位置:博客 > Barrons > 一个实业家的诞生——读巴菲特的信(10)




Like virginity, a stable price level seems capable of maintenance, but not of restoration.



But before we drown in a sea of self-congratulation, a further - and crucial - observation must be made.  A few years ago, a business whose per-share net worth compounded at 20% annually would have guaranteed its owners a highly successful real investment return.  Now such an outcome seems less certain.  For the inflation rate, coupled with individual tax rates, will be the ultimate determinant as to whether our internal operating performance produces successful investment results - i.e., a reasonable gain in purchasing power from funds committed - for you as shareholders.


Just as the original 3% savings bond, a 5% passbook savings account or an 8% U.S. Treasury Note have, in turn, been transformed by inflation into financial instruments that chew up, rather than enhance, purchasing power over their investment lives, a business earning 20% on capital can produce a negative real return for its owners under inflationary conditions not much more severe than presently prevail.


If we should continue to achieve a 20% compounded gain - not an easy or certain result by any means - and this gain is translated into a corresponding increase in the market value of Berkshire Hathaway stock as it has been over the last fifteen years, your after-tax purchasing power gain is likely to be very close to zero at a 14% inflation rate.  Most of the remaining six percentage points will go for income tax any time you wish to convert your twenty percentage points of nominal annual gain into cash.


That combination - the inflation rate plus the percentage of capital that must be paid by the owner to transfer into his own pocket the annual earnings achieved by the business (i.e., ordinary income tax on dividends and capital gains tax on retained earnings) - can be thought of as an “investor’s misery index”.  When this index exceeds the rate of return earned on equity by the business, the investor’s purchasing power (real capital) shrinks even though he consumes nothing at all.  We have no corporate solution to this problem; high inflation rates will not help us earn higher rates of return on equity.


One friendly but sharp-eyed commentator on Berkshire has pointed out that our book value at the end of 1964 would have bought about one-half ounce of gold and, fifteen years later, after we have plowed back all earnings along with much blood, sweat and tears, the book value produced will buy about the same half ounce.  A similar comparison could be drawn with Middle Eastern oil.  The rub has been that government has been exceptionally able in printing money and creating promises, but is unable to print gold or create oil.


We intend to continue to do as well as we can in managing the internal affairs of the business.  But you should understand that external conditions affecting the stability of currency may very well be the most important factor in determining whether there are any real rewards from your investment in Berkshire Hathaway.



High rates of inflation create a tax on capital that makes much corporate investment unwise - at least if measured by the criterion of a positive real investment return to owners.  This “hurdle rate” the return on equity that must be achieved by a corporation in order to produce any real return for its individual owners - has increased dramatically in recent years.  The average tax-paying investor is now running up a down escalator whose pace has accelerated to the point where his upward progress is nil.






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.


1978 年给伯克希尔 · 哈撒韦股东的信)
It is comforting to be in a business where some mistakes can be made and yet a quite satisfactory overall performance can be achieved.  In a sense, this is the opposite case from our textile business where even very good management probably can average only modest results.  One of the lessons your management has learned - and, unfortunately, sometimes re-learned - is the importance of being in businesses where tailwinds prevail rather than headwinds.


1977 年给伯克希尔 · 哈撒韦股东的信)
Harking back to our textile experience, we should have realized the futility of trying to be very clever (via sinking funds and other special type issues) in an area where the tide was running heavily against us.
1979 年给伯克希尔 · 哈撒韦股东的信)

Both our operating and investment experience cause us to conclude that “turnarounds” seldom turn, and that the same energies and talent are much better employed in a good business purchased at a fair price than in a poor business purchased at a bargain price.



We have written in past reports about the disappointments that usually result from purchase and operation of “turnaround” businesses.  Literally hundreds of turnaround possibilities in dozens of industries have been described to us over the years and, either as participants or as observers, we have tracked performance against expectations.  Our conclusion is that, with few exceptions, when a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.


GEICO may appear to be an exception, having been turned around from the very edge of bankruptcy in 1976.  It certainly is true that managerial brilliance was needed for its resuscitation, and that Jack Byrne, upon arrival in that year, supplied that ingredient in abundance.

GEICO似乎是个例外,已经被从1976年的破产边缘拯救回来。当然,它的复兴需要卓越的管理。当Jack Byrne从到达的那年起,就贡献了大量的卓越管理。

But it also is true that the fundamental business advantage that GEICO had enjoyed - an advantage that previously had produced staggering success - was still intact within the company, although submerged in a sea of financial and operating troubles.


GEICO was designed to be the low-cost operation in an enormous marketplace (auto insurance) populated largely by companies whose marketing structures restricted adaptation.  Run as designed, it could offer unusual value to its customers while earning unusual returns for itself.  For decades it had been run in just this manner.  Its troubles in the mid-70s were not produced by any diminution or disappearance of this essential economic advantage.


GEICO’s problems at that time put it in a position analogous to that of American Express in 1964 following the salad oil scandal.  Both were one-of-a-kind companies, temporarily reeling from the effects of a fiscal blow that did not destroy their exceptional underlying economics.  The GEICO and American Express situations, extraordinary business franchises with a localized excisable cancer (needing, to be sure, a skilled surgeon), should be distinguished from the true “turnaround” situation in which the managers expect - and need - to pull off a corporate Pygmalion.





Our own analysis of earnings reality differs somewhat from generally accepted accounting principles, particularly when those principles must be applied in a world of high and uncertain rates of inflation. (But it’s much easier to criticize than to improve such accounting rules.  The inherent problems are monumental.) We have owned 100% of businesses whose reported earnings were not worth close to 100 cents on the dollar to us even though, in an accounting sense, we totally controlled their disposition. (The “control” was theoretical.  Unless we reinvested all earnings, massive deterioration in the value of assets already in place would occur.  But those reinvested earnings had no prospect of earning anything close to a market return on capital.) We have also owned small fractions of businesses with extraordinary reinvestment possibilities whose retained earnings had an economic value to us far in excess of 100 cents on the dollar.


The value to Berkshire Hathaway of retained earnings is not determined by whether we own 100%, 50%, 20% or 1% of the businesses in which they reside.  Rather, the value of those retained earnings is determined by the use to which they are put and the subsequent level of earnings produced by that usage.



Our view, we warn you, is non-conventional.  But we would rather have earnings for which we did not get accounting credit put to good use in a 10%-owned company by a management we did not

personally hire, than have earnings for which we did get credit put into projects of more dubious potential by another management - even if we are that management.



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.)



If you have owned .01 of 1% of Berkshire during the past decade, you have benefited economically in full measure from your share of our retained earnings, no matter what your accounting system.  Proportionately, you have done just as well as if you had owned the magic 20%.  But if you have owned 100% of a great many capital-intensive businesses during the decade, retained earnings that were credited fully and with painstaking precision to you under standard accounting methods have resulted in minor or zero economic value.  This is not a criticism of accounting procedures.  We would not like to have the job of designing a better system.  It’s simply to say that managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.




Our acquisition preferences run toward businesses that generate cash, not those that consume it.  As inflation intensifies, more and more companies find that they must spend all funds they generate internally just to maintain their existing physical volume of business.  There is a certain mirage-like quality to such operations.  However attractive the earnings numbers, we remain leery of businesses that never seem able to convert such pretty numbers into no-strings-attached cash.



推荐 44