原文信息：
- 标题：1994 Annual Meeting
- 发表时间：1994-04-25
- 视频及文字稿：1994 Annual Meeting
- 整理：纪璐，Ponge
About 1994 Annual Meeting</br
关于 1994 年年度会议
(April 25, 1994) Buffett warns that excessive risks in the reinsurance business may not become evident until big problems arise years later, and calls derivatives a dangerous combination of “ignorance and borrowed money.” He and Munger also tell investors why they don’t need to do extraordinary things to get extraordinary results.
(1994 年 4 月 25 日）巴菲特警告说，再保险业务中的过度风险可能要到多年后出现大问题时才会显现出来，并称衍生产品是「无知和借来的钱」的危险结合。他和芒格还告诉投资者，为什么不需要做非凡的事情就能获得非凡的结果。
Berkshire Hathaway Shareholder Letters: 1993 Letter to Berkshire Shareholders
Morning Session</br
上午场 1. Bigger meeting venue needed next year
明年需要更大的会议场地
WARREN BUFFETT: Put this over here.
巴菲特：把这个放在这里。
CHARLIE MUNGER:
WARREN BUFFETT: Am I live yet? Yeah.
巴菲特：我在线吗?是的。
Morning.
早…
AUDIENCE: Morning.
观众：早。
WARREN BUFFETT: We were a little worried today because we weren’t sure from the reservations whether we can handle everybody, but it looks to me like there may be a couple seats left up there.
巴菲特：我们今天有点担心，因为我们不确定，我们场地是不是足够大，但我看可能还有几个座位空着。
But I think next year, we’re going to have to find a different spot because it looks to me like we’re up about 600 this year from last year, and to be on the safe side we will seek out a larger spot.
但我认为明年，我们将不得不寻找一个新的地点。我们今年比去年增加了大约600个座位，为了安全起见，明年我们将寻找一个更大的地点。
Now, there are certain implications to that because, as some of the more experienced of you know, a few years ago we were holding this meeting at the Joslyn Museum, which is a temple of culture. (Laughter)
你们当中一些更有经验的人知道，几年前我们在乔斯林博物馆举行了这个会议，那是一个文化圣殿。(笑声)
And we’ve now, of course, moved to an old vaudeville theater. And the only place in town that can hold us next year, I think, is the Ak-Sar-Ben Coliseum where they have keno and racetracks. (Laughter)
当然，我们现在搬到了一个古老的歌剧院。我想，明年城里唯一能容纳我们的地方是Ak - Sar - Ben竞技场，那里有基诺（注：一种赌博游戏）和赛马场。(笑声)
We are sliding down the cultural chain — (laughter) — just as Charlie predicted years ago. He saw all this coming. (Laughter)
我们的文化品味正在下降——(笑声)——就像查理几年前预测的那样。他预见到了这一切。(笑声)
WARREN BUFFETT: Charlie — I have some rather distressing news to report. There are always a few people that vote against everyone on the slate for directors and there’s maybe a dozen or so people do that. And then there are others that single shot it, and they pick out people to vote against.
巴菲特：查理，我有一些非常令人沮丧的消息要告诉你。总有一些人投票反对董事候选人，也许有十几个人这样做，然后还有一些人是只针对某人投反对票。
And, this will come as news to Charlie, I haven’t told him yet. But he is the only one among our candidates for directors that received no negative votes this year. (Applause).
我还没通知查理这个消息——他是今年我们的董事候选人中唯一没有收到反对票的人。(掌声)。
Hold it — hold it. No need to applaud.
等等，等等。没必要鼓掌。
I tell you, when you lose out the title of Miss Congeniality to Charlie, you know you’re in trouble. (Laughter)
我告诉你们，我“万人迷”的头衔被查理抢去了，你们要有麻烦了。(笑声)
3. Meeting timetable </br
会议日程
WARREN BUFFETT: Now, I’d like to tell you a little bit how we’ll run this. We will have the business meeting in a hurry with the cooperation of all of you, and then we will introduce our managers who are here, and then we will have a Q&A period.
巴菲特：现在，我想告诉你我们今天股东大会的日程。先是在各位的配合下，把股东大会普通流程走完，然后我们会介绍我们的经理，然后我们会有一个问答环节。
We will run that until 12 o’clock, at which point we’ll break, and then at 12:15, if the hardcore want to stick around, we will have another hour or so until about 1:15 of questions.
我们会一直持续到12点，到那时我们会休息15分钟，然后在12点15分继续，预计下午我们会有1个小时左右的时间，问答会在大约1点15分结束。
So, you’re free to leave, of course, any time and I’ve pointed out in the past that it’s much better form if you leave while Charlie is talking rather than when I’m talking, but — (Laughter)
在此期间，你可以自由地离开。当然，如果你在查理发言而不是我发言的时候离开，那样更好。(笑声)
Feel free anytime, but you can — if you’re panicked and you’re worried about being conspicuous by leaving, you will be able to leave at noon.
你们任何时候都可以离席，但如果你感到恐慌，担心离开会惹人注意，你可以选择在中午离开。
We will have buses out front that will take you to the hotels or the airport or to any place in town in which we have a commercial interest. (Laughter)
(会议结束的时候)，门口会有大巴，可以载大家回酒店、去机场或者前往我们位于奥马哈的任何一家子公司。(笑声)
We encourage you staying around on that basis.
不过我们还是希望你们都留下来。
4. Berkshire directors introduced </br
伯克希尔的董事介绍
WARREN BUFFETT: Let’s have the — let’s get the business of the meeting out of the way. Then we can get on to more interesting things.
I will first introduce the Berkshire Hathaway directors that are present in addition to myself and —
First of all, there’s Charlie, who is the vice chairman of Berkshire, and if the rest of you will stand.
We have Susan T. Buffett, Howard Buffett, Malcolm Chase III, and Walter Scott Jr. And that’s it. (Applause)
5. Meeting quorum </br
会议议案
WARREN BUFFETT: Also with us today are partners in the firm of Deloitte and Touche, our auditors, Mr. Ron Burgess and Mr. Craig Christiansen (PH).
They are available to respond to appropriate questions you might have concerning their firm’s audit of the accounts of Berkshire.
Mr. Forrest Krutter, secretary of Berkshire. He will make a written record of the proceedings.
Mr. Robert M. Fitzsimmons has been appointed inspector of election at this meeting. He will certify to the count of votes cast in the election for directors.
The named proxy holders for this meeting are Walter Scott Jr. and Marc D. Hamburg.
Proxy cards have been returned through last Friday representing 1,035,680 Berkshire shares to be voted by the proxy holders as indicated on the cards. That number of shares represents a quorum and we will therefore directly proceed with the meeting.
We will conduct the business of the meeting and then adjourn to the formal meeting — and then adjourn the formal meeting. After that, we will entertain questions that you might have.
First order of business will be a reading of the minutes of the last meeting of shareholders.
I recognize Mr. Walter Scott Jr. who will place a motion before the meeting.
WALTER SCOTT: I move that the reading of the minutes of the last meeting of the shareholders be dispensed with.
WARREN BUFFETT: Do I hear a second?
VOICES: Seconded.
Motion has been moved and seconded. Are there any comments or questions? Hearing none, we will vote on the motion by voice vote. (Laughter)
All those in favor say aye.
VOICES: Aye.
WARREN BUFFETT: Opposed? The motion is carried and it’s a vote.
Does the secretary have a report of the number of Berkshire shares outstanding entitled to vote and represented at the meeting?
FORREST KRUTTER: Yes, I do. As indicated in the proxy statement that accompanied the notice of this meeting that was sent by first class mail to all shareholders of record on March 8, 1994, being the record date for this meeting, there were 1,177,750 shares of Berkshire common stock outstanding, with each share entitled to one vote on motions considered at the meeting. Of that number, 1,035,680 shares are represented at this meeting by proxies returned through last Friday.
6. Directors elected </br
董事会选举
WARREN BUFFETT: Thank you. We will proceed to elect directors.
If a shareholder is present who wishes to withdraw a proxy previously sent in and vote in person, he or she may do so.
Also, if any shareholder that’s present has not turned in a proxy and desires a ballot in order to vote in person, you may do so.
If you wish to do this, please identify yourself to meeting officials in the aisles who will furnish a ballot to you.
Would those persons desiring ballots please identify themselves so that we may distribute them? Just raise your hand.
I now recognize Mr. Walter Scott Jr. to place a motion before the meeting with respect to election of directors.
WALTER SCOTT: I move that Warren Buffett, Susan Buffett, Howard Buffett, Malcolm Chase, Charles Munger, and Walter Scott be elected as directors.
WARREN BUFFETT: Is there a second?
VOICE: Seconded.
WARREN BUFFETT: It’s been moved and seconded that Warren E. Buffett, Susan T. Buffett, Howard G. Buffett, Malcolm G. Chase III, Charles T. Munger, and Walter Scott Jr. be elected as directors.
Are there any other nominations? Is there any discussion? Motions and nominations are ready to be acted upon.
If there are any shareholders voting in person, they should now mark their ballots and allow the ballots to be delivered to the inspector of elections.
Seeing none, will the proxy holders please also submit to the inspector of elections the ballot voting the proxies in accordance with the instructions they have received.
Mr. Fitzsimmons, when you’re ready you may give your report.
ROBERT FITZSIMMONS: My report is ready. The ballot of the proxy holders received through last Friday cast not less than a 1,035,407 votes for each nominee.
That number far exceeds a majority of the number of all shares outstanding and a more precise count cannot change the results of the election.
However, the certification required by Delaware law regarding the precise count of the votes, including the votes cast in person at this meeting, will be given to the secretary to be placed with the minutes of this meeting.
WARREN BUFFETT: Thank you, Mr. Fitzsimmons.
Warren E. Buffett, Susan T. Buffett, Howard G. Buffett, Malcolm G. Chase III, Charles T. Munger, and Walter Scott Jr. have been elected as directors. (Applause)
7. Formal meeting adjourns </br
股东大会普通流程结束
WARREN BUFFETT: Does anyone have any further business to come before this meeting before we adjourn?
If not, I recognize Mr. Walter Scott Jr. to place a motion before the meeting.
WALTER SCOTT: I move the meeting be adjourned.
WARREN BUFFETT: Second?
VOICES: Seconded.
The motion to adjourn has been made and seconded. We will vote by voice. Is there any discussion? If not, all in favor say aye?
VOICES: Aye
WARREN BUFFETT: Opposed say no, the meeting is adjourned. (Laughter)
It’s democracy in Middle America. (Laughter)
8. Berkshire managers introduced </br
伯克希尔的管理者团队介绍
WARREN BUFFETT: Now, I’d like to introduce some of the people that make this place work to you. And if you would hold your applause until the end because there are quite a number of our managers here.
I’m not sure which ones for sure are here, some of them may be out tending the store as well.
But, first of all, from Nebraska Furniture Mart, Louie, Ron, and Irv Blumkin. I’m not sure who’s here, but would you stand please, any of the Blumkins that are present?
OK, we’ve — looks like Irv. I can’t quite see it.
From Borsheims, is Susan Jacques here? Susan? There she is. Susan had a record day yesterday. She just — (applause) — Susan became CEO just a few months ago and she’s turning in records already. Keep it up. (Laughter)
And from Central States Indemnity, we have the Kizers. I’m not sure which ones are here, but there’s Bill Sr., Bill Jr., John, and Dick.
Kizers, stand up. I think I can see him — John.
Don Wurster from National Indemnity.
Rod Eldred from the Homestate Companies.
Brad Kinstler from Cypress, our worker’s comp company.
Ajit Jain, the big ticket writer in the East.
And Mike Goldberg, who runs our real estate finance group and also generally oversees the insurance group. Mike.
Gary Heldman from Fechheimers.
Chuck Huggins from See’s, the candy man.
Stan Lipsey from the Buffalo News.
Chuck’s been with us, incidentally, twenty-odd years. Stan’s been working with me for well over 25 years.
Frank Rooney and Jim Issler from H.H. Brown.
Dave Hillstrom from Precision Steel.
Ralph Schey from Scott Fetzer.
Peter Lunder, who is with our newest acquisition, Dexter Shoe. And Harold Alfond, his partner, couldn’t be with us because his wife is ill.
And finally, the manager that’s been with Charlie and me the longest, Harry Bottle from K&W. Harry, you here? There’s Harry.
Harry saved our bacon back in 19 — what? — 62 or so, when in some mad moment I went into the windmill business. And Harry got me out of it. (Laughter)
That’s our group of managers and I appreciate it if you give them a hand. (Applause)
9. Midwest Express adding flights to Omaha </br
中西部航空公司增加了飞往奥马哈的航班
WARREN BUFFETT: I have one piece of good news about next year for you.
巴菲特：我有一个好消息要告诉你们。
In addition to moving to larger quarters, they’re going to add nonstop air service from New York, Washington, and Los Angeles here in the next few months, Midwest Express.
在接下来的几个月里，中西部航空公司将增加从纽约、华盛顿和洛杉矶到这里的直达航班。
So, I hope they do very well with it and I hope that makes it easier for you to get into town.
我希望能让你更加容易来奥马哈。
10. Q&A logistics </br
问答环节
WARREN BUFFETT: Now, in this — for the next two hours and 15 minutes or so, we’ll have a session where we will take questions.
沃伦·巴菲特：现在，在接下来的两个小时15分钟左右的时间里，我们将有一个会议，我们将回答问题。
We have seven zones, three on the main floor. We’ll go start over there with zone one and work across.
我们有七个分区，主楼有三个。我们从那边的一区开始，然后穿过一区。
On the main floor, if you’ll raise your hand, the person who is handling the mic will pass it to you and we’ll try to not repeat any individual in any one zone till everyone in that zone has had a chance to ask one question. So, after you’ve been on once, let other people get a shot.
在主会场，如果你举手，负责拿话筒的人会把话筒递给你，我们会尽量不重复任何一个区域的任何人，直到该区域的每个人都有机会问一个问题。所以，在你发言一次后，让其他人也有机会发言。
When we move up to the loge, we have one person there and in the case — and then we have three in the balcony, which is essentially full now.
当我们走上平台时，我们有一个工作人员在那里——
And we would, up there, we would appreciate it if you would you leave your seat and go to the person with the mic. It’ll be a little easier in both the loge and the balcony to handle it that way.
如果你能离开座位，走向拿麦克风的人，我们将不胜感激。这样无论是在大厅还是在阳台都会方便一些。
And if you’ll go a little ahead of time, that way if there’s a line of two or three you can you can line up for questions in both the loge and balcony.
如果你们提前一点去，有两三个人排队，你们就可以在大厅和阳台排队提问。
So, whatever you’d care to ask. If you want an optimistic answer you’ll, of course, direct your question to Charlie. If you’d like a little more realism you’ll come to me and — (laughter).
所以，你想问什么都行。如果你想要一个乐观的答案，当然可以直接向查理提问。如果你想要更现实一点的答案，你可以来找我—（笑声）。
11. Derivatives: dangerous combination of “ignorance and borrowed money”</br
衍生品：“无知与借钱”的危险组合
WARREN BUFFETT: Let’s start over in zone 1.
Sometimes we can’t see too well from up here, but —
In fact, I can’t even see the monitor right now, but do we have one over there?
And if you’ll identify yourself by name and your hometown, we’d appreciate it.
AUDIENCE MEMBER: My name is Michael Mullen (PH) from Omaha. Would you comment on the use of derivatives? I noticed that Dell computer stock was off 2 1/2 points Friday with the loss of derivatives.
WARREN BUFFETT: Question is about derivatives. We have in this room the author of the best thing you can read on that. There was an article in Fortune about a month ago or so by Carol Loomis on derivatives, and far and away it’s the best article that has been written.
We also have some people in the room that do business in derivatives from Salomon.
And it’s a very broad subject. It — as we said last year, I think someone asked what might be the big financial story of the ’90s and we said we obviously don’t know, but that if we had to pick a topic that it could well be derivatives because they lend themselves to the use of unusual amounts of leverage and they’re sometimes not completely understood by the people involved.
这是一个非常宽泛的主题。去年有人问我们，1990 年代最大的金融话题会是什么。我说我们显然不知道，不过如果要我们选一个题材，我们会选择衍生品，因为可以通过衍生品使用异常巨大的杠杆，有时候连与衍生品打交道的人都不完全明白衍生品。
And any time you combine ignorance and borrowed money — (laughter) — you can get some pretty interesting consequences. (Laughter)
任何时候你把无知和借钱结合起来，你会得到一些非常有趣的结果，特别是当金额模糊不清的的时候。(笑声)
Particularly when the numbers get vague. And you’ve seen that, of course, recently with the recent Procter and Gamble announcement.
想必你们已经看到宝洁公司最近的做法。
Now, I don’t know the details of the P&G derivatives, but I understand, at least from press reports, that what started out as interest rate swaps ended up with P&G writing puts on large quantities of U.S. and, I think, one other country’s bonds. And any time you go from selling soap to writing puts on bonds, you’ve made a big jump. (Laughter)
我也不知道宝洁公司衍生品的详细情况，但我从媒体报道中得知，宝洁公司从利率掉期协议开始卖出美国和另一个国家的大量的债券的看跌期权。我想还有一个国家的债券写了看跌期权。从卖肥皂到卖债券，这是个很大的转变。（笑声）
And it — the ability to borrow enormous amounts of money combined with a chance to get either very rich or very poor very quickly, has historically been a recipe for trouble at some point.
从历史上看，借大量的钱——有机会迅速变得非常富有或非常贫穷——在某种程度上一直是麻烦的根源。
Derivatives are not going to go away. They serve useful purposes and all that, but I’m just saying that it has that potential. We’ve seen a little bit of that.
I can’t think of anything that we’ve done that would — can you think of anything we do that approaches derivatives, Charlie? Directly?
CHARLIE MUNGER: No. (Laughter)
芒格：不。(笑声)
WARREN BUFFETT: I may have to cut him off if he talks too long. (Laughter)
巴菲特：如果他讲得太久，我可能得打断他的话。(笑声)
Is there anything you would like to add to your already extensive remarks? (Laughter)
巴菲特：你有什么想补充的吗？笑
CHARLIE MUNGER: No. (Laughter)
芒格：没有。(笑声)
WARREN BUFFETT: OK.
沃伦·巴菲特：好的
12. Berkshire participated in Cap Cities stock buyback</br
WARREN BUFFETT: In that case we’ll go to zone 2. (Laughter)
AUDIENCE MEMBER: My name is Hugh Stevenson (PH). I’m a shareholder from Atlanta.
股东：我叫休·史蒂文森，来自亚特兰大。
My question involves the company’s investment in the stock of Cap Cities. It’s been my understanding in the past that that was regarded as one of the four, quote unquote, “permanent” holdings of the company.
根据我的理解，首府/ABC 广播公司是你宣称永久持有的四大公司之一，
So I was a little bit confused by the disposition of one million shares. Could you clarify that? Was my previous misunderstanding — was my previous understanding incorrect? Or has there been some change or is there a third possibility?
所以你出售 100 万股的行动让我很困惑。你能澄清一下吗？是我之前的理解是错误的？或者有一些新变化？还是说有其他解释？
WARREN BUFFETT: Well, we have classified the Washington Post Company and Cap Cities and GEICO and Coke in the category of permanent holdings. But in the case of three of those four, The Washington Post Company, I don’t know, maybe seven or eight years ago, GEICO some years back, and now Cap Cities, we have participated in tenders where the company has repurchased shares.
巴菲特：我们把华盛顿邮报、大都公司、GEICO 和可口可乐公司列为永久持有的类别。但在这四家中有三家，华盛顿邮报可能在七八年前、GEICO 在若干年前，现在是首府/ABC 广播公司，我们都参与了它们股票回购计划中的要约收购。
Now the first two, the Post and GEICO, we participated proportionally. That was not feasible, and incidentally, not as attractive taxwise anymore. The 1968 Tax Act changed the desirability of proportional redemptions of shares, from our standpoint. That point has been missed by a lot of journalists in commenting on it, but it just so happens that the commentary that has been written has been obsolete, in some cases, by six or seven years.
在前两个例子中，也就是华盛顿邮报和 GEICO，我们按比例将股票回售给公司。但是首府广播公司采取以前的回购方式就不可行了，税负也不合算。从我们的角度看，1986 年税法的修改降低了按比例回售股票的可行性，很多评论这件事的报道都忽视了这一点，但这件事就这么发生了，有些评论过时了 6、7 年。
But, we did participate in the Cap Cities tender offer, just as we did in the Post and GEICO. We still are, by far, the largest shareholder of Cap Cities. We think it’s a superbly run operation in a business that looks a little tougher than it did 15 years ago, but looks a little bit better than it did 15 months ago.
我们确实参加了首府/ABC 广播公司的要约收购，就和我们以前参加华盛顿邮报和 GEICO 的股票回购一样，到目前为止，我们依旧是首府广播公司最大的股东。我们认为首府广播公司的运营非常出色，公司面对的环境比 15 年前更困难一点，但表现却比 15 个月前更好一点。
Charlie, you have anything?
查理，你有什么可补充的吗？
CHARLIE MUNGER: Uh, no. (Laughter)
芒格：不。(笑声)
WARREN BUFFETT: He’s thinking it over now though before — (Laughter)
巴菲特：他现在还在考虑呢。(笑声)
13. Unlikely we’d buy company with no current cash flow</br
我们不太可能买下没有现金流的公司
WARREN BUFFETT: Zone 3.
AUDIENCE MEMBER: Good morning. My name is Howard Bask (PH) and I’m from Kansas City. And I’ve got a theoretical value question for you. If you were to buy a business and you bought it at its intrinsic value, what’s the minimum after-tax free cash flow yield you’d need to get?
股东：早上好。我叫霍华德·巴斯克，来自堪萨斯城。我有一个关于如何估值的问题想请教。如果你要购买一项业务，并且是按其内在价值购买的，你需要获得的税后自由现金流的最低收益率是多少？
WARREN BUFFETT: Well, your question is if we were buying all of a business and we’re buying at what we thought was intrinsic value, what was the minimum —
AUDIENCE MEMBER: Correct.
WARREN BUFFETT: — present earning power or what the present — the minimum discount rate of future streams?
AUDIENCE MEMBER: No, what’s the minimum current after-tax free cash flow yield you’d…
股东：不。我想问的是最小的税后自由现金流收益率是多少？
WARREN BUFFETT: We could conceivably buy a business — I don’t think we would be likely to — but we could we could conceivably buy a business that had no current after-tax cash flow. But, we would have to think it had a tremendous future.
巴菲特：我们可能投资一笔生意——我不认为我们这么做的可能性很大——但我们可能买到一个现在没有税后现金流的生意。但是，我们必须认为它有着巨大的未来(才会这么做)。
But we would not find — obviously the current figures, particularly in the kind of businesses we buy, tend to be representative, we think, of what’s going to happen in the future.
我们并没有发现——根据我们目前买进的企业的财务数据，特别是根据当前的财务数据——可以指示企业未来的发展。
But that would not necessarily have to be the case. You can argue, for example, in buying stocks, we bought GEICO at a time when it was losing significant money. We didn’t expect it to continue to lose significant money.
事实未必如此。比如，我们在 GEICO严重亏损的时候收购了它，当时我们预期它不会继续亏损。
But if we think the present value of the future earning power is attractive enough compared to the purchase price, we would not be overwhelmed by what the first year’s figure would be.
如果我们认为未来盈利能力的现值相对于购买价格具有足够的吸引力，我们就不会被第一年的数字所左右。
Charlie, you want to add to that?
查理，你有什么可补充的吗？
CHARLIE MUNGER: Yeah. We don’t care what we report in the first year or two of — after buying anything.
芒格：我们在并购任何公司之后，公司头两年的报表如何我们根本就不在乎。
AUDIENCE MEMBER OFF MIC: (INAUDIBLE) on average over the years (INAUDIBLE).
股东：你用的自由现金流的贴现率是多少？
WARREN BUFFETT: Well, I would say that in a world of 7 percent long-term bond rates that we would certainly want to think we were discounting future after-tax streams of cash at at least a 10 percent rate.
But that will depend on the certainty we feel about the business. The more certain we feel about a business, the closer we are willing to play it.
但是这要看我们对企业有多确定，我们对企业越觉得确定，贴现率越接近最低值。只有在我们对所有的问题都有相当的把握之后才会对一家企业感兴趣，但确定性有不同的程度之分。
We have to feel pretty certain about any business before we’re even interested at all. But there are still degrees of certainty, and —
If we thought we were getting a stream of cash over the next 30 years that we felt extremely certain about, we would use a discount rate that would be somewhat less than if it was one where we thought we might get some surprises in five or 10 years — possibility existed. Charlie?
如果我们觉得对未来 30 年里获得的现金流极其确定，我们对这家公司使用的贴现率，就会比我们认为会在 5 年或 10 年内发生预期外事情的公司，更低一点，这种可能性是存在的。查理？
CHARLIE MUNGER: Nothing to add.
芒格：我没有什么要补充的。
14. Insurance business intrinsic value is well above book value</br
WARREN BUFFETT: OK. Zone 4.
AUDIENCE MEMBER: Maurus Spence from Omaha, Nebraska.
You’ve made comments on several occasions about the intrinsic business value of the insurance operations. And in this year’s report you state that the insurance business possesses an intrinsic value that exceeds book value by a large amount, larger, in fact, than is the case at any Berkshire — other Berkshire business.
I was wondering if you would explain in greater detail why you believe that to be true.
WARREN BUFFETT: Well, I — it’s very hard to quantify, as we’ve said many times in the report. But, I think that it’s clear that even taking fairly pessimistic assumptions, that the excess of intrinsic value over carrying value is higher, by some margin, for the insurance business.
And I think that the table in the report that shows you what our cost to float has been over the years, and also what the trend of float has been over the years, would, unless you thought that table had no validity for the future, I think that that table would tend to the point you in the direction of saying the insurance business does have a very significant excess of intrinsic value over carrying value.
Very hard number to put something on. But — and you don’t want to extrapolate that table out. But I think that table shows that we started with maybe 20 million of float and that we’re up to something close to three billion of float. And that that float has come to us at a cost that’s extremely attractive, on average, over the years.
很难用数据完全解释清楚，但年报里的表格已经足够清晰了。从表里可以知道，我们从 2000 万的浮存金开始发展，现在已经超过 30 亿美金，并且这么多年来，浮存金的成本一直很有吸引力。
And just to pick an example, last year, when we actually had an underwriting profit, the value of that float was something over $200 million. And that figure was a lot bigger than it was 10 years ago or 20 years ago.
举例来说，去年在我们获取承保利润的同时，我们获取的浮存金(投资创造)的价值超过了 2 亿美元，大大多于 10年或 20 年前。
So that’s — that is a stream — last year was unusually favorable, but that is a — that’s a very significant stream of earnings, and it’s one we feel we have reasonably good prospects in. So we feel very good about the insurance business.
不过去年的现金流和经营情况异常的好，我们也对未来保险业务的盈利能力及前景感到非常乐观。
15. Why Berkshire doesn’t split its stock</br
为什么伯克希尔不拆分其股票
WARREN BUFFETT: OK. Zone 5?
AUDIENCE MEMBER: My name is Cy Rademacher (PH) from Omaha.
Is there any point at which your stock would rise to the point where you might split the stock?
股东：我是来自奥马哈的赛·瑞德马赫。你们会不会在伯克希尔股价上升到某个价格的时候，进行拆股呢？
WARREN BUFFETT: Surprise, surprise. (Laughter)
I think I’ll let Charlie answer that this year. (Laughs)
He’s so popular with the shareholders that I can afford to let him take the tough questions. (Laughter)
巴菲特：Woo…惊喜，惊喜(笑声)我还是让查理来回答这个问题吧，他那么受股东欢迎，那我就把困难的问题留给他吧。
CHARLIE MUNGER: I think the answer is no. (Laughter and applause)
芒格：我认为答案是不拆股。(笑声和掌声)
I think the idea of carving ownerships in an enterprise into little, tiny 20 account and I don’t see why there shouldn’t be a minimum as a condition of joining some enterprise. Certainly we’d all feel that way if we were organizing a private enterprise.
我认为把企业所有权分割成 20 美元的一小块的想法几乎是疯狂的。对一个 20 美元的账户去提供服务，是非常低效的。我不明白为什么企业不可以有一个加入投资的最小投资金额？可以肯定的是，如果我们都是私营企业的业主，我们会这么做(设立最小投资金额)。
WARREN BUFFETT: Yeah, we would not carve it up in $20 units.
We find it very — it’s interesting because every company finds a way to fill up its common shareholder list. And you can start with the As and work through to the Zs and you’ll — every company in the New York Stock Exchange, one way or another, has attracted some constituency of shareholders.
巴菲特：对。不应该把股票切成 20 美元的一小块。我们发现这非常有趣——因为每家公司都能找到方法来填满其普通股股东名单。你可以从 a 开始，一直到 z，你会发现，纽交所的每一家公司，都以这样或那样的方式，吸引了一些稳定的股东。
And frankly, we can’t imagine a better constituency than is in this room. I mean, we have — we don’t think we can improve on this group, and we followed certain policies that we think attracted certain types of shareholders and actually pushed away others.
And that is part of our eugenics program here at Berkshire. (Laughter)
坦率地说，我想象不出哪家公司的股东构成会比我们的好——我们认为我们的股东好得不能再好。我们遵循某些政策，我们认为这些政策吸引了某些类型的股东，但实际上也排斥了其他类型的股东。这是我们伯克希尔优生优育计划的一部分。(笑声)
CHARLIE MUNGER: Yeah, just look around this room and as you mingle with one another. This is a very outstanding group of people. And why would anybody want a different kind of a group?
芒格：看看这个房间，看看你们周围，都是多么优秀的一群人啊。为什么会有人想要进行改变呢？
WARREN BUFFETT: Yeah, if we cause — if we follow some policies that cause a whole bunch of people to buy Berkshire for the wrong reason, the only way they can buy it is to replace somebody in this room, or in this larger metaphorical room, of shareholders that we have.
So someone in one of these seats gets up and somebody else walks in. The question is do we have a better audience?
I don’t think so. So I think that — I think Charlie said it very well.
巴菲特：对。如果我们的政策吸引了一些投资者，以错误的理由购买了伯克希尔的股票，同时他们要因此把在座的各位里的某人给替换掉，让在座的一些人起身离开……我认为这样不会给我们带来更好的股东。我觉得查理对这点已经说的很透彻了。
16. Buffett is keeping his private jet</br
巴菲特将保留他的私人飞机
WARREN BUFFETT: Zone 6
AUDIENCE MEMBER: Mr. Buffett, my name is Rob Na (PH) and I’m from Omaha, Nebraska.
My question is, given the recent announcement of Midwest Express and their nonstop jet service between East and West Coasts, will this cut down on your use of “The Indefensible?” (Laughter)
And will you use more commercial air travel?
股东：罗伯·纳来自奥马哈。我的问题是，考虑到中西部航空最近宣布将在东西海岸之间开通直飞航班，这会减少你使用”不可原谅号”吗？(笑声)你会乘坐更多的商务航空吗？
WARREN BUFFETT: This is a question planted by Charlie. (Laughter)
I think you should know, I take it to the drugstore at the moment, and I — (Laughter)
No, it’s just a question when I start sleeping in it at the hangar.
Nothing will cut back on “The Indefensible.” It’s being painted right now, but I told them to make it last a long time.
Charlie, though, was pointing out the merits of other kinds of transportation last night at the meeting of our managers. He might want to repeat those here.
巴菲特：这一定是查理准备的问题。(笑声)我觉得你应该知道，我每天都乘坐它去药店……(笑声)唯一的问题是，你得看我什么时候开始睡在飞机上。没有任何事情能让我减少乘坐”不可原谅号”，现在(飞机名称)已经开始粉刷了，我让工人们让它尽可能刷的保持清晰可见。昨晚和经理们开会的时候，查理指出了乘坐其他交通工具的优点。也许查理可以在这里重复一下。
CHARLIE MUNGER: Well, I just pointed out that the back of the plane arrived at the same time as the front of the plane, invariably. (Laughter)
芒格：我只是指出坐飞机后舱和坐飞机前舱都是同时抵达而已。(笑声)
WARREN BUFFETT: He’s even more of an authority on buses, incidentally, if anybody has his — (Laughter)
巴菲特：顺便说一句，他在公共汽车领域更是专业，如果有人有的话——(笑声)
17. Buffett’s next goal in life</br
巴菲特的下一个人生目标
AUDIENCE MEMBER: Mr. Buffett, my name’s Allan Maxwell from Omaha. I’ve got two questions.
What is your next goal in life now that you’re the richest man in the country?
股东：巴菲特先生，我叫艾伦·麦克斯韦尔，来自奥马哈。我有两个问题。你现在是这个国家最有钱的人，你人生的下一个目标是什么？
WARREN BUFFETT: That’s easy. It’s to be the oldest man in the country. (Laughter and applause)
巴菲特：这个问题很简单，我要成为美国最长寿的人。(笑声&掌声)
18. “Two yardsticks” for judging management</br
评判管理层的“两个标准”
AUDIENCE MEMBER: Secondly, you talk about good management with corporations and that you try and buy companies with good management.
I feel that I have about as much chance of meeting good managers, other than yourself, as I do bringing Richard Nixon back to life.
How do I, as an average investor, find out what good management is?
股东：你尝试发现好的管理层并购买管理良好的公司。就我个人而言，我觉得我遇见像你一样优秀的管理层的概率，就像我把理查德·尼克松复活一样(意思是不可能)。作为一个普通的投资者，我怎么才能知道什么是好的管理层呢？
WARREN BUFFETT: Well, I think you judge management by two yardsticks.
One is how well they run the business and I think you can learn a lot about that by reading about both what they’ve accomplished and what their competitors have accomplished, and seeing how they have allocated capital over time.
You have to have some understanding of the hand they were dealt when they themselves got a chance to play the hand.
But, if you understand something about the business they’re in — and you can’t understand it in every business, but you can find industries or companies where you can understand it — then you simply want to look at how well they have been doing in playing the hand, essentially, that’s been dealt with them.
巴菲特：我们根据两个准绳来衡量管理层。第一是弄明白他们管理的企业到底有多好。我认为你可以通过阅读他们的成就、将他们的成就和竞争对手相比，并看看他们的长期资本配置能力到底如何。你可以从中学习到很多东西。你必须了解他们当时手中到底有怎样的牌。如果你对这家企业有所了解——你不可能理解所有的企业，但可以找到你能理解的行业或公司——那么你就可以看看管理层在利用手里的资源方面有多出色。
And then the second thing you want to figure out is how well that they treat their owners. And I think you can get a handle on that, oftentimes. A lot of times you can’t. I mean it — they’re many companies that obviously fall in — somewhere — in that 20th to 80th percentile and it’s a little hard to pick out where they do fall.
But, I think you can usually figure out — I mean, it’s not hard to figure out that, say, Bill Gates, or Tom Murphy, or Don Keough, or people like that, are really outstanding managers. And it’s not hard to figure out who they’re working for.
And I can give you some cases on the other end of the spectrum, too.
It’s interesting how often the ones that, in my view, are the poor managers also turn out to be the ones that really don’t think that much about the shareholders, too. The two often go hand in hand.
但是，我认为你不难发现，比尔·盖茨，汤姆·墨菲，唐·基奥……或者像这样的人，都是非常优秀的经理人。要弄清楚他们为谁工作并不难，我也可以给你另一些反面的例子。有趣的是，在我看来，管理能力差劲的管理者常常不考虑股东利益。管理能力和对股东态度常常要么都好，要么都差劲。
But, I think reading of reports — reading of competitors’ reports — I think you’ll get a fix on that in some cases. You don’t have to — you know, you don’t have to make a hundred correct judgments in this business or 50 correct judgments. You only have to make a few. And that’s all we try to do.
And, generally speaking, the conclusions I’ve come to about managers have really come about the same way you can make yours. I mean they come about by reading reports rather than any intimate personal knowledge or — and knowing them personally at all.
但是，我认为阅读报告——阅读竞争对手的报告——在某些情况下您会得到一个结论。你不需要在这个行业中做出 100 个正确的判断或者 50 个正确的判断。你只需要做几个，而这就是我们要做的。总的来说，我对管理层的评价和你对管理层的评价来源是一样的，都是来自于阅读报表而不是因为我和他们很熟或者我完全了解他们。
So it — you know, read the proxy statements, see what they think of — see how they treat themselves versus how they treat the shareholders, look at what they have accomplished, considering what the hand was that they were dealt when they took over compared to what is going on in the industry.
And I think you can figure it out sometimes. You don’t have to figure out very often.
所以，去阅读报表吧，看看他们是怎么想的，看看他们是怎么对待自己和股东的，看看他们取得了什么成就，考虑一下他们在接管时所做的事情，并和这个行业的其他公司做对比。我认为有时候能弄明白这些问题就行，用不着次次都能判断。查理？
CHARLIE MUNGER: Nothing to add.
芒格：我没有什么要补充的。
19. How Berkshire keeps great managers</br
伯克希尔如何留住优秀的经理人
WARREN BUFFETT: Ok, we’re back to zone 1.
AUDIENCE MEMBER: Hi there. My name is Lee. I’m from Palo Alto, California.
In meeting Ajit Jain, I’ve been very impressed over the years. And I think I even met his parents once they came from India.
Please comment on your deepest impressions of his personality and managerial skills, and also how you go about exactly keeping somebody who has such fine skills within the fold. He might go to Walt Disney someday and, you know, pull down 200 million.
股东：嗨，我叫李。我来自加州的帕洛阿尔托。这些年来，对于[Ajit_Jain|阿吉特·贾恩]我印象深刻。请对他的人格和管理技能进行一下评论，以及请你谈谈你是如何让那些有能力的人保持这种能力的。我觉得以阿吉特·贾恩的能力，也许有一天他会去迪士尼工作，年薪两亿。
WARREN BUFFETT: Well, if he gets offered 200 million — (laughs) — we may not compete too vigorously at that level. (Laughter)
We basically try to run a business so that — Charlie and I have two jobs. We have to identify and keep good managers interested after we’ve figured out who they are.
And that often is a little different here, because I would say a majority of our managers are financially independent, so that they don’t go to work because they are worried about putting kids through school or putting food on the table. So they have to have some reason to go to work aside from that.
巴菲特：好吧，如果他得到 2 亿美元的工作的话(笑声)，我们可能不会给他这个回报。(笑声)一般而言，查理和我有两个任务：我们得识别出优秀的经理人，并且在找到这些人之后，想办法保持他们的工作热情。因为我们大多数经理人都已实现财务自由，所以要保持他们的工作热情略有点难度——他们不需要为小孩上学的学费、为了赚钱买食物而去上班的，他们去上班是因为除此之外的一些原因。
They have to be treated fairly in terms of compensation, but they also have to figure it is better than playing golf every day or whatever it may be.
在薪酬方面，他们必须得到公平对待，但也要给他们找到比每天打高尔夫球或其他事情更有意思的事。
And, so that’s one of the jobs we have and we basically attack that the same way — we look at what they do the same way we look at what we do.
这是我们的工作之一，我们对待经理人的态度和对我们自己一样。
We’ve got a wonderful group of shareholders. Before I ran this, I had a partnership. I had a great group of partners. And essentially, I like to be left alone to do what I did. I like to be judged on the scorecard at the end of the year rather than on every stroke, and not second guessed in a way that was inappropriate.
我们有一群非常好的股东，在巴菲特合伙基金的时代，我曾有一群非常好的合伙人。实际上，我喜欢很多事情自己干。我喜欢在年底的时候，用我的内部记分卡来评价我自己，而不想在每次挥棒的时候都被人用一种不恰当的方式来评判。
I like to have people who understood the environment in which I was operating.
我喜欢和能理解我经营企业时所处环境的人共事。
And so the important thing we do with managers, generally, is to find the .400 hitters and then not tell them how to swing, as I put in the report.
所以我们对待经理人的重点在于，找到击球率为40%的棒球击球手，然后让他自己决定如何挥棒，而不是在旁边告诉他该怎么挥棒。
The second thing we do is allocate capital. And aside from that, we play bridge. (Laughter)
我们所做的第二件事是分配资金。除此之外，我们还打桥牌。(笑声)
Pretty much what happens at Berkshire.
伯克希尔的情况差不多就是这样。
So, with any of the managers you might name here, we try to make it interesting and fun for them to run their business. We try to have a compensation arrangement that’s appropriate for the kind of business they’re in.
对每一位经理人，我们都努力使他们的企业管理工作变得有趣且开心。我们努力使薪酬安排和经理人所在的企业类型相匹配。
We have no company-wide compensation plan. We wouldn’t dream of having some compensation expert or consultant come in and screw it up. (Laughter)
我们没有全公司范围内的薪酬计划。我们做梦也想不到会有薪酬专家或顾问来把事情搞砸。(笑声)
We try to — some businesses require a lot of capital that we’re in, some require no capital. Some are easy businesses where good profit margins are a cinch to come by, but we’re really paying for the extra beyond that. Some are very tough businesses to make money in.
有些公司需要大量资本，有些不需要。有些企业是很容易就可以赚到利润，只要我们对这些新增的利润进行额外的奖励。而有些企业就很难赚到利润。
And it would be crazy to have some huge framework that we try to place everybody in that — where one size would fit all.
如果想建立一个薪酬框架，把每个人都放进去，这样的薪酬制度就好像给身材不同的人穿同一尺码的衣服，那是疯狂的。
People, generally, are compensated relating in some manner that relates to how their business does as opposed to — there’s no reason to pay anybody based on how Berkshire does, because no one has responsibility for Berkshire except for Charlie and me.
And we try to make them responsible for their own units, compensated based on how those units do.
We try to understand the businesses they’re in, so we know what the difference between a good performance and a bad performance —
我们努力使经理人能对自己管理的企业负责，根据他们所管理的企业的业绩来给他们制订薪酬，同时我们试着去理解他们的企业，这样我们就可以真正区分企业经营业绩的好与坏。
And that’s about — that’s how we work with people.
这就是我们与人共事的方法。
We’ve had terrific luck over the years in retaining the managers that we wanted to retain. I think, largely, it’s because — particularly if they sell us a business — to a great extent, the next day they’re running it just as they were the day before. And they’re having as much fun running their business as I am running Berkshire.
多年以来，我们一直感到很幸运可以留住这些我们希望留住的经理人。我认为这主要是因为他们管理的企业依旧是和我们并购前的一样。他们和我们管理伯克希尔一样，在管理企业的时候得到很多乐趣。
查理，你觉得呢？
CHARLIE MUNGER: Well, I’ve got nothing to add, but I think that concept of treating the other fellow the way you’d like to be treated if the roles were reversed — it’s so simple, when you stop to think about it, but —
芒格：我没什么要特别补充的。不过我觉得，我们的理念就是，假如我们和他们对调位置，我们希望怎么被对待，那我们就怎么对待他们——你只要停下来想一下，就会发现这很简单。
It’s a rare evening when Ajit and Warren aren’t talking once on the phone. It’s more than a business relationship, at least it seems that way to me.
阿吉特（Ajit）和沃伦几乎每个晚上都在通电话。在我看来，这不仅仅是工作关系了。
WARREN BUFFETT: Yeah, well, it is. It will stay that way, too.
巴菲特：的确如此。未来这种关系也会继续保持。
CHARLIE MUNGER: And by the way, we like our businesses — our relationships — to be more than a business relationship
芒格：顺便提一句，我喜欢我们业务上的关系——是一种超越普通商业关系的关系。
WARREN BUFFETT: Charlie and I are very — we basically — it’s a luxury but it’s a luxury that we should try to nurture — we get to work with people we like. And it makes life a lot simpler.
巴菲特：查理和我非常幸运。和自己喜欢的人一起工作是很奢侈的，这种奢侈很值得培育——这使得我们的生活更加简单。
It probably helps in that goal of being the oldest living American, too. (Laughter)
对我成为美国最长寿的人的野心也很有帮助。(笑声)
CHARLIE MUNGER: Yeah, and we tend to like people we admire. (Laughter)
芒格：是的，我们喜欢我们钦佩的人。(笑声)
WARREN BUFFETT: Yeah, who do we like that we don’t admire, Charlie? (Laughter)
巴菲特：说说我们不喜欢的人是谁吧，查理?(笑声)
Start naming names. These people have names. (Laughter)
20. Guinness hurt by weak demand for scotch</br
苏格兰威士忌需求疲软影响了健力士（Guinness ）
WARREN BUFFETT: Zone 2.
AUDIENCE MEMBER: My name is Peter Bevelin from Sweden.
How do you perceive Guinness long-term, economics growth-wise?
股东：我是来自瑞典的Peter Bevelin，你对健力士的长期看法如何？(Arthur Guinness Son&Co.健力士公司，1997 年 Grand Metropolitan和 Guinness 两大公司合并为帝亚吉欧 Diageo。2019 年帝亚吉欧并购四川水井坊。)
WARREN BUFFETT: Fitz — would you repeat that please, Fitz. What was it? What firm growth-wise?
VOICE: Guinness.
AUDIENCE MEMBER: Guinness.
WARREN BUFFETT: Oh, Guinness.
I’m not as much of an expert on Guinness’ products as Charlie is.
巴菲特：在健力士方面，我不如查理，查理才是专家…(笑声)
CHARLIE MUNGER: We approved that. (Laughter)
芒格：我们同意。(笑声)
WARREN BUFFETT: You didn’t hear him. He said, “I approved that.”
沃伦·巴菲特：你没听见。他说：“我同意了。”
I made the decision to buy Guinness and Guinness has — it’s down somewhat from — actually, the price in pounds is about the same but the pound is at about 1.80-something, so we’ve had a significant exchange loss on that.
The — Guinness’ — despite the name — you know, the main product, of course, is scotch. And that’s where most of the money is made, although they make good money in brewing.
巴菲特：实际上是我决定买健力士的。健力士的英镑价格并没有下跌，只是英镑对美元下跌了。英镑兑美元从 1 比 1.8，现在跌到 1 比 1.47 了，所以我们对健力士的投资出现了严重的汇率损失。健力士最主要的产品是苏格兰威士忌，这也是他们最赚钱的业务，也决定了整个公司的业绩。
But, distilling is the main business. And, you know, the usage of scotch, particularly in this country, the trends have not been strong at all, but that was true when we bought it, too.
苏格兰威士忌在一些国家增长一般，在一些国家却增长迅速——在远东的一些国家，苏格兰威士忌卖的越贵，人们就会越尊重你。我搞不懂他们怎么想的，不过我希望这可以持续。(笑声)
There are some countries around the world where it’s grown and there are certain countries where it’s a huge prestige item.
I mean, in certain parts of the Far East, the more you pay for scotch, the better you think people think of you. Which I don’t understand completely, but I hope it continues. (Laughter)
But — the scotch — worldwide scotch consumption has not been anything to write home about.
Guinness makes a lot of money in the business. But, I would not — I don’t see anything in the — in published history that would lead you to believe that the growth prospects, in terms of physical volume, are high for scotch.
The — Guinness itself, the beer, actually has shown pretty good growth rates in some countries. Actually, from a very tiny base in the U.S. as well.
从整个世界看，苏格兰威士忌的消费并没有什么值得大书特书的地方。健力士在他们的领域赚了很多钱，但我在这家公司的历史中没有发现任何证据——能够让人相信苏格兰威士忌的销售量还会大幅增长。健力士啤酒的销量在一些国家增长得很快，实际上美国只占到其国外市场很小的一部分。
But, they will have to do well in distilling or — I mean that will govern the outcome of Guinness.
I think Guinness is well run and it’s a very important company in that business. But, I wouldn’t count on a lot of physical growth.
Charlie, what — any consumer insights?
健力士未来在蒸馏酒领域必须要有好的表现，这决定了它未来的业绩。总的来说，我认为健力士经营的非常好，它也是这个领域中非常重要的公司之一，但我不会期待它在销量上有大的增长。查理，对消费品领域，你有什么高见吗？
CHARLIE MUNGER: No. (Laughter)
芒格：我没有什么要补充的。(笑声)
WARREN BUFFETT: Zone 3.
AUDIENCE MEMBER: Mr. Buffett, my name is Arthur Coleus (PH) from Canton, Massachusetts.
And I’d like to know how you’d respond to the question that my associates ask me when they say that Berkshire Hathaway has been a good investment up to now, but what happens to your investment if, God forbid, something happens to Mr. Warren Buffett?
WARREN BUFFETT: Well, I’m glad you didn’t say Charlie Munger. (Laughter)
No, there — Berkshire will do just fine. We’ve got a wonderful group of businesses.
I’ve told you the two things I do in life. And, in terms of the managers we have, you have to come in and really want to mess it up, I would think. And we don’t have anybody like that, in terms of succession plans at Berkshire.
巴菲特：你没有问查理三长两短，我很开心。(笑声)伯克希尔的表现仍将良好，因为我们有一群很好的企业。我告诉你我做的两件事。考虑到我们现有的经理人，我想若你担心有人继任后会乱来一气，那么尽可放心，伯克希尔的继任者名单中没有这种人。
And then there’s the question of allocation of capital. And, you could do worse than just adding it to some of the positions that we already had.
The ownership is — if I die tonight, the ownership structure does not change. So, you’ve the same large block of stock that has every interest in having good successor management as I would.
I mean, there’s no — there would be no greater interest. And it is not a complicated business. I mean, you ought to worry more about, if you own Microsoft, about Bill Gates, I think, or something of the sort.
还有资本配置方面，我认为如果我们增加新人负责这个工作，表现可能会不如现在。假如我今晚去世，伯克希尔的所有权结构不会改变。你还是会和现在一样，拥有一个像我一样的继任者去保持良好的管理。我认为，我们的业务并不复杂，如果你持有微软的股票，要更加担心比尔·盖茨的身体。
But, this place is, you know, we’ve got a group down here that are running these. You didn’t see me out at Borsheims selling any jewelry the other day. I mean, that’s somebody else’s job. So, I — it is not — it’s not very complicated.
Incidentally, I think I’m in pretty good health. I mean this stuff (Coca-Cola) will do wonders for you if you’ll just try it. (Laughter)
Charlie, do you want to add anything as the —?
在我们伯克希尔，我们有一群人在经营着我们的生意。今天你不会看到我在波仙珠宝店里卖珠宝，因为那是别人的工作。我的工作并不是很复杂。顺便说一下，我身体很好。我建议你尝试一下，这些东西(可口可乐)会给你创造奇迹。(笑声)查理，你有什么要补充的么？
CHARLIE MUNGER: Yeah. I think the prospects of Berkshire would be diminished — obviously diminished — if Warren were to drop off tomorrow morning. But it would still be one hell of a company and I think it would still do quite well.
I used to do legal work, when I was young, for Charlie Skouras. I heard him once say, my business, which was movie theaters like this one, was off 25 percent last year, and last year was off 25 percent from the year before, and that was off 25 percent from the year before, and then he pounded the table and he’d say, “But it’s still one hell of a business.”
芒格：假如沃伦明天早上去世，伯克希尔的前景就会很明显地黯淡下来。但伯克希尔仍然是一家好公司，我们的业绩依旧会很好。我年轻时曾为查理·斯库拉斯(Charlie Skouras)做过法律工作。我听见他说，“我的生意，去年下降 25%，前年下降 25%，大前年也下降 25%“，然后他猛击桌子说，“但它仍然是一个非常好的生意。”
WARREN BUFFETT: It’s not a formula we want to test, incidentally.
巴菲特：我可不认为我们的业绩每年会下降 25%。
CHARLIE MUNGER: No, no. (Laughter)
芒格：这倒是。(笑声)
WARREN BUFFETT: It is one hell of a business that we’ve got here. I mean — and if you saw what happened at Berkshire headquarters, you would not worry as much. There’s very little going on there that contributes to things. (Laughter)
We’re, right now, at our peak of activity. This is it.
22. Easy answer: no reverse split, either</br
我们说了不会拆股，更不会有合股
WARREN BUFFETT: Zone 4.
AUDIENCE MEMBER: First of all, my name is Al Martin (PH) and my wife Terry (PH) is here with me. And I appreciate the invitation to attend this meeting.
I was a little bit dubious and quite excited at that game Saturday night. I didn’t know which side was going to throw the game to the other one. But I did find out at the end.
The first question, actually, was somewhat answered, but not fully. Has the board considered a reverse split? My experience has been that —
股东：我叫 AlMartin，我的妻子 Terry 和我在一起。我感谢你们邀请我参加这次会议。实际上，第一个问题已经得到了某种程度的回答，但还不够全面。董事会是否考虑过合股？
WARREN BUFFETT: Would you like to make that a motion? There was a motion for a reserve — reverse split. (Laughter)
巴菲特：你是想提出一项议案吗？(笑声)
AUDIENCE MEMBER: I would say a two-for-one because if it were three or four-for-one I might end up with no shares. Or fractional shares.
But, anyway, my experience has been that all of the stocks that have split have gone down in the next two or three months or the next two or three years, including one which you are drinking, which is a flat Coke.
Also, I have observed Merck over the last several years to be hitting a low, which split three-for-one.
So, I think that, you know, the reasons for splitting stocks are to make it affordable. I found that every stock I ever bought was never affordable. I found the reason I bought it was because I couldn’t afford not to buy it.
So that’s a different philosophy, I guess, as somewhat shared indirectly with the boards running the stock.
The second question, which is — has to do with —
股东：我会提议 2 股合 1 股，因为如果 3 合 1 或 4 合 1 的话，我可能没有足够的股份(或只有部分股份)。我的经验是，进行股票拆分的公司的股价往往在未来一段时间都下跌，包括你现在正在喝的可口可乐。同时，我观察到默克公司的股价在每股拆分成 3 股后，股价创了新低。所以我在想，拆分股价的原因之一是让大众买得起。……我的第二个问题是……
WARREN BUFFETT: Hope it’s as easy as the first question. (Laughter)
巴菲特：我希望你的第二个问题会比第一个问题简单。(笑声)
AUDIENCE MEMBER: Well, I didn’t want to wait for an answer of the first question for that reason, because it could be complicated and confusing and so forth.
23. Hillary Clinton’s success as commodities trader</br
希拉里·克林顿(Hillary Clinton )：成功的大宗商品交易商
AUDIENCE MEMBER: The second question has to do with, could the board consider looking into a commodity broker, or a lawyer, or both, that could take action similar to Hillary Clinton’s?
I think, you know, making your net worth go up by a factor of five overnight is more than enticing. Some of us might even want to wait for ten months to get a 100-to-1 return on the money.
股东：董事会是否会考虑物色一位商品经纪人、或者律师、或者身兼两者的人，做像类似希拉里·克林顿那样的工作？——一夜之间就让净资产增长 5 倍，那可不是一般的诱人啊。我觉得在做得人当中，有一些人指望着 10个月内赚 100 倍呢。
WARREN BUFFETT: Well, I want to say — I want to say to you, when I saw that 530 percent in one day, it — Charlie has never done that for us.
I mean — (laughter) — it really caused me to reassess succession plans at Berkshire. (Laughter)
And Hillary may be free in a few years. (Laughter and applause)
I hope you’re applauding over her coming to Berkshire, not — but I’ll leave that up — (Laughter)
OK, that was their second question. (Laughs)
巴菲特：我曾在一天内取得过 530%的回报，查理从来没有做到过。(笑声)这真的促使我重新评估伯克希尔的继任计划。(笑声)希拉里·克林顿可能几年后就是自由身了。(掌声)我希望你们鼓掌是希望她来伯克希尔。(笑声)看起来这就是他们的第二个问题。(笑声)
AUDIENCE MEMBER: That was my second question.
Of course, in my experience, it’s been that most of us have thought through this situation and I guess it’s pretty speculative, but I found out that the rules and laws that are made for trading are interpreted rather than enforced. And I think that applied to this particular case, so let’s go on to the third question. (Laughter)
股东：这的确是我的第二个问题。当然，根据我的经验，我们大多数人都已经考虑过这种情况了，让我们继续第三个问题吧。
WARREN BUFFETT: Alright. They’re getting easier. (Laughter)
巴菲特：希望第三个问题会更简单一点。
AUDIENCE MEMBER: This one is real easy. My wife was a collector of Blue Chip stamps for many, many years. And she brought some stamps with her. What should she do with them?
股东：我的老婆收集了很多蓝筹印花公司的印花，她一直带着它们，你觉得她应该怎么办呢？
WARREN BUFFETT: Well, that — we can give you a definitive answer to that. Charlie and I entered the trading stamp business to apply our wizardry to it in what, 1969 or so, Charlie?
巴菲特：我们可以给你一个明确的答案。查理和我进入优惠券这个行业，是大概在 1969 年吧，查理？
CHARLIE MUNGER: Yes.
芒格：是的。
WARREN BUFFETT: We were doing what then, about 110 million?
巴菲特：我们在那之后做了啥？收入大概 1.1 亿？
CHARLIE MUNGER: No, it went up to 120.
芒格：不，最多的时候值 1.2 亿。
WARREN BUFFETT: OK. And then we arrived on the scene and we’re going to do what, about 400,000 this year?
巴菲特：好吧，然后到现在，只剩 40 万？
CHARLIE MUNGER: Yes.
芒格：是的。
WARREN BUFFETT: Yeah. (Laughter)
That shows you what can be done when your management gets active. (Laughter)
巴菲特：哈，那不错。(笑声)这表明了[Management|管理层]开始行动时，会有什么后果。(笑声)
CHARLIE MUNGER: We have presided over a decline of 99 1/2 percent. (Laughter)
芒格：我们只是主导了 99.5%下跌。(笑声)
WARREN BUFFETT: Yeah. Yeah. But, we’re waiting for a bounce — (Laughter)
巴菲特：没错，我们即将迎来一波反弹。(笑声)
I would say this. The trading stamp business, as those of you who have followed all know, it only works because of the float.
I mean, there — a very, very high percentage of the stamps in the ’60s were cashed in. We have some years that we’ve gone up to 99 percent, I believe — we sampled the returns — because they were given out in such quantity.
But, our advice to anyone who has stamps is to save them because they’re going to be collector’s items, and besides if you bring them to us we have to give you merchandise for them.
Tell her to keep them. They’ll do nothing but gain in value over years. (Laughter)
从事印花交易的人都知道，只有在波动的情况下，这项业务才会成功。在 60 年代，有很大一部分印花已经被兑换掉了，那些年我们 99%的印花都被兑换了。那些持有印花是因为相信它们将成为收藏家藏品的人，我们给的建议是保存他们的印花，此外如果你把它们带来给我们，我们还得给你商品。告诉你老婆保留好这些印花，它们以后只会更值钱。(笑声)
25. Stock split wouldn’t raise long-term average price</br
股票拆分不会提高长期平均价格
WARREN BUFFETT: Going back, incidentally, to your point on the split.
巴菲特：顺便再说一下股票拆分的问题。我觉得大多数人认为，股票拆分可以提高股价。
I think most people think that the stock would sell for more money split.
首先，我们认为这并不明智，同时我们认为，这种股价的提高不会长时间持续下去。
A, we wouldn’t necessarily think that was advisable in the first place.
But we — in the second place, we don’t think it would necessarily be true over a period of time.
We think our stock is more likely to be rationally priced over time following the present policies than if we were to split it in some major way.
And we don’t think the average price would necessarily be higher. We think that the volatility would probably be somewhat greater, and we see no way that volatility helps our shareholders as a group.
我们认为遵循现有的政策，比采取大动作拆股，能使我们的股票定价更加合理。同时我们不认为拆股后的股票价格会变得更高，反倒是波动性会有所增大——而波动性对保持股东群的稳定并没有好处。
26. Fed Chairman Greenspan’s actions are “quite sound”</br
美联储主席格林斯潘的行动“相当稳健”
WARREN BUFFETT: Zone 5.
AUDIENCE MEMBER: I am Peg Gallagher from Omaha.
股东：佩格·加拉格尔来自奥马哈。
Mr. Buffett, are you interested in influencing Mr. Greenspan at the Fed to stop raising interest rates?
巴菲特先生，请问你有兴趣对美联储的格林斯潘建议，让他停止加息吗？
WARREN BUFFETT: Well, I wouldn’t have any influence with him. He was on the board of Cap Cities some years ago and I know him a bit. But I don’t think anyone would have any influence with Mr. Greenspan on that point.
巴菲特：我不会对他给他任何建议。若干年前，他曾是首府广播公司(CapCities)的董事会成员，我认识他。但我认为关于加息，没有人能够对格林斯潘先生施加任何影响。
But, I generally think that his actions have been quite sound during his period as Fed chief.
I mean, it’s part of the job of the Fed, as Mr. Martin said many years ago, was to take away the punchbowl at the party, occasionally. And that’s a very difficult, difficult policy to quantify working with markets day-by-day.
总体上，我认为，他在担任美联储主席期间的做法相当明智，正如很多年前马丁先生所言，有时候在派对狂欢时拿走盛满美酒的酒杯，也是美联储职责的一部分。将美联储每天在市场的政策进行量化评价，是很困难的。
And, of course, it’s always been the job of the Fed, basically, to lean against the wind. Which, of course, means if the wind changes, you fall flat on your face. But that’s another question.
当然，美联储的职责一直都是逆周期操作，这就意味着当风向改变时，美联储的措施就会失效。不过那是另一个问题了。
But the — I don’t — I think what he has done is probably been somewhat appropriate. I think he’s probably been surprised, a little bit, as to what has happened with long-term rates as he’s nudged up short-term rates.
格林斯潘的做的基本上是恰当的。我想他在提高短期利率之后，可能会对长期利率的反应有点吃惊。
I think he was hoping that — this is just a guess on my part — that action, sort of early in the cycle on the short-term rate front, would — might make people feel more confident about the longer-term rates and therefore that the yield curve would flatten some. I don’t know that. And, he may have been a little surprised on that.
But it’s not an easy job he has. So, I would not second guess him myself.
Charlie, how do you feel about him?
我认为他可能本来想通过提升短期利率，让大家对长期利率前景更有信心，让收益率曲线更平坦一点。他的工作并不容易，所以，我就不去评论他了。查理，你对格林斯潘先生怎么看呢？
CHARLIE MUNGER: Fine. (Laughter)
芒格：不错。(笑声)
WARREN BUFFETT: Greenspan is safe. (Laughter)
巴菲特：格林斯潘位置安全了。(笑声)
27. Don’t pay attention to what people say about stocks</br
不要在意人们对股票的看法
WARREN BUFFETT: Zone 6.
MILLER: Mr. Buffett, I’m Lee Miller (PH) from St Louis.
股东：巴菲特先生，我是圣路易斯的李·米勒博士。
There was an article in the April 18th Barron’s that attempted to calculate the value behind each Berkshire Hathaway share.
I’m sure you have some views on that and I’d be very interested in your perspective on that issue.
《
WARREN BUFFETT: Yeah, there was an article about a week or so ago in Barron’s. The same fellow wrote an article about four years ago reaching pretty much the same conclusion, and I hope he hasn’t been short in between, but the — (Laughter)
I would say this. It is not the way I would calculate the intrinsic value of Berkshire.
But everyone in securities markets make choices on that. Every day somebody sells a few shares of Berkshire and someone sell — buys — and, you know, they are probably coming to differing opinions about valuation.
I would say that I found it strange that apparently he forgot we were in the insurance business, but that — that’s not — (Applause).
我觉得很奇怪，这位作者似乎忘记我们也有保险业务。（笑声）
It really doesn’t make any difference. I mean, what — we don’t pay any attention to what people say about Coca-Cola stock or Gillette stock or any of those things.
I mean, on any given day, two million shares of Coca-Cola may trade. That’s a lot of people selling, a lot of people buying. If you talk to one person, you’d hear one thing, and you’d talk to another — you really should not make decisions in securities based on what other people think.
随便哪一天，都可能有200万股可口可乐股票被交易，很多人买入，很多人卖出。你问一个人，会听到一种观点；你问另一个人，又会听到另一种观点——在投资中，你不应该根据别人的想法而做出任何决定。
If you’re doing that, you should think about doing something else, because it’s —
A public opinion poll will just — it will not get you rich on Wall Street. So you really want to stick with businesses that you feel you can somehow evaluate yourself.
如果你这么做，就应该考虑改行，因为在华尔街，听大众的观点（去投资）是不可能致富的。所以你必须坚持投资那些你自己可以进行评估的企业。
And, I don’t think — I mean Charlie and I, we don’t read anything about what business is going to be — the economy is going to do, or the market’s going to do, or what anybody —
Anytime I see some article that says, you know, these analysts say this or that about some business, it just — it doesn’t mean anything to us.
查理和我不关注任何关于经济或市场会怎么发展的文章，因为分析师说这说那，对我们毫无意义。
You cannot get rich with a weather vane.
你不可能通过猜测风往哪儿吹而致富。
28. Judge bank stock buybacks on case-by-case basis</br
对具体银行的股票回购的观点
WARREN BUFFETT: Zone 7.
AUDIENCE MEMBER: I’m Edward Barr from Lexington, Kentucky, and I’d like to ask, given the amount of capital in the banking industry, do you think that more banks should be buying back significant amounts of their stock, like SunTrust, versus just the token amounts that they’re buying back or just the authorized amounts?
And then also, related question in banking. Are they — are banks too focused on goodwill amortization when declining to buy other banks for cash, thereby using purchase accounting versus the normal practice in the industry of pooling accounting even when the stock they issue may be depressed or undervalued?
WARREN BUFFETT: Well, the first question about the capital in the industry — that — you really have to look at that on a bank-by-bank basis and there is a lot more repurchasing of shares by banks taking place.
You mentioned SunTrust, but National City is — they bought it back, I think, 5 percent of their — National City of Cleveland — bought back 5 percent of their stock in the first quarter.
你提到了SunTrust，但National City在第一季度回购了5%的股票。
There’s much more repurchasing going on, and that’s simply a judgment call by management that — as to the level of capital they need going forward, and what level of capital enables them to earn the return on equity that they think appropriate and whether they — what they feel like paying for their own shares.
So, I think you have to look at that on case-by-case.
所以我建议你必须分银行来看待回购这件事。
We certainly like it, if we were to own a bank, we would — or own shares in a bank — we would like the idea of the bank repurchasing its stock at a price that we thought was attractive. We would think that they probably knew more about their own bank than some other bank they were going to buy and that if the numbers are right, it’s an attractive way to use capital.
29. We don’t pay attention to accounting of a transaction</br
在交易中，我们不太关心会计处理方式
WARREN BUFFETT: Your second question about goodwill amortization and purchase accounting versus pooling: we care not — at Berkshire, it absolutely makes no difference to us what accounting treatment we get on something. We are interested in the economics of a transaction.
Some banks — some businesses generally, most businesses perhaps — prefer pooling because they don’t like to take a goodwill amortization charge.
一般来说，大多数银行和企业(也许是大多数企业)偏爱使用权益会计法(pooling method)，因为他们不喜欢把商誉费用摊销。
We think our shareholders are smart enough, particularly if we make it clear to them — the accounting consequences — we think they’re smart enough to look through to the economic reality of what Berkshire’s businesses are all about.
我们认为，在我们把会计结果清楚告知的情况下，我们的股东会足够聪明，能够透过报表洞悉伯克希尔的经济现实。
And I think that some managements sell short their own ownership group by doing various kinds of financial acrobatics in order to have the charges come in a certain way rather than, as you point out, often they might be better off buying for cash rather than using their own stock as currency, but they may prefer to use their own stock because they avoid goodwill charges.
有些管理人员会通过利用各式各样的财务技巧粉饰报表，从而出卖自己的股东，以获得一些经济利益。就像你指出的那样，他们更愿意用现金去支付而不是用股份，因为使用股份支付可以避免商誉摊销。
We’ve written a few things on goodwill in the past and past annual reports that might get to that subject.
我们在过去的年度报告中，写过一些可能会涉及到会计政策话题的文章。
We don’t care what accounting — we sort of rewrite the accounting for any business that we’re looking at, because in our heads we want to have, in effect, a standardized way of looking at businesses.
我们根本不关心会计政策——我们在某种程度上重新编写了我们所有公司的财务报表。因为我们希望用一种标准化的方式来衡量企业。
And if one company goes through pooling transactions and another goes through purchase transactions, we’re going to recast them in our own minds so that there is comparability.
如果一家公司使用权益会计法，另一家使用购买会计法，我们就重新将它们的报表按照我们的法子进行重写，以方便比较。
查理？
CHARLIE MUNGER: Yeah, the published accounting results are in accordance with standard convention and they’re a place to start economic analysis. The figures are frequently quite silly on a functional basis. I’m not criticizing accounting conventions except for some. (Laughter)
芒格：公开的会计业绩当然是一个很好的通用的比较标准，这是进行经济分析的出发点。很多财务数字常常会很愚蠢，我对会计标准不予评价。（笑声）
WARREN BUFFETT: Yeah.
CHARLIE MUNGER: But, I think it’s just a place to start thinking about economic reality.
By their nature, they can’t tie perfectly — they can’t even tie very well — to economic reality.
我认为会计数据只是思考经济实质的起点，我认为很多会计数据的本质，并不能很好的体现经济的实质。
WARREN BUFFETT: We regard it is a negative when we find a management that’s preoccupied with accounting considerations. But, we find it so frequent that we can’t afford to use it as a total exclusionary factor.
It really surprises me how many managements focus on accounting, and the time they spend on it, the — it’s really unproductive.
我真的很吃惊，竟然有这么多的经理把注意力放在会计政策上，浪费在会计政策上的时间根本不会有任何收益。
If you find a management that doesn’t care about the accounting but does explain to you in clear terms what’s going on, I think you should regard that as a plus in owning a security.
如果管理层不关心会计政策，但却能清楚地解释公司在做什么，这就是一个积极的因素。
30. Buffett praises new Salomon Brothers management</br
WARREN BUFFETT: Zone 1.
AUDIENCE MEMBER: Mr. Buffett, my name is Bill Ackman. I’m from New York City. And my question relates to the appeal of Salomon Brothers as an investment.
You talked earlier about leverage and the dangers of leverage. Salomon is a business which is levered 30-to-1, which has very narrow margins, and earns a relatively modest return on equity, in light of the amount of leverage that they use. What is the appeal of the business to you?
WARREN BUFFETT: We have here today the chief executive of Salomon, Inc., the parent company, and also the chief executive of Salomon Brothers, the investment banking arm.
And, I would say one of the things we — Charlie and I — feel extraordinarily good about are the two fellows that are running that operation. They did an exceptional job under extraordinarily difficult circumstances, as did John Macfarlane, who’s also here today.
查理和我都觉得他们管理得非常好，他们在极其困难的环境下取得了极好的成绩，还有约翰·麦克法兰(John Macfarlane)，他今天也在这里。
The three of them — I mentioned four people in the annual report — and Salomon wouldn’t be here today without those three. And it wouldn’t be the company in the future that it’s going to be without them. They did an absolutely fabulous job.
没有这三位管理人，所罗门公司不可能活到现在，也不会有今天和美好的未来。他们做了非常出色的工作。
It’s the sort of business that, as you point out, uses a lot of leverage. It doesn’t — in one way it doesn’t use as much as it looks like and in another way it uses even more than it looks like.
But — it — the test will be: A, whether they control that business in a way that that leverage does not prove dangerous, and secondly, what kind of returns on equity they earn while using it.
You certainly should expect to earn somewhat higher returns on equity when you are necessarily exposed to a small amount of systemic risk and significant amounts of borrowed money, than you would in a business that’s an extremely plain vanilla business.
当你必须面对少量的系统风险和大量的借款时，你当然应该期望获得更高的ROE，这当然应该比你在一个非常普通的行业中期盼的要高。
But, I don’t know whether you’ve met Bob and Deryck, but, I think you’d feel better about having a leverage in their hands than about any other hand you can imagine.
我不知道你们有没有见过鲍勃·德纳姆(Bob Denham)和德瑞克·毛姆(Deryck Maughan)。我认为，在管理杠杆方面，没有谁能比他们更让人放心的。
查理？
CHARLIE MUNGER: Why don’t we have those three gentlemen stand up?
芒格：为什么不让这三人起立呢？
WARREN BUFFETT: Yeah, you ought to give them a hand.
CHARLIE MUNGER: They really have done a job for Berkshire in this last year.
WARREN BUFFETT: Yeah, I’ll lead the applause for them. Where are they? There they are. (Applause).
巴菲特：你们在哪里？（掌声）
I mentioned this before, but it’s worth mentioning again. Deryck took on the job of being the operating head of Salomon Brothers on what, August 18th, 1991.
He didn’t know what — he couldn’t know what he was getting into, exactly. He — two months later or three months later, we’d never had a conversation about compensation. He did not ask me for Berkshire, or my, guarantee for indemnification because he was walking in not knowing legal problems. We didn’t know what we would finally uncover.
And he worked incredible hours to keep that place together, which was not easy.
我之前提到过，这里值得再说一次，德瑞克从1991年8月18日起开始负责管理所罗门兄弟公司的运作，他当时并不知道他要接管的是什么样的公司。在那两三个月后，我们还没有谈过他的薪酬。他没有因为他接掌的是一家有未知法律问题且前途未卜的公司，而问过伯克希尔或我对他有什么保证或补偿。他夜以继日地工作，使得公司能维持下去，这可不是件容易的事情。
Bob Denham, I called — I guess on the 23rd or so, 20th. I called him on a Friday. I got home on a Saturday, the 24th of August.
He was living a nice pleasant peaceful life in California. And had a first class law firm, a good group of clients, wife had a good job there.
And I told him I was in a mess and there wasn’t any second choice and three days later he was back in New York and living in a small apartment in Battery City and handling the general counsel’s job at Salomon.
我想应该是在8月24日，一个周五的晚上，我打电话给鲍勃·德纳姆。当时他在加利福尼亚州过着舒适、愉快而平静的生活，他拥有一家一流的律师行、一群很好的客户，他的妻子在加州也有一份很好的工作。我告诉他，我遇到麻烦了，而且除了他没有第二人选。三天后，他就搬到纽约，住进了巴特里公园城的一套小公寓，担任所罗门公司的总顾问。
They found John Macfarlane on that Sunday, on the 18th. I think he was running a triathlon or something.
Not a practice that Charlie and I follow, but, ah — (Laughter)
And he was yanked from that and came down, and I think John was over in New Jersey, but he holed up in the Downtown Athletic Club. And it was his job to keep funding what was then $150 billion balance sheet during a period when people right and left were canceling.
他们在星期天找到了约翰·麦克法兰，我想应该是8月18日吧，当时他在参加铁人三项全能赛——这种运动可不是查理和我所能参加的。（笑声）我们硬生生地把他从比赛中拽了出来，我以为约翰当时在新泽西，但当时他却躲在市中心运动员俱乐部里。他的工作是在周围的人都在取消和我们的业务的时候，保持1,500亿美元规模的资产负债表的资金链不断裂。
It’s not because we weren’t a good credit, but because they just didn’t want to have anything to do with us for a while.
And the World Bank and the State of Texas pension fund and CalPERS, all these people were shutting off funding at a time — and funding in a business is — gentleman just indicated — is the lifeblood of an enterprise like Salomon.
And so those three deserve an enormous hand by — really by the Salomon shareholders — but by this group in turn because we have an important investment. So I thank them publicly. (Applause)
周围的人不和我们做生意并不是因为我们的信用差，只是因为他们在那段时间不想和我们有任何关系。世界银行、养老金基金都停止向我们提供资金，资金是这家企业的生命血液。这三个人理当受到热烈的鼓掌。（掌声）
31. Wesco sold small savings and loan as regulations tightened after crisis</br
随着危机后监管收紧，韦斯科金融出售了小额储蓄和贷款业务
WARREN BUFFETT: Zone 2.
AUDIENCE MEMBER: I’m Kelly Ranson from San Antonio, Texas.
股东：我是来自德克萨斯州圣安东尼奥的凯莉·兰森。
And I wondered if you could comment on the Mutual Savings and Loan. There was just a footnote that the deposits have been assumed by a federal savings bank.
我想知道你能否就共同储蓄贷款公司（Mutual Savings and Loan）发表一下意见。有评论说说存款是由联邦储蓄银行所假定的。
And also, what about the annual report for Wesco Financial that I know it used to be in the annual report for Berkshire. Just wondered if you could comment on that, please.
WARREN BUFFETT: The question is about — we — our 80 percent-owned subsidiary Wesco Financial sold its ownership in Mutual Savings and Loan of Pasadena last year. I’ll let Charlie comment on that.
And then the second question is about the Wesco report, which is available to any Berkshire shareholder simply by writing Wesco. But, we found that the stapling problems and other things made it a little difficult to keep adding that every year to the report. So, now we just — we make it available to anyone who would, at Berkshire, who would like to have it.
第二个问题是关于韦斯科金融公司的报告，伯克希尔哈撒韦的任何股东需要韦斯科金融公司的报告，是都没问题的。但是，我们今年发现了一些装订和年报编辑上的问题，使得每年在报告中继续添加这些内容变得有点困难。所以，我们只是会把它提供给在伯克希尔里任何想要它的人。
But Charlie, want to comment on the sale of Mutual?
查理，对于出售共同储蓄贷款公司，你有什么评论吗？
CHARLIE MUNGER: Yes. The savings and loan business became very much more heavily regulated after the huge nationwide collection of scandal and insolvency and so on.
芒格：在全国范围内发生了大量的丑闻和资不抵债等事件之后，存贷款业务受到了更加严格的监管。
And meanwhile, we had a very small savings and loan association. And the combination of the new regulation, and the fact that it was a very small part of our operation, made us decide that we were better off without it.
同时，我们有一个非常小的储蓄和贷款协会。根据新的法律规定，以及它只是我们经营业务很小一部分的事实，我们决定出售它，我相信我们会更好。
That does happen from time to time in Berkshire. We do exit once in a while.
在伯克希尔，这种情况时有发生。我们偶尔会退出一项业务。
And, by the way, we would reserve the right to change our mind. I always liked Lord Keynes when he said that he got new facts or new insights, why he changed his mind and then he’d say, what do you do? So we changed our mind.
顺便说一下，我们保留改变主意的权利。我曾经很喜欢凯恩斯爵士，特别是当他说他有一些新的见解的时候。但当他的见解能力消失后，我们改变了主意。
WARREN BUFFETT: They start — they asked our directors at Mutual to start going to school on Saturday, didn’t they, Charlie? Or something? I think that helped change our mind about Mutual.
巴菲特：是因为他们让我们在共同储蓄贷款公司的董事周六开始参加培训，查理？还是什么？我认为这改变了我们对共同储蓄贷款公司的看法。
CHARLIE MUNGER: There’s a time to vote with your feet. (Laughter)
芒格：是时候用脚投票了。(笑声)
WARREN BUFFETT: And even your wallet.
巴菲特：甚至还有你的钱包。
32. Shoe industry is tough, but Dexter has great managers</br
制鞋业是艰难的，但德克斯特（Dexter ）有伟大的经理人
WARREN BUFFETT: Zone 3.
AUDIENCE MEMBER: (Inaudible) Chicago. Can you speak to some of the economic characteristics of the shoe industry that allow the business to be profitable and, in your view, attractive?
股东：你可以评价一下制鞋行业的优点吗？你为什么会觉得这个行业有吸引力呢？
WARREN BUFFETT: I didn’t hear that. Did you hear that, Charlie?
CHARLIE MUNGER: He wanted you to comment on the merits of the shoe industry.
WARREN BUFFETT: Well, I think our feelings for the shoe industry are very clear from what’s been happening the last few years.
We think it’s a great business to be in as long as you’re in with Frank Rooney and Jim Issler and Peter Lunder and Harold Alfond. Otherwise, it hasn’t been too good.
巴菲特：我们对制鞋行业的情况很清楚，只要有弗兰克·鲁尼(Frank Rooney)、哈罗德·阿方德(HaroldAlfond)和彼得·伦德(Peter Lunder)这几位打理，德克斯特就是很值得投资的好公司。
The — we have a couple of extraordinary shoe operations, but they’re not extraordinary because we get our leather from different steers or anything of the sort.
我们有两家非常好的制鞋公司，但因为我们的皮革来源等问题，现在这些公司还没有体现出优势。
It’s — we have two companies, really three now that Lowell’s been brought in, too, but that have truly extraordinary records. I think those same managements would have been enormous successes in any business they’d gone into.
我们有两家公司，在购入洛威尔公司（Lowell‘s）后，现在实际上是三家，我认为它们都有非常出色的业绩。我认为这几个管理人员，不管在什么行业都能取得巨大的成功。
But, they have gone into the — they are in the shoe business and the companies earn unusual returns on equity. They earn unusual returns on sale. They’ve got terrific trade reputations.
And I think that to the extent we can find ways to expand in the shoe business while employing those managements, we’ll be very excited about doing so.
他们的公司ROE和利润回报都非常棒，而且在行业内有很好的名声，若这些公司能在这些管理人员的领导下，找到扩张制鞋行业的新途径，我们将会拭目以待。
It isn’t because we think that the shoe industry is any cinch, you know, per se, or anything of the sort. But we’ve got a lot of talent employed in the shoe business and whenever we’ve got talent we like to try and figure out a way to give them as big a domain as we can.
这并不是因为我们认为制鞋业本身肯定会繁荣或者别的什么原因，这只是因为我们在制鞋公司里有很多人才。不管何时，只要我们得到人才，我们总是尽可能地给他们舞台发挥。
And it’s not inconceivable that we would expand the shoe business, perhaps even significantly over time.
我们扩张制鞋公司并非不可想象，从长期看，这块业务甚至会有很显著的扩张。
33. Buffett on investing in tobacco companies</br
巴菲特对投资烟草公司的看法
WARREN BUFFETT: Zone 4.
AUDIENCE MEMBER: Yeah, thanks Mr. Buffett. My name is Stewart Hartman from Sioux City. After the brevity of the last question from section 4, I’ll try to be extremely brief.
The — given the scrutiny that the tobacco business is going under right now, number one, what do you see as the business prospects for those huge cash cows? And, at any point, would that be attractive to you given their liability?
股东：我是苏城的斯图尔特·哈特曼。你对烟草行业以及烟草行业中的这些巨型现金牛怎么看？这些公司在某个时间点会吸引你吗？
WARREN BUFFETT: The question is about the future of the tobacco business?
I don’t — I probably know no more about that then you do because it’s fraught with questions that relate to societal attitudes and you can form an opinion on that just as well as I could.
巴菲特：我在这方面知道得可能并不比你多，至于社会各界对烟草的态度，你在这方面的了解应该不比我少。
But, I would not like to have a significant percentage of my net worth in the tobacco business myself, but —
They may have better futures than I envision. I don’t really think that I have special insights on that.
但我不会把自己很大百分比的净值投入烟草行业，烟草行业的未来可能比我预期的好，我不认为我在烟草方面有什么特别的洞察力。
Charlie, you —?
查理，你——？
CHARLIE MUNGER: No.
芒格：我没啥要说的。
WARREN BUFFETT: You have to come to a conclusion as to how society is going to want to treat — and the present administration for that matter. And the economics of the business may be fine, but that doesn’t mean it has a great future.
巴菲特：你必须对社会以及本届政府将会怎样对待烟草有个看法。目前烟草公司的经济情况可能良好，但这并不意味着烟草公司前程似锦。
34. “Hard to argue with the market”
“
你很难和市场争辩”
WARREN BUFFETT: Zone 5.
AUDIENCE MEMBER: I’m Harriet Morton from Seattle, Washington.
股东：我是哈里特·莫顿，来自华盛顿。
I’m wondering, when you are considering an acquisition, how you look at the usefulness of the product?
我想知道，当你考虑收购时，你是如何看待产品的实用性的?
WARREN BUFFETT: In looking at any business?
AUDIENCE MEMBER: Yes.
WARREN BUFFETT: Yeah. Well, obviously we look at what the market says is the utility. And the market has voted very heavily for Dexter Shoe, just to be an example.
巴菲特：显然我们要看看市场是怎么看产品的实用性的。比如市场就非常喜欢Dexter鞋业的鞋子。
I don’t know many how many pairs of shoes they were turning out back in 1958 or thereabouts, but year after year, people have essentially voted for the utility of that product.
我不知道1958年前它们生产了多少双鞋，但年复一年过去了，人们都很喜欢它们的鞋子。
There are 750 million or so 8-ounce servings of one product or another from the Coca-Cola Company consumed every day around the world. And there are those of us who think the utility is very high. I can’t make it through the day without a few. But there are other people that might rate it differently.
每天在全世界各地，人们都要消费7.5亿吨的可口可乐。包括我们在内，许多人认为可乐的实用性非常高。像我自己，我每天都要消费很多罐。但总有些人，有不同的评价。
But essentially, people are going to get thirsty and if this is the way they take care of their thirst better than — and they prefer that to other forms — then I would rate the utility high of the product. But, I think it’s hard to argue with the market on that.
一般来说，人们总会感到口渴，如果喝可乐就是是他们解决口渴的方式，同时他们喜欢这种方式，而不是其他形式，那么人们就会给产品的效用打高分。但是，我认为这一点很难与市场争辩。
I mean, people — some people may think that, you know, listening to a rock concert is not something of high utility. Other people might think it’s terrific.
就像有些人可能会认为，听摇滚音乐会并不是很有用。但其他人可能会觉得这很棒。
And so, we would judge that — I don’t think we would come to an independent decision that there was some great utility residing in some product that had been available to the public for a long time, but that the public and not endorsed in any way.
我不认为我们会做出一个独立的决定——在某些产品中，巨大的实用价值已经在公众面前持续了很长一段时间，但公众对这些产品却没有任何认同。
查理？
CHARLIE MUNGER: Well, I think that’s right. But, that’s averaged out.
We’re in a bunch of high-utility products. I mean, nurses’ shoes, work shoes, casual shoes. We don’t have a lot of, what, Italian pumps? (Laughter)
芒格：我认为这是对的，这就是取一个平均水平。我只是说，如果你认为现有的投资产品组合，意味着未来就会是什么样……
WARREN BUFFETT: Don’t rule it out, Charlie. We may be here next year defending it. (Laughter)
巴菲特：别排除这种可能性，查理。我们明年可能会在这里为它辩护。（笑声）
CHARLIE MUNGER: Yeah, right, well.
No, I’m just saying, if you judge the existing portfolio as indicating what the future’s likely to be like, why —
是的，对，好吧。我只是说，如果你认为现有的投资产品组合，意味着未来就会是什么样……
WARREN BUFFETT: Well, certainly a lot of essentials were sold out of Borsheims yesterday.
CHARLIE MUNGER: Yes. (Laughter and applause)
芒格：没错。（掌声&笑声）
WARREN BUFFETT: I hear my family clapping.
35. No question from zone 6</br
第六区没有提问
WARREN BUFFETT: Zone 6.
VOICE: We have no question up here.
36. Insurers have “head in the sand” on catastrophes</br
保险公司不能“逃避现实”
WARREN BUFFETT: OK, zone 7.
WARREN BUFFETT: I have a niece here who has a son named Berkshire so it —
AUDIENCE MEMBER: I’m Chris Blunt (PH) from Omaha.
My first question is, in years past, we’ve had samples of various products. When are we going to have some Guinness?
WARREN BUFFETT: Some what now?
AUDIENCE MEMBER: Guinness samples?
WARREN BUFFETT: (Laughs)
AUDIENCE MEMBER: And my second question is, in light of the multiple disasters that have taken place in LA, has that had any impact on the cats for Berkshire?
股东：洛杉矶遭遇了两场灾害，有没有对伯克希尔的“霹雳猫”巨灾保险造成冲击呢?
WARREN BUFFETT: On our super-cat business?
AUDIENCE MEMBER: Yes.
WARREN BUFFETT: The LA earthquake, which is originally — I believe the first estimate of insured damage was a billion-five, which struck us as kind of ludicrous, but has now escalated.
巴菲特：我认为，洛杉矶地震造成的保险损失的初步估算是15亿美元，我们觉得这个数字不可信，因为实际损失要更严重。
The last official estimate, the one we use that’s a trigger in our policies, I think is either 4.5 billion or 4.8 billion. But it’s going to be higher than that.
不过我们承保的保单的起赔点是45亿至48亿美元，实际损失应该比这更高。
Our losses are fairly minor. If it gets to eight billion of insured damage, that would trigger another policy or two. But, I would say that the LA quake — which did considerably more damage, I think, than people would have anticipated from a 6.7 for various reasons having to do with how quakes operate — that quake is not going to turn out to be of any real — it’s not the kind of super-cat that a 15 or $20 billion hurricane which hit Florida or Long Island or New England would be.
我们的损失非常小，不过如果有80亿美元的保险损失，就会触发另外一两种巨灾保险。洛杉矶的地震虽然造成的损失比预期的6.7级地震大得多，但这并不是像飓风袭击佛罗里达、长岛或新英格兰那样造成超过150亿美元损失的重大事件。
That’s the kind of — we could lose — or we could pay out — 6 or $700 million in sort of a worst case super-cat. Now our total premiums this year might be, say, 250 million or something in that area.
So one super-cat in the wrong place would produce — and there could be more than one — could produce, we’ll say, a $400 million or thereabouts underwriting loss from that business.
在最严重的情况下，我们可能要支付6亿至7亿美元，而今年我们在这个区域收取的保险费可能有2.5亿美元。所以说，在未预料到的地区发生异常巨灾，可能会祸不单行，可能会给巨灾保险业务带来4亿美元的保险损失。
The LA quake is peanuts on that scale, but it wouldn’t have taken a whole lot more in terms of numbers on the Richter scale, if it happened to have an epicenter where it did, and be of the type that it was, relatively shallow, that we could have had that sort of thing happen.
从规模上说，洛杉矶地震小得像花生米。但是，如果震源较浅，用不着更大的里氏震级，也能造成巨灾，这种情况也是有可能发生的。安德鲁飓风和洛杉矶地震远远算不上是最糟糕的情况。
I think that the insurance industry has vastly underestimated — maybe not now, but up till a few years ago — the full potential of what a super-cat could do. But Hurricane Andrew and the LA quake may have been something of a wake-up call.
They were far from a worst-case situation. A really big Type Five hurricane on Long Island would end up leaving a lot of very major insurance companies in significant trouble.
We define our losses — essentially, 700 million sounds like a lot of money. It is a lot of money. But, there are limits on our policies. That is not true of people that are just writing the basic homeowners or business. Those losses could go off the chart.
我认为保险业大大低估了巨灾可能造成的危害，安德鲁飓风和洛杉矶地震可能会唤醒他们。不过这一次远远称不上是最糟糕的，假如一场5级大型飓风登陆长岛，不少大型保险公司就会有大麻烦。我们的损失是有上限的，这个数字差不多是7亿美元，这听起来是很大一笔钱，的确是很大一笔。我们的保险单上设置了理赔的上限，但是那些保险公司卖给房屋业主或企业的保单却没有设置上限，他们的损失可能超出预期。
There were certain companies in the LA quake that thought they had a — what they call a “probable maximum loss” for California quakes. And the LA quake, which was far from the worst case you can imagine, turned out to far exceed those probable maximum losses.
So, I think the industry has had, and may still have, its head in the sand a little bit, in terms of what can happen, either in terms of a quake in California or, more probably, in terms of a hurricane along the East Coast.
有一些公司在洛杉矶板块上卖保险，自以为有所谓的加利福尼亚州地震损失可能的最高值。洛杉矶地震虽然远远称不上是最糟糕的场景，但依旧超出了那些可能的最高损失。所以我认为，巨灾保险行业以前采取鸵鸟政策——现在依旧还是把脑袋埋在沙里（意思是逃避现实），他们对加利福尼亚州发生地震和东海岸遭遇飓风的可能性都视而不见。
So far this year we’re in reasonable shape, but that doesn’t mean much because, by far, the larger exposure is in hurricanes and essentially 50 percent of the hurricanes hit in September. And about — I think it’s about 15 percent would be in August. Close to 15 percent in October. So you have 80 percent, roughly, in those three months and there’s a little tail on both sides.
今年到目前为止，我们的情况很合理，但因为我们还有飓风风险，所以目前的情况尚不能说明什么。我记得，50%的飓风发生在9月份，8月份和10月份各有15%，所以大约80%的飓风会在8至10月份中发生。等这三个月过去了，我们就会知道巨灾保险今年是好年景还是差年景。
But that’s when you find out whether you’ve had a good or bad year in the super-cat business, basically.
It’s a business we like at the right rates because there are very few people who can afford to write it at the level that the underlying company, the reinsured companies, need it. And we’re in a position, if the rates are right, to do significant business.
我们愿意从事巨灾保险。只要保险费合适，我们就会放手大干。
查理？
CHARLIE MUNGER: Nothing to add.
芒格：我没有什么要补充的。
37. Book recommendations</br
推荐书单
WARREN BUFFETT: Zone 1,
AUDIENCE MEMBER: Clayton Riley (PH) from Jacksonville, Florida.
股东：莱利，来自佛罗里达州杰克逊维尔。
This is a little different than all the other questions, but what were the three best books you read last year outside of the investment field? Why don’t — even one will do.
在投资领域之外，去年你读到的最好的三本书是哪三本？
WARREN BUFFETT: I’ll give you — I’ll tout a book first that I’ve read but that isn’t available yet. But it will be in September.
The woman who wrote it, I believe, is in the audience and it’s Ben Graham’s biography, which will be available in September, by Janet Lowe. And I’ve read it and I think those of you who are interested in investments, for sure, will enjoy it. She’s done a good job of capturing Ben.
巴菲特：要吹捧的第一本书我已经读过，但现在还没有上市，会在9月份上市。写这本书的女士今天也在座，这本书就是珍妮特·洛尔所作的本·格雷厄姆的传记。你们喜欢投资，自然也会喜欢这本书。她深得本·格雷厄姆的神韵。
One of the books I enjoyed a lot was written also by a shareholder who is not here because he’s being sworn in, I believe today or tomorrow, maybe tomorrow, as head of the Voice of America.
And that’s Geoff Cowan’s book, which is on “The People v. Clarence Darrow.” It’s the story of the Clarence Darrow trial for, essentially, jury bribery in Los Angeles back around 1912, when the McNamara brothers had bombed the LA Times.
It’s a fascinating book. Geoff uncovered a lot of information that the previous biographies of Darrow didn’t have. I think you’d enjoy that.
另一本书我非常欣赏的书也是股东写的，他今天不在会场,因为他明天就要参加就职典礼，担任美国之音的台长。这本书是杰夫·考恩(Jeff Cowen)所著，书名叫《克拉伦斯.达罗的审判》 (The Trial of Clarence Darrow)。这是1912年克拉伦斯·达罗(美国曾颁布《布特勒法》禁止公立学校讲授进化论，美国民间团体进行诉讼试图废除该法案，史称“猴子审判”，克拉伦斯,达罗是“猴子审判”中民间团体的律师——译者注)因为贿赂陪审团的罪名而在洛杉矶受审的故事。这是一本好书，杰夫挖掘出很多达罗过去的传纪中没有的信息。我想你们也会喜欢的。
查理，你有什么书要推荐的吗？
CHARLIE MUNGER: Well, I very much enjoyed Connie Bruck’s biography Master of the Game, which was a biography of Steve Ross, who headed Warner and later was, what, co-chairman of Time Warner.
芒格：我很喜欢康妮·布鲁克(Connie Bruck)所著的传纪文学《游戏大师》 (Master of the Game)，这本传纪写的是史蒂夫·罗斯(Steve Ross)的故事，此人曾执掌华纳公司，后来担任时代华纳公司的联席董事长。
WARREN BUFFETT: Yeah, he’s a little more than co-chairman. (Laughs)
巴菲特：他可不仅仅是联席董事长。（笑声）
CHARLIE MUNGER: Yeah, and — she’s a very insightful writer and it’s a very interesting story.
芒格：对，康妮是一位非常有洞察力的作家。这是一个非常有趣的故事。
I am rereading a book I really like, which is Van Doren’s biography of Benjamin Franklin, which came out in 1952, and I’d almost forgotten how good a book it was. And that’s available in paperback everywhere. We’ve never had anybody quite like Franklin in this country. Never again.
我正在读一本我很喜欢的书，这本书是范·多伦(VanDoren)所著的本富兰克林的传纪, 1952年出版，平装本到处都可以买到。在这个国家里，从没有人能像富兰克林那样,将来也不会再有。
WARREN BUFFETT: He believed in compound interest, too, incidentally, as you may remember. (Laughter)
What did he — he set up those two little funds, one in Philadelphia, one in Boston?
他开设了两只小基金，一只基金在费城，另一只在波士顿，用来展示复利的优势。
CHARLIE MUNGER: Right.
WARREN BUFFETT: Yeah, to demonstrate the advantages of compound interest. I think that’s the part Charlie’s rereading. (Laughter)
我想查理肯定重读了那一段。（笑声）
38. Nike and Reebok</br
耐克和锐步
WARREN BUFFETT: Zone 2.
AUDIENCE MEMBER: Thank you for teaching me — teaching so much to all of us about business. My name is Mike Assail (PH) from New York City.
股东：谢谢你们教了我们那么多关于商业的知识。我叫迈克·阿塞尔，来自纽约市。
You mentioned earlier that Berkshire’s shoe business was great, but that other shoe businesses were not so good.
What are the uncertainties of the global brand leaders that Berkshire seems to like? They like Coke and Gillette. The global brand leaders in the shoe business being Nike and Reebok.
What are their uncertainties, in terms of long-term competitive advantage, business economics, consumer behavior, and the other risk factors that you mentioned in the annual report this year? Thank you.
WARREN BUFFETT: So, you’re really asking about the future prospects of Nike and Reebok?
Yeah. I don’t know that much about those businesses. We do have one person in this audience, at least, who owns a lot of Reebok.
But I am not expressing a negative view in any way on that. I just — I don’t understand that — I don’t understand their competitive position and the likelihood of permanence of their competitive position over a 10 or 20 year period as well as I think I understand the position of Brown and Dexter.
巴菲特：我对这两家公司不是很了解。现场的观众中有一位先生，是GEICO公司的卢·辛普森(Lou Simpson)，他有很多锐步的股份。我并不是对这两家公司有任何负面的评价，只是不理解它们的竞争优势和在未来10年、20年或30年里竞争优势的持久性如何，但是我理解布朗鞋业(Brown)和Dexter（Dexer是当时巴菲特买下的制鞋公司,现在已倒闭-译者注）。
That doesn’t mean I think that it’s inferior. Doesn’t mean I think that we’ve got better businesses or anything.
这并不是说我认为耐克和锐步不如我买下的企业那么好，虽然我认为我们的制鞋企业是非常好的企业。
I think we’ve got very good businesses. But I — I’m not — I haven’t done the work and I’m not sure if I did the work I would understand them.
我没有分析过耐克和锐步，也不能确定如果我分析的话，是不是会理解它们。
I think they are harder to understand, frankly, and to develop a fix on, than our kinds. But, they may be easier for other people who just have a better insight into that kind of business.
我认为这两家公司比我们的公司更难理解，也更难得出结论。不过对于更加精通制鞋业的人来说，这两家公司可能更容易理解，但这并不意味着我认为我们的企业比别的制鞋企业更好。
39. “You don’t have to do exceptional things to get exceptional results”
”
你不需要做特别的事情就能得到特别的结果”
WARREN BUFFETT: Some businesses are a lot easier to understand than others. And Charlie and I don’t like difficult problems. I mean, we — if something is hard to figure, you know, we’d rather multiply by three than by pi. I mean it’s just easier for us. (Laughter)
Charlie, you have any —?
巴菲特：有些企业比其他企业更容易理解，查理和我都不喜欢艰难的问题。如果某样东西很难懂……我们宁愿用3而不用Π。（笑声）查理，你有啥说的吗？
CHARLIE MUNGER: Well, that is such an obvious point. And yet so many people think if they just hire somebody with the appropriate labels they can do something very difficult. That is one of the most dangerous ideas a human being can have.
芒格：这是非常明显的。有人以为他们雇用一些有头衔的人，就能完成一些非常困难的工作。这是人类所能有的最危险的想法之一。
All kinds of things just intrinsically create problems. The other day I was dealing with a problem and I said, this thing — it’s a new building — and I said this thing has three things I’ve learned to fear: an architect, a contractor, and a hill. (Laughter)
很多事情可能会因增加复杂性而导致问题。有一天我去处理一个问题，那是一栋新楼。我说， “这个问题有三样东西让我害怕——建筑师、承包商和一座山。”（笑声）
And — if you go at life like that, I think you, at least, make fewer mistakes than people who think they can do anything by just hiring somebody with a label.
如果你能这样生活，我认为，比起那些自以为只要雇用一个有适当头衔的人、不管多么复杂的问题都能解决的人，你可以少犯错误。
WARREN BUFFETT: We don’t comment — excuse me, go ahead.
CHARLIE MUNGER: You don’t have to hire out your thinking if you keep it simple.
如果你能保持简单，用不着请你不懂的高人。
WARREN BUFFETT: You don’t have to do — we’ve said this before — but you don’t have to do exceptional things to get exceptional results.
巴菲特：用不着为了获得出色的业绩而去做异常的事。
And some people think that if you jump over a seven-foot bar that the ribbon they pin on you is going to be worth more money than if you step over a one-foot bar. And it just isn’t true in the investment world, at all.
有人认为，如果你能跳过7英尺高的栅栏，就能比跨过1英尺高的栅栏得到更值钱的绥带。可惜在投资界里完全不是这样，在投资界，你可以靠做非常平常的事情发财。
So, you can do very ordinary things. I mean, what is complicated about this? But, you know, we’re $3 billion pretax better off than we were a few years ago because of it.
There’s nothing that I know about that product, or its distribution system, its finances, or anything, that, really, hundreds of thousands — or millions — of people aren’t capable of, that they don’t already know. They just don’t do anything about it.
And similarly, if you get into some complicated business, you can get a report that’s a thousand pages thick and you got Ph.D.s working on it, but it doesn’t mean anything.
You know, what you’ve got is a report but you don’t — it — you won’t understand that business, what it’s going to look like in 10 or 15 years.
如果你进入有点复杂的企业，可能会得到一份1,000页厚的报表，你可能有一个理学博士分析报表。但这并没有任何意义，你得到的只是一份报表，从报表里无法理解那家企业，也不能看出未来10至15年后企业会怎样。
The big thing to do is avoid being wrong. (Laughter)
重要的是避免犯错误。（笑声）
CHARLIE MUNGER: There are some things that are so intrinsically dangerous. Another of my heroes is Mark Twain, who looked at the promoters of his day and he said, “A mine is a hole in the ground owned by a liar.” (Laughter)
芒格：有些东西本质上很危险……我心目中的另一个英雄，马克·吐温说起过他那个时代的促销商。他说:“骗子把自己拥有的土地上的一个洞称为矿井。”（笑声）
And that’s the way I’ve come to look at projections. I mean, basically, I can remember, Warren and I were offered $2 million worth of projections once in the course of buying a business and the book was this thick.
这就是我看待前景预期的态度。我记得，在一桩企业并购交易中，曾有人想让我们花200万美元买份专家的前景预测。
WARREN BUFFETT: For nothing.
巴菲特：其实没有任何价值。
CHARLIE MUNGER: And, if we were given it for nothing, and we wouldn’t open it.
芒格：那本书有这么厚，我们不会翻开看。
WARREN BUFFETT: We almost paid 2 million not to look at it. (Laughter)
巴菲特：我们宁可花200万美元不看这本书。（笑声）
It’s ridiculous. I do not understand why any buyer of a business looks at a bunch of projections put together by a seller or —
CHARLIE MUNGER: Or his agent.
WARREN BUFFETT: — or his agent.
I mean, it — you can almost say that it’s naive to think that that has any utility whatsoever. We just are not interested.
这是荒谬的。我不明白，为什么会有企业并购者去阅读卖方或者卖方的代理人拼凑出来的一堆预测呢？相信卖方的前景预期有任何用处是很天真的，我们对这种东西完全不感兴趣。
If we don’t have some idea ourselves of what we think the future is, to sit there and listen to some other guy who’s trying to sell us the business or get a commission on it tell us what the future’s going to be — it — like I say, it’s very naïve.
如果我们对并购目标的未来心里没数，坐在那里，听卖方的人或想得到交易佣金的人来告诉我们这家企业的未来如何如何，就像我说的那样，很天真。
CHARLIE MUNGER: Yeah, and five years out.
芒格：而且是五年展望！
WARREN BUFFETT: Yeah. We had a line in the report one time, “Don’t ask the barber whether you need a haircut.” And — (laughter) — it’s quite applicable to projections of — by sellers — of businesses.
巴菲特：对。我们在年报里有句话：“不要问理发师你是否需要理发。”（笑声）这句话对卖方的前景预期也很适用。
40. Cutting USAir’s costs will be “enormously tough”</br
缩减全美航空公司的成本会很艰难
WARREN BUFFETT: Zone 3.
AUDIENCE MEMBER: Mr. Buffett, Greg Elright (PH) from Washington, DC.
股东：巴菲特先生，我是来自华盛顿特区的格雷格·埃尔特。
In the last year, United Airlines and Northwest have resolved some of their financial problems by moving ownership over to the employees.
去年，联合航空和西北航空通过将所有权转移给员工，解决了一些财务问题。
With USAir’s current positions — uh, problems — what do you see as occurring with USAir and do you see any movement toward employee ownership? And how will that affect Berkshire’s interest in the company?
目前全美航空面临的问题，你认为全美航空会发生什么?你认为它会朝着员工所有制的方向发展吗?这将如何影响伯克希尔在该公司的利益?
WARREN BUFFETT: USAir has a cost structure which is non-viable in today’s airline business. Now that, in an important way, involves its labor cost, but it involves other things, too. But it certainly involves its labor costs.
巴菲特：全美航空公司(US Air)的成本结构无法在今天的民航业中生存下去，其中主要的问题是劳动力成本问题，当然也有其他问题，但主要是劳动力成本。
And they’ve stated this publicly. And I think — and they have — they are talking with their unions about it and they’re talking with other people about other parts of their cost structure.
And I think you’ll just see what unfolds in the next relatively few months, because there isn’t any question that the cost structure is out of line. I think the cost structure could be brought into line. But whether it will be brought into line or not is another is another question.
该公司已经公开承认这一点，他们正在和工会和其他有关人员讨论这个问题。由于他们的成本结构已经失控，所以用不着几个月，我们会看到结果如何。该公司的成本可以恢复到合理的水平，但会不会恢复是另一个问题。
And, looking backwards, the answer is not to get into businesses that need to solve problems like that. It’s to — but — that was a mistake I made.
回顾(伯克希尔对全美航空公司优先证券的投资)，得出的结论是不应该投资有问题待解决的公司。这是我犯的一个错误，查理和这完全没有关系。
And I think in Seth Schofield you’ve got a manager who understands that business extremely well, who probably is as — in my view, anyway — is as well regarded and trusted by people who are going to have to make changes as anyone could be in that position. But that may not be enough. I mean that — there’s enormous tensions when you need to take hundreds and hundreds of millions of dollars out of the cost structure of any business.
至于塞思·修菲尔德(Seth Schofield)，他非常理解全美航空公司，我认为他很受尊敬和信赖，不管谁坐上他的位置，都将不得不进行改变。但是这可能还不够，当你准备对任何企业几亿美元几亿美元地削减成本时，总是会遇到巨大的阻力。
And when you need cooperative action, all by various groups, each one of which feels that maybe they’re having to give a little more than some other group, and understandably feels that way, you know that is an enormously tough negotiating job.
在你需要很多群体的配合时，每个群体都会认为自己比其他群体牺牲得更多，人们就会觉得不开心，这可是一个非常艰巨的协商工作。
I think Seth is as well-equipped for that as anyone. But I would not want to — you know, I cannot predict the outcome.
我想塞思在这方面不比任何人差。但结果会怎样，我也不能预测。
WARREN BUFFETT: Charlie, do you —?
查理？
CHARLIE MUNGER: Well, if I were a union leader, I would give Seth whatever he wants because he’s not the kind of a fellow who would ask for more than he needs. And, it’s perfectly obvious that’s the correct decision on the labor side. But whether the obvious will be done or not is in the lap of the gods.
芒格：假如我是工会领导人，我就会满足赛思的任何要求，因为我可以信任他，他可不是会提出非分要求的人。劳工方的正确决定是什么非常清楚，不过他们会不会作出这个决定，只有天知道。
WARREN BUFFETT: It’s a lot of people with a lot of different motivations and, I mean, those are really tough questions. I mean, we — Charlie and I’ve been involved in that sort of thing a few times and frequently it works out, but it’s not preordained.
巴菲特：其中涉及到很多人，有很多不同的动机，这是一个艰巨的问题。查理和我也遇到过几次这种问题，虽然通常都能达成谅解，但这不能事先判断。
41. We’re “not in any hurry” to retire</br
我们并不着急退休
WARREN BUFFETT: Zone 4.
AUDIENCE MEMBER: My name is Sheldon Scizick (PH) from Chicago, Illinois. I have two questions.
股东：我的名字是来自伊利诺斯州芝加哥的谢尔顿.齐茨克。我有两个问题。
The first one is concerning Mr. Munger. We know what Mr. Buffett’s retirement plans are. I was wondering what yours — your plans for the future concerning Berkshire are?
CHARLIE MUNGER: I have always preferred the system of retirement where you can’t quite tell from observing from the outside whether the man is working or retired. (Laughter)
芒格：我喜欢这样的退休机制，要让外面的人看不出我退休后仍然在工作。（笑声）
WARREN BUFFETT: He does it well, too. (Laughter)
CHARLIE MUNGER: You know, a problem in many businesses, particularly the more bureaucratic ones, is that your employees retire, but they don’t tell you. (Laughter)
芒格：很多企业，,特别是更官僚制度的企业，都有一个问题，就是员工退休了，但是不公布。（笑声）
WARREN BUFFETT: I think I can speak for Charlie on this one.
Charlie and I are not in any hurry to retire. He’s trying to outlast me, actually. (Laughter)
巴菲特：我能代表查理发言。查理和我不急着退休，实际上，查理在努力和我比赛谁活得更久。（笑声）
AUDIENCE MEMBER: Thank you.
42. Berkshire sold some Cap Cities shares in tender offer</br
AUDIENCE MEMBER: My second question is, I was just curious why you sold a portion of Cap Cities?
股东：我的第二个问题是，为什么你卖了一部分的大都会的股票？
WARREN BUFFETT: We thought that — we thought it was a good idea for Cap Cities to have a tender offer. They had cash that we thought that they could not use in any — they were not likely to be able to use — in a better way than repurchasing their own shares because they do have some very good businesses.
They, and we, felt that a tender offer would not be successful, in terms of attracting a number of shares unless Berkshire were tendering. We felt the price was reasonable to tender at.
It turned out that the business was getting stronger during that period and various things were happening in media, so there were only 100,000 shares or so tendered outside of our million. That isn’t necessarily what we thought was going to happen going in, but that is what happened.
It’s acceptable to us, but that doesn’t mean that it was the desired outcome. We would not have tendered all of our shares or anything of the sort.
股票回购并不是我们所期待的，只是发生了这件事情，我们觉得可接受而已。
We want to remain a substantial shareholder of Cap Cities. We’ve always — most of the time we favored Cap Cities buying in its stock and it’s bought in a fair amount of stock since the ABC merger took place in 19 — started in 1986.
43. Structured settlements business isn’t big, but is “perfectly satisfactory”</br
结构化结算业务规模不大，但“令人非常满意”
WARREN BUFFETT: Zone 5.
AUDIENCE MEMBER: Good morning. My name is Matt Voke (PH). I’m from Omaha.
股东：早上好。我叫马特·沃克。我来自奥马哈。
In last year’s meeting you made reference to structured settlements. I was wondering, how is that business progressing for you?
在去年会议上，你提到了结构化结算。我想知道，你们的业务进展如何?
WARREN BUFFETT: Question’s about the structured settlement business, which is a business in which Berkshire guarantees, in effect, an annuity to some claimant of another — usually — of another insurance company, who suffered an injury and instead of getting a lump sum now wants to get a stream of payments over many years in the future, sometimes going out 75 years.
巴菲特：问题是关于结构结算业务的。这是一项伯克希尔为另一家保险公司的索赔人担保年金的业务。通常情况下，是另一家保险公司的索赔人，他们受伤了，现在不想一次性得到一笔钱，而是希望在未来的很多年里得到一笔付款，有时是75年。
We have set up a life company to do that business. We formerly did it all through our property-casualty companies. And, we have done some business, but it’s not been a big business yet, and it may never be a big business.
我们成立了一家人寿保险公司来做这项业务。我们以前都是通过我们的财产保险公司来做的。我们已经做了一些生意，但这还不是大生意，也可能永远不会是个大生意。
It’s a perfectly satisfactory business, but it’s not an important item at present in the analysis of Berkshire’s value.
这是一项令人非常满意的业务，但在目前对伯克希尔价值的分析中，它还不是一个重要项目。
Are you getting — having a problem with sound out there on this or no? Just — no?
44. No comment on Wrigley</br
对箭牌不予置评
WARREN BUFFETT: Zone 6.
AUDIENCE MEMBER: My name is David Samra. I’m from San Francisco, California.
股东：我叫大卫·萨姆拉。我来自加利福尼亚的旧金山。
In your annual report, I noticed you mention Wrigley as being a company that has worldwide dominance, somewhat like Coca-Cola and Gillette. And, was curious to know if you had looked at the company in any detail. And, if so, whether or not — if you decided not to invest, what were the reasons why?
WARREN BUFFETT: Well, we wouldn’t want to comment on a company like that because we might or might not be buying it. We might or might not be selling it. We might or might not buy or sell it in the future. (Laughter)
巴菲特：我们不想评论这样的公司，因为我们可能会买，也可能不会买。我们可能会卖，也可能不会卖。我们将来可能会买，也可能不会卖。(笑声)
And, since it falls under that narrow definition of things that we don’t talk about —
因为它属于我们不讨论的范围内。
It’s a good illustration of a company that has a high market share worldwide, but you can understand the Wrigley Company just as well as I can. I have no insights in the — into the Wrigley Company that you wouldn’t have and I don’t — I wouldn’t want to go beyond that in giving you our evaluation of the company.
箭牌是一家在全球拥有很高的市场份额的公司，但我对箭牌的理解和你没什么差别。我对箭牌公司没有什么见解。对于箭牌，我不会给出超过你认知水平的评价。
I hate to disappoint you on those, but on specific securities, we are not too forthcoming sometimes.
我不想让你失望，不过在一些特定的证券上，我们有时不太愿意说。
查理?
CHARLIE MUNGER: I’m good at not being forthcoming. (Laughter)
芒格：我非常善于啥都不说。（笑声）
45. “No specific desire” to buy companies in certain parts of the world</br
对于买美国外的公司并不十分渴望
WARREN BUFFETT: Zone 7.
AUDIENCE MEMBER: Mr. Buffett, Kathleen Ambrose (PH) from Omaha.
股东：凯瑟琳·安布罗斯，来自奥马哈。
I have a question regarding global diversification. Just in general, what do you look for in a company and, if so, as far as Europe or Latin America, if you’d like to be specific?
我有一个关于全球多元化的问题。一般来说，你对一家公司有什么要求?如果有的话，你希望欧洲或拉丁美洲的公司有什么要求?
WARREN BUFFETT: The question is about global diversification.
All we want to be in is businesses that we understand, run by people that we like, and priced attractively compared to the future prospects.
巴菲特：我们想要的东西很简单，那就是投资由我们欣赏的人掌管且价格相对于前景很有吸引力的企业。
So, there is no specific desire to either be in the rest of Europe, or the rest of the world, or Far East, or to avoid it.
若这些企业位于欧洲、远东或别的什么地方，我们并不会因此而有特别的兴趣，也不会因此而回避。
It’s simply a factor that — it’s not a big factor. There may be more chances for growth in some countries.
虽然在某些国家可能会有更多的机会，但地理位置不是重要的因素。
We — 80 percent of Coca-Cola’s earnings, roughly, will come from outside the United States. Eighty percent of Guinness’s earnings will come from outside the United States, but they’re domiciled outside the United States, whereas Coca-Cola is domiciled here.
Certainly, in many cases, there are markets outside the United States that have way better prospects for growth than the U.S. market would have, but they probably have some other risks to them that this market may not have.
可以肯定，在很多案例中，国外市场的成长前景远远好于美国市场，不过可能也存在着美国市场没有的风险。
But, we, you know, we like the international prospects, obviously, of a company like Coke. We like the international prospects of a company like Gillette. Gillette earned 70 percent of its money outside this country.
So, if you look — on a look-through basis — Coke — we might this year get something like $150 million of earnings, indirectly, for Berkshire’s interest from the rest of the world just through Coca-Cola alone.
But, we don’t make any specific — we don’t think in terms of, I like this region so I want to be there or something of a sort.
It’s something that’s specific to the companies we’re looking at, then we’ll try to evaluate that.
我们的思路并不是“我们喜欢这个地区，希望能投资这里”，或者任何类似的想法。
Coke is expanding in China. Well, it — you know — I think that — I forget what they showed last year, maybe 38 percent growth, or something like that, in cases. Maybe —
It’s nice to have markets like that that are relatively untapped.
可口可乐正在中国扩张。去年，其在中国的销量增长率达到38%左右。能有这样尚未开发的市场是件好事。
Actually, Gillette is expanding in China in a big way and the Chinese don’t shave as often. And more of them are what they call “dry shavers” than “wet shavers” there, which is electric shavers.
吉列也在中国大举扩张，中国人刮胡须不怎么频繁，他们用干剃须刀(电动剃须刀)比用湿剃须刀多。
But you know, maybe we could stick something in the Coke that would — (laughter)
也许我们可以在可口可乐里下点药（帮助长胡子）……（笑声）
Maybe a little synergy at Berkshire, finally. Who knows?
若这么做，可算是伯克希尔旗下公司的协同效应了。
46. Hurricanes are bigger insurance risk than riots</br
飓风比暴乱的保险风险更大
WARREN BUFFETT: Zone 1.
AUDIENCE MEMBER: Good morning. I’m Marshall Patton (PH) from Bandera, Texas.
股东：早上好。我是杰马歇尔巴顿，来自德克萨斯。
And back to the insurance losses. What is the comparison between natural disasters, such as the earthquake, and so on, and the LA riots?
回到保险损失。自然灾害，比如地震，和洛杉矶暴乱的区别是什么?
WARREN BUFFETT: Well, I’m not sure what the connection —They, you know, they obviously can both lead to super-cats that we insure against, because if there is enough insured damage, it’s likely to trigger a payment under some of our policies. It would take some really big riot damage to get to our levels, because normally we don’t kick in now until an event gets up to at least, you know, $5 billion or so of insured damage under a very large majority of our policies. Something like a quake causes a fair amount of damage that is not insured, because of the extent that it’s highways and things of that sort, public buildings. A lot of that is not insured.
巴菲特：很明显，只要有足够高的保险损失，就会触发我们的一些保单，会导致我们的巨灾再保险赔付。要触发巨灾险的保单，骚乱得造成相当大的损失，对于我们的大部分巨灾险保单而言，事件造成的损失至少得 50 亿美元左右，才能触发巨灾险赔付。像地震这种灾害导致的很多损失不在保险范围内，比如说高速公路和公共建筑等。
But you get interesting questions on this. Usually we insure an event, but what’s an event? If you go back to the riots that occurred after Martin Luther King was shot, you had riots in dozens of cities. Is that one event or is that a multiple number of events? I mean, it was started by different people, but maybe arising from a common cause. Some of those things aren’t actually very well-defined, even after hundreds of years of insurance law and custom, the experience of that. But I would say that rioting is very unlikely to get to a level that triggers our policy. The big risks we face are quake and hurricanes, and hurricanes are a more significant risk than quake. They call them typhoons in the Pacific Ocean. But floods, tremendous damage from floods last year. But basically there’s not a lot of private flood insurance bought, so the insured losses do not get large. Just watch the Weather Channel. (Laughter)
不过这就遇到一个很有趣的问题，一般来说，我们是为一个事件承保。什么事件呢？例如，在马丁·路德·金被枪击后，几十个城市出现骚乱。这是一个事件呢，还是多个事件？虽然保险法、惯例操作以及业务经验已经有数百年的历史，但有些事情依旧很难定义。但我认为，骚乱很难达到触发巨灾险的程度，我们面对的大风险是地震、飓风(飓风是较大的风险)以及台风。至于洪水，去年洪水造成了巨大的损失，不过买洪水保险的人却不多，所以保险损失不怎么可能会有(触发我们的巨灾险)。你们只要看天气预报就会心里有数。(笑声)
47. Why we have no short-term opinion on stocks</br
为什么我们对股票没有短期看法
WARREN BUFFETT: Zone 2.
AUDIENCE MEMBER: Diane West (PH) from Corona Del Mar, California.
股东：黛安·韦斯特，来自加利福尼亚的科罗娜德尔玛。
I know, Mr. Buffett, that you said that you don’t read what other people say about the market or the economy, but do either you or Charlie have an opinion about how you think things are going to go? Are you bullish or bearish?
巴菲特先生，我知道你说过你不读别人对市场或经济的看法，但你和查理对你认为事情会如何发展有什么看法吗?你是看涨还是看跌?
WARREN BUFFETT: You may have trouble believing this, but Charlie and I never have an opinion about the market because it wouldn’t be any good and it might interfere with the opinions we have that are good. (Laughter)
巴菲特：你可能很难相信这一点，但查理和我从来没有对市场有过任何看法，因为它不会有任何好处，它可能会干扰我们对市场的看法。(笑声)
If we’re right about a business, if we think a business is attractive, it would be very foolish for us to not take action on that because we thought something about what the market was going to do, or anything of that sort.
如果我们看中了一个企业，如果我们认为其业务是非常有吸引力的，如我我们只是因为认为市场将发生一些事情，就不采取行动，那无疑是很愚蠢的。
Because we just don’t know. And to give up something that you do know and that is profitable for something that you don’t know and won’t know because of that, it just doesn’t make any sense to us, and it doesn’t really make any difference to us.
大市的走向并非我们所能理解的，为了现在不理解而且将来也不会理解的大市走向，放弃理解的有利可图的投资项目，我们觉得是没有道理的。
I mean, I bought my first stock in, probably, April of 1942 when I was 11. And since then, I mean, actually World War II didn’t look so good at that time. I mean, the prospects, they really didn’t. I mean, you know, we were not doing well in the Pacific. I’m not sure I calculated that into my purchase of my three shares. (Laughter)
大市走向对我们没有任何影响。我在1942年4月买了我人生中的第一只股票，那时我11岁，当时正处于二战中期，而且盟军的前景看起来不容乐观，真的不乐观。当时，太平洋战场的情况很不妙，我不确定我在购买这三股股票时是否考虑到了这一点。（笑声）
But I mean, just think of all the things that have happened since then, you know? Atomic weapons and major wars, presidents resigning, and all kinds of things, massive inflation at certain times.
但我想起了之后发生的事情：核武出现、大规模冲突、总统辞职、通胀和其他各种事件。
To give up what you’re doing well because of guesses about what’s going to happen in some macro way just doesn’t make any sense to us. The best thing that can happen from Berkshire’s standpoint — we don’t wish this on anybody — but is that over time is to have markets that go down a tremendous amount.
我们觉得，为了猜测将来的某些宏观事件，放弃你很拿手的投资项目是说不通的。从伯克希尔的立场出发，最美妙的事情莫过于市场大幅下跌，当然，这只是我的个人看法，不会把它强加给任何人。假如你问，若下个月市场下跌50%，伯克希尔是不是情况更好了，我们会告诉你，若真的下跌50%，伯克希尔的情况会更好。
I mean, we are going to be buyers of things over time. And if you’re going to be buyers of groceries over time, you like grocery prices to go down. If you’re going to be buying cars over time, you like car prices to go down.
我们是长期的股票买方，如果你常常去一家食品店买东西，就应该喜欢价格下降。如果你常常要买汽车，就会喜欢汽车降价。
We buy businesses. We buy pieces of businesses: stocks. And we’re going to be much better off if we can buy those things at an attractive price than if we can’t.
我们买公司，也买公司的一部分——股票。如果我们能以一个有吸引力的价格买进，我们的情况就会更好。
So we don’t have any fear at all. I mean, what we fear is an irrational bull market that’s sustained for some long period of time.
我们什么都不怕，只怕长期持续的不理智的牛市。
You, as shareholders of Berkshire, unless you own your shares on borrowed money or are going to sell them in a very short period of time, are better off if stocks get cheaper, because it means that we can be doing more intelligent things on your behalf than would be the case otherwise.
作为伯克希尔的股东，除非你是借钱买的股票或者你马上就要出售股票，股价更便宜也会对你有好处，因为股价更便宜就意味着我们能更好地为你进行明智的投资。
But we have no idea what — and we wouldn’t care what anybody thought about it. I mean, most of all ourselves. (Laughter)
我们不知道将会发生什么，也不关心别人的想法，尤其是别人对我们的看法。（笑声）
Charlie, do you have anything?
查理，你有啥补充的吗？
CHARLIE MUNGER: No. I think the — if you’re agnostic about those macro factors and therefore devote all your time to thinking about the individual businesses and the individual opportunities, it’s just, it’s a way more efficient way to behave, at least with our particular talents and lacks thereof.
芒格：如果你是一个对宏观因素持不可知论的人，就把所有的时间都用在分析个别公司和单个机会上吧，这是一种特别有效的方法，至少对有我们来说是有效的方法。
WARREN BUFFETT: If you’re right about the businesses, you’ll end up doing fine.
巴菲特：如果你对企业的判断正确,就会有不错的回报。
We don’t know, and we don’t think about when something will happen. We think about what will happen. It’s fairly, it’s not so difficult to figure out what will happen. It’s impossible, in our view, to figure out when it will happen. So we focus on what will happen.
我们不知道，也不思考某件事何时发生，我们只思考什么事会发生，会发生什么并不难弄明白。我们认为判断何时发生是不可能的，所以我们只全力思考会发生什么。
This company in 1890 or thereabouts, the whole company sold for $2,000. It’s got a market value now of about 50-odd-billion, you know?
Somebody could’ve said to the fellow who was buying this in 1890, you know, “You’re going to have a couple of great World Wars, and you know, you’ll have the panic of 1907, all these things will happen. And wouldn’t it be a better idea to wait?” (Laughter)
1890年时， 2,000美元就能把可口可乐整家公司买下来，今天可口可乐的市值是500多亿美元。有人可能会对在1890年买可口可乐股票的人说：“我们将会经历两场世界大战，1907年会有大恐慌，所有的这些事情都会发生。是不是该等等再买可口可乐的股票呢?”（笑声）
We can’t afford that mistake, basically. Yeah.
我们可承受不了这种错误。
48. We’d rather buy an entire company, but stocks offer more bargains</br
我们希望买下整个公司，但股票更便宜
WARREN BUFFETT: Zone 3.
AUDIENCE MEMBER: Mr. Buffett, Mr. Munger, last year — I’m Tim Medley from Jackson, Mississippi — last year the question was asked about your preference for purchasing entire businesses versus parts of public companies. You mentioned you prefer to buy private businesses because of the tax advantages and your attraction to the people in those businesses. Are you finding today that there are better purchases within the private market versus in the public securities market?
股东：巴菲特先生，芒格先生，我是来自密西西比州杰克逊市的蒂姆·麦德利。去年，有人问你，比起部分上市公司，你更喜欢收购整个企业。你提到你更倾向于购买私营企业，因为它的税收优势，以及你对这些私营企业中的管理者的吸引力。今天你是否发现在私人市场上的购买行为比在公共证券市场上的购买行为要好？
WARREN BUFFETT: Well, I would answer that no. We do not — we very seldom find something to buy on a negotiated basis for an entire business. We have certain size requirements. A big limiting factor is it has to be something we can understand. I mean, that eliminates 95 percent of the businesses. nd we don’t pay any attention to them, but we get lots of proposals for things that just are totally outside the boundaries of what we’ve already said we’re interested in.
巴菲特：我的答案是不。我们很少在谈判的基础上找到可以买到的东西。我们有一定的规模要求。一个很大的限制因素是它必须是我们能够理解的。这就排除了 95%的业务。我们对大多数生意没有兴趣，但我们收到了很多已经超出我们感兴趣的东西的提议。
We prefer to buy entire businesses, or 80 percent or greater interest in businesses, partly for the tax reasons you mentioned, and frankly, we like it better. We just, it’s the kind of business we would like to build if we had our absolute druthers on it. Counter to that is we can usually get more for our money in wonderful businesses, in terms of buying little pieces of them in the market, because the market is far more inefficient in pricing businesses than is the negotiated market.
我们更喜欢把整个企业都买下来，或者买下 80%或更多，这部分是出于税负考虑，坦率地说，也是因为我们更喜欢这样做。如果在这件事上我们能完全随心所欲，我们会整体并购。和议价市场相反，在股市中，我们总是能够以更便宜的价格买到公司的一小部分，这是因为股市在给企业定价方面的有效程度远低于议价市场。
You’re not going to buy any bargains, and I mean, you shouldn’t even approach the idea of buying a bargain in a negotiated purchase.
在议价买进中，你不会买到任何便宜货，也不应该指望能买到便宜货。
You want to buy it from people who are going to run it for you. You want to buy it from people who are intelligent enough to price their business properly, and they are. I mean, that’s the way things are.
如果你指望这些管理层将来为你管理企业，想从这些足够聪明的人以合理定价买入他们的企业。如果他们能正确地为自己的企业定价，你就甭想买到便宜货。道理就是这么简单。
You’re not going to buy any bargains, and I mean, you shouldn’t even approach the idea of buying a bargain in a negotiated purchase. You want to buy it from people who are going to run it for you. You want to buy it from people who are intelligent enough to price their business properly, and they are. I mean, that’s the way things are. The market does not do that. The market — in the stock market, you get a chance to buy businesses at foolish prices, and that is why we end up with a lot of money in marketable securities.（
这里似乎少了一段）
在议价买进中，你不会买到任何便宜货，也不应该指望能买到便宜货。如果你指望这些管理层将来为你管理企业，要以合理定价从这些足够聪明的人手中买入他们的企业。如果他们能正确地为自己的企业定价，你就甭想买到便宜货。道理就是这么简单。虽然整体并购企业有税负上的优势，而且我们也偏爱这种方式，但是有一个事实可以抵消这两个理由——你永远不可能有机会整体并购可口可乐或吉列这种企业，这种好企业不可能(从议价市场中)以便宜的价格买到。不过有时候我们能在股市中找到机会以合理的价格买入好企业的股票，有时候甚至有机会以愚蠢的价格买进好企业的股票。
If we absolutely had our choice, we would own a group of — we would own three times the number of businesses we own outright. We’re unlikely to get that opportunity over time, but periodically we’ll get the chance to find something that fits our test. And in between we will, when the market offers us the right prices, we will buy more, either businesses we already own pieces of, or we’ll buy one or two new ones. Something’s usually going on. There are tax advantages to owning all of them, but that’s more than offset by the fact that you’ll never get a chance to buy the whole Coca-Cola Company or the whole Gillette company. I mean, businesses like that, sensational businesses, are just not available. Sometimes you get a chance to make a sensible purchase in the market of such businesses. Charlie?
这就是我们大量投资有价证券的原因。如果有这样的机会，我希望我们全资控股的企业数量是现在的三倍。从长期看，虽然我们隔段时间就能找到机会买进符合我们投资标准的企业，但是将我们全资拥有的企业数量翻三倍不太可能。当市场价格合适的时候，我们就会增持已有的股票，或者买进一两只新的股票。通常就是这样。查理，你觉得呢？
CHARLIE MUNGER: Well, I think that’s exactly right. And if you stop to think about it, if a hundred percent of a business is for sale, you’ve got — the average corporate buyer is being run by people who have the mindset of people buying with somebody else’s money. And we have the mindset of people buying with our own money. And there’s also a class of buyers for a hundred percent of businesses who are basically able and assured financial promoters. I’m talking about the leveraged buyout funds and so on. And those people tend to have the upside, but not the downside, in the private arrangements they’ve made with their investors. And naturally, they tend to be somewhat optimistic. And so we have formidable competition when we try and buy a hundred percent of businesses.
芒格：我认为这完全正确。你可以停下来想一想，在整体并购企业时，普通的企业并购者的心态是拿别人的钱买东西，我们的心态是拿我们自己的钱买东西。还有一种整体并购企业的并购者，他们天生有很强的抬高价格的能力。我说的是杠杆并购基金等机构，根据这些基金和它们的投资者之间的分成协议，这些基金趋向于并购价格越高越好而不是越便宜越好。因此，当我们试图收购 100%的企业时，我们面临着强大的竞争。
WARREN BUFFETT: Most managers are better off, in terms of their personal equation, if they’re running something larger. And they’re also better off if they’re running something larger and more profitable. But the first condition alone will usually leave them better off. We’re only better off if we’re running something that’s more profitable. We also like it if it’s larger, too. But our equation, actually, our personal equation is actually different than a great many managers in that respect. Even if that didn’t operate, I think most managers psychically would enjoy running something larger. And if you can pay for it with other people’s money, I mean, that gets pretty attractive. You know, how much would — and let’s just say you’re a baseball fan — well, how much would you pay to own whatever your hometown, the Yankees?
巴菲特：所以，这些基金在并购时，会对企业前景持某种乐观的态度。管理的企业规模越大，经理人的收入也会越高。当然，若企业规模更大且利润更高，经理人的收入也会更高，不过呢，只要规模更大，无须利润更高，就足以让经理人腰包更鼓。在这方面，我们的个人收入公式和绝大多数经理人不一样，规模变大未必能使腰包更鼓，我想，大多数经理人还是喜欢自己的王国越大越好。如果并购的时候能够用别人的钱付账，并购就会非常诱人。假设你是一个棒球迷，让你买下你家乡的棒球队，你愿意出多少钱？比如说扬基队。
You might pay more if you were writing a check on someone else’s bank account than if you were writing it on your own. It’s been known to happen. (Laughter) And in corporate America, animal spirits are there. And those are our competitors on buying entire businesses. In terms of buying securities, most managers don’t even think about it. It’s very interesting to me, because they’ll say that — they’ll have somebody else manage their money in terms of portfolio securities. Well, all that is is a portfolio of businesses. And I’ll say, “Well, why don’t you pick out your own portfolio?” And they’ll say, “That’s much too difficult.” And then some guy will come along with some business that they never heard of a week before and give them some figures and a few projections, and the guy thinks he knows enough to buy that business. It’s very puzzling to me sometimes.
假如你可以开一张用别人的账户付账的支票，你的出价就会比你用自己的银行账户付账时更高。(笑声)所以美国企业界存在着动物精神，这些人就是在我们在整体并购时面对的竞争对手。因此，我们整体并购企业时，竞争非常激烈。买证券的时候，大多数经理人根本就不操心，这个现象非常有趣。他们会委派一个人去管理证券投资组合，其实证券投资组合就是企业的投资组合。我说：“你为什么不亲自挑选一个投资组合呢？“他们会说，“不，这太难了。“如果有人向他出售他自己从未听说过的企业，并告诉他一些数字和预测，他就以为彻底了解这个企业了。这真叫我看不懂。
49. Revealing Wesco’s estimated intrinsic value was a “quirk”</br
揭示威斯科金融的潜在内在价值是一个“怪癖”
WARREN BUFFETT: Zone 4.
Could you hold it a little closer to you? I can’t hear too well.
It’s hard to hear. Is the mic on there?
AUDIENCE MEMBER: It’s on.
WARREN BUFFETT: OK, I can hear that fine.
AUDIENCE MEMBER: Let’s try it one more time. Dan Raider (PH) —
WARREN BUFFETT: Got it.
AUDIENCE MEMBER: — San Mateo, California. This is a question for Mr. Munger. In your most recent letter to shareholders in Wesco’s annual report, you calculated the intrinsic value of Wesco at about 130 per share. In the same letter, you stated that it was unclear whether at then-current market prices Berkshire or Wesco presented a better value to prospective purchasers. In light of that, would you compare the intrinsic value of Berkshire to its current market price?
股东：在你最近的致威斯科金融公司股东信中，你计算了威斯科的内在价值是 100 美元一股，而当时的股价是 130 美元一股。在那封信里，你说，在当时的价格下，是否有购买的价值并不很清晰。你可不可以把伯克希尔的内在价值和市场价比较一下呢？
CHARLIE MUNGER: Well, the answer to that is no. (Laughter) Berkshire has never calculated intrinsic value per share and reported it to the shareholders, and Wesco never did before this year. We changed our mind at Wesco because we really thought some of the buyers had gone a little crazy, and a lot of things were being said to prospective shareholders that, in our opinion, were unwise. And we don’t really like attracting — even though we’ve had nothing to do with it — we don’t like attracting people in at high prices that may not be wise. So we departed from our long precedent, and we did in the Wesco report make an estimate of intrinsic value per share. But we’re not changing the general policy. That was just a one-time quirk.
芒格：答案是不行。(笑声)伯克希尔从来不曾在给股东的报告中计算每股内在价值。威斯科在今年之前也从未这样做过，我们之所以改变做法，是因为我们真的认为有些买方有点疯狂，潜在的股票购买者得到的很多信息照我们看来是很不明智的。虽然这并不是我们的错，但我们真的不想在可能不明智的高价位上吸引股东购买我们的股票。所以我们改变了一直以来不公布内在价值的习惯做法。我们没有改变总的政策，这次只是下不为例的特殊情况。
WARREN BUFFETT: Well, and also I think it’s true that the Wesco intrinsic value per share can be estimated by anyone within fairly close limits. It just isn’t that complicated because there aren’t a number of businesses there that have values different than carrying values, or where they are, they’re all footnoted, in terms of numbers. So it would be almost impossible to come up with numbers that are significantly different than the number Charlie put in there.
Berkshire has assets that, number one of which would be the insurance business, that it’s clear have very significant excess values, but one person might estimate those at maybe three times what somebody else would estimate them at. That’s less true of our other businesses, but it’s still true in a way, so that Berkshire’s range would be somewhat greater. And as Charlie — we basically — we don’t want to disappoint people, but we also don’t want to disappoint ourselves. But we have our own yardsticks for what we think is doable. We try to convey that as well as we can to the people who are partners in the business, and I think that we saw some things being published about Wesco that simply might have led to, and probably did lead to, some expectations that simply weren’t consonant with our own personal expectations. And that leaves us uncomfortable.
伯克希尔的资产很多，排名第一的是保险业务，保险业务明显有巨大的超额价值。不同的人估算价值，结果可能会相差三倍，不同的人估算伯克希尔的价值，结果可能相差很大。查理和我——我们不想让大家失望，也不想让自己失望。不过我们有自己的行为准则，我们希望能尽可能全面地向我们的合伙人传达信息。我们看到一些关于威斯科的公开出版的文章，可能会导致(确实导致了)某些和我们自己的预期不致的预期。这种情况让我们很不安。
50. Risk is “inextricably wound up” in how long an asset is held</br
风险与资产持有时间“密不可分”
WARREN BUFFETT: Zone 5.
AUDIENCE MEMBER: Hello, my name is Charles Pyle (PH) from Ann Arbor, Michigan. I’d like to ask you to expound on your view of risk in the financial world, and I ask that against the background of what appear to be a number of inconsistencies between your view of risk and the conventional view of risk. I mention that in a recent article you pointed out inconsistency in the use of beta as a measure of risk, which is a common standard. And I mention that derivatives are dangerous, and yet you feel comfortable playing at derivatives through Salomon Brothers. And betting on hurricanes is dangerous, and yet you feel comfortable playing with hurricanes through insurance companies. So it appears that you have some view of risk that’s inconsistent with what would appear on the face of it to be the conventional view of risk.
股东：你好，我叫查尔斯·派尔，来自密歇根州的安阿伯市。我想请你们阐述一下你们对金融世界风险的看法，我问这个问题的背景是，你们的风险观和传统的风险观之间似乎存在一些不一致之处。衍生品是危险的，你却悠然自在地通过所罗门公司交易衍生品。下注赌热带风暴是危险的，你却通过保险公司放心大胆地出售热带风暴保险。看起来你对风险的看法和传统的风险观点是不一致的。
WARREN BUFFETT: Well, we do define risk as the possibility of harm or injury. And in that respect we think it’s inextricably wound up in your time horizon for holding an asset. I mean, if your risk is that you’re going — if you intend to buy XYZ Corporation at 11:30 this morning and sell it out before the close today, I mean, that is, in our view, that is a very risky transaction. Because we think 50 percent of the time you’re going to suffer some harm or injury. If you have a time horizon on a business, we think the risk of buying something like Coca-Cola at the price we bought it at a few years ago is essentially, is so close to nil, in terms of our perspective holding period. But if you asked me the risk of buying Coca-Cola this morning and you’re going to sell it tomorrow morning, I say that is a very risky transaction.
巴菲特：我们对风险的定义是受到伤害的可能性。因此，风险不可避免地和你准备持有资产的时间长短缠绕在一起。如果你盘算在上午 11 点 30 分买进某公司，然后在闭市之前卖出，照我们看来，这个交易的风险非常大，因为你可能有 50%的几率赔钱。不过呢，如果持有这只股票更长的时间…例如，若你持有的时间和我们一样长，用几年前我们买进可口可乐的价格买进股票的风险接近于零。但如果你要我评估今天上午买进可口可乐、明天上午卖出的风险，那么我说，这是高风险的交易。
Now, as I pointed out in the annual report, it became very fashionable in the academic world, and then that spilled over into the financial markets, to define risk in terms of volatility, of which beta became a measure. But that is no measure of risk to us. The risk, in terms of our super-cat business, is not that we lose money in any given year. We know we’re going to lose money in some given day, that is for certain. And we’re extremely likely to lose money in a given year. Our time horizon of writing that business, you know, would be at least a decade. And we think the probability of losing money over a decade is low. So we feel that, in terms of our horizon of investment, that that is not a risky business. And it’s a whole lot less risky than writing something that’s much more predictable.
如我在年报里所言，用代表波动性的贝塔系数来衡量风险的观点不仅在学术界变得很时髦，而且扩散到金融市场中。不过对我们来说，这根本不是衡量风险的标尺。至于我们的巨灾再保险业务，风险并不在于某个年份亏损。我们知道，我们会在某个日子亏损，这是肯定的，我们也极有可能在某些年份亏损，但我们承保巨灾险的眼光长达 10 年，我们认为在 10 年的时间段里亏损的可能性很低。所以，考虑到我们的投资时间段，我们认为这不是一个高风险的业务。巨灾再保险业务的风险大大低于一些更加容易预测的保险业务。
Interesting thing is that using conventional measures of risk, something whose return varies from year to year between plus-20 percent and plus-80 percent is riskier, as defined, than something whose return is 5 percent a year every year. We just think the financial world has gone haywire in terms of measures of risk. We look at what we do — we are perfectly willing to lose money on a given transaction, arbitrage being an example, any given insurance policy being another example. We are perfectly willing to lose money on any given transaction.
我们觉得很好笑，按照传统的用波动性衡量风险的理论，一个年回报在+20%至+80%之间逐年波动的项目的风险竟然高于一个年回报稳定在 5%的项目。我认为金融界在衡量风险方面简直是一塌糊涂。我们很乐意在某些交易中亏损，套利交易就是个例子，卖保单是另一个例子。
We are not willing to enter into transactions in which we think the probability of doing a number of mutually independent events, but of a similar type, has an expectancy of loss. And we hope that we are entering into our transactions where our calculations of those probabilities have validity. And to do so, we try to narrow it down. There are a whole bunch of things we just won’t do because we don’t think we can write the equation on them.
但若有任何交易，我们认为其中存在一些互相独立的相似事件有可能会造成损失，我们就不会参与这些交易。我们希望参加这样的交易——我们能正确计算出损失可能性的交易。为了达到这个目的，我们努力缩小范围。有很多业务，因为我们不能正确计算，所以敬而远之。
But we, basically, Charlie and I by nature are pretty risk-averse. But we are very willing to enter into transactions —We, if we knew it was an honest coin, and someone wanted to give us seven-to-five or something of the sort on one flip, how much of Berkshire’s net worth would we put on that flip? Well we would — it would sound like a big number to you. It would not be a huge percentage of the net worth, but it would be a significant number. We will do things when probabilities favor us.
查理和我都是天生的风险厌恶者。如果有一个不出老千的扔硬币赌局，有人愿意给我们 7 比 5或者类似别的赔率，我们会投入伯克希尔多少账面价值呢？我愿意投入的金额可能会被你认为是巨额，虽然并未占(伯克希尔)净价值的很高百分比，但会是一个很大的金额。我们会做这种赢率对我们有利的交易。
CHARLIE MUNGER: Yeah, we, I would say we try and think like Fermat and Pascal as if they’d never heard of modern finance theory. I really think that a lot of modern finance theory can only be described as disgusting. (Laughter)
芒格：我们努力像费马(法国数学家，系统阐述了现代数理论和概率论)和帕斯卡(法国哲学家和数学家，发展了现代概率理论)那样思考，就好像我们从未听说过现代金融理论那样。我认为很多现代金融理论只能用恶心来形容。(笑声)
51. Buffett favors a “steeply progressive” consumption tax</br
巴菲特赞成“大幅累进”的消费税
WARREN BUFFETT: Zone 6.
AUDIENCE MEMBER: Good morning, I’m Paul Miller (PH) from Kansas City, Missouri. I’ve got two questions. First, not too long ago, I believe it was Fortune Magazine that ran an article regarding personal tax rates. And at the risk of misquoting you, my recollection is that you favored higher personal rates, rates even higher than those proposed by those in Washington.
The second question is, I’ve heard Berkshire Hathaway referred to as nothing more than a high-priced rich man’s mutual fund. Would you care to comment on that also?
股东：早上好，我是保罗·米勒，来自密苏里州堪萨斯城。我有两个问题。首先，就在不久前，《财富》杂志刊登了一篇有关个人税率的文章。冒着错误引用你的话的风险，我记得你倾向于更高的个人税率，甚至高于华盛顿那些人提出的税率。第二个问题是，有人说伯克希尔只不过是一家价格不菲的富人共同基金。你能就此发表评论吗？
WARREN BUFFETT: Well, on tax rates, if you ask me what I personally favor, I personally favor a steeply progressive consumption tax. That has a little more attention being paid to it now, although the “steeply progressive” might be modified by most of the advocates of the consumption tax, maybe to “mildly progressive” or something of the sort. There’s a Nunn-Domenici proposal along that line, and there are other people that are talking about it more. It may be examined by the new Kerrey-Danforth Commission, of which we’ve got a member in the audience.
巴菲特：在税率方面，如果你问我个人赞成什么，我个人赞成大幅累进消费税。现在人们对它的关注多了一点，尽管”大幅累进”可能会被大多数消费税的支持者修改成”温和累进”之类的。有一个 Nunn-Domenici 的提议就是这样的，还有很多人在讨论这个问题。它可能会被新的 Kerrey-Danforth 委员会检查。
But I believe, in one way or another, I believe in progressive taxes. So I am not shocked in terms of my own situation, and I don’t think Charlie is particularly, about having a progressive income tax. Although, like I say, I think society would run better over time if it were a progressive consumption tax instead. Do you want the comment on the tax situation, Charlie?
但无论如何，我相信累进税。所以就我自己的情况而言，我并不感到震惊，我也不认为查理特别反对累进所得税。不过，就像我说的，我认为随着时间的推移，如果实行累进消费税，社会会运转得更好。你想对税收形势发表意见吗，查理？
CHARLIE MUNGER: Well, I think there is a point at which income taxes become quite counterproductive if their progression is too high. But I don’t think we’re there yet.
芒格：我认为，在某一时刻，如果所得税的累进幅度过高，就会产生相当大的反效果。但我认为我们还没到那一步。
WARREN BUFFETT: We think — at least I think — I’m extraordinarily well treated by this society, and I think most people with high incomes are. I think if you transported most of them to Bangladesh or Peru or something, they would find out how much of it is them and how much is the society. And I think there’s nothing better than a market system, in terms of motivating people and in terms of producing the goods and services that the society wants. But I do think it gets a little out of whack, in terms of what the productivity may be of an outstanding teacher compared to somebody who is good at figuring out the intrinsic value of businesses.
巴菲特：我们认为——至少我认为——我在这个社会受到了非常好的待遇，我认为大多数高收入的人都是如此。我想，如果你把他们中的大多数送到孟加拉国或秘鲁或其他地方，他们对财富的分配会有新的看法。我认为没有什么比市场体系更好的了，特别是在激励人们生产社会想要的产品和服务方面。但我确实认为，与那些善于发现企业内在价值的人相比，对于一个出色的教师的贡献来说，这(给教师的回报)有点不正常。
I don’t have a better system on the income side, but I think society should figure out some way to make those who are particularly blessed, in a sense, that have talents that get paid off enormously in a market system, to give back a fair amount of that to the society that produces that.
在收入方面，我没有更好的制度，但我认为社会应该想办法让那些特别幸运的人，在某种意义上，让那些有天赋的人、对给生产这些东西的人，在市场体系中得到一个公平的回报。
52. Berkshire isn’t a “rich man’s mutual fund”</br
伯克希尔不是“富人的共同基金”
WARREN BUFFETT: The question about Berkshire being I think it was, was it rich man’s mutual fund or something like that? We don’t look at it that way at all. We look at it as a collection of businesses, and ideally we would own all of those businesses. So it’s, to the extent that a mutual fund owns stock in a lot of companies and diversifies among businesses and we try to own a lot of businesses ourselves, I guess that’s true. But I guess you could say the same thing of General Electric, or an operation like that.
伯克希尔是富人的基金？我们根本不这么看。我们将其视为业务的集合，理想情况下，我们将拥有所有这些业务。从某种程度上来说，共同基金持有很多公司的股票，并在不同的业务之间进行多元化，我们自己也试图拥有很多业务，我想这是对的。我想你可能会说通用电气，或者类似的公司。
We are more prone to buy pieces of businesses than the typical manager, but we are trying to do, in a sense, the same thing Jack Welch is trying to do at General Electric, which is try to own a number of first-class businesses. He gets to put the imprint of his own management, which I think is very good, on those businesses, and we are more hands-off, both in the businesses we own outright and in the ones that we own pieces of. But we’re going at it the same way. And General Electric has been very successful under Jack’s leadership, and doing it his way. We think, in terms of what we bring to the game, and the problems of putting money to work all the time, that our own system will work best for us. Charlie?
我们比一般的管理者更倾向于购买一些业务，但我们在某种意义上正试图做杰克·韦尔奇(Jack Welch)在[General_Electric|通用电气]尝试做的事情，也就是试图拥有一些一流的业务。他给自己的管理留下了印记，我认为这是非常好的。但在这些业务上，我们不干涉我们旗下的管理者，无论是我们的全资企业还是只持有其中的一部分。我们的做法是一样的。在杰克的领导下，通用电气取得了巨大的成功。我们认为，就我们所给带来的东西，以及需要始终投入资金的问题而言，我们自己的模式将最适合我们。查理？
CHARLIE MUNGER: Yeah, I’ve got nothing to add to that.
芒格：我没啥要说的。
53. Don’t need interest rate outlook to value companies</br
不需要利率前景来评估公司
WARREN BUFFETT: Zone 1.
CHRISTOPHER DAVIS: Hello, I’m Christopher Davis from New York City. I’m interested in that many of the holdings of Berkshire are in industries that are perceived as interest rate-sensitive industries, including Wells Fargo, Salomon, Freddie Mac, even GEICO. And yet you have an admitted sort of ambivalence towards interest rates or changes in interest rates. And it therefore seems that you don’t feel that those changes affect the fundamental attractiveness of those businesses. I thought maybe you could share your thoughts on what you see in these businesses that the investment community as a whole is ignoring.
股东：我是来自纽约市的克里斯托弗·戴维斯。我感兴趣的是，伯克希尔持有的许多股票都属于被视为对利率敏感的行业，包括[Wells_Fargo|富国银行]、[Salomon_Brothers|所罗门]、[Freddie_Mac|房地美]，甚至还有美国政府雇员保险公司(GEICO)。但你承认自己对利率或利率变化有矛盾心理。看起来，你并不觉得利率变化会影响这些公司基本面的吸引力。我想也许你可以分享一下你的想法，你在这些企业发现了什么整个投资界都忽视了的东西？
WARREN BUFFETT: Well, the value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100 percent sensitive to interest rates, because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in, over a period of time. And the higher interest rates are, the less that present value is going to be. So every business, by its nature, whether it’s Coca-Cola or Gillette or Wells Fargo, is in its intrinsic valuation, is a hundred percent sensitive to interest rates.
巴菲特：所有东西的价值，比如农场的价值、公寓的价值或者任何其他经济资产的价值，都 100%对利率敏感。因为投资的实质就是你现在把钱转让给某人，换取将来返还给你的一笔资金流。利率越高，现值越低。所以所有东西的价值，从本质上说，不管是可口可乐还是吉列还是富国银行，其内在价值都 100%对利率敏感。
Now, the question as to whether a Wells Fargo or a Freddie Mac or whatever it may be, whether their business gets better or worse internally, as opposed to the valuation process, because of higher interest rates, that is not easy to figure. I mean, GEICO, if they write their insurance business at the same underwriting ratio — in other words they have the same loss and expense experience relative to premiums — they benefit by higher interest rates, obviously, over time, because they’re a float business, and the float is worth more to them. Now, externally, getting back to the valuation part, the present value of those earnings also becomes less then. But the present value of Coke’s earnings becomes less in a higher interest rate environment.
因为利率升高，富国银行或房地美或任何企业的内部情况是变好还是变差并不容易判断，这和价值评估相反。如果GEICO 的承保费用率不变，换句话说就是得到每美元保险费要承受的亏损和支出不变，长期而言，加息对利润有益，很显然，这是因为 GEICO 的浮存金，浮存金的价值因为加息而升高了。至于外部情况，回到估值上来，利润的现值会因加息而降低。可口可乐利润的现值在利息更高的环境中的价值会变小。
Wells Fargo, it’s — whether they earn more or less money under any given interest rate scenario is hard to figure. There may be one short-term effect and there may be another long-term effect. So I do not have to have a view on interest rates — and I don’t have a view on interest rates — to make a decision as to an insurance business, or a mortgage guarantor business, or a banking business, or something of the sort, relative to making a judgment about Coke or Gillette. Charlie?
至于富国银行，很难判断它在利率变动的背景下会挣得更多还是更少。利率变化既会产生短期影响，又会产生长期影响，我们对保险公司、抵押贷款担保机构、金融机构或可口可乐、吉列这类企业作出决策的时候，不必先对利率的走向形成自己的想法，我们在这方面也没有想法。查理？
CHARLIE MUNGER: I’ve got nothing to add.
芒格：我没有什么要补充的。
54. “Retroactive” insurance is small part of our business
“
追溯”保险是我们业务的一小部分
WARREN BUFFETT: Zone two?
AUDIENCE MEMBER: Hello, I’m Benjamin Baron (PH) from New York.
股东：大家好，我是本杰明·巴伦，来自纽约。
Could you speak about your insurance business a little bit? And especially the retroactive policies you’ve been writing.
你能谈谈你的保险业务吗?尤其是你写的追溯政策。
WARREN BUFFETT: Can we speak about the — you say the reinsurance business?
CHARLIE MUNGER: Retroactive —
WARREN BUFFETT: I heard the retroactive part, but the first part.
BENJAMIN BARON: The reinsurance and the retroactive, and also the market in Bermuda and how you see it as one of your potential markets.
WARREN BUFFETT: I think the retroactive market is, what’s called “retroactive insurance,” has been pretty well eliminated by developments in accounting. So I would not expect us to really have any volume in retroactive-type policies. Now, when we write workers’ comp with a policy holder dividend, in effect that’s a retroactive policy. But that’s a relative — that’s small part of Berkshire’s business. Did I answer what you were driving at there?
巴菲特：我认为追溯市场，也就是所谓的”追溯保险”已经被会计的发展完全淘汰了。所以我不希望我们在追溯型政策上有任何建树。现在，当我们用保单持有人红利来计算工人薪酬时，实际上这是一种追溯政策。但这只是相对的——这只是伯克希尔业务的一小部分。
Did I answer what you were driving at there?
AUDIENCE MEMBER: (Inaudible)
WARREN BUFFETT: Pardon me?
AUDIENCE MEMBER: (Inaudible)
WARREN BUFFETT: Did you get that, Charlie?
55. “You don’t find out who’s been swimming naked until the tide goes out”</br
只有等潮水退去，你才能知道谁在裸泳
CHARLIE MUNGER: Just comment on the development of the insurance business in Bermuda.
WARREN BUFFETT: Oh, Bermuda is simply a, you know, a new competitor. They’re not so new, I mean, there’ve been companies in Bermuda before. But in the last 15 months, 18 months, maybe there’s been 4 billion-plus raised. And because, for tax reasons — maybe other reasons as well, but certainly for tax reasons — that capacity has been concentrated in Bermuda-based, Bermuda-domiciled reinsurers. But essentially there’s no great difference between that type of competition and other reinsurers competition, except for the fact that that capacity is new and the money’s just been raised, and so there may be some greater pressure on the managers of those businesses to go out and write business promptly than on somebody that’s been around for 50 years.
巴菲特：百慕大是一个新的竞争对手，其实也不算那么新，以前也有公司在百慕大注册，不过在过去的 15-18 个月里，注册在百慕大的再保险公司可能筹集到 40 亿美元资金。因为税负原因，可能还有别的原因，再保险公司都往百慕大聚集。实质上这种竞争和其他的再保险商的竞争并无不同，除了新的承保能力和刚筹集的资金之外，和那些已从业 50 年的机构相比，百慕大的经理人承受的压力更大，需要立即把保险卖出去。
But it’s no plus for us any time new capacity enters any business that we’re in, and that certainly goes for the reinsurance business. Reinsurance business, by its nature, will be a business in which some very stupid things are done en masse periodically. I mean, you can be doing dumb things and not know it in reinsurance, and then all of a sudden wake up and find out, you know, the money is gone.
不论何时，我们的任何业务出现新的竞争对手都对我们不利，再保险公司当然也是这样。再保险行业会周期性地集体做蠢事，你可能做蠢事，但自己并不知道，突然醒悟过来，钱已经损失了，就和最近使用保证金投机债券的人一样。在潮水退去之前，你不知道谁在裸泳。(笑声)这就是再保险行业的情况，在起风之前，你不知道谁在裸泳。
And it’s what people have found out — and I used that line in the report a year ago — it’s what people have found out that were speculating on bonds with (inaudible) margins recently, that, you know, you don’t find out who’s been swimming naked until the tide goes out. And — (laughter) — essentially that’s what happens in reinsurance. You don’t, you really don’t find out who’s been swimming naked until the wind blows at them.
56. When cash “piles up,” it’s not through choice</br
现金堆积如山是因为找不到投资机会
WARREN BUFFETT: Zone 3.
AUDIENCE MEMBER: I’m Whitney Anderson (PH) from Miami, Florida. And my question is, right now, we are reading about various analysts and how you should, in their individual opinion, adjust your more cash, more stocks, more bonds because of …How does Berkshire Hathaway feel about times of relative financial insecurity? Do you arrange for more cash reserves looking forward to a time when you might be able to buy? Or do you go along your path?
股东：我是惠特尼·安德森，来自佛罗里达州迈阿密。我的问题是，现在，我们正在阅读各种各样的分析师的文章，他们认为你应该如何调整你的现金、股票和债券，因为……伯克希尔是如何看待金融危机的？你是否准备了更多的现金储备，以备将来有能力购买？
WARREN BUFFETT: I think the question is do we sort of get into asset allocation by maintaining given levels of cash, depending on some kind of outlook or something of the sort? We don’t really think that way at all. If we have cash, it’s because we haven’t found anything intelligent to do with it that day, in the way of buying into the kind of businesses we like. And when we can’t find anything for a while, the cash piles up. But that’s not through choice, that’s because we’re failing at what we essentially are trying to do, which is to find things to buy, and —We make no attempt to guess whether cash is going to be worth more three months from now or six months from now or a year from now.
巴菲特：我想你要问的问题是，我们是否会通过维持一定的现金水平，在将来根据某些情况下去进行资产配置？我不认为我们是这么想的。如果我们有现金在手，是因为我们找不到聪明的处置现金的方法(买进企业)。如果我们持续一段时间找不到任何投资机会，现金就会越积越多，那并不是我们可以选择的。我们有现金是因为我们没能做到我们努力去做的事情，我们从不费劲去猜三个月后、六个月后或一年后现金是不是更值钱。
So it is — you will never see — we don’t have any meetings of any kind anyway at Berkshire, but we would never have an asset allocation meeting. We would — (laughter) — keep looking. I mean, Charlie’s looking, I’m looking. Some of our managers are looking. We’re looking for things to buy that meet our tests, and if we showed no cash or short-term securities at year-end, we would love it, because it would mean that we’d found ways to employ the money in ways that we like.
我们在伯克希尔从来不召开任何种类任何形式的会议，也不召开资产配置会议。我们一直都在物色——查理物色，我物色，而且我们的一些经理人也在物色——物色那些达到我们要求、可以买进的东西。如果年底的时候，手里没有现金也没有短期证券，我们会很高兴，这意味着我们找到了投资的途径，以我们喜欢的方式使用了资金。
I think I would have to admit that if we have a lot of money around, we are a little dumber than usual. I mean, it tends to make you careless. And I would say that the best purchases are usually made when you have to sell something to raise the money to get them, because it just raises the bar a little bit that you jump over in the mental decisions. But we have, I don’t know what we’ll show, but certainly well over a billion dollars of cash around, and that’s not through choice. That is a — you can look at that as an index of failure on the part of your management. And we will be happy when we can buy businesses, or small pieces of businesses, that use up that money.
我必须承认，要不你们可能会忽视，如果我们有很多钱在手，就说明我们的表现不如往常。我们现在确实有超过 10 亿美元现金在手，这并不是我们所希望的，你们可以将其视为我们管理业绩的一种失败指数。我们产生很多现金，若我们能整体并购企业或买企业的一小部分，用光我们的现金，我们会很开心。
57. Fannie Mae and Freddie Mac as investments</br
对投资房地美和房利美的看法
WARREN BUFFETT: Zone 4.
AUDIENCE MEMBER: Gentlemen, my name is Richard Sercer from Tucson, Arizona. I understand that 40 percent of all home mortgages have been securitized by Fannie Mae and Freddie Mac, the duopoly. I would, at the risk of asking you for a projection, since you’ve talked about projections before, I’d be interested in understanding what you think will happen to that market share over time for this duopoly. Thank you.
股东：先生们，我叫理查德·塞尔，来自亚利桑那州图森市。我知道 40%的房屋抵押贷款都被房利美和房地美和双寡头抵押证券证券化了。我冒昧地要求你们做一个预测，因为你们之前已经讨论过预测了，我很想知道你们认为随着时间的推移，这种双寡头垄断的市场份额会发生什么。谢谢你！
WARREN BUFFETT: Well, the answer to that doesn’t involve much of a prediction. That market share is essentially certain to go up. That doesn’t mean that those are wonderful businesses to buy, but the market share is essentially certain to go up because the economics that those two entities possess, compared to other ways of intermediating money between investors and people who want to borrow, no one else has those economics.
巴菲特：这个问题的答案不需要太多的预测。市场份额肯定会上升。这并不意味着两房是值得买进的好企业。两房的市场份额之所以肯定会上升，是因为这两家实体跟在投资者与希望借贷的人之间扮演媒介的其他机构相比，拥有无与伦比的经济特征。
So what holds the share of Freddie Mac and Fannie Mae down is the fact that they are only allowed to loan roughly $200,000 on any mortgage. That’s a limiting factor. It’s probably been a good thing for them that it has been a limiting factor, but they are shut out of part of the market. But the market that they are in, they essentially have economics that other people can’t touch for intermediating money, including the savings and loan business that we were in. We had a business that intermediated money, went out and got it from depositors and lent it to people who wanted to borrow on a home. Freddie Mac and Fannie Mae do it the same way. They don’t do it exactly the same way, but they perform the same function. And they could do it so much more cheaply than we could do it by having branches or anything of the sort and paying the insurance fee we paid. They’re going to get the business. They should get the business. And so their market share will grow. Charlie?
两房市场份额不高的原因是两房受允许发放的任何抵押贷款额度只有(不超过)大约 20 万美元。这以前是一个限制因素，有一个限制因素对它们来说未必不是好事。以前有部分市场不允许两房进入，但在它们所允许进入的(那一部分)市场中，两房在货币媒介方面拥有其他机构无法望其项背的经济特征，我们投资的储贷机构都无法与其相比。我们有一家货币媒介机构，从储户处得到资金，然后放贷给想买房的人。两房也从事同样的业务，只是它们在开设分支门店等支出和年度保险费上的成本比我们低得多，所以它们将会抢到业务，它们的市场份额将会上升。查理？
CHARLIE MUNGER: Well, I think that’s right. (Laughter)
芒格：我觉得你说得没错。(笑声)
WARREN BUFFETT: You’re doing great. (Laughter)
巴菲特：你做的很棒。(笑声)
58. Increased information speed doesn’t affect our decisions</br
信息传播速度的提高不会影响我们的决定
WARREN BUFFETT: Zone 5.
AUDIENCE MEMBER: Good morning, I’m Sarah Pruitt (PH) from Milwaukee, Wisconsin. And I wondered if you feel that the speed with which information is available and disseminated today has affected your business-buying decision process. And do you believe that speed has caused you to miss opportunities?
股东：早上好，我是萨拉·普鲁特，来自威斯康辛州密尔沃基市。我想知道你是否觉得今天信息的传播速度是否影响了你的商业购买决策过程？你认为信息传播迅速会导致你错过了机会吗？
WARREN BUFFETT: Question about seas expanding?
沃伦·巴菲特：关于海洋扩张的问题？
CHARLIE MUNGER: No. Does the speed of information today affect our decision-making process?
CHARLIE MUNGER：
没有。今天的信息速度会影响我们的决策过程吗？
WARREN BUFFETT: No, we — I would say that we perform about like we were doing 30 or 40 years ago. I mean — (laughter) — we read annual reports. It isn’t the — the speed of information really doesn’t make any difference to us. It’s the processing and finally coming to some judgment that actually has some utility, that is, that it’s a judgment about the price of a business or a part of a business, a security, versus what it’s essentially worth. And none of that involves anything to do, really, with quick information. It involves getting good information.
巴菲特：不会。我们现在的运作和 30 年至 40 年前很相似，我们还在读年度报告。(笑声)信息快速传播其实对我们没有任何影响，关键在于处理信息并最后得出一些有用的结论，那就是判断企业或者企业的一部分(意即企业的证券)的价格和其价值的比例，这些和信息的快速与否毫无关系，只是和得到的信息好不好有关。
But usually that — it’s not — we’re not looking for needles in haystacks or anything of the sort. You know, we like haystacks, not needles, basically. And we want it to shout at us. And I would say that, well, virtually everything we’ve done has been reading public reports, and then maybe asking questions around to ascertain trade positions or product strengths or something of that sort. But we never have to — we can make decisions very fast. I mean, we get called on a business — or we can make up our mind whether we’re interested in two or three minutes. That takes no time. We may have to do a little checking on a few things subsequently.
我们不做在干草堆里找针或类似的事情，我们只是喜欢干草堆一样大的机会，不喜欢针一样难找的机会，我们希望机会能对我们大叫。我们所做的就是阅读公开报告，然后会去询问几个问题，从而确定交易仓位、产品强度等问题。我们可以很快地作出决策，能在两三分钟内判断是否对某事感兴趣，这并不需要花费很多时间。然后我们可能需要检查一些东西。
But we don’t need to get — I can’t think of anything where we really need lots of price data or things like that extremely fast to make any decisions. We’ve got good management information systems in our operating businesses, but that’s just another — that’s a question of keeping inventories where they should be and all of that sort of thing. I don’t think the invest — I think you could be in someplace where the mails were delayed three weeks, and the quotations were delayed three weeks, and I think you could do just fine in investing.
但我想不出有什么场合是需要快速得到大量数据才能作出决策的。我们的营运子公司有良好的管理信息系统，不过那些信息是库存。我认为，就算住在一份邮件要三周才能到达、报价也要三周才能到达的地方，照样能明智地投资。
59. Why a stock buyback is unlikely</br
WARREN BUFFETT: Zone 6.
AUDIENCE MEMBER: James Pan (PH), New York City. I have a two-parter question. One, do you think the stock price of Berkshire Hathaway is trading within 15 percent of its intrinsic value currently? And two, if you think Berkshire Hathaway is undervalued with the amount of cash you have on your balance sheet, would you consider a buyback?
WARREN BUFFETT: The answer about a buyback is that we generally have felt that market conditions that would make Berkshire attractively priced is probably going to make other things even more attractively priced, because we think our shareholders are more rational than the shareholders of many companies.
It’s more likely that we will find some wonderful business at a silly price than we will find Berkshire at a silly price as we go along. So — (applause) that tends to eliminate repurchases.
将来，我们会发现一些优秀公司处于荒谬低价，这比我们发现伯克希尔处于荒谬低价的可能性更高。（掌声）
But it doesn’t rule them out, but it explains why the circumstances will not arise very often where repurchases would make good sense.
60. Why we don’t estimate our intrinsic</br
WARREN BUFFETT: In terms of giving you a number on intrinsic value, I don’t want to spoil your fun. I mean, you really should work that one out for yourself. (Laughter)
Charlie is the expert on intrinsic —
Do you have any comment for him, Charlie?
查理是研究内在价值的专家，查理？
CHARLIE MUNGER: Well, your attitude on that subject reminds me of a famous headmaster who used to address the graduating class every year. And he’d say, “You know,” he says, “Five percent of you people are going to end up criminals.” And he says, “I know exactly who you are.” (Laughter) And he said, “But I’m not going to tell you, because it would deprive your lives of a sense of excitement.” (Laughter) If you stop to think about it, the companies that constantly told their shareholders what the intrinsic value was were the real estate holding companies in corporate form. And I must say, that the amount of folly and misbehavior that crept into that process was disgusting. We would be just associating with a bad group if we were to change our ways.
芒格：嗯，你在这个问题上的态度让我想起了一位著名的校长，他每年都在毕业班演讲。他会说，“你知道，“他说，“你们当中有5%的人最终会成为罪犯。他说：“我知道你是谁。“(笑声)他说，“但我不会告诉你，因为这会让你的生活失去激情。“(笑声)以前房地产控股公司不断告诉股东自己的内在价值是多少，必须指出，它们报出的数字之愚蠢以及其中的歪门邪道令人作呕。如果我们也公布自己的内在价值，我们岂不是和这些人为伍了？
WARREN BUFFETT: Bill Zeckendorf Sr. I think was probably the first one to do that, with Webb and Knapp back in the late ’50s. I still have those annual reports. And he would announce, you know, like, to eight decimal places what the intrinsic value of Webb and Knapp was. And he did it right till the day they filed for Chapter 11. (Laughter)
CHARLIE MUNGER: I remember that well, because somebody said that he fell into bankruptcy. And somebody else said, “How can you fall off a pancake?” (Laughter)
芒格：我记得很清楚，因为有人说他破产了。还有别人说：“你怎么可能会破产呢？“(笑声)
WARREN BUFFETT: Beware of people that give you a lot of numbers about their businesses. I mean, in terms of projections or valuations or that sort of thing. We try to give you all of the numbers that we would use ourselves in making our own calculations of value. We really — if you read the Berkshire reports, you essentially — you have all the information that Charlie and I would use in making a decision about the security. And if there’s anything really lacking in that respect, you know, we would actually — we would truly appreciate hearing from you, because we want to have that kind of information in the report. But then we want you to make the calculation.
巴菲特：若有人提供一大串企业预期和估值等方面的数据，你要小心。我们尽量向你们提供我们自己在计算价值时使用的所有数据，在伯克希尔的年报里，查理和我用来对一个证券下决策的所有的信息都有，但我们希望你自己计算。
But we’ve stuck, I mean, that material, for example, on the float in the insurance business, we consider that quite relevant, obviously, because we use up almost a page printing it. It’s pretty serious stuff at Berkshire. (Laughter) But that is relevant. I mean, your interpretation may be different than mine or Charlie’s, but those are important numbers. And we could give you a lot of baloney about satisfied policyholders, you know, in Lincoln, Nebraska. It wouldn’t tell you a thing about what the company’s worth — and have pictures of them, and happy, you know, receiving the check from the agent and all of that. (Laughter)
我们在年报里放进那些保险公司浮存金的资料，几乎用了一页篇幅，在伯克希尔，这算是非常重视的。(笑声)我们认为这些资料关系相当重大。你的解读可能和我或查理的解读不一样，但这是很重要的数据。我们可以给你们写一些胡扯，比如说保单持有者对我们很满意之类，但这样就不能告诉你们保险业务的价值。我们可以描绘一下保险客户收到支票时有多么开心等等，(笑声)但我们不会这么做。
61. Buffett on Peter Lynch</br
巴菲特谈彼得林奇
WARREN BUFFETT: Zone 1.
AUDIENCE MEMBER: Mike Macy (PH) from Indianapolis. I have really enjoyed reading your annual letters and your annual report, and I’ve gone back and read all of the older ones, too. They’re terrific. I have also enjoyed reading the two books by Peter Lynch, and I see a lot of commonalities between the two of you, the way you think, your philosophy, et cetera. I’d certainly appreciate it if you’d make a few comments on what you think of Peter Lynch, the things he says in his two books, and the advice that he gives to investors. Thank you.
股东：迈克·梅西，来自印第安纳波利斯。我真的很喜欢读你的年度信件和年度报告，而且我还回去读了以前所有的信件和报告。它们是很棒的。我也很喜欢读彼得·林奇的两本书，我发现你们俩有很多共同点，你们的思维方式，你们的哲学等等。如果您能就您对彼得·林奇的看法、他在两本书中所说的话以及他给投资者的建议发表一些评论，我将不胜感激。谢谢你！
WARREN BUFFETT: Well, I know Peter. I don’t know him well, but we’ve played bridge together in Omaha as a matter of fact. I like him personally, and obviously he has an outstanding record. And he has written those two books, which have been bestsellers, about his investment philosophy. I don’t really have anything — you know, I’m not going to embroider on his. There’s certainly a fair amount of overlap. There’s some difference.
巴菲特：我认识彼得，虽然和他不熟，但我们曾在奥马哈一起玩过桥牌。我个人很欣赏他。他是个高层次的人，有出色的以往业绩，他写的两本关于他的投资哲学的书很畅销。我没有什么可补充的，我不想添油加醋。我们之间肯定有一些相同的观点，当然也会有一些不同的观点。
Peter, obviously, likes to diversify a lot more than I do. He owns more stocks than the names of companies I can remember. I mean, but that’s Peter. (Laughter) And, you know, I’ve said in investing, in the past, that there’s more than one way to get to heaven. And there isn’t a true religion in this, but there’s some very useful religions. And Peter’s got one, and I think we’ve got one that’s useful, too. And there is a lot of overlap. But I would not do as well if I tried to do it the way Peter does it, and he probably wouldn’t do as well if he tried to do it exactly the way I’d do it. I like him personally very much. He’s a high-grade guy.
很显然，彼得多元化的程度大大超过我，他持有的股票数比我能记起来的公司名还多。那是彼得的风格。(笑声)我以前说过，通往投资天堂的路不止一条。投资中没有唯一的方法，有用的方法有很多，我认为我们的方法也是有用的。我们有很多相同的地方，但如果让我用彼得的方法，我不可能获得彼得的成就。如果让彼得用我的方法，他也不能获得我的成就。我个人非常喜欢他，我对他有很高的评价。
62. We’ll only write insurance when prices make sense</br
伯克希尔只会在价格合适的时候承保
WARREN BUFFETT: Zone 2.
AUDIENCE MEMBER: Mr. Buffett, Mr. Munger, my name is Dave Lankes (PH). I’m a senior editor at Business Insurance Magazine. A two-part question for you. Can you explain a little bit regarding your primary insurance operations? What drove up written premiums by more than 50 percent last year, and if you expect that to continue this year? And then regarding your earlier comments on the stupid things reinsurers can do en masse, can you explain what potential pitfalls that the new cat facilities in Bermuda will have to avoid that you feel Berkshire Hathaway won’t fall into?
股东：巴菲特先生，芒格先生，我叫戴夫·兰克斯。我是商业保险杂志的高级编辑。问你两个问题。您能解释一下您的主要保险运营情况吗？是什么因素导致去年的书面保费上涨了 50%以上，如果你预计今年还会继续上涨的话？然后，关于再保险公司会集体做的蠢事，你能否解释一下，什么是百慕大群岛注册的保险商有而伯克希尔没有的潜在的缺陷？
WARREN BUFFETT: Well, the first question about our primary insurance figures, you’ll find it way in the back someplace. But they’re a little distorted because we bought Central States Indemnity, what would it be, late in the year ’92. So there’s a lot more premium volume in there for Central States in ’93 than there was in ’92. Our basic — National Indemnity’s basic insurance, which is commercial, auto, and general liability, premium volume was fairly flat, the Homestate operation fairly flat, Cypress up somewhat. But those numbers were not anything like the changes —
巴菲特：关于主要保险运营情况的第一个问题，你们可以在后面找到。但是他们有一点扭曲，因为我们在 92年晚些时候购买了中央州信用赔款保险。所以 93 年中央州信用卡的保费收入要比 92 年更高一点。我们最主要的国民保险公司，主要经营商业保险、汽车保险、一般责任险等，这些保费都很平稳。同时，住宅保险业务(HomeState)也运营的很平稳。这些业务都稳中有升。但所有的这些数字，和实际变化有所不同。
So our business last year, pro forma for including Central States Indemnity for all of ’92, would not have shown a dramatic change. There really hasn’t been much happening in our primary business, except that it’s been run, it’s done very well, but it is not growing or exploding. And that’s true this year as well as last year. It’s a good business. And it could grow in certain kinds of markets very substantially, but it is not growing in this market, and it did not grow last year, although its underwriting was very good. In the reinsurance business, I think, essentially, the difference in our reinsurance business from many others, you know — it doesn’t include them all in a place like Bermuda — is essentially the difference that may exist in our operations and securities versus other people.
我们去年的业务，包括92 年中央州信用赔款保险，都不会有太大的变化。我们的主要业务并没有发生太多变化，除了它一直在运行，它做得很好，但它没有爆炸性的增长。今年和去年都是如此。这是个好买卖。它可以在某些市场大幅增长，但在这个市场却没有增长，去年也没有增长，尽管它的承销业务非常好。我们的保险公司和其他机构(不是所有的机构)的区别，实质上是安全感的来源。
We will offer reinsurance at any time in very large quantities at prices we think make sense. But we won’t do business if we don’t think it makes sense, just like we will buy securities, to the extent of the cash we have available, if they make sense. But we have no interest in being in the stock market per say just to be in it. We want to own securities that make sense to us. I think for most managements, if the only thing they’re in is the reinsurance business, they may like it better when prices make sense, but they will, I think they will be prone to do quite a bit of business when prices don’t make sense as well, because there’s no alternative, except to give the money back to the owners. And that is not something that most managements, you know, do somersaults over. (Laughter)
不论何时，只要我们认为价格合理，就会提供大量的再保险服务，但如果我们认为不合理，就不进行此业务。这和投资是一样的，简单地说，如果我们认为证券的价格合理，我们会投入所有可用现金购买证券，但对为了买股而买股毫无兴趣。我认为大多数管理层如果只从事再保险业务，在价格合理的时候会更喜欢进行业务，但在价格不合理的时候，除了把钱还给股东外没有别的选择，他们不愿还钱给股东，就会倾向于进行更多的不合理的业务。大多数经理人无法跨越这个坎。(笑声)
So, I think we are in a favored position, essentially being — having the flexibility of capital allocation that lets us take the lack of business with a certain equanimity that most managements probably can’t, because of their sole focus on the business. Rates will get silly, in all likelihood, after a period when nothing much happens, when you’ve had a couple of years of good experience. We price to what we think is exposure. We don’t price to experience. I mean, the fact that there was no big hurricane last year — I forget the name of the one that was coming in at North Carolina and then veered out essentially — but to us, it has nothing to do with the rates next year whether that hurricane actually came in in a big way or veered out into the Atlantic again. I mean, we are pricing to exposure.
我想我们的情况很好，我们的资本配置很灵活，在没有合适的业务的时候，可以不动如山，而其他大多数机构的管理层就无法做到这一点，因为他们只有一个业务可做。若一段时间没有任何灾难发生，保险商过了两年好日子，保险费就会下降到愚蠢的程度。不过我们还是根据我们认为自己所承担的风险，而不是根据过往的经验来定价。事实上，去年没有发生飓风和明年的保险费毫无关系。
And everyone says that, but the market tends to price and respond to experience, and generally to recent experience. That’s why all the retrocessional operations in London, you know, in the spiral, went busted, because they priced, in our view, they priced to experience rather than to exposure. It’s very hard not to do that, to be there year after year with business coming by and investors expecting this of you and not do that.
所有的人都说自己根据风险定价，但是市场趋向于根据过去的经验，特别是最近的经验来定价并作出反应。这就是伦敦那么多的再保险公司以破产告终的原因，因为它们的定价体现了经验而不是风险。很难年复一年地坚持，看着业务从门前走过不去接。
But we will never knowingly do that. We may get influenced subconsciously in some way to do that, but we will not do that any more than we will accept stock market norms as being the proper way for us to invest money and equities. Basically, when you lay out money or accept insurance risks, you really have to think for yourself. You cannot let the market think for you. Charlie?
不过我们绝不在知情的情况下，去承接价格不合理的业务，我们也可能潜意识地受到影响，接下价格不合理的业务。但是我们进行的价格不合理的投资，不会多于价格合理的投资。当你投资或者承担保险风险的时候，应该自己思考，不能让市场替你思考。查理？
CHARLIE MUNGER: Yeah, I think Berkshire is basically a very old-fashioned kind of a place. And it tries to exert discipline to stay old-fashioned. CHARLIE MUNGER: Yeah, I think Berkshire is basically a very old-fashioned kind of a place. And it tries to exert discipline to stay old-fashioned.
芒格：伯克希尔是一家非常老派的公司，我们努力自律，保持我们的风格。我说的老派并不是老旧的愚蠢，我说的是永恒的真理包括基本的数学、基本的常识、基本的恐惧、对人类本性的基本诊断，这使得预测人类行为成为可能。如果你能自律地遵照那些真理，你的回报可能会很不错。
63. Praise from Sandy Gottesman</br
来自桑迪·戈特斯曼的赞扬
WARREN BUFFETT: Zone 3.
DAVID GOTTESMAN: David Gottesman from New York. It’s no wonder that this meeting draws stockholders from all over the country. And despite the talk about age today, I’m happy to say this meeting gets better every year. Berkshire stands unique in American business as a company whose name has become synonymous with management excellence. Unlike many American corporations, we, as stockholders, don’t have to worry about reorganizations, large write-offs, massive restructurings, overstated earnings, and overpaid executives with strategic visions. Instead, year in and year out, we enjoy the benefits of the common sense and brilliance of Charlie and Warren. (APPLAUSE)
戈特斯曼：David Gottesman 来自纽约。难怪这次会议吸引了全国各地的股东。尽管今天已经谈论得很多了，但我还是很高兴地说，这个会议一年比一年好。作为一家名字已经成为卓越管理代名词的公司，伯克希尔在美国商界独树一帜。与许多美国公司不同的是，作为股东，我们不必担心公司的重组、巨额减记、大规模重组、过高的利润以及高管薪酬过高等问题。相反，年复一年，我们享受着查理和沃伦的常识和智慧带来的好处。(掌声)
WARREN BUFFETT: What did you say your name was? (Laughter)
巴菲特：不好意思，你刚刚说你叫啥来着？(笑声)
DAVID GOTTESMAN: I want to add to that, to say nothing of your good humor. It’s easy to take such consistently outstanding results for granted, but we in this room are the direct beneficiaries of their efforts. By our presence here today, we show our appreciation to them for their exceptional performance. But we can also demonstrate in another way. I would like to suggest we give them a rousing hand of applause for a job well done. Thank you. (APPLAUSE)
戈特斯曼：我想补充一点，更不用说你的幽默了。我们很容易把这种持续不断的杰出成果视为理所当然，但我们在座的各位是他们努力的直接受益者。我们今天出席会议，是为了感谢他们的杰出表现。但我们也可以用另一种方式来证明。我想建议我们为他们出色的工作给予热烈的掌声。谢谢你！(掌声)
WARREN BUFFETT: Thank you. That was Sandy Gottesman. We’ve worked together for 30-odd years, and he’s finally got that down. I appreciate that, Sandy. (Laughter)
巴菲特：谢谢你！那是桑迪·戈特斯曼。我们一起工作了30多年，他终于明白了。我很感激，桑迪。(笑声)
64. Brief adjournment</br
短暂休会
WARREN BUFFETT: With that, we will adjourn. And anyone who wants to stay around, we’ll reconvene in 15 minutes, and then we’ll be here till about 1:15.
巴菲特：我们现在短暂休会。如果有人想留下来，我们会在15分钟后再集合，然后我们会在这里待到1点15分。
Afternoon Session</br
下午场
PDF: [[
500-投资与投资人/510-海外价值投资人/510.01-巴菲特与芒格/510.01.20-股东大会/510.01.21-Berkshire Hathaway Annual Meeting/19940425-1994 Annual Meeting (Afternoon Session).pdf|1994 Annual Meeting (Afternoon Session)]]
1. No comment on Guinness investment
WARREN BUFFETT: Zone 2 now. Well, I don’t know where zone 2 is, but we’ll — (laughs)
AUDIENCE MEMBER: Do you feel basically the same about your investment in Guinness now as when you made the investment, in terms of the company?
WARREN BUFFETT: Well, I wouldn’t like to comment on anything that we own, in terms of how we rate them as desirability or anything. I mean, whether it’s Coke or Gillette or anything that — we made decisions at a given time, at a given price, which you can figure out by looking at our purchases.
But we may be buying or selling any of those securities right as we talk. And we simply don’t think it’s in the interest of Berkshire shareholders as a group to be talking about things that we could be buying or selling.
2. World Book’s sales slide: “I wish I knew the answer”
WARREN BUFFETT: OK?
AUDIENCE MEMBER: Hi, David Winters, from Mountain Lakes, New Jersey.
Just wondering, World Book’s had a tough time lately, and I’m wondering if there’s things you’re doing to try to improve that.
And also, The Buffalo News has been fabulous. And I’m kind of wondering what’s driving The Buffalo News?
WARREN BUFFETT: Buffalo News is doing what?
AUDIENCE MEMBER: Fabulously.
WARREN BUFFETT: Yeah, it’s doing well, right. Well, I would say you got to give credit Stan Lipsey — I’m not sure whether Stan’s here right now, but — who’s been running the News.
World Book, in terms of unit sales — as we put in the report — have fallen off significantly the last few years. It’s actually surprising, in a sense, how well the profits have held up because they’ve done a good job, a very good job, in that respect.
And as we put in the report, we don’t know the answer, precisely. We are, Ralph Schey is — has taken some actions — is taking some actions — that he thinks will improve the operations. Ralph’s record as a manager is absolutely at the top of the list. I mean, it — I wrote about it in the 1992 report.
In 1993, Ralph did even better. I mean, it was a — fabulous. I think, probably, may have been 110 or so million pre-tax on 90-some million of average equity capital, or something of the sort. So it’s a fabulous record.
But Encyclopedia Britannica, as you probably know, ran at a loss last year. The encyclopedia business has been very — has been poor. Could be due to electronic competition, could be due to recruiting problems for salespeople. Obviously, it can be a combination of many factors.
If we knew the answer, we’d have — you wouldn’t be seeing those figures right now. But it is a top item of attention for Ralph. He takes anything that’s not performing as well as before very seriously. And we will see what happens.
But I don’t have a prediction on it. I wish I knew the answer. I don’t see any variables to, in any intelligent way, tell you or — we put in the report the best we could do on that.
The profitability has, like I say, has been pretty good. But obviously, current trends of new sales will catch up with us at some point, unless we boost unit sales.
I don’t think our market share, if you look at print encyclopedias, has fallen. But I can’t be sure of that, but I think that’s probably true. But there are an awful lot of encyclopedias going out there as part of a bundled product with computer sales.
3. Breaking up Berkshire wouldn’t help
WARREN BUFFETT: How are we going to do this, is there?
VOICE: We got three now.
WARREN BUFFETT: OK, I’ll let you hand the mic to whomever, you —
VOICE: (Inaudible) three.
AUDIENCE MEMBER: Lee again, from Palo Alto. By Omaha standards you are a relatively young man.
And every year, you point out that Berkshire’s size now precludes you from making the great, relatively small trades which made your reputation.
How much thought have you given to breaking up Berkshire into smaller entities?
WARREN BUFFETT: How much what?
AUDIENCE MEMBER: How much thought have you given into breaking up Berkshire into smaller entities, which would allow you to make those nice, small, wonderful trades that you made from the beginning?
WARREN BUFFETT: It wouldn’t do any good to break into smaller entities, because I’d still own, you know, we’d still have 10 billion-plus of capital to be responsible for, wherever it would be.
So, the — we could distribute it out to the shareholders, and let them make their own decisions, obviously. And any time we thought that we weren’t going to get more than a dollar of value per dollar retained, that, obviously, would be the course to follow.
But there’s no magic to creating multiple little — I mean, we could call Berkshire Two, Berkshire Three, Berkshire Four, but you still got the problem. There’s $10 billion to invest, and it doesn’t really solve anything.
Charlie, do you have any thoughts on that?
CHARLIE MUNGER: No, the — Berkshire is incredibly decentralized, in the — in terms of power and decisions resting in the operating divisions. In terms of the marketable securities, it’s incredibly centralized.
And so far, we have not had any big penalty from not being able to do the things that we did when we were young. Eventually we will reach the penalty.
WARREN BUFFETT: Yeah, I think we’re — there’s no question we could earn higher percentage returns working with 10 billion. But, yeah — but it hasn’t hurt us as much as we thought it would, as size has increased.
But your universe of opportunity shrinks. But it shrinks no matter — I mean, you can set it up in 20 bank accounts or one bank account, but you still — the universe still has to fit the 10 billion, in aggregate.
4. “Absolutely sensational job” by General Dynamics management
WARREN BUFFETT: Now, how are we doing this? Do we have another zone over there? Yeah.
AUDIENCE MEMBER: Michael Bunyaner (PH), New York City.
Two questions. One, last year you discussed in your annual report your investment in General Dynamics. And you also gave your proxy to the company and its management. This year, it appears you have sold the stock.
WARREN BUFFETT: This year, what?
AUDIENCE MEMBER: This year, it appears that you have sold the stock in General Dynamics.
What has changed that you sold 20 percent of your stake? This is question number one, and I have number two.
WARREN BUFFETT: Probably inappropriate to be talking about what we’re buying or selling, except to the extent that we make a public — have to make a public announcement, which, on something like General Dynamics, we’ve got 13G requirements if we change by more than 5 percent.
And we also have — as long as we own more than 10 percent — we have monthly reporting requirements under Form 4.
We think the management of General Dynamics has done an absolutely sensational job.
Obviously, also it isn’t the kind of business, basically, that we have a 20-year view on, or something of the sort. So, it’s — the shareholders of General Dynamics have been extraordinarily well-served by the management of that company. And we’ve — we’re thankful, because we prospered accordingly.
AUDIENCE MEMBER: But should I take from this comment that you have changed your view about the business itself?
WARREN BUFFETT: Pardon me?
AUDIENCE MEMBER: Should I take from your comment that you have changed your view about the business itself?
WARREN BUFFETT: No, no. I think you take my comments as saying just what I’ve said. (Laughs)
AUDIENCE MEMBER: OK. (Laughter)
Question number two, could you tell me —
WARREN BUFFETT: I think we want to give people a chance around the room, and then when, in the zone you’re in, when a second question comes along, it will be fine. But we want to get as many people in this hour as we can, because this is the hard core here.
5. No encouragement for short-term stockholders
WARREN BUFFETT: Zone 1?
AUDIENCE MEMBER: It appeared to me that in 1993 the variation between the stock price for the high and the low was much greater than years in the past. Would you mind commenting on that?
WARREN BUFFETT: Well, there was more volatility in the price of Berkshire last year. And as I put in the annual report, the stock overperformed the business last year.
Now, over any 10 or 20 or 30-year history, every year the stock is going to perform a little differently, at least, from the business. I mean, it may slightly underperform, or slightly overperform.
We would prefer that those variations be as small as possible. But there was more variability last year than historically’s been the case. Although we’ve had one or two other — we had a few years like that. We —
Our best way to handle that is to give all the information we can to shareholders and prospective shareholders, and follow policies that we think will induce the investment-oriented with long time horizons to join us, and not to encourage other people. But, occasionally — you know, we can’t guarantee that result.
One of the things that was interesting to me, I don’t know whether it was three months ago or when, but I happened to be talking to the [NYSE] specialist, terrific specialist, Jimmy Maguire. He had to leave, but he was here earlier in the session.
And I think, at the time, the stock was around 16,000 or something like that. And he had some rather significant stop-loss orders on the books at 15-5, or thereabouts, involving some hundreds of shares.
And that to me is a signal that, you know, we have some people that are — in my view — are not really the kind of owners that we would like to attract. Because why somebody wants to put in an order to sell something for 15,500 that they don’t want to sell at 16,000 is beyond me, but — (Laughter)
The idea of people using stop-loss orders with Berkshire, obviously — it tells me that we’ve got some people in that are using it as trading vehicle of some sort, or have some totally non-investment-type calculations in their mind.
I don’t think we have very many of them. But obviously, if we have enough people like that, you will have a more volatile stock than if you have a whole bunch of people who look at it as something that they’re going to hold for the rest of their life.
And the stock did go down at that time and hit 15,500. And there were — that — I think it was close to 300 shares, which is 4 1/2 million dollars’ worth of stock.
And somebody made a decision, apparently, that they — or some small number of people — made a decision that they wanted to sell something at 15,500 that they could have sold for 16,000. The lower it went, the better they liked it, apparently. I mean, the better they liked the sale. (Laughter)
Which, you know, has always struck me as like having a house that you like, and you’re living in, and, you know, it’s worth $100,000 and you tell your broker, you know, if anybody ever comes along and offers 90, you want to sell it. I mean, it doesn’t — (laughter) — make any sense to me.
But it has — I would say that there’s been some small — I think, relatively small — tendency for people to get — relatively few people — but to get more interested in the price of the stock in terms of — and thinking of it in terms of whether it’s going to go up or down in the next six months, than might formerly have been the case.
I think we’re unusually well-blessed in that respect, in that we’ve got people who basically want to own it for a very long time.
But to the extent that you get people who were owning it because they think the stock market’s going to go up, or something of that sort’s going to happen, that is not good news from our standpoint, and it will increase the volatility in it.
We will do nothing to encourage that.
6. Berkshire benefits when the stock market falls
WARREN BUFFETT: Zone 2?
AUDIENCE MEMBER: Yes, Mr. Buffett, Steve Lang (PH) from Toronto.
I was just curious about when you were saying that one of the best things that could happen to shareholders is the — the market goes down and you’re able to buy good businesses at foolish prices.
And then a little on, you were saying that we could judge your ability to do what it is that you feel you should be doing by how much cash you have in the account at any given point in time, and —
WARREN BUFFETT: By what?
AUDIENCE MEMBER: By the amount of cash that you have in the account. In other words, I guess, what you feel you’re supposed to be doing is investing the cash in good businesses.
So I’m just wondering about that kind of dichotomy. Where does the cash come from if the market does go down, if you’ve been successful in your first ability? Would that be from the cash flow on the operations of the business from the float?
WARREN BUFFETT: Yeah.
AUDIENCE MEMBER: Is that —?
WARREN BUFFETT: Yeah.
AUDIENCE MEMBER: So really, the success of the company then is, to some degree, the fact that you’re able to dollar-cost average into the market on an ongoing basis? Is that right?
WARREN BUFFETT: Well, it isn’t that precise. But A, we do generate cash in considerable amounts, so that we will not husband cash, simply because we think the market’s going to go down, in order to buy something.
But obviously, as cash comes in, we’re always looking for things to do. And the cheaper that the market is generally, the more likely it is that we will find something that we understand and that we like, and that the price will be attractive, and that we will do it.
But it isn’t like we can change around the whole portfolio then, because that doesn’t gain us anything. I mean, we’d be selling things at lower prices to buy things at lower prices.
But to the extent that we have net cash coming in — which we do, and which we will have — on balance, we’re, you know, we’re adding to our businesses at more attractive prices than would be the other case.
And it’s no prediction on any given company. I mean, whether it’s Gillette or Coke, or anything. It might be something we already own, it might be something we don’t own. But we welcome the chance to buy more shares.
We’re not wishing it on anybody. But if you asked us next month whether Berkshire would be better off if the whole stock market were down 50 percent or where it is now, we would be better off if it was down 50 percent, whether we had any cash on hand now or not, because we would be generating cash to buy things.
7. Salomon’s compensation: “Far from ideal”
WARREN BUFFETT: Zone 3?
AUDIENCE MEMBER: Byron Ransdell (PH) from Raleigh, North Carolina. Thanks for your hospitality to this weekend.
WARREN BUFFETT: Well, we thank you for coming, too.
AUDIENCE MEMBER: My question concerns Salomon, Inc., and more specifically, Salomon Brothers. I know that you were on the board of directors, I think, from ’87 to the current time. Very much interested in compensation there, and maybe on the compensation committee.
Between 1987 and 1992, Salomon’s financial results were quite dismal in a very lumpy way, but overall, quite dismal.
In your opinion, if the compensation had been rational during this time, would Salomon have shown results that would make it a quite decent business?
WARREN BUFFETT: Would Salomon — if the compensation —
CHARLIE MUNGER: If the past compensation —
WARREN BUFFETT: — had been more rational —
CHARLIE MUNGER: — decisions had been more rational, ’87 to the current time, would Salomon have done better? Yeah, was that it?
AUDIENCE MEMBER: Yes, sir.
WARREN BUFFETT: Well, I would — yeah, I would say that, if the present people and the present compensation philosophy — which allows for very large payments for very large results — I think the company would have done better, yeah.
It — you’re going to see very big numbers paid in Wall Street. That’s the nature of it. The trick is to pay them only when you’re getting very big results for the owners. I mean, it — there’s no way you’re going to pay numbers that look like numbers in other industries, and get great results for owners.
But if you pay these big numbers, I think you should be getting very good results for owners.
And there — the old system was not — I mean, it wasn’t totally off the mark on that. But it was far from an ideal system, in my view.
8. Unlikely to write put options on Coca-Cola again
WARREN BUFFETT: Zone 1?
AUDIENCE MEMBER: Warren, I have one question.
Last year you were using Coca-Cola puts as a way to increase income, and conversely, if they were exercised, as a way of increasing your position. Do you still use puts in this type on investments you wish to add to?
(BREAK IN RECORDING)
WARREN BUFFETT: — five million shares, as I remember, of Coke sometime in the early fall or thereby — I don’t remember exactly — last year. And the puts, I think the premium was around 7 1/2 million dollars, and they were priced around 35.
We have not done that very often, and we’re unlikely to do very much of it. For one thing, there are position limits on puts, which don’t apply to us, but they apply to the brokers for which we do them. And those position limits were not clear before that. But we could probably write puts on that same amount by doing it through a bunch of different brokers.
It’s not something we’re really very likely to do. I was happy to do it, and in that particular case, we made 7 1/2 million dollars.
But we’re better off, probably — if we like something well enough to write a put on it, we’re probably better off buying the security itself, and particularly since we can’t do it in the kind of quantities that really would make it meaningful to Berkshire.
There are securities I would not mind writing puts for 10 million shares or something, but I — that probably — it’s probably allowable for us to do it. It’s not allowed — we’d probably have to do it through multiple brokers to get the job done.
And on balance, I don’t think it’s as useful a way to spend my time as just looking for securities to buy outright.
Charlie, you have anything?
CHARLIE MUNGER: No.
9. Don’t believe reports on what we’re buying or selling
WARREN BUFFETT: Zone 2?
AUDIENCE MEMBER: Mr. Buffett, I’m from West Point. And my name is Rogers.
A couple of months ago, there were stories in The World-Herald that Berkshire Hathaway had taken a large position in Philip Morris, and UST. But in your annual report, I don’t see anything about that. Can you comment?
WARREN BUFFETT: Yeah, I would say, in the last two years maybe — I’m just approximating — I’ve probably seen reports in either The Wall Street Journal, or USA Today — maybe picked up by The Associated Press, or in The Herald, but in papers of some significance — I’ve probably seen stories that we were buying maybe any one of 10 companies in aggregate over that period of time. I would say a significant majority were erroneous.
We don’t correct the erroneous ones, because if we don’t correct the erroneous ones — if we correct the erroneous ones, and don’t say anything about the correct ones, in effect we’re identifying the correct ones, too.
So we will never comment on those stories, no matter how ridiculous they are.
And it’s interesting because, you know, they keep getting printed. And frankly, from our standpoint, the fact that most of them are inaccurate is probably useful to us. We don’t do anything to encourage it, but it — the fact that people are reading that we are buying A, B, C, or X, Y, Z when we aren’t — you know, that’s — I don’t think people should be buying stocks because they’re reading in the paper that we’re buying something. But if they do, they may get cured of it at some point.
Maybe the newspapers will even get cured of writing the stories when they don’t know, you know, what the facts are.
But it’s something we live with, and we’ll probably continue to live with.
And I would say that based on history, if you read something about us buying or selling something, other than through reports we’ve filed with the SEC or regulatory bodies, the chances are well over 50 percent — that I can tell you, based on history, is correct — well over 50 percent that it’s wrong.
AUDIENCE MEMBER: Do you expect that Berkshire will become one of the Standard & Poor 500 stocks, or a Dow Jones stock?
WARREN BUFFETT: Well, I think it’s unlikely it ever becomes a Dow Jones stock.
I don’t know what the criteria are for the S&P 500. But I imagine there’s some reason why we don’t fit. I don’t know whether they have questions about number of shares outstanding or — I’ve never checked with S&P.
I wouldn’t be surprised if we have the largest market capitalization of any company that isn’t in the S&P, although I don’t know that. But they may have some criteria that preclude Berkshire being part of it.
I’ve always thought it would be very interesting, for those of you who like to think about such things, that if we were part of the S&P 500, and enough people became indexed so that 60 percent of the market was indexed, and if Charlie and I wouldn’t sell, which we wouldn’t, it’d be an interesting proposition as to how the index funds would ever get their 60 percent if they tried to replicate the S&P.
It’d be — I don’t know whether they have rules even about concentration of ownership. That same line of thinking might have applied to Walmart, or some company.
Because just take the extreme example of a company that had 90 percent of its stock owned by one individual, and 12 percent of the money in the market were indexed, and the 90 percent wouldn’t sell, it would bring back the Northern Pacific Corner or something of the sort.
In any event, I don’t think that’s going to be a problem. And I don’t think we are going to end up being in either index, so —
11. Diversify if you don’t understand businesses
WARREN BUFFETT: Yeah, zone 1?
AUDIENCE MEMBER: Mr. Buffett, my name is Aaron Morris (PH). I’m from California.
What I wanted to know was how you think about how large a position you’re willing to take in a given security, both in your case, where you have new cash coming in that you can invest, and in the case of an investor, where they have a fixed amount of capital, and they’re trying to decide what’s the most (inaudible) security that they really love?
WARREN BUFFETT: Well, Charlie and I have — probably at our present size, we will never find anything that we get as much money into as we want. Don’t you think that’s probably true, Charlie? If we really like it?
CHARLIE MUNGER: Yeah, I think that’s quite likely.
WARREN BUFFETT: Yeah, so we will probably never hit the limit. We would love to. We’d love to find something we felt that strongly about, and occasionally we do.
But we won’t get as much money into it as we would wish, or as if we were running a million dollars of our own money or some number like that, so —
We are willing to put a lot of money into a single security. When I ran the partnership, the limit I got to was about 40 percent in a single stock. I think Charlie, when you ran your partnership, you had more than 40 percent in —
CHARLIE MUNGER: Sure. (Laughter)
WARREN BUFFETT: And we would do the same thing if we were running smaller partnerships, or our own capital were smaller and we were running that ourselves.
Because, no, we’re not going to do that unless we think we understand the business very well, and we think the nature of the business, what we’re paying for it, the people running it, and all of that lead up to virtually no risk, and —
But you find those things, occasionally. And we would put — assuming it were that much more attractive than the second, and third, and fourth choices — we would put a big percentage of our net worth in it.
We only advise you to do that — well, we probably don’t advise you to do it all, maybe — but we would only advise you to do it, if you’re doing it based on your conclusions about — your own ideas of value, and something that you really feel you know enough to buy the whole business, if your funds were sufficient, and it was being offered to you. You ought to really understand the business.
But people do that all the time, incidentally, in private businesses, which have got terrible prospects. I mean, they buy dry cleaning establishments, or filling stations, or whatever, and they put very high —franchises of some kind — they put a very high percentage of their net worth into something — a business that’s very risky, basically. I mean, it —
People put all their money in a farm, you know. It’s a business. It’s subject to all kinds of business risk.
So it’s not crazy, if you understand the business well, and if the price is sufficiently attractive, to put a very significant percentage of your net worth in. If you don’t understand businesses, then you’re better off diversifying and fairly widely diversifying.
Zone — go ahead. Sorry
CHARLIE MUNGER: Berkshire has a substantial shareholder whose father accumulated the original position, and when he died he left a very large estate, practically all of which was in two securities, Berkshire and one other outstanding company.
A bank was co-trustee. And the bank trust officer said you’ve got to diversify this. And, you know, it was a very large estate.
And the young man who was co-trustee with the bank said, “Well,” he says, “you know, if my father believed the way you do, he might have been a trust officer in a bank instead of — (laughter) — leaving this large estate.” (Applause)
And that young man holds the Berkshire to this day. And I suppose the bank is still giving the same advice. (Laughter)
12. We don’t like to “give you our answers” on Coca-Cola
WARREN BUFFETT: Zone 2?
AUDIENCE MEMBER: Mr. Buffett, this is Chuck Peterson (PH) from Omaha.
And I was just wondering if you could comment on the Coca-Cola Company — you haven’t really talked about it too much today — in regards to what you foresee over the next five years, the earnings per share growth, and where this growth is, perhaps, going to come from.
WARREN BUFFETT: Was that the question, about the growth of Coke?
CHARLIE MUNGER: Yeah.
WARREN BUFFETT: You really have to come to your own conclusion.
Coca-Cola Company writes — their annual reports are extremely good. I mean, they’re very informative. You know, you —
My guess is that, at least, if you read a few of the reports, you’d absolutely know as much about the Coca-Cola Company as I would.
But in the end, you have to make your own decisions about growth potential, profitability potential, and all that.
But the one thing I can assure you is that, probably, if you spend a relatively small amount of time on it, the facts that you will have available to you for making a decision on that question will be just as good, essentially, as the facts you’d get if you’d worked at the Coca-Cola Company for 20 years, or if you were a food and beverage analyst in Wall Street or anything of the sort.
That’s the kind of businesses we like to look at, are things that we think we can understand that way. And they’re also businesses that, usually, I think you could understand that way.
But we don’t like you to give you our answers. I mean, that would not be a good idea.
13. Allianz deal was “close to a wash”
WARREN BUFFETT: Zone 3?
AUDIENCE MEMBER: David — I’m sorry — David Swab (PH) from Austin, Texas.
I have a question pertaining to the convertible bonds that were outstanding for about four years.
Any thoughts on, if you’re a teacher, to grade if that was a good deal, bad deal, how the money was employed compared to the cost of getting out of the bonds? Any thoughts?
WARREN BUFFETT: Charlie what? Did you get that?
CHARLIE MUNGER: He wants to know if you think, in retrospect, your deal with Allianz was a good deal for Berkshire.
WARREN BUFFETT: No, I would say that if I knew everything at the time that we did the Allianz deal — which was a convertible shareholder coupon debenture — if I knew everything now — then — that I know now, would we have done it? Probably pretty close. We had relatively few bonds converted when we called — when he called them. And so — that — it really wasn’t a negative in that sense.
But if we’d had more — we could have easily had a lot more converted. And that would not have been so good, obviously, if we’d ended up selling a lot of stock at 11,800 or whatever it was.
It’s very hard to measure exactly what we did with the 400 million or so that we took in at the time. So, money being fungible, separating that 400 million from other resources to measure the — what happened on the plus side from having the money — is hard to do.
But my guess is, if you could play the whole hand over again, it probably was maybe a tiny minus to have issued them. What do you think, Charlie?
CHARLIE MUNGER: It’s certainly close to a wash.
WARREN BUFFETT: Yeah.
CHARLIE MUNGER: Now, you could ask about USAir, and that is one we would have been well to duck. (Laughter)
WARREN BUFFETT: And I might say Charlie had nothing to do with that decision. (Laughter) He didn’t even know about it till I did it. And when he knew about it, hmmm. (Laughter)
14. “Size is a disadvantage” in buying and selling
WARREN BUFFETT: Zone 1?
AUDIENCE MEMBER: Mr. Buffett, I’m Joe Sirdevan from Toronto.
With respect to Berkshire’s non-permanent, but large — and therefore, illiquid — holdings, what is your strategy for managing market impact on sales, given the intense scrutiny that Berkshire’s under by the market?
WARREN BUFFETT: I didn’t get that either. You get that?
CHARLIE MUNGER: I’m not hearing that very well.
WARREN BUFFETT: Yeah, I don’t know whether you’re too close to the mic — we’re having a little trouble on that.
CHARLIE MUNGER: Speak a little more slowly.
WARREN BUFFETT: Or maybe the monitor can repeat that and — would you repeat the question?
AUDIENCE MEMBER: Sorry. Just with respect to Berkshire’s large non-permanent holdings that are, therefore, illiquid, I’m just wondering what your strategy is for managing market impact when you do decide to sell portions of those holdings, given the intense scrutiny you’re under?
WARREN BUFFETT: Yeah, question about the things we might sell, and what’s going to happen to the market when we sell them.
That depends. I mean, it can be a very significant impact. It can be a negligible impact.
And it depends on market conditions, it depends on whether we might sell in a couple of large blocks to some institutions, it depends on — it could be, you know, there could be a tender off or something of the sort we would sell through. So, it’s hard to measure.
But it is a disadvantage. Size is a disadvantage, you’re absolutely correct in the basic point, both in buying and in selling. And we don’t know any way around that.
We allow for it, in terms of what we expect, you know, the kind of possibilities we need to see. And we do — we sell so infrequently, that it’s not a crusher of a negative point, but it’s a negative we have that you do not.
AUDIENCE MEMBER: My name is Anna (inaudible). I’m from Roanoke, Virginia.
Does Berkshire Hathaway or any of its subsidiaries have key man insurance on you and Mr. Munger?
CHARLIE MUNGER: Does Berkshire have key man insurance on —
WARREN BUFFETT: Oh, no. No. We have no life insurance, to my knowledge, on anyone except the maybe standard — the group life contracts people have. We have no key man insurance.
It really doesn’t — it wouldn’t be material.
I mean, that if we have a market value of 18 billion or something like that, if it really didn’t — if it — a one — if it made a 1 percent difference, it’d be $180 million.
And basically, the math of intelligently selling insurance is better than the math of intelligently buying insurance. (Laughter and applause)
16. Guinness-VNMH restructuring was “logical”
WARREN BUFFETT: Zone 3?
AUDIENCE MEMBER: Mr. Buffett, I’m Barry Siskind (PH) from Mesa, Arizona. Long-time admirer of yours. Question pertains to Guinness.
I remember reading in a publication I greatly respect, Outstanding Investor Digest by [editor] Henry Emerson in New York, that back in — I think it was ’58 or ’59, you made an investment in Cuba, decided to never to make an investment outside the United States again at that time.
Have subsequently invested in Guinness. I’m a fellow investor in Guinness. I’ve invested in Guinness for — and its sister company, Louis Vuitton Moët Hennessy — for over five years. And I’m very happy with those investments, by the way.
There’s been a restructuring, as you know, of the Guinness-LVMH relationship, where Guinness no longer owns 24 percent of LVMH. Rather, it owns only its distilling, or I should say, alcoholic beverage-related businesses —
WARREN BUFFETT: The Moët Hennessy part.
AUDIENCE MEMBER: Right, the Moët Hennessy part.
The other parts of LVMH are showing better results these days, namely the Louis Vuitton luggage, as well as the Christian Dior perfume. They’ve also expanded into the newspaper business this past year, a business that you understand.
Do you intend to look at the possibility, first of all, of participating in those businesses that you no longer own now — with the restructured Guinness-LVMH deal — through some other form?
And the second question relates to the currency risk inherent in the Guinness investment, having bought it at about 1.48.
The cost of hedging foreign currency through the FX has diminished through the combination of lower interest rates in the U.K., and higher interest rates, most recently in the U.S., to just about zero.
I take it we’re all investors in companies, not speculators in currencies. So, the second part of the question is, do you intend to do anything about the currency risk portion of that investment?
WARREN BUFFETT: Well LVMH, which as you mentioned was 24 percent owned by Guinness — you know, that’s one of thousands of securities that we could be a buyer or a seller of. So, I really don’t want to comment on LVMH’s specific attractiveness, or lack thereof.
And Guinness, I think what Guinness did was quite logical. I mean, their interest in that operation was basically through the distribution advantages that it gave to Guinness’s own brands around the world, to be hooked up with Moët Hennessy, and vice versa. So, I think what they did was logical.
You can — the question of the exchange rate and all of that — the exchange rate, in terms of what they got in the spirits business, versus what they gave up in the luggage business, as in Christian Dior and a few things. You can form your own opinion on that.
But I think the logic was sound. But in terms of whether we want to be in LVMH by itself, that’s like any other security, which we really can’t answer.
17. Berkshire doesn’t hedge currencies
WARREN BUFFETT: Second question related to —
CHARLIE MUNGER: Hedging.
WARREN BUFFETT: Hedge. Yeah, the hedging of currency —
CHARLIE MUNGER: Do we hedge?
WARREN BUFFETT: The answer to that is we don’t. And Coca-Cola, as I mentioned, gets 80 percent of their earnings from a variety of currencies, the yen and the mark being two very important ones. They’re going to be getting a very high percentage five years from now, 10 years from now.
They do certain currency transactions, but it’s a practical matter. If you own Coca-Cola, you own a bunch of foreign bonds with coupons on them, denominated in local currencies, that go on forever.
Now, should you try and engage in currency swaps on all those coupons — you don’t know what those coupons are yet, because you don’t know how much they’re going to earn in Japan or Germany, but you do know it’s going to go on for decades, and it’s — they’re going to be very significant sums.
Should you try and engage in a whole bunch of currency swaps to go on out and convert all that stream into dollars or anything?
We basically don’t think it’s worth it. We don’t think our opinion on currencies is any good. We don’t think — we think the market probably know — well, we know it knows as much about it — it probably knows more about currencies, but it — we don’t know — we do not know more than the market does about currencies.
So there are costs to hedging. And even though interest rate structures may cause the curve to look flat going out forward, so that, in effect, there’s no contango on it, there’s still the cost — there are costs in it. Now, it’s a relatively efficient market, so that they’re not huge.
But we see no reason to incur those costs with what we regard as a — totally, a 50-50 proposition. And it really doesn’t go out that far anyway. I mean, we could do it for a couple of years.
But if you take that — the way we look at businesses, being the discounted flow of future cash out between now and Judgment Day, we can’t really hedge that kind of a risk anyway. We could keep rolling hedges, but there’s a cost to it that we don’t want to incur.
We don’t — we wouldn’t worry a whole lot about whether some portion of our earnings, whether it’s from Guinness, whether it’s from Coke, whether it’s from Gillette, are denominated at some mixture of marks, and pounds, and yen, and dollars, or whether they’re all in dollars.
We’d slightly prefer if it were all in dollars, but we don’t lose sleep over the fact that it may be coming from a mix of currencies like that. We wouldn’t like it, in terms of, obviously, some very weak currencies.
18. Insurance intrinsic value far exceeds book value
WARREN BUFFETT: Zone 1?
AUDIENCE MEMBER: Lawrence Grawning (PH), Mill Valley, California.
On page 13 of the annual report, in — talking about the insurance operation, you say that it possesses an intrinsic value that exceeds its book value by a “large amount — larger, in fact, than is the case at any other Berkshire business.”
To refine an earlier question that was asked, could you tell me whether you mean that it is larger in — by a percentage or in absolute dollars, that is —
WARREN BUFFETT: By absolute dollars. And —
AUDIENCE MEMBER: That’s what you’re referring to?
WARREN BUFFETT: Yeah, by absolute — it’s very hard to stick a percentage figure on the insurance business, because we have so much capital in there that —
And then — and we have other businesses. I think that the — we’ve got businesses with a book value of in the tens of millions that are worth in the many hundreds of millions. So, you couldn’t apply that to the insurance company (Inaudible). So, it’s absolute dollars.
But in terms of absolute dollars, we think the excess of intrinsic value over carrying value — at least I do — is substantially greater for the insurance business than any other business we own.
Charlie, do you have any —
CHARLIE MUNGER: No —
WARREN BUFFETT: — thoughts on that?
CHARLIE MUNGER: — that’s exactly right.
19. No concerns on Coca-Cola succession
AUDIENCE MEMBER: Joe Little (PH), Vancouver, Canada.
Does the management succession issue for the top job at Coca-Cola concern you?
WARREN BUFFETT: Management picture, you’d do what with the —?
AUDIENCE MEMBER: The management succession issue over the next several years.
WARREN BUFFETT: Oh, yeah.
AUDIENCE MEMBER: The top job. Does that concern you?
WARREN BUFFETT: At Coca-Cola —
AUDIENCE MEMBER: Yeah.
WARREN BUFFETT: I think any announcement that — from that would come with — from Coca-Cola.
CHARLIE MUNGER: He said do you like it?
AUDIENCE MEMBER: Does it concern you?
CHARLIE MUNGER: Does it concern you?
WARREN BUFFETT: Oh, I’m not concerned at all, no. No, Coca-Cola is very well managed. (Laughs)
20. Salomon CEO’s $24M bonus target “hellishly hard to hit”
WARREN BUFFETT: Zone 3?
AUDIENCE MEMBER: Chris Stavrou (PH) from New York.
According to the latest Salomon Brothers proxy, if [Chairman and CEO] Deryck [Maughan] earns 30 percent on allocated equity of Salomon Brothers, provided that that’s at least 10 percent above the return for competitors, he could earn a bonus of $24 million.
My question is whether that return number is reduced by a charge for preferred dividends?
WARREN BUFFETT: I, Charlie, do you remember on the comp committee —?
CHARLIE MUNGER: I can’t remember the detail on that.
WARREN BUFFETT: I think the equity — I — my — I’m fairly sure, but I’m not positive, that the equity figure would include our preferred, but not non-convertible preferreds.
And it would apply to the earnings applicable to the — to our preferred plus common, but not — but it would be after dividends on non-convertible preferred.
But I, you know, I’m not on the comp committee, and I have not read the description that carefully.
CHARLIE MUNGER: Well, I am, and I can’t remember. (Laughter)
But I will tell you, one thing I do remember about that, and that is a target which would be one — would be hellishly hard to hit.
WARREN BUFFETT: It’d be unbelievable. I mean —
CHARLIE MUNGER: That’s is, you’re talking about Babe Ruth —
WARREN BUFFETT: Squared.
CHARLIE MUNGER: Yeah, doing 150 home runs in a season instead of a — if that happens, you’ll be very glad to pay the money. (Laughter)
WARREN BUFFETT: Very. Under either calculation, yeah. It really — but it, you know, I’m glad it’s there. (Laughs)
I hope Deryck’s paying attention to it.
21. Salomon is a “better company than it was some years back”
WARREN BUFFETT: Zone 1?
AUDIENCE MEMBER: Hi, I’m Chris Davis again, from New York.
I wanted to ask if you — I feel there’s such a huge discrepancy between the valuation of some of your holdings versus others, in terms of the market valuation, in terms of price-to-earnings, price-to-book.
In your opinion, do the growth prospects of Salomon Brothers, or the quality — or your anticipation of your ability to clip the coupons at Salomon Brothers — justify such a dramatic discount to the growth prospects of Coca-Cola or Gillette, in terms of our ability as Berkshire shareholders to clip those coupons?
And if you could explain, or perhaps share your thoughts on why the market perception, if it is — justifies that distinction?
WARREN BUFFETT: Yeah, I’m not sure I can answer that question without getting into a discussion of the relative merits of the two companies — or the three companies — you mentioned, at these prices, but —
Salomon and Coca-Cola are obviously very different kinds of businesses, or Salomon and Gillette. And Charlie and I do our best to try to understand the businesses.
Obviously, it’s easier to understand the future of a Coca-Cola than it is a Salomon. But that doesn’t mean it’s a better buy.
And what you see at any given time in our holdings is partly the historical accident, even, of when we bought, and when we had money available, and all that. But it reflected an affirmative decision at that point, obviously.
Our guess would be that the — you know, we would feel reasonably good about anything that we owned, in terms of the price at which we bought it, and the facts at the time we bought it. And the facts change over time.
Salomon, I think, is a better company now than it was some years back. But it’s still in a business that’s — can be very volatile, and it has a small amount — as does any investment banking firm and as any commercial banking firm — of systemic risk. I mean, you can’t get rid of that.
Charlie, you want to?
CHARLIE MUNGER: No, I’ve got nothing to add.
22. Calculating intrinsic value
WARREN BUFFETT: Zone 2?
AUDIENCE MEMBER: Thank you. Sean Barry, Regina, Canada.
Mr. Buffett, you’ve indicated that most of us in this room could acquire a lot of the information that you and Charlie acquire through the annual reports. Yet you both also indicated that the GAAP rules, a lot of times, leave a little to be desired.
Could you perhaps give an indication as to how you and Charlie come up with the economic value, or the intrinsic value, of the businesses that you finally decide to invest in? And a little bit about the process that you go through with that? Thank you.
WARREN BUFFETT: Well, the — in the 1992 annual report, we discuss that a fair amount.
But the economic value of any asset, essentially, is the present value, the appropriate interest rate, of all the future streams of cash going in or out of the business.
And there are all kinds of businesses that Charlie and I don’t think we have the faintest idea what that future stream will look like. And if we don’t have the faintest idea what the future stream is going to look like, we don’t have the faintest idea what it’s worth, now. Now that —
So, if you think you know what the price of a stock should be today, but you don’t think you have any idea what the stream of cash will be over the next 20 years, you’ve got cognitive dissonance, I guess, is what they call it. (Laughter) The —
So we are looking for things where we feel — fairly high degree of probability — that we can come within a range of looking at those numbers out over a period of time, and then we discount them back.
And we are more concerned with the certainty of those numbers than we are with getting the one that looks absolutely the cheapest, but based upon numbers that we don’t have any — we don’t have great confidence in.
And that’s basically what economic value is all about.
The numbers in any accounting report mean nothing, per se, as to economic value. They are guidelines to tell you something about how to get at economic value.
But they don’t tell you anything. It — there are no answers in the financial statements. There are guidelines to enable you to figure out the answer. And to figure out that answer, you have to understand something about business.
You don’t have to understand a lot about mathematics. I mean, the math is not complicated. But you do have to understand something about the business.
But that’s the same thing you would do if you were going to buy an apartment house, or a farm, or any other small business you might be interested in.
You would try to figure out what you are laying out currently, and what you are likely to get back over time, and how certain you felt about getting it, and how it compared to other alternatives. That’s all we do, we just do it with large businesses, basically.
The accounting figures are very helpful to us, in the sense that they generally guide us to what we should be thinking about.
And of course, if we find numbers where it looks like people are taking the most optimistic interpretation of things that they can under GAAP and all of that, we get very worried about people who look like they massage the numbers in any way. And there are plenty of people that do.
23. Growth alone doesn’t make a company a good investment
WARREN BUFFETT: Zone 3?
AUDIENCE MEMBER: I’m Howard Bask (PH). I’m from Kansas City.
When you are estimating a growth rate on a company (inaudible), a very predictable company, I imagine you apply a big margin of safety to it. What kind of rate do you generally apply? I mean, high single digits?
WARREN BUFFETT: In the margin of safety, or —
AUDIENCE MEMBER: What kind of growth rate would you, on a predictable company, might you —
WARREN BUFFETT: We are willing to —
AUDIENCE MEMBER: — stab at?
WARREN BUFFETT: — buy companies that aren’t going to grow at all.
AUDIENCE MEMBER: OK.
WARREN BUFFETT: It — assuming we get enough for our money when we do it. So, it — we are not looking — we are looking at projecting numbers out, as to what kind of cash we think we’ll get back over time.
But you know, would you rather have a savings — if you’re going to put a million dollars in a savings account, would you rather have something that paid you 10 percent a year and never changed, or would you rather have something that paid you 2 percent a year and increased at 10 percent a year? Well, you can work out the math to answer those questions.
But you can certainly have a situation where there’s absolutely no growth in the business, and it’s a much better investment than some company that’s going to grow at very substantial rates, particularly if they’re going to need capital in order to grow.
There’s a huge difference in the business that grows and requires a lot of capital to do so, and the business that grows, and doesn’t require capital.
And I would say that, generally, financial analysts do not give adequate weight to the difference in those. In fact, it’s amazing how little attention is paid to that. Believe me, if you’re investing, you should pay a lot of attention to it.
CHARLIE MUNGER: I agree with that. But it’s fairly simple, but it’s not so simple it can all be explained in one sentence. (Laughter)
WARREN BUFFETT: Our — some of our best businesses that we own outright don’t grow. But they throw off lots of money, which we can use to buy something else. And therefore, our capital is growing, without physical growth being in the business.
And we are much better off being in that kind of situation [than] being in some business that, itself, is growing, but that takes up all the money in order to grow, and doesn’t produce at high returns as we go along. A lot of managements don’t understand that very well, actually.
24. Capital allocation shouldn’t be delegated
WARREN BUFFETT: Zone 1?
AUDIENCE MEMBER: Byron Wien from New York.
You said that you decentralized the operating decisions, but centralized the capital allocation decisions.
What kind of staff do you have in Omaha to help you with the capital allocation decisions and the stock selection decisions you make? Or do you and Charlie do that, pretty much, by yourselves?
WARREN BUFFETT: Yeah, we don’t have any staff to help us on it. I mean, basically we tell them to mail all the money to Omaha — (laughter) — and then when we get there, we put our arms around it. (Laughs)
And we allocate all the capital ourselves. I mean, that is our job.
And we don’t feel we should delegate, I mean, we wouldn’t do it anyway. Our personalities aren’t such that we would delegate our — allocating our own money to someone — letting somebody else allocate our own money.
But we feel that’s our job. And it’s interesting, and we’ve — I’ve written about this in the past — that that’s an important job for most managements. There’s some companies where it’s not, but it’s a — it usually is a very important job for most managements.
And if you take a CEO that’s in a job for 10 years, and he has a business that earns, say, 12 percent on equity, and he’s — and he pays out a third, that means he’s got 8 percent per year of equity. I mean, when you think of his tenure in office, how much capital he’s allocated, it’s an enormous factor over time.
And yet, probably relatively few chief executives are either trained for, or are selected on, the basis of their ability to allocate capital. I mean, they get there through other routes.
So, I’ve said it’s like somebody playing the piano all their life, and then getting to Carnegie Hall and they hand him a violin. I mean, it is a different function than most — than the route — than the functions that exist along the routes to the CEO’s job at most companies.
And so many CEOs, when they get there, think they can solve it by either having a staff that does it, or by hiring consultants, or whatever it may be.
And in our view, that is — and that’s a terrible mistake, because it’s — it is, if not the key function of the CEO, it’s one of two or three key functions at say 80 or 90 percent of all companies.
And if you can’t do it yourself, you’re going to make a lot of mistakes. You may make a lot of mistakes even if you do it yourself. But if you —
You know, you wouldn’t want anybody in any other position of that importance in the company essentially saying, “I don’t know how to do this, so I’m going to have somebody else do it,” when it’s their key responsibility. But that’s the way it works in business.
And Charlie and I take responsibility for all capital allocation decisions, other than just, sort of, routine expenditures at the operating businesses. And we don’t get into those at all.
I mean, if our managers are spending three or four million dollars a year on machinery — or if one of them is, I mean — on machinery, equipment, plants, new leases — we have no review process on that. We don’t have a staff at headquarters. We don’t waste the time to do that.
We think those people know how to allocate the money that relates to the actual operations of their business. We think, in terms of the capital that is generated above that, that that’s our job.
Charlie, anything —?
CHARLIE MUNGER: I would say we have practically nobody at headquarters in Omaha. One of the reasons Warren shines up so well is, you know, he’s being compared to practically nobody. (Laughter)
WARREN BUFFETT: I might say if — one interesting — when we’re having this meeting, for example, I think there’s one person there in the office. I mean, the rest of them are down here helping on the meeting. I mean, it —
CHARLIE MUNGER: Here we are, Warren and I are selling candy and encyclopedias, and so forth. The chief financial officer of Berkshire Hathaway is handling the microphones. I mean, this makes Southwest Airlines look like they don’t understand —
WARREN BUFFETT: Cost control. (Laughter)
CHARLIE MUNGER: — cost accounting, yeah. It’s a very old-fashioned place.
And by the way, speaking of hawking our merchandise, if any of you have safety deposit boxes full of Berkshire Hathaway certificates, and have children or grandchildren who don’t have World Book in print in the house, you are making a very serious error.
That is a marvelous thing for — to have in the house with —
WARREN BUFFETT: And the discount only applies —
CHARLIE MUNGER: — full of young people.
WAWRREN BUFFETT: The discount only applies today — (laughs) — incidentally. I think that’s right.
CHARLIE MUNGER: It is. That is, it may not be selling too well because of the current vogue for encyclopedias on computers. And by the way, those encyclopedias that are available are inferior compared to World Book, which is very user-friendly for children, and I like it that way myself. And —
WARREN BUFFETT: We —
CHARLIE MUNGER: That is one product you really ought to buy.
WARREN BUFFETT: We both use it, personally. I mean, I keep a set at the office, and a set at home. And I —
CHARLIE MUNGER: I give away more of that product —
WARREN BUFFETT: — I use it a lot.
CHARLIE MUNGER: — than other product that Berkshire Hathaway makes in any subsidiary. It’s a perfectly fabulous human achievement. To edit a thing, to — that user friendly, with that much wisdom encapsulated. It is a — it’s a fabulous thing.
25. Keynes: Great “wisdom” about investing
WARREN BUFFETT: Zone 2?
AUDIENCE MEMBER: (Inaudible) from Houston, Texas. From time to time, you have quoted John Maynard Keynes, the British economist.
So, I would assume that you have read the investment writings very extensively. What are two or three investment lessons, in your opinion, one can learn from that economist?
WARREN BUFFETT: Well, I forget which, I think it’s chapter eight of “The General Theory,” do you remember Charlie? Or is it chapter —
CHARLIE MUNGER: No.
WARREN BUFFETT: There’s one chapter in “The General Theory” that relates to markets, and the psychology of markets, and the behavior of market participants and so on, that probably is, aside from Ben Graham’s two chapters, eight and 20, in “The Intelligent Investor” — I think you’ll find you’ll get as much wisdom from reading that as anything written in investments. And you’ll know it when you see it in “The General Theory.”
It’s a chapter that jumps out to you about securities and so on. And I — could be chapter eight, but I may be wrong on that. But I would recommend reading that.
Keynes and Graham, from vastly different starting points, came to the same conclusion at about the same time in the ’30s, as to the soundest way to invest over time. They differed some on their ideas on diversification. Keynes believed in diversifying far less than did Graham.
But Keynes started off with the wrong theory, I would say, in the ’20s and essentially tried to predict business cycles in markets, and then shifted to fundamental analysis of businesses in the ’30s, and did extremely well.
And about the same time, Graham was writing his first material. I think Janet Lowe, in her book on Ben Graham, actually has a little correspondence that took place between Keynes and Ben. So I would advise you to read that.
And there’s some letters of his that he — of Keynes’ — that he wrote to co-trustees of life insurance societies, and colleges, and so on, that I think you’d find interesting, too.