Warren E. Buffett 1962 annual Letter-1(中英文对照)

Warren E. Buffett 1962 annual Letter(中英文对照)

BUFFETT PARTNERSHIP, LTD. 810 KIEWIT PLAZA OMAHA 31, NEBRASKA

January 18, 1963

The Ground Rules

Some partners have confessed (that's the proper word) that they sometimes find it difficult to wade through my entire annual letter. Since I seem to be getting more long-winded each year, I have decided to emphasize certain axioms on the first pages. Everyone should be entirely clear on these points. To most of you this material will seem unduly repetitious, but I would rather have nine partners out of ten mildly bored than have one out of ten with any basic misconceptions.

1. In no sense is any rate of return guaranteed to partners. Partners who withdraw one-half of 1% monthly are doing just that--withdrawing. If we earn more than 6% per annum over a period of years, the withdrawals will be covered by earnings and the principal will increase. If we don't earn 6%, the monthly payments are partially or wholly a return of capital.

2. Any year in which we fail to achieve at least a plus 6% performance will be followed by a year when partners receiving monthly payments will find those payments lowered.

3. Whenever we talk of yearly gains or losses, we are talking about market values; that is, how we stand with assets valued at market at yearend against how we stood on the same basis at the beginning of the year. This may bear very little relationship to the realized results for tax purposes in a given year.

4. Whether we do a good job or a poor job is not to be measured by whether we are plus or minus for the year. It is instead to be measured against the general experience in securities as measured by the DowJones Industrial Average, leading investment companies, etc. If our record is better than that of these yardsticks, we consider it a good year whether we are plus or minus. If we do poorer, we deserve the tomatoes.

5. While I much prefer a five-year test, I feel three years is an absolute minimum for judging performance. It is a certainty that we will have years when the partnership performance is poorer, perhaps substantially so, than the Dow. If any three-year or longer period produces poor results, we all should start looking around for other places to have our money. An exception to the latter statement would be three years covering a speculative explosion in a bull market.

6. I am not in the business of predicting general stock market or business fluctuations. If you think I can do this, or think it is essential to an investment program, you should not be in the partnership.

7. I cannot promise results to partners. What I can and do promise is that:

a. Our investments will be chosen on the basis of value, not popularity;

b. That we will attempt to bring risk of permanent capital loss (not short-term quotational loss) to an absolute minimum by obtaining a wide margin of safety in each commitment and a diversity of commitments; and

c. My wife, children and I will have virtually our entire net worth invested in the Partnership.

[笑]基本规则

由于部分合伙人坦白地承认看不太懂(这是一个恰当的词)我的整封给投资者的信,尤其是我也把给投资者的信写得越来越长。我决定在第一页再次强调几个关于我们合伙企业的基本规则,每个人应该完全明白这些规则。当然大多数合伙人会觉得这种重复实在让人难以忍受,但我宁愿十个合伙人中有九个感到无聊郁闷,也不愿有一个合伙人误解了其中一些基本的规则。
1、对合伙人的任何投资回报承诺是没有意义的。合伙人每月收取0.5%的利息(年华6%)仅仅是利息。如果我们年华盈利回报超过6%,那么利息就会被盈利回报所覆盖,资本金也会增加。如果我们没有获得6%的盈利回报,那么每月的利息支付部分就从资本金里面扣除。
2、在任何一年中,如果我们未能取得 6%的回报率,则在下一年合伙人会发现收到的每月利息也会减少。
3、我们所提到的年回报率,是指我们投资组合的市场价值与其年初时的市场价值的对比。这跟我们的税收情况没有关联。
4、至于我们在一年到底是做得好还是不好,主要是参考道琼斯指数或者 领先投资公司(leading investment companies)的相对收益,而不是看我们的绝对收益情况。只要我们战胜了道琼斯指数,我们就认为我们在这一年是做得比较好的,不考虑今年是否盈利还是亏损,否则的话你们就应该无情地把西红柿扔向我的头。
5、三年是最少的一个检测投资回报的时间段,但是我认为 5 年是一个更加合适的时间段。如果在连续三年(或更长)的时间里我们的投资回报表现很差,那无论是你们还是我自己都应该考虑一种更好的让资金保值增值的方式。
6、我从来都不懂如何去预测市场的未来走势,也不会试图去预测商业产业在未来的波动。如果你们认为我可以去预测这些东西,或者认为这些预测对于投资行为是非常重要的因素,那你们就不应该加入这个合伙企业。
7、我不可能对最终的投资结果有所保证,而我所能作出的承诺如下:
a、我们的投资将是基于价值而非市场的流行观点。b、我将致力于通过在最大范围内确保投资的安全边际来减少我们可能遇到的永久性资本损失(不是暂时性的短期损失)。c、我全家的全部资产都投资在合伙企业当中。[笑]

Our Performance in 1962

I have consistently told partners that we expect to shine on a relative basis during minus years for the Dow, whereas plus years of any magnitude may find us blushing. This held true in 1962.

Because of a strong rally in the last few months, the general market as measured by the Dow really did not have such a frightening decline as many might think. From 731 at the beginning of the year, it dipped to 535 in June, but closed at 652. At the end of 1960, the Dow stood at 616, so you can see that while there has been a good deal of action the past few years, the investing public as a whole is not too far from where it was in 1959 or 1960. If one had owned the Dow last year (and I imagine there are a few people playing the high flyers of 1961 who wish they had), they would have had a shrinkage in market value of 79.04 or 10.8%. However, dividends of approximately 23.30 would have been received to bring the overall results from the Dow for the year to minus 7.6%. Our own overall record was plus 13.9%. Below we show the year-by-year performance of the Dow, the partnership before allocation to the general partner, and the limited partners' results for all full years of Buffett Partnership, Ltd.'s and predecessor partnerships' activities:

(1) For 1957-61 consists of combined results of all predecessor limited partnerships operating throughout entire year after all expenses but before distributions to partners or allocations to the general partner. (2) For 1957-61 computed on basis of preceding column of partnership results allowing for allocation to general partner based upon present partnership agreement.

The following table shows the cumulative or compounded results in the same three categories, as well as the average annual compounded rate:

My (unscientific) opinion is that a margin of ten percentage points per annum over the Dow is the very maximum that can be achieved with invested funds over any long period of years, so it may be well to mentally modify some of the above figures.

Partners have sometimes expressed concern as to the effect of size upon performance. This subject was reflected upon in last year’s annual letter. The conclusion reached was that there were some situations where larger sums helped and some where they hindered, but on balance, I did not feel they would penalize performance. I promised to inform partners if my conclusions on this should change. At the beginning of 1957, combined limited partnership assets totaled $303,726 and grew to $7,178,500 at the beginning or 1962. To date, anyway, our margin over the Dow has indicated no tendency to narrow as funds increase.

[笑]1962 年的表现

我们不断地告知我们的合伙人:我们将在道琼斯下降的抗跌,而在道琼斯上升时跟得上指数。上述预言在今年得到了证实。
由于过去几个月的强劲反弹,以道琼斯指数衡量的整体市场并没有像许多人认为的那样出现恐慌性下跌。指数一度从年初的 731 点跌至六月份的 535 点,然而在年末重新恢复至 652 点的水平。而在1960 年年末,道琼斯指数是 616 点。所以虽然过去两年市场中有不少波动,然而实际上我们目前的市场跟 1959 年和 1960 年的市场点位差别不大。

如果去年有人持有道琼斯指数(我想没几个人在玩1961年的大师级游戏,他们希望自己拥有),他的市值就会缩水79.04点10.8%。不过,如果当时粉红和是23.30美元,道琼斯指数今年的整体亏损是7.6%。而我们的整体回报是盈利 13.9%,下面我们展示了道琼斯指数的路历年的回报,和扣除付给合伙人利息前的合伙公司 和有限合伙人的回报。

我个人的想法是(没有科学根据),长期而言我们所能取得的最好的成绩就是年均复合增长率超过道琼斯指数的10%,所以上述的高回报可能会在未来需要向下修正。

对于资金增加可能带来投资绩效下降的忧虑,我在去年的给投资者信中已经有所提及。资金的增加目前对我们的投资来说有利有弊,总体而言我认为对我们的绩效不会有明显的影响。我也已经保证在我认为会对我们的投资绩效有影响的时候及时将这种判断告知各位。1957年初,有加上有限合伙人的合伙企业 总资产为303,726美元,到1962年初则增至7,178,500美元。,我目前仍不认为资金的增加会降低我们的投资绩效。[笑]

Investment Companies

Along with the results of the Dow, we have regularly included the tabulations on the two largest open-end investment companies (mutual funds) following a common stock policy, and the two largest diversified closedend investment companies. These four companies, Massachusetts Investors Trust, Investors Stock Fund, TriContinental Corp. and Lehman Corp. manage over $3 billion and are probably typical of most of the $20 billion investment company industry. My opinion is that their results parallel those of most bank trust departments and investment counseling organizations which handle, in aggregate, vastly greater sums.

The purpose of this tabulation, which is shown below, is to illustrate that the Dow is no pushover as an index of investment achievement. The advisory talent managing just the four companies shown commands annual fees of approximately $7 million and this represents a very small fraction of the industry. Nevertheless, the public batting average of this highly-paid talent indicates results slightly less favorable than the Dow. In no sense is this statement intended as criticism. Within their institutional framework and handling the many billions of dollars involved, I consider such average results virtually the only possible ones. Their merits lie in other than superior results.

Both our portfolio and method of operation differ substantially from the companies mentioned above. However, most partners, as an alternative to their interest in the partnership would probably have their funds invested in media producing results comparable with investment companies, and I, therefore feel they offer a meaningful test of performance.

[笑]投资公司

除了道指的数据,我们还定期公布了两家遵循普通股政策的最大开放式投资公司(共同基金)和两家最大的多元化封闭式投资公司的数据。这四家公司分别是Massachusetts Investors Trust、Investors Stock Fund、TriContinental Corp.和Lehman Corp,它们管理的资产超过30亿美元,可能是200亿美元投资行业中大公司的典型代表。我的观点是,他们的研究结果与大多数银行信托部门和投资咨询机构的研究结果差不多,这些机构操作的资金总额要大得多。

这张表的目的,如下所示,是为了说明道琼斯指数并不是容易被击败的。仅管理上述四家公司的管理人员每年的费用约为700万美元,在整个行业中只占很小的一部分。然而,这些高薪管理人的公开击球率表明,他们的成绩跑输了道琼斯指数。这句话决不是批评的意思。在他们的制度框架内,在操作运营数十亿美元的问题上,我认为这样的平均结果实际上是唯一可能的结果。它们的优点不在于回报好。

我们的投资组合和经营方式与上述公司有很大的不同。然而,大多数合伙人或合伙公司可能会将其资金投资于媒体中拥有良好业绩的投资公司,因此,我认为他们提供了一种有意义的业绩测试。[笑]

The Joys of Compounding

I have it from unreliable sources that the cost of the voyage Isabella originally underwrote for Columbus was approximately $30,000. This has been considered at least a moderately successful utilization of venture capital. Without attempting to evaluate the psychic income derived from finding a new hemisphere, it must be pointed out that even had squatter's rights prevailed, the whole deal was not exactly another IBM. Figured very roughly, the $30,000 invested at 4% compounded annually would have amounted to something like $2,000,000,000,000 (that's $2 trillion for those of you who are not government statisticians) by 1962. Historical apologists for the Indians of Manhattan may find refuge in similar calculations. Such fanciful geometric progressions illustrate the value of either living a long time, or compounding your money at a decent rate. I have nothing particularly helpful to say on the former point.

The following table indicates the compounded value of $100,000 at 5%, 10% and 15% for 10, 20 and 30 years. It is always startling to see how relatively small differences in rates add up to very significant sums over a period of years. That is why, even though we are shooting for more, we feel that a few percentage points advantage over the Dow is a very worthwhile achievement. It can mean a lot of dollars over a decade or two.

[笑]复利的乐趣

我从一些小道消息得知,Isabella最初为Columbus承保的航程费用约为3万美元。这至少被认为是对风险资本的一种适度成功的利用。如果不去评估发现一个新半球所带来的心理收益,就必须指出,即使占领者的权利取得优势,整个交易也不完全是另一家IBM。非常粗略地计算,到1962年,以4%的复利计算的3万美元投资将达到大约20亿美元(对你们这些不是政府统计学家的人来说,这是2万亿美元)。曼哈顿印第安人的历史辩护者可能会在类似的计算中找到避难地。这些奇怪的几何级数展现了长寿的价值或者你的钱复利的价值。关于前一点,我没有什么特别有用的东西要说。([献花花]小欧注:这里讲了复利的起源,说的是“24美元买下曼哈顿”的故事)

下表显示10万美元在10年、20年和30年和利率分别为5%、10%和15%下的复利价值。令人吃惊的是,利率上相对较小的差异,在多年的时间里累积起来,就会变成非常可观的数额。这就是为什么,尽管我们的目标是更多,但我们认为,相对于道琼斯指数几个百分点的优势是一个非常值得的成就。这可能意味着10年或20年的获得更多的资金。[笑]

Our Method of Operation

Our avenues of investment break down into three categories. These categories have different behavior characteristics, and the way our money is divided among them will have an important effect on our results, relative to the Dow, in any given year. The actual percentage division among categories is to some degree planned, but to a great extent, accidental, based upon availability factors.

The first section consists of generally undervalued securities (hereinafter called “generals”) where we have nothing to say about corporate policies and no timetable as to when the undervaluation may correct itself .Over the years, this has been our largest category of investment, and more money has been made here than in either of the other categories. We usually have fairly large positions (5% to 10% of our total assets) in each of five or six generals, with smaller positions in another ten or fifteen.

Sometimes these work out very fast; many times they take years. It is difficult at the time of purchase to know any compelling reason why they should appreciate in price. However, because of this lack of glamour or anything pending which might create immediate favorable market action, they are available at very cheap prices. A lot of value can be obtained for the price paid. This substantial excess of value creates a comfortable margin of safety in each transaction. Combining this individual margin of safety with a diversity of commitments creates a most attractive package of safety and appreciation potential. We do not go into these generals with the idea of getting the last nickel, but are usually quite content selling out at some intermediate level between our purchase price and what we regard as fair value to a private owner.

Many times generals represent a form of "coattail riding" where we feel the dominating stockholder group has plans for the conversion of unprofitable or under-utilized assets to a better use. We have done that ourselves in Sanborn and Dempster, but everything else equal we would rather let others do the work. Obviously, not only do the values have to be ample in a case like this, but we also have to be careful whose coat we are holding.

The generals tend to behave market-wise very much in sympathy with the Dow. Just because something is cheap does not mean it is not going to go down. During abrupt downward movements in the market, this segment may very well go down percentage-wise just as much as the Dow. Over a period of years, I believe the generals will outperform the Dow, and during sharply advancing years like 1961. This is the section of our portfolio that turns in the best results. It is, of course, also the most vulnerable in a declining market, and in 1962, not only did we not make any money out of our general category, but I am even doubtful if it did better than the Dow.

Our second category consists of "work-outs. These are securities whose financial results depend on corporate action rather than supply and demand factors created by buyers and sellers of securities. In other words, they are securities with a timetable where we can predict, within reasonable error limits, when we will get how much and what might upset the applecart. Corporate events such as mergers, liquidations, reorganizations, spin-offs, etc., I lead to work-outs. An important source in recent years has been sell-outs by oil producers to major integrated oil companies.

This category will produce reasonably stable earnings from year to year, to a large extent irrespective of the course of the Dow. Obviously, if we operate throughout a year with a large portion of our portfolio in work-outs, we will look extremely good if it turns out to be a declining year for the Dow, or quite bad if it is a strongly advancing year.

We were fortunate in that we had a good portion of our portfolio in work outs in 1962. As I have said before, this was not due to any notion on my part as to what the market would do, but rather because I could get more of what I wanted in this category than in the generals. This same concentration in work-outs hurt our performance during the market advance in the second half of the year.

Over the years, work-outs have provided our second largest category. At any given time, we may be in five to ten of these; some just beginning and others in the late stage of their development. I believe in using borrowed money to offset a portion of our work-out portfolio, since there is a high degree of safety in this category in terms of both eventual results and intermediate market behavior. For instance, you will note when you receive our audit report, that we paid $75,000 of interest to banks and brokers during the year. Since our borrowing was at approximately 5%, this means we had an average of $1,500,000 borrowed from such sources. Since 1962 was a down year in the market, you might think that such borrowing would hurt results. However, all of our loans were to offset work-outs, and this category turned in a good profit for the year. Results, excluding the benefits derived from the use of borrowed money, usually fall in the 10% to 20% per annum range. My self-imposed standard limit regarding borrowing is 25% of partnership net worth, although something extraordinary could result in modifying this for a limited period of time.

You will note on our yearend balance sheet (part of the audit you will receive) securities sold short totaling some $340,000. Most of this occurred in conjunction with a work-out entered into late in the year. In this case, we had very little competition for a period of time and were able to create a 10% or better profit (gross, not annualized) for a few months tie-up of money. The short sales eliminated the general market risk.

The final category is I “control” situations, where we either control the company or take a very large position and attempt to influence policies of the company. Such operations should definitely be measured on the basis of several years. In a given year, they may produce nothing as it is usually to our advantage to have the stock be stagnant market-wise for a long period while we are acquiring it. These situations, too, have relatively little in common with the behavior of the Dow. Sometimes, of course, we buy into a general with the thought in mind that it might develop into a control situation. If the price remains low enough for a long period, this might very well happen. Usually, it moves up before we have a substantial percentage of the company's stock, and we sell at higher levels and complete a successful general operation.

[笑]我们的运营方法

我们的投资渠道分为三类。这些类别有不同的行为特征,而我们在这些类别中分配资金的方式,在任何一年都会对我们的业绩产生重要影响。类别之间的实际百分比划分在某种程度上是有计划的,但在很大程度上是偶然的,是基于可用性因素。

第一部分包括通常被低估的证券(以下简称“将军”),我们没什么可说的关于公司政策和没有时间表,当低估可能会自我纠正之后的几年,这一直是我们最大的投资类别,和更多的钱已经比在其他类别。我们通常在五六个将军中各占相当大的职位(占我们总资产的5%到10%),而在另外十个或十五个将军中则有较小的职位。

有时这些方法很快奏效;很多时候,这需要很多年。在购买时,很难知道他们应该升值的任何有说服力的理由。然而,由于缺乏魅力或任何可能立即创造有利的市场行动的悬而未决,它们以非常便宜的价格出售。付出的代价可以获得很多价值。这种巨大的超额价值为每笔交易创造了舒适的安全边际。将这种个别的安全边际与多样化的承诺结合起来,创造出一套最具吸引力的安全与升值潜力组合。我们不是为了得到最后一枚镍币才去找这些将军的,而是通常满足于在我们的购买价和我们认为对私人所有者公平价值之间的某个中间水平卖出。

很多时候,将军们代表了一种“乘顺风车”的形式,我们认为占主导地位的股东集团计划将不盈利或未充分利用的资产转化为更好的用途。我们在桑伯恩和登普斯特已经做到了这一点,但在其他条件相同的情况下,我们宁愿让别人来做这项工作。显然,在这种情况下,值必须足够大,而且我们还必须小心我们拿着的外套是谁的。

将军们倾向于以市场为导向,与道琼斯指数保持一致。某些东西便宜并不意味着它不会降价。在市场突然下行期间,这一板块很可能会像道指一样,按百分比下跌。我相信,在一段时间内,将军们的表现将超过道琼斯指数,在1961年这样的大幅上涨时期也会如此。这是我们投资组合中能带来最好结果的部分。当然,在不断下滑的市场中,它也是最脆弱的。1962年,我们不仅没有从一般类别中赚到钱,我甚至怀疑它是否比道琼斯指数表现更好。

我们的第二类包括“锻炼”。这些证券的财务业绩取决于公司行为,而不是证券买卖双方创造的供求因素。换句话说,它们是一种有时间表的证券,在合理的误差范围内,我们可以预测什么时候能得到多少以及什么可能会扰乱应用程序。企业事件,如合并、清算、重组、剥离,等等,我导致解决。近年来,石油生产商向大型综合性石油公司出售石油是一个重要来源。

这类股票每年都会产生相当稳定的收益,在很大程度上与道指走势无关。很明显,如果我们在一整年的运作中,投资组合中有很大一部分用于健身,那么如果道指今年下跌,我们看上去会非常好;如果道指今年强劲上涨,我们就会非常糟糕。

幸运的是,1962年,我们的投资组合中有很大一部分用于健身。正如我之前所说的,这并不是因为我对市场会怎么做有任何想法,而是因为我可以在这一类别中得到更多我想要的东西,而不是将军。同样集中在健身上,也影响了我们下半年市场的表现。

多年来,健身为我们提供了第二大类别。在任何给定的时间,我们可能在其中的5到10个;有的刚刚起步,有的处于发展的后期。我相信用借来的钱来抵消我们的部分资产组合,因为这类资产在最终结果和中间市场行为方面都有很高的安全性。例如,当你收到我们的审计报告时,你会注意到我们在一年内向银行和经纪人支付了75,000美元的利息。由于我们的借款约为5%,这意味着我们从这些来源平均借款150万美元。由于1962年是市场下跌的一年,你可能会认为这种借贷会损害业绩。然而,我们所有的贷款都是用来抵消失业的,而这类贷款在今年产生了丰厚的利润。如果不考虑使用借来的钱所带来的好处,结果通常是每年下降10%到20%。我自己设定的借款标准上限是合伙企业净值的25%,不过一些不寻常的事情可能会导致在有限的时间内对其进行修改。

您将在我们的年终资产负债表(您将收到审计的一部分)上注意到,我们的证券卖空总额约为34万美元。其中大部分是与年底开始的健身活动同时进行的。在这种情况下,我们在一段时间内几乎没有竞争,并且能够在几个月的时间里创造10%或更高的利润(毛利,不是年化)。卖空消除了一般的市场风险。

最后一类是我所说的“控制”情况,即我们要么控制公司,要么占据一个非常大的位置,试图影响公司的政策。这种行动绝对应该以几年为基础来衡量。在某一年,他们可能什么也不生产,因为在我们收购时,让股票长期处于市场停滞状态通常对我们有利。这些情况与道琼斯指数的走势也没有多少共同之处。当然,有时我们会接受一个将军的思想,认为他可能会发展成一个控制局面。如果价格长期保持在足够低的水平,这种情况很可能会发生。通常,在我们拥有公司相当大比例的股票之前,股价就会上涨,我们会在更高的水平上卖出股票,完成一次成功的总体运营。

[笑]

Dempster Mill Manufacturing Company

The high point of 1962 from a performance standpoint was our present control situation --73% owned Dempster Mill. Dempster has been primarily in farm implements (mostly items retailing for $1,000 or under), water systems, water well supplies and jobbed plumbing lines.

The operations for the past decade have been characterized by static sales, low inventory turnover and virtually no profits in relation to invested capital.

We obtained control in August, 1961 at an average price of about $28 per share, having bought some stock as low as $16 in earlier years, but the vast majority in an offer of $30.25 in August. When control of a company is obtained, obviously what then becomes all-important is the value of assets, not the market quotation for a piece of paper (stock certificate).

Last year, our Dempster holding was valued by applying what I felt were appropriate discounts to the various assets. These valuations were based on their status as non-earning assets and were not assessed on the basis of potential, but on the basis of what I thought a prompt sale would produce at that date. Our job was to compound these values at a decent rate. The consolidated balance sheet last year and the calculation of fair value are shown below.

Dempster's fiscal year ends November 30th, and because the audit was unavailable in complete form, I approximated some of the figures and rounded to $35 per share last year.

Initially, we worked with the old management toward more effective utilization of capital, better operating margins, reduction of overhead, etc. These efforts were completely fruitless. After spinning our wheels for about six months, it became obvious that while lip service was being given to our objective, either through inability or unwillingness, nothing was being accomplished. A change was necessary.

A good friend, whose inclination is not toward enthusiastic descriptions, highly recommended Harry Bottle for our type of problem. On April 17, 1962 I met Harry in Los Angeles, presented a deal which provided for rewards to him based upon our objectives being met, and on April 23rd he was sitting in the president's chair in Beatrice.

Harry is unquestionably the man of the year. Every goal we have set for Harry has been met, and all the surprises have been on the pleasant side. He has accomplished one thing after another that has been labeled as impossible, and has always taken the tough things first. Our breakeven point has been cut virtually in half, slowmoving or dead merchandise has been sold or written off, marketing procedures have been revamped, and unprofitable facilities have been sold.

The results of this program are partially shown in the balance sheet below, which, since it still represents nonearning assets, is valued on the same basis as last year.

Three facts stand out: (1) Although net worth has been reduced somewhat by the housecleaning and writedowns ($550,000 was written out of inventory; fixed assets overall brought more than book value), we have converted assets to cash at a rate far superior to that implied in our year-earlier valuation. (2) To some extent, we have converted the assets from the manufacturing business (which has been a poor business) to a business which we think is a good business --securities. (3) By buying assets at a bargain price, we don't need to pull any rabbits out of a hat to get extremely good percentage gains. This is the cornerstone of our investment philosophy: “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results. The better sales will be the frosting on the cake.”

On January 2, 1963, Dempster received an unsecured term loan of $1,250,000. These funds, together with the funds all ready "freed-up" will enable us to have a security portfolio of about $35 per share at Dempster, or considerably more than we paid for the whole company. Thus our present valuation will involve a net of about $16 per share in the manufacturing operation and $35 in a security operation comparable to that of Buffett Partnership, Ltd.

We, of course, are devoted to compounding the $16 in manufacturing at an attractive rate and believe we have some good ideas as to how to accomplish this. While this will be easy if the business as presently conducted earns money, we have some promising ideas even if it shouldn't.

It should be pointed out that Dempster last year was 100% an asset conversion problem and therefore, completely unaffected by the stock market and tremendously affected by our success with the assets. In 1963, the manufacturing assets will still be important, but from a valuation standpoint it will behave considerably more like a general since we will have a large portion of its money invested in generals pretty much identical with those in Buffett Partnership, Ltd. For tax reasons, we will probably not put workouts in Dempster. Therefore, if the Dow should drop substantially, it would have a significant effect on the Dempster valuation. Likewise, Dempster would benefit this year from an advancing Dow which would not have been the case most of last year.

There is one final point of real significance for Buffett Partnership, Ltd. We now have a relationship with an operating man which could be of great benefit in future control situations. Harry had never thought of running an implement company six days before he took over. He is mobile, hardworking and carries out policies once they are set. He likes to get paid well for doing well, and I like dealing with someone who is not trying to figure how to get the fixtures in the executive washroom gold-plated. Harry and I like each other, and his relationship with Buffett Partnership, Ltd. should be profitable for all of us.

[笑]Dempster Mill Manufacturing Company

从性能角度看,1962年的高点是我们目前的控制状况——73%的公司拥有Dempster Mill。登普斯特主要从事农具(大部分商品零售价格在1000美元以下)、供水系统、水井供应和管道工程。

过去十年的经营特点是销售稳定,存货周转率低,与投入资本相比几乎没有利润。

我们在1961年8月以每股28美元左右的平均价格获得了控股权,在早些年我们以16美元的低价购入了一些股票,但在8月以30.25美元的价格收购了绝大多数。当公司获得控制权时,显然资产的价值就变得至关重要,而不是一张纸(股票)的市场报价。

去年,我们对邓普斯特持有的股票进行了估值,我认为这是对各种资产的适当折价。这些估值是基于它们作为非盈利资产的地位,而不是基于潜力来评估的,而是基于我认为在那个时候立即出售会产生的结果。我们的工作是将这些价值以一个合理的比率复利。以下是去年合并后的资产负债表和公允价值的计算。

登普斯特的财政年度将于11月30日结束,由于无法获得完整的审计报告,我估计了一些数字,并在去年将其四舍五入至每股35美元。

最初,我们与老管理层合作,以更有效地利用资本,提高营业利润率,减少管理费用等等。这些努力都是徒劳的。经过大约6个月的努力,我们清楚地看到,尽管我们通过无能或不愿意对我们的目标口惠而实非,但什么也没有取得。改变是必要的。

一个好朋友,他不喜欢热情的描述,强烈推荐哈利波特来解决我们的问题。1962年4月17日,我在洛杉矶见到了哈里,提出了一项协议,根据我们的目标达成,给予他奖励。

哈里无疑是年度人物。我们为哈利设定的每一个目标都实现了,所有的惊喜都是令人高兴的。他完成了一件又一件被认为是不可能完成的事情,而且总是把困难的事情放在第一位。我们的盈亏平衡点实际上被削减了一半,滞销或呆滞的商品被出售或冲销,营销程序被改进,无利可图的设施被出售。

这个项目的结果部分显示在下面的资产负债表中,因为它仍然代表着非盈利资产,它的估值与去年相同。

有三个事实引人注目:(1)尽管资产净值因清理和减记而有所减少(55万美元从库存中减记;总的来说,固定资产带来的收益超过了账面价值),我们将资产转换为现金的比率远远高于我们一年前的估值。(2)在某种程度上,我们已经将资产从制造业务(一直是一项糟糕的业务)转换为我们认为是一项不错的业务——证券业务。(3)以很便宜的价格购买资产,我们不需要使出浑身解数来获得极好的百分比收益。这是我们投资理念的基石:“永远不要指望能做成一笔好买卖。”购买价格要有吸引力,即使是普通的销售也要有好的结果。更好的销售将是蛋糕上的糖霜。

1963年1月2日,邓普斯特获得了一笔1,250,000美元的无担保定期贷款。这些资金,加上所有准备就绪的“释放”资金,将使我们能够在登普斯特拥有每股约35美元的证券投资组合,或大大高于我们为整个公司支付的价格。因此,我们目前的估值将涉及制造业务的每股净估值约为16美元,证券业务的每股净估值约为35美元,与巴菲特合伙公司(Buffett Partnership, Ltd.)相当。

当然,我们致力于以极具吸引力的速度使16美元的制造业复利,并相信我们有一些好主意来实现这一点。虽然这将是容易的,如果业务像目前进行的赚钱,我们有一些有前途的想法,即使它不应该。

需要指出的是,Dempster去年100%是一个资产转换问题,因此完全不受股票市场的影响,也受到我们资产成功的巨大影响。1963年,制造资产仍然是重要的,但从估值的角度来看它将表现得更像一个将军,因为我们将有很大一部分的资金投资于将军几乎相同的与巴菲特合伙企业,有限公司出于税收原因,我们不可能把锻炼放在法官。因此,如果道指大幅下跌,将对邓普斯特的估值产生重大影响。同样,登普斯特今年也将受益于道琼斯指数的上涨,而去年的大部分时间都不会是这样。

对于巴菲特合伙公司来说,还有最后一点是非常重要的。我们现在与一位运营人员建立了合作关系,这对未来的控制有很大的帮助。哈里在接手前6天从没想过经营一家工具公司。他行动灵活,工作勤奋,一旦政策确定下来,他就会执行。他喜欢做得好就能得到丰厚的报酬,而我喜欢与一个不试图弄明白如何让高管卫生间的设备镀金的人打交道。我和哈里互相喜欢,他和巴菲特合伙有限公司的关系应该对我们大家都有利。

1962 年我们的突出表现是我们控制了这家公司。该公司主要生产价格低于 1000 美元的农场器械(包括灌溉系统)。这家公司面临的情况是没有利润产生,低存货周转率和停滞不前的销售业绩。我们在大约 1961 年 8 月将这家公司大部分股权买下,均价约在 28 美元。当你买下一家公司后,对你而言市场的价格波动已经不再重要,重要的是这家公司的资产到底价值几何。
在买下该公司后,我们努力尝试使该公司的成本降低,降低其管理费用,提高其资金利用效率。然而所有的这些努力都化为了泡影。在六个月之后,我们意识到我们需要给这间公司带来一些新的变化。
一个朋友向我介绍了 Harry Bottle,在他的帮助下所有的一切都上了正轨,他不但完成了我们的所有目标,还为我们带来了不少有利的惊喜。目前该公司持有的证券价值约 35 美元/股,生产制造部分的价值约为 16 美元/股[笑]

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