1978 年致股东信

BERKSHIRE HATHAWAY INC.
To the Shareholders of Berkshire Hathaway Inc.:

伯克希尔·哈撒韦公司
致伯克希尔·哈撒韦公司股东：

First, a few words about accounting. The merger with Diversified Retailing Company, Inc. at yearend adds two new complications in the presentation of our financial results. After the merger, our ownership of Blue Chip Stamps increased to approximately 58% and, therefore, the accounts of that company must be fully consolidated in the Balance Sheet and Statement of Earnings presentation of Berkshire. In previous reports, our share of the net earnings only of Blue Chip had been included as a single item on Berkshire’s Statement of Earnings, and there had been a similar one-line inclusion on our Balance Sheet of our share of their net assets.

首先，谈一下会计处理。年末与Diversified Retailing Company, Inc.的合并，给我们财务业绩的呈现带来了两个新的复杂问题。合并后，我们对Blue Chip Stamps的持股比例增加到约58%，因此，该公司的账目必须完全并入伯克希尔的资产负债表和利润表。在之前的报告中，我们仅将Blue Chip的净利润份额作为单列项目包含在伯克希尔的利润表中，资产负债表上也类似地以单列项目体现我们应占的净资产份额。

This full consolidation of sales, expenses, receivables, inventories, debt, etc. produces an aggregation of figures from many diverse businesses - textiles, insurance, candy, newspapers, trading stamps - with dramatically different economic characteristics. In some of these your ownership is 100% but, in those businesses which are owned by Blue Chip but fully consolidated, your ownership as a Berkshire shareholder is only 58%. (Ownership by others of the balance of these businesses is accounted for by the large minority interest item on the liability side of the Balance Sheet.) Such a grouping of Balance Sheet and Earnings items - some wholly owned, some partly owned - tends to obscure economic reality more than illuminate it. In fact, it represents a form of presentation that we never prepare for internal use during the year and which is of no value to us in any management activities.

这种对销售额、费用、应收款项、存货、债务等的完全合并，将诸多特性迥异的业务——纺织、保险、糖果、报纸、印花——的数字混杂在一起。这些业务中，有些你拥有100%股权，但那些由Blue Chip拥有却被完全合并的业务，作为伯克希尔股东的你只拥有58%的权益。（其余股东对这些业务的权益，在资产负债表的负债方以少数股东权益项目体现。）将部分全资和部分非全资的资产与收益项目如此归集，往往掩盖而非揭示经济现实。事实上，这是一种我们全年内部从不采用、对任何管理活动都毫无价值的呈现方式。

For that reason, throughout the report we provide much separate financial information and commentary on the various segments of the business to help you evaluate Berkshire’s performance and prospects. Much of this segmented information is mandated by SEC disclosure rules and covered in “Management’s Discussion” on pages 29 to 34. And in this letter we try to present to you a view of our various operating entities from the same perspective that we view them managerially.

因此，在整份报告中，我们提供了大量关于各项业务分部的独立财务信息和评论，以帮助你评估伯克希尔的业绩与前景。其中大部分分部信息是应SEC披露要求而列示，并在第29至34页的“管理层讨论”中进行了阐述。在这封信中，我们试图以我们在管理上审视这些运营实体的相同视角，向你呈现它们的情况。

A second complication arising from the merger is that the 1977 figures shown in this report are different from the 1977 figures shown in the report we mailed to you last year. Accounting convention requires that when two entities such as Diversified and Berkshire are merged, all financial data subsequently must be presented as if the companies had been merged at the time they were formed rather than just recently. So the enclosed financial statements, in effect, pretend that in 1977 (and earlier years) the Diversified-Berkshire merger already had taken place, even though the actual merger date was December 30, 1978. This shifting base makes comparative commentary confusing and, from time to time in our narrative report, we will talk of figures and performance for Berkshire shareholders as historically reported to you rather than as restated after the Diversified merger.

合并带来的第二个复杂问题是，本报告所示的1977年数据与我们去年度寄发给你的报告中所列的数据不同。会计准则要求，当Diversified与伯克希尔这样的两个实体合并时，此后所有的财务数据都必须呈现得好像它们从成立之初就已合并，而非刚刚合并。因此，所附财务报表实际上假定1977年（及更早年度）的Diversified-伯克希尔合并已经发生，尽管实际合并日期是1978年12月30日。这种基础的变化使得比较性评论变得混乱，在报告的叙述部分，我们会不时地谈论历史上报告给你的、而非按Diversified合并重述后的伯克希尔股东的数据和业绩。

With that preamble it can be stated that, with or without restated figures, 1978 was a good year. Operating earnings, exclusive of capital gains, at 19.4% of beginning shareholders’ investment were within a fraction of our 1972 record. While we believe it is improper to include capital gains or losses in evaluating the performance of a single year, they are an important component of the longer term record. Because of such gains, Berkshire’s long-term growth in equity per share has been greater than would be indicated by compounding the returns from operating earnings that we have reported annually.

有了上述开场白，可以说，无论是否进行重述，1978年都是一个好年头。不含资本利得的营业利润，达到期初股东投资的19.4%，仅略低于我们1972年的记录。虽然我们认为在评估单一年度业绩时计入资本利得或亏损不妥，但它们却是长期记录的重要组成部分。正因如此，伯克希尔每股净值的长期增长，高于按我们每年报告的营业利润回报复利计算所显示的增速。

For example, over the last three years - generally a bonanza period for the insurance industry, our largest profit producer - Berkshire’s per share net worth virtually has doubled, thereby compounding at about 25% annually through a combination of good operating earnings and fairly substantial capital gains. Neither this 25% equity gain from all sources nor the 19.4% equity gain from operating earnings in 1978 is sustainable. The insurance cycle has turned downward in 1979, and it is almost certain that operating earnings measured by return on equity will fall this year. However, operating earnings measured in dollars are likely to increase on the much larger shareholders’ equity now employed in the business.

例如，在过去三年——通常是保险业的大繁荣期，而保险是我们最大的利润来源——伯克希尔的每股净值几乎翻了一番，通过良好的营业利润和相当可观的资本利得，年复合增长率约为25%。无论是来自所有来源的25%净值增长，还是1978年19.4%的营业利润净值增长，都不可持续。保险周期在1979年已转向下行，几乎可以肯定，按净值回报衡量的营业利润今年将会下降。然而，按美元计价的营业利润，却可能因现在业务中运用的股东权益规模更大而增加。

In contrast to this cautious view about near term return from operations, we are optimistic about prospects for long term return from major equity investments held by our insurance companies. We make no attempt to predict how security markets will behave; successfully forecasting short term stock price movements is something we think neither we nor anyone else can do. In the longer run, however, we feel that many of our major equity holdings are going to be worth considerably more money than we paid, and that investment gains will add significantly to the operating returns of the insurance group.

与对近期运营回报的谨慎看法相反，我们对保险公司持有的主要股权投资长期回报前景感到乐观。我们无意预测证券市场将如何表现；我们认为，无论是我们还是其他任何人，都无法成功预测短期股价波动。然而，从长远来看，我们觉得许多主要持股的价值将远高于我们的买价，投资收益将为保险集团的运营回报增添重要力量。

Sources of Earnings

收益来源

To give you a better picture of just where Berkshire’s earnings are produced, we show below a table which requires a little explanation. Berkshire owns close to 58% of Blue Chip which, in addition to 100% ownership of several businesses, owns 80% of Wesco Financial Corporation. Thus, Berkshire’s equity in Wesco’s earnings is about 46%. In aggregate, businesses that we control have about 7,000 full-time employees and generate revenues of over $500 million.

为了让你更清楚地了解伯克希尔收益的出处，我们列出下表，这张表需要稍作说明。伯克希尔持有Blue Chip约58%的股权，而Blue Chip除全资拥有数家企业外，还持有Wesco Financial Corporation 80%的股权。因此，伯克希尔在Wesco收益中的权益约为46%。总体而言，我们控制的业务拥有约7,000名全职员工，收入超过5亿美元。

The table shows the overall earnings of each major operating category on a pre-tax basis (several of the businesses have low tax rates because of significant amounts of tax-exempt interest and dividend income), as well as the share of those earnings belonging to Berkshire both on a pre-tax and after-tax basis. Significant capital gains or losses attributable to any of the businesses are not shown in the operating earnings figure, but are aggregated on the “Realized Securities Gain” line at the bottom of the table. Because of various accounting and tax intricacies, the figures in the table should not be treated as holy writ, but rather viewed as close approximations of the 1977 and 1978 earnings contributions of our constituent businesses.

该表列示了每个主要经营类别的税前总收益（由于拥有大量免税利息和股息收入，部分业务税率较低），以及归属于伯克希尔的税前和税后收益份额。可归属于任何业务的重大资本利得或亏损未包含在营业利润数字中，而是汇总在表底的“已实现证券收益”行。由于各种会计和税务的复杂性问题，表中数字不应视为绝对精确，而应看作是对我们各项业务1977年和1978年收益贡献的合理近似。

In thousands of dollars

单位：千美元

Blue Chip and Wesco are public companies with reporting requirements of their own. Later in this report we are reproducing the narrative reports of the principal executives of both companies, describing their 1978 operations. Some of the figures they utilize will not match to the penny the ones we use in this report, again because of accounting and tax complexities. But their comments should be helpful to you in understanding the underlying economic characteristics of these important partly-owned businesses. A copy of the full annual report of either company will be mailed to any shareholder of Berkshire upon request to Mr. Robert H. Bird for Blue Chips Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040, or to Mrs. Bette Deckard for Wesco Financial Corporation, 315 East Colorado Boulevard, Pasadena, California 91109.

Blue Chip和Wesco是独立承担报告义务的上市公司。在本报告稍后部分，我们转载了这两家公司主要高管对1978年经营情况的叙述报告。由于会计和税务的复杂性，他们使用的一些数字将与我们报告中的不尽相同。但他们的评论应有助于你理解这些重要的非全资子公司的基本经济特征。如有伯克希尔股东索取任一家公司的完整年报，可致函：蓝筹印花公司，Robert H. Bird先生，地址5801 South Eastern Avenue, Los Angeles, California 90040；或韦斯科金融公司，Bette Deckard女士，地址315 East Colorado Boulevard, Pasadena, California 91109。

Textiles

纺织

Earnings of $1.3 million in 1978, while much improved from 1977, still represent a low return on the $17 million of capital employed in this business. Textile plant and equipment are on the books for a very small fraction of what it would cost to replace such equipment today. And, despite the age of the equipment, much of it is functionally similar to new equipment being installed by the industry. But despite this “bargain cost” of fixed assets, capital turnover is relatively low reflecting required high investment levels in receivables and inventory compared to sales. Slow capital turnover, coupled with low profit margins on sales, inevitably produces inadequate returns on capital. Obvious approaches to improved profit margins involve differentiation of product, lowered manufacturing costs through more efficient equipment or better utilization of people, redirection toward fabrics enjoying stronger market trends, etc. Our management is diligent in pursuing such objectives. The problem, of course, is that our competitors are just as diligently doing the same thing.

1978年130万美元的收益虽较1977年大为改善，但对所投入的1,700万美元资本而言，回报仍然很低。纺织厂房和设备的账面价值仅为其重置成本的一小部分。而且，尽管设备老旧，但大部分在功能上与该行业正在安装的新设备相似。尽管固定资产具有这种“廉价成本”，资本周转率仍相对较低，反映出在应收账款和存货上需要的投资水平与销售额相比较高。缓慢的资本周转，加上较低的销售利润率，不可避免地导致资本回报不足。提高利润率的明显途径包括产品差异化、通过更高效设备或更好的人员利用降低制造成本、转向市场趋势更强的织物品种等。我们的管理层在努力实现这些目标。当然，问题在于我们的竞争对手也同样在努力做同样的事情。

The textile industry illustrates in textbook style how producers of relatively undifferentiated goods in capital intensive businesses must earn inadequate returns except under conditions of tight supply or real shortage. As long as excess productive capacity exists, prices tend to reflect direct operating costs rather than capital employed. Such a supply-excess condition appears likely to prevail most of the time in the textile industry, and our expectations are for profits of relatively modest amounts in relation to capital.

纺织业以教科书般的方式说明，在资本密集型行业中，生产相对无差异化产品的厂商，除非在供应紧张或真正短缺的情况下，否则只能获得不足的回报。只要存在过剩产能，价格往往只反映直接运营成本，而非所投入的资本。这种供应过剩的状态似乎将在纺织业大部分时间持续，我们预期利润相对于资本将保持相对温和的水平。

Insurance Underwriting

保险承保

The number one contributor to Berkshire’s overall excellent results in 1978 was the segment of National Indemnity Company’s insurance operation run by Phil Liesche. On about $90 million of earned premiums, an underwriting profit of approximately $11 million was realized, a truly extraordinary achievement even against the background of excellent industry conditions. Under Phil’s leadership, with outstanding assistance by Roland Miller in Underwriting and Bill Lyons in Claims, this segment of National Indemnity (including National Fire and Marine Insurance Company, which operates as a running mate) had one of its best years in a long history of performances which, in aggregate, far outshine those of the industry. Present successes reflect credit not only upon present managers, but equally upon the business talents of Jack Ringwalt, founder of National Indemnity, whose operating philosophy remains etched upon the company.

1978年伯克希尔整体优异业绩的头号贡献者，是Phil Liesche所经营的国家赔偿公司保险业务部门。在约9,000万美元的已赚保费基础上，实现了约1,100万美元的承保利润，即便在行业环境极好的背景下，这也是一项真正非凡的成就。在Phil的领导下，在核保部Roland Miller和理赔部Bill Lyons的出色协助下，国家赔偿公司的这个部门（包括作为搭档运营的National Fire and Marine Insurance Company）在其长期以来远超行业的表现中，度过了最好的年份之一。当前的成功不仅归功于现任管理者，同样也要归功于国家赔偿公司创始人Jack Ringwalt的商业才能，他的经营哲学至今仍刻印在公司中。

Home and Automobile Insurance Company had its best year since John Seward stepped in and straightened things out in 1975. Its results are combined in this report with those of Phil Liesche’s operation under the insurance category entitled “Specialized Auto and General Liability”.

自John Seward于1975年接手并理顺事务以来，Home and Automobile Insurance Company度过了最好的一年。其业绩在本报告中与Phil Liesche的业务合并，列于“特种汽车和一般责任险”的保险类别下。

Worker’s Compensation was a mixed bag in 1978. In its first year as a subsidiary, Cypress Insurance Company, managed by Milt Thornton, turned in outstanding results. The worker’s compensation line can cause large underwriting losses when rapid inflation interacts with changing social concepts, but Milt has a cautious and highly professional staff to cope with these problems. His performance in 1978 has reinforced our very good feelings about this purchase.

1978年工伤赔偿业务喜忧参半。由Milt Thornton管理的Cypress Insurance Company，作为子公司的第一年，交出了出色的答卷。当快速通胀与变化的社会观念相互作用时，工伤赔偿险种可能导致巨额承保损失，但Milt拥有一支谨慎且高度专业的团队来应对这些问题。他1978年的表现，强化了我们对这项收购的良好感觉。

Frank DeNardo came with us in the spring of 1978 to straighten out National Indemnity’s California Worker’s Compensation business which, up to that point, had been a disaster. Frank has the experience and intellect needed to correct the major problems of the Los Angeles office. Our volume in this department now is running only about 25% of what it was eighteen months ago, and early indications are that Frank is making good progress.

Frank DeNardo于1978年春天加入我们，以理顺国家赔偿公司加利福尼亚工伤赔偿业务——在此之前，该业务一直是个灾难。Frank具备纠正洛杉矶办公室主要问题所需的经验和智慧。我们该部门的业务量目前仅为18个月前的25%左右，早期迹象显示Frank正在取得良好进展。

George Young’s reinsurance department continues to produce very large sums for investment relative to premium volume, and thus gives us reasonably satisfactory overall results. However, underwriting results still are not what they should be and can be. It is very easy to fool yourself regarding underwriting results in reinsurance (particularly in casualty lines involving long delays in settlement), and we believe this situation prevails with many of our competitors. Unfortunately, self-delusion in company reserving almost always leads to inadequate industry rate levels. If major factors in the market don’t know their true costs, the competitive “fall-out” hits all - even those with adequate cost knowledge. George is quite willing to reduce volume significantly, if needed, to achieve satisfactory underwriting, and we have a great deal of confidence in the long term soundness of this business under his direction.

George Young领导的再保险部门，相对于保费规模，继续产生供投资使用的巨额资金，从而为我们带来尚属满意的整体业绩。但承保结果仍未达到应有的水平。在再保险（尤其是涉及长结算延迟的意外险种）中，很容易在承保结果上自欺欺人，我们相信许多竞争对手就处于这种状态。不幸的是，公司在准备金上的自我欺骗几乎总是导致整个行业费率水平不足。如果市场中的主要参与者不了解自己的真实成本，竞争“冲击”会波及所有人——即使是那些拥有充分成本知识的人。George非常愿意在必要时大幅缩减业务量，以实现满意的承保，我们对他领导下该业务的长期稳健性抱有极大信心。

The homestate operation was disappointing in 1978. Our unsatisfactory underwriting, even though partially explained by an unusual incidence of Midwestern storms, is particularly worrisome against the backdrop of very favorable industry results in the conventional lines written by our homestate group. We have confidence in John Ringwalt’s ability to correct this situation. The bright spot in the group was the performance of Kansas Fire and Casualty in its first full year of business. Under Floyd Taylor, this subsidiary got off to a truly remarkable start. Of course, it takes at least several years to evaluate underwriting results, but the early signs are encouraging and Floyd’s operation achieved the best loss ratio among the homestate companies in 1978.

1978年州内业务的表现令人失望。我们不尽人意的承保结果，虽可部分归因于中西部异常高发的风暴，但在我们州内集团所承保的传统险种——行业业绩非常有利的背景下，尤其令人担忧。我们相信John Ringwalt有能力纠正这一状况。该集团中的亮点是Kansas Fire and Casualty在第一个完整业务年度的表现。在Floyd Taylor的带领下，这家子公司起步确实非凡。当然，评估承保结果至少需要几年的时间，但早期迹象鼓舞人心，Floyd的业务在1978年州内公司中取得了最低的综合赔付率。

Although some segments were disappointing, overall our insurance operation had an excellent year. But of course we should expect a good year when the industry is flying high, as in 1978. It is a virtual certainty that in 1979 the combined ratio (see definition on page 31) for the industry will move up at least a few points, perhaps enough to throw the industry as a whole into an underwriting loss position. For example, in the auto lines - by far the most important area for the industry and for us - CPI figures indicate rates overall were only 3% higher in January 1979 than a year ago. But the items that make up loss costs - auto repair and medical care costs - were up over 9%. How different than yearend 1976 when rates had advanced over 22% in the preceding twelve months, but costs were up 8%.

虽然部分部门令人失望，但总体而言，我们的保险业务度过了辉煌的一年。当然，当整个行业高歌猛进时，比如1978年，我们理应有好的年头。几乎可以肯定，1979年行业的综合比率（定义见第31页）将上升至少几个点，或许足以使全行业陷入承保亏损境地。例如，在汽车险领域——对行业和我们都是最重要的领域——CPI数据显示，1979年1月的费率整体仅比一年前高出3%。但构成损失成本的要素——汽车维修和医疗费用——却上涨了超过9%。这与1976年末的情形大相径庭，当时费率在过去12个月上涨超过22%，而成本仅上升8%。

We continue to look for ways to expand our insurance operation. But your reaction to this intent should not be unrestrained joy. Some of our expansion efforts - largely initiated by your Chairman have been lackluster, others have been expensive failures. We entered the business in 1967 through purchase of the segment which Phil Liesche now manages, and it still remains, by a large margin, the best portion of our insurance business. It is not easy to buy a good insurance business, but our experience has been that it is easier to buy one than create one. However, we will continue to try both approaches, since the rewards for success in this field can be exceptional.

我们继续寻找扩展保险业务的方法。但你对此意图的反应不应是无节制的欣喜。我们的一些扩展努力——主要源自你们董事长——有些平淡无奇，有些则是代价高昂的失败。我们于1967年通过收购进入保险业，所收购的正是Phil Liesche如今管理的部门，至今它仍以巨大优势成为我们保险业务的最佳部分。购买一家好的保险业务并不容易，但我们的经验是，购买比自建更容易。当然，我们将继续尝试两种方式，因为在这一领域成功的回报可能是非凡的。

Insurance Investments

保险投资

We confess considerable optimism regarding our insurance equity investments. Of course, our enthusiasm for stocks is not unconditional. Under some circumstances, common stock investments by insurers make very little sense.

我们承认对保险股权投资相当乐观。当然，我们对股票的热情并非无条件。在某些情况下，保险公司投资普通股毫无意义。

We get excited enough to commit a big percentage of insurance company net worth to equities only when we find (1) businesses we can understand, (2) with favorable long-term prospects, (3) operated by honest and competent people, and (4) priced very attractively. We usually can identify a small number of potential investments meeting requirements (1), (2) and (3), but (4) often prevents action. For example, in 1971 our total common stock position at Berkshire’s insurance subsidiaries amounted to only $10.7 million at cost, and $11.7 million at market. There were equities of identifiably excellent companies available - but very few at interesting prices. (An irresistible footnote: in 1971, pension fund managers invested a record 122% of net funds available in equities - at full prices they couldn’t buy enough of them. In 1974, after the bottom had fallen out, they committed a then record low of 21% to stocks.)

我们只有在发现（1）我们能理解的业务，（2）具有良好的长期前景，（3）由诚实而能干的人经营，且（4）价格极具吸引力时，才会有足够的热情将保险公司净值的很大比例投入股票。我们通常能识别出少数符合条件（1）（2）（3）的潜在投资，但条件（4）往往阻止行动。例如，1971年，我们的保险子公司在普通股上的总持仓成本仅1,070万美元，市值为1,170万美元。那时有可明确识别为优秀的公司股票——但价格诱人的极少。（一条难以抗拒的脚注：1971年，养老金基金经理将净可用资金的122%投入股票，创下纪录——在饱满的价格下他们买得不够多。1974年，在市场底部坍塌后，他们将这一比例降到了当时的最低记录21%。）

The past few years have been a different story for us. At the end of 1975 our insurance subsidiaries held common equities with a market value exactly equal to cost of $39.3 million. At the end of 1978 this position had been increased to equities (including a convertible preferred) with a cost of $129.1 million and a market value of $216.5 million. During the intervening three years we also had realized pre-tax gains from common equities of approximately $24.7 million. Therefore, our overall unrealized and realized pre-tax gains in equities for the three year period came to approximately $112 million. During this same interval the Dow-Jones Industrial Average declined from 852 to 805. It was a marvelous period for the value-oriented equity buyer.

过去几年对我们则是另一番景象。1975年底，我们的保险子公司持有市价恰好等于成本3,930万美元的普通股。到1978年底，这一持仓已增至（包括可转换优先股）成本1.291亿美元，市价2.165亿美元。在这三年间，我们还实现了来自普通股的税前收益约2,470万美元。因此，三年间我们在股票上的未实现与已实现税前收益合计约1.12亿美元。而同期道琼斯工业平均指数从852点下降至805点。对于价值导向的股票买家而言，这是一段绝妙的时期。

We continue to find for our insurance portfolios small portions of really outstanding businesses that are available, through the auction pricing mechanism of security markets, at prices dramatically cheaper than the valuations inferior businesses command on negotiated sales.

我们持续为保险投资组合发现那些真正出色的企业中的一小部分，这些机会通过证券市场的拍卖定价机制，以远低于逊色企业在协议销售中估值水平的低廉价格获得。

This program of acquisition of small fractions of businesses (common stocks) at bargain prices, for which little enthusiasm exists, contrasts sharply with general corporate acquisition activity, for which much enthusiasm exists. It seems quite clear to us that either corporations are making very significant mistakes in purchasing entire businesses at prices prevailing in negotiated transactions and takeover bids, or that we eventually are going to make considerable sums of money buying small portions of such businesses at the greatly discounted valuations prevailing in the stock market. (A second footnote: in 1978 pension managers, a group that logically should maintain the longest of investment perspectives, put only 9% of net available funds into equities - breaking the record low figure set in 1974 and tied in 1977.)

这种以低廉价格收购企业小部分（普通股）的计划，鲜有热情追随，与普遍火热的企业收购活动形成鲜明对比。对我们而言，似乎很清楚：要么企业在以协议交易和收购要约中普遍的价格购买整个企业时犯了重大错误，要么我们最终将因以股票市场大幅折价的价格购买这些企业的小部分而赚得盆满钵满。（第二条脚注：1978年，按理应保持最长投资眼光的养老金基金经理，仅将净可用资金的9%投入股票——打破了1974年创下并与1977年持平的最低记录。）

We are not concerned with whether the market quickly revalues upward securities that we believe are selling at bargain prices. In fact, we prefer just the opposite since, in most years, we expect to have funds available to be a net buyer of securities. And consistent attractive purchasing is likely to prove to be of more eventual benefit to us than any selling opportunities provided by a short-term run up in stock prices to levels at which we are unwilling to continue buying.

我们并不关心市场是否会迅速对我们认为售价低廉的证券进行重估上调。事实上，我们更希望相反，因为在多数年份，我们预计会有资金可作为净买家。持续地以吸引力价格买入，最终可能比因股价短期上涨到我们不愿继续买入的水平而带来的卖出机会，对我们更为有利。

Our policy is to concentrate holdings. We try to avoid buying a little of this or that when we are only lukewarm about the business or its price. When we are convinced as to attractiveness, we believe in buying worthwhile amounts.

我们的政策是集中持有。当我们对某项业务或其价格只是不冷不热时，我们尽量不零敲碎打地买入。一旦确信其吸引力，我们便信奉买入有分量的份额。

Equity holdings of our insurance companies with a market value of over $8 million on December 31, 1978 were as follows:

1978年12月31日，我们保险公司持有市值超过800万美元的股权投资明细如下：（表格）

In some cases our indirect interest in earning power is becoming quite substantial. For example, note our holdings of 953,750 shares of SAFECO Corp. SAFECO probably is the best run large property and casualty insurance company in the United States. Their underwriting abilities are simply superb, their loss reserving is conservative, and their investment policies make great sense.

在某些情况下，我们对盈利能力的间接权益正变得相当可观。例如，请注意我们持有的953,750股SAFECO公司股票。SAFECO很可能是美国经营最佳的大型财产和意外险保险公司。他们的承保能力极为出色，损失准备金保守，投资政策非常明智。

SAFECO is a much better insurance operation than our own (although we believe certain segments of ours are much better than average), is better than one we could develop and, similarly, is far better than any in which we might negotiate purchase of a controlling interest. Yet our purchase of SAFECO was made at substantially under book value. We paid less than 100 cents on the dollar for the best company in the business, when far more than 100 cents on the dollar is being paid for mediocre companies in corporate transactions. And there is no way to start a new operation - with necessarily uncertain prospects - at less than 100 cents on the dollar.

SAFECO是一家远比我们自己的保险业务更好的公司（尽管我们认为我们某些部门远高于平均水平），比我们所能构建的更优秀，同样，远比任何我们可能通过谈判购买控股权的公司出色。然而，我们购买SAFECO时，价格却显著低于账面价值。我们以低于1美元的价格买入了业内最佳公司，而在企业交易中，平庸的公司却要付出远超1美元的价格。而且，绝无可能以低于1美元的成本从零开始一项新业务——其前景必然充满不确定性。

Of course, with a minor interest we do not have the right to direct or even influence management policies of SAFECO. But why should we wish to do this? The record would indicate that they do a better job of managing their operations than we could do ourselves. While there may be less excitement and prestige in sitting back and letting others do the work, we think that is all one loses by accepting a passive participation in excellent management. Because, quite clearly, if one controlled a company run as well as SAFECO, the proper policy also would be to sit back and let management do its job.

当然，作为少数权益股东，我们无权指导甚至影响SAFECO的管理政策。但我们为何想要这么做呢？记录表明，他们在经营管理方面做得比我们自己能做的更好。虽然坐享其成、让他人工作可能不那么激动人心、不那么有威望，但我们认为，这就是接受对优秀管理进行被动参与所失去的全部。因为很明显，如果一个人控制了一家像SAFECO一样经营出色的公司，恰当的政策同样是退后一步，让管理层做好他们的工作。

Earnings attributable to the shares of SAFECO owned by Berkshire at yearend amounted to $6.1 million during 1978, but only the dividends received (about 18% of earnings) are reflected in our operating earnings. We believe the balance, although not reportable, to be just as real in terms of eventual benefit to us as the amount distributed. In fact, SAFECO’s retained earnings (or those of other well-run companies if they have opportunities to employ additional capital advantageously) may well eventually have a value to shareholders greater than 100 cents on the dollar.

1978年，伯克希尔所持SAFECO股份应占收益为610万美元，但只有收到的股息（约占收益的18%）反映在我们的营业利润中。我们相信，其余部分虽不可报告，但在最终对我们的益处方面，与已分配部分同样真实。事实上，SAFECO的留存收益（或其他经营良好的公司，如果它们有机会有效地运用额外资本）最终对股东的价值很可能超过1美元。

We are not at all unhappy when our wholly-owned businesses retain all of their earnings if they can utilize internally those funds at attractive rates. Why should we feel differently about retention of earnings by companies in which we hold small equity interests, but where the record indicates even better prospects for profitable employment of capital? (This proposition cuts the other way, of course, in industries with low capital requirements, or if management has a record of plowing capital into projects of low profitability; then earnings should be paid out or used to repurchase shares - often by far the most attractive option for capital utilization.)

当我们的全资子公司能够以有吸引力的回报率在内部运用所有留存收益时，我们丝毫不感到不快。那么，对于我们所持股份较少的公司，如果记录表明其资本盈利运用的前景甚至更好，我们为何要对留存收益有不同的感受呢？（当然，这一命题反过来也成立：在资本需求低的行业，或者管理层有将资本投入低利润项目的记录时，收益应当派发或用于回购股份——这往往是对资本最具吸引力的运用方式。）

The aggregate level of such retained earnings attributable to our equity interests in fine companies is becoming quite substantial. It does not enter into our reported operating earnings, but we feel it well may have equal long-term significance to our shareholders. Our hope is that conditions continue to prevail in securities markets which allow our insurance companies to buy large amounts of underlying earning power for relatively modest outlays. At some point market conditions undoubtedly will again preclude such bargain buying but, in the meantime, we will try to make the most of opportunities.

这些优质公司应占留存收益的总额正变得相当可观。它们并不计入我们报告的营业利润，但我们认为，对股东而言，它们很可能具有同等的长期意义。我们希望证券市场继续保持那种状态，使我们的保险公司能以相对温和的支出购买到大量的潜在盈利能力。在某个时刻，市场状况无疑将再次阻碍这种低价买入，但在此期间，我们将尽力抓住机会。

Banking

银行业务

Under Gene Abegg and Pete Jeffrey, the Illinois National Bank and Trust Company in Rockford continues to establish new records. Last year’s earnings amounted to approximately 2.1% of average assets, about three times the level averaged by major banks. In our opinion, this extraordinary level of earnings is being achieved while maintaining significantly less asset risk than prevails at most of the larger banks.

在Gene Abegg和Pete Jeffrey的领导下，罗克福德的伊利诺伊国家银行与信托公司继续刷新纪录。去年的收益达到平均资产的约2.1%，约为各大银行平均水平的三倍。在我们看来，这一非凡的盈利水平是在保持远低于多数大银行的资产风险的同时实现的。

We purchased the Illinois National Bank in March 1969. It was a first-class operation then, just as it had been ever since Gene Abegg opened the doors in 1931. Since 1968, consumer time deposits have quadrupled, net income has tripled and trust department income has more than doubled, while costs have been closely controlled.

我们于1969年3月购买了伊利诺伊国家银行。它自1931年Gene Abegg开门营业以来，一直是一流的运营。自1968年以来，消费者定期存款增长了四倍，净收入增长了三倍，信托部门收入增长了一倍多，而成本得到了严格控制。

Our experience has been that the manager of an already high-cost operation frequently is uncommonly resourceful in finding new ways to add to overhead, while the manager of a tightly-run operation usually continues to find additional methods to curtail costs, even when his costs are already well below those of his competitors. No one has demonstrated this latter ability better than Gene Abegg.

我们的经验是，一家已属高成本的运营，其经理往往在寻找增加间接费用的新方法上格外“足智多谋”；而一家管理紧凑的运营，其经理通常能继续找到额外的方法来削减成本，即使其成本已远低于竞争对手。在这方面，没有人比Gene Abegg表现得更好。

We are required to divest our bank by December 31, 1980. The most likely approach is to spin it off to Berkshire shareholders some time in the second half of 1980.

我们被要求在1980年12月31日之前剥离该银行。最可能的做法是在1980年下半年某个时候，将其分拆给伯克希尔的股东。

Retailing

零售

Upon merging with Diversified, we acquired 100% ownership of Associated Retail Stores, Inc., a chain of about 75 popular priced women’s apparel stores. Associated was launched in Chicago on March 7, 1931 with one store, $3200, and two extraordinary partners, Ben Rosner and Leo Simon. After Mr. Simon’s death, the business was offered to Diversified for cash in 1967. Ben was to continue running the business - and run it, he has.

随着与Diversified的合并，我们获得了Associated Retail Stores, Inc.的100%所有权，这是一家拥有约75家大众价位女装店的连锁企业。Associated于1931年3月7日在芝加哥创立，起初只有一家店、3200美元和两位非凡的合伙人Ben Rosner与Leo Simon。Simon先生去世后，该企业在1967年以现金方式出售给了Diversified。Ben则继续经营业务——并且，他确实在经营。

Associated’s business has not grown, and it consistently has faced adverse demographic and retailing trends. But Ben’s combination of merchandising, real estate and cost-containment skills has produced an outstanding record of profitability, with returns on capital necessarily employed in the business often in the 20% after-tax area.

Associated的业务并未增长，并且持续面临不利的人口和零售趋势。但Ben结合了商品经营、房地产和成本控制的技巧，创造了出色的盈利记录，业务所需资本的回报率常常在税后20%左右。

Ben is now 75 and, like Gene Abegg, 81, at Illinois National and Louie Vincenti, 73, at Wesco, continues daily to bring an almost passionately proprietary attitude to the business. This group of top managers must appear to an outsider to be an overreaction on our part to an OEO bulletin on age discrimination. While unorthodox, these relationships have been exceptionally rewarding, both financially and personally. It is a real pleasure to work with managers who enjoy coming to work each morning and, once there, instinctively and unerringly think like owners. We are associated with some of the very best.

Ben现年75岁，与伊利诺伊国家银行81岁的Gene Abegg和Wesco 73岁的Louie Vincenti一样，每天继续以近乎热情的所有者心态对待业务。在外人看来，这群高层管理者似乎是我们对OEO关于年龄歧视的公告反应过度。尽管非正统，但这些关系无论在财务还是个人层面都异常有价值。与那些每天早晨乐于上班、一上班便本能而准确地像所有者一样思考的经理共事，真是一种乐趣。我们与一些最优秀的人为伍。

Warren E. Buffett, Chairman
March 26, 1979

沃伦·E·巴菲特，董事长
1979年3月26日