资金成本甚至是负
的，此时我们的保险事业盈余等于是由原先从浮存金获取的利益再加上承保利
益。
(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%
