下午茶时间到！让我们一起来跟着巴菲特老爷子学投资吧！今天我们分享的是《巴菲特致股东的信（1974）》。文章翻译来源于网络，向那些把知识带给我们的人致敬！向那些提供知识交流渠道的人致敬！
To the Stockholders of Berkshire Hathaway Inc.:
Operating results for 1974 overall were unsatisfactory due to the poor performance of our insurance business. In last year's annual report some decline in profitability was predicted but the extent of this decline, which accelerated during the year, was a surprise. Operating earnings for 1974 were $8,383,576, or $8.56 per share, for a return on beginning shareholders' equity of 10.3%.
This is the lowest return on equity realized since 1970. Our textile division and our bank both performed very well, turning in improved results against the already good figures of 1973.
However, insurance underwriting, which has been mentioned in the last several annual reports as running at levels of unsustainable profitability, turned dramatically worse as the year progressed.
The outlook for 1975 is not encouraging. We undoubtedly will have sharply negative comparisons in our textile operation and probably a moderate decline in banking earnings. Insurance underwriting is a large question mark at this time—it certainly won't be a satisfactory year in this area, and could be an extremely poor one. Prospects are reasonably good for an improvement in both insurance investment income and our equity in earnings of Blue Chip Stamps. During this period we plan to continue to build financial strength and liquidity, preparing for the time when insurance rates become adequate and we can once again aggressively pursue opportunities for growth in this area.
Textile Operations
During the first nine months of 1974 textile demand was exceptionally strong, esulting in very firm prices. However, in the fourth quarter significant weaknesses began to appear, which have continued into 1975.
We currently are operating at about one-third of capacity. Obviously, at such levels operating losses must result. As shipments have fallen, we continuously have adjusted our level of operations downward so as to avoid building inventory.
Our products are largely in the curtain goods area. During a period of consumer uncertainty, curtains may well be high on the list of deferrable purchases. Very low levels of housing starts also serve to dampen demand. In addition, retailers have been pressing to cut inventories generally, and we probably are feeling some effect from these efforts. These negative trends should reverse in due course, and we are attempting to minimize losses until that time comes.
Insurance Underwriting
In the last few years we consistently have commented on the unusual profitability in insurance underwriting. This seemed certain eventually to attract unintelligent competition with consequent inadequate rates. It also has been apparent that many insurance organizations, major as well as minor, have been guilty of significant underreserving of losses, which inevitably produces faultyinformation as to the true cost of the product being sold. In 1974, these factors, along with a high rate of inflation, combined to pr produce a rapid erosion in underwriting results.
The costs of the product we deliver (auto repair, medical payments, compensation benefits, etc.) are increasing at a rate we estimate to be in the area of 1% per month. Of course, this increase doesn't proceed in an even flow but, inexorably, inflation grinds very heavily at the repair services—to humans and to property— that we provide. However, rates virtually have been unchanged in the property and casualty field for the last few years. With costs moving forward rapidly and prices remaining unchanged, it was not hard to predict what would happen to profit margins.
Best's, the authoritative voice of the insurance industry, estimates that in 1974 all auto insurance premiums in the United States increased only about 2%. Such a growth in the pool of dollars available to pay insured losses and expenses was woefully inadequate. Obviously, medical costs applicable to people injured during the year, jury awards for pain and suffering, and body shop charges for repairing damaged cars increased at a dramatically greater rate during the year. Since premiums represent the sales dollar and the latter items represent the cost of goods sold, profit margins turned sharply negative.
As this report is being written, such deterioration continues. Loss reserves for many giant companies still appear to be understated by significant amounts, which means that these competitors continue to underestimate their true costs. Not only must rates be increased sufficiently to match the month-by-month increase in cost levels, but the existed expense- revenue gap must be overcome. At this time it appears that insurors must experience even more devastating underwriting results before they take appropriate pricing action.
All major areas of insurance operations, except for the "home state" companies, experienced significantly poorer results for the year.
The direct business of National Indemnity Company, our largest area of insurance activity, produced an underwriting loss of approximately 4% after several years of high profitability.
Volume increased somewhat, but we are not encouraging such increases until rates are more adequate. At some point in the cycle, after major insurance companies have had their fill of red ink, history indicates that we will experience an inflow of business at compensatory rates. This operation, headed by Phil Liesche, a most able underwriter, is staffed by highly profit-oriented people and we believe it will provide excellent earnings in most future years, as it has in the past.
Intense competition in the reinsurance business has produced major losses for practically every company operating in the area. We have been no exception.
Our underwriting loss was something over 12%—a horrendous figure, but probably little different from the average of the industry. What is even more frightening is that, while about the usual number of insurance catastrophes occurred during 1974, there really was no "super disaster" which might have accounted for the poor figures of the industry. Rather, a condition of inadequaterates prevails, particularly in the casualty area where we have significant exposure. Our reinsurance department is run by George Young, an exceptionally competent and hardworking manager. He has cancelled a great many contracts where prices are totally inadequate, and is
making no attempt to increase volume except in areas where premiums are commensurate with risk. Based upon present rate levels, it seems highly unlikely that the reinsurance industry generally, or we, specifically, will have a profitable year in 1975.
Our "home state" companies, under the leadership of John Ringwalt, made good progress in 1974.
We appear to be developing a sound agency group, capable of producing business with acceptable loss ratios. Our expense ratios still are much too high, but will come down as the operation develops into units of economic size. The Texas problem which was commented upon in last year's report seems to be improving. We consider the "home state" operation one of our most promising areas for the future.
Our efforts to expand Home and Automobile Insurance Company into Florida proved disastrous.
The underwriting loss from operations in that market will come to over $2 million, a very large portion of which was realized in 1974. We made the decision to drop out of the Florida market in the middle of 1974, but losses in substantial amounts have continued since that time because of the term nature of insurance contracts, as well as adverse development of outstanding claims. We can't blame external insurance industry conditions for this mistake. In retrospect, it is apparent that our management simply did not have the underwriting information and the pricing knowledge necessary to be operating in the area. In Cook County, where Home and Auto's volume traditionally has been concentrated, evidence also became quite clear during 1974 that rates were inadequate. Therefore, rates were increased during the middle of the year but competition did not follow; consequently, our volume has dropped significantly in this area as competitors take business from us at prices that we regard as totally unrealistic.
While the tone of this section is pessimistic as to 1974 and 1975, we consider the insurance business to be inherently attractive. Our overall return on capital employed in this area—even including the poor results of 1974—remains high. We have made every effort to be realistic in the calculation of loss and administrative expense. Because of accruals, this had a double effect at both the bank and corporate level in 1974.
Under present money market conditions, we expect bank earnings to be down somewhat in 1975 although we believe they still are likely to compare favorably with those of practically any banking institution in the country.
Blue Chip Stamps
During 1974 we increased our holdings of Blue Chip Stamps to approximately 25.5% of the outstanding shares of that company. Overall, we are quite happy about the results of Blue Chip and its prospects for the future. Stamp sales continue at a greatly reduced level, but the Blue Chip management has done an excellent job of adjusting operating costs. The See's Candy Shops, Inc. subsidiary had an outstanding year, and has excellent prospects for the future.Your Chairman is on the Board of Directors of Blue Chip Stamps, as well as Wesco Financial Corporation, a 64% owned subsidiary, and is Chairman of the Board of See's Candy Shops, Inc.
We expect Blue Chip Stamps to be a source of continued substantial earning power for Berkshire Hathaway Inc.
The annual report of Blue Chip Stamps, which will contain financial statements for the year ended March 1, 1975 audited by Price, Waterhouse and Company, will be available in May. Any shareholder of Berkshire Hathaway Inc. who desires an annual report of Blue Chip Stamps may obtain it at any time by writing Mr. Robert H.
Bird, Secretary, Blue Chip Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040.
Merger with Diversified Retailing Company, Inc.
As you previously have been informed, the proposed merger with Diversified etailing Company, Inc. was terminated by the respective Boards of Directors on January 28, 1975. We continue to view such a merger as eventually desirable, and hope to reopen the subject at some future time.
致伯克希尔哈撒韦公司的股东们：
1974年公司整体运营业绩并不令人满意，原因在于我们的保险业务表现不好。在去年年报中已预测盈利的下降，但是下降的程度却是意料之外的。1974年运营收入为$8,383,576，每股$8.56，初始股东权益回报率为10.3%。这是自1970年以来最差的已实现净资产收益率。我们的纺织业务和银行业务都表现的非常好，带来了与1973年早前业绩相比更好的结果。
然而，在过去几年的年报中提到的以无法支撑的利润率运作的保险承保业务，在今年的表现十分的差。而对于1975年的前景也不乐观。在我们纺织业务中明年同今年相比毋庸置疑会有大幅下降，而在银行业务的收入也可能会有个缓慢的下降。保险承保业务在这时是一个很大的问题，在这个领域今年显然不是令人满意的年份，而且可能是十分糟糕的一年。对于保险投资收入以及我们在蓝筹印花公司股权收益增长的前景是十分看好的。在这一年内，我们计划继续建立财务力量和流动性，为保险费率变得合适的时机做准备，同时我们可以再一次激进的追逐这一行业的增长机会。
纺织业
在1974年前的九个月，纺织业务的需求猛增，导致价格稳固不变。然而，第四季度纺织业务的重大疲软开始出现了，这会持续到1975年。
我们目前在这个业务里只运作了大约三分之一的生产力。显然的，在这种情况下必然会带来运作损失。随着运输量的下降，我们继续向下调整我们运作的标准，以避免增加存货。我们的产品大多集中在窗帘商品中。在一段消费者不稳定的时期里，窗帘可能会是可延迟购买商品列表的前几名。新房装修的低标准同时也会降低对窗帘的需求。同时，零售商大都开始施压降低存货了，我们可能也能感受到这些努力的影响。这些负面的趋势会在适当的时候扭转，我们试图在这个时期到来之前最小化我们的损失。
保险承保业务
在过去的几年里，我们总是高度评价保险承保业务中不寻常的盈利能力。这可能最终引起了愚蠢的行业竞争，使得费率不足。很显然，很多保险机构，不论大小，对于损失准备金的重要性认识不足，不可避免的导致对于出售产品的实际成本的错误信息。在1974年，这些因素及高通货膨胀率，使得保险承保业务的业绩大幅下降。
我们经营的产品的成本（汽车修理，医疗赔付，补偿收益等）以我们估计这行业每月1%的增速增长。当然，这种增长并不是平稳的进行，但是通货膨胀无情地使我们提供的人身保险和财产保险的维修服务损失很大。然而，财险和意外伤害险费率事实上在最近几年是没有变化。由于成本快速上升，而价格保持不变，不难预测会有怎样的边际利润。
保险行业最权威的机构Best's估计，1974年美国全部汽车保险的保费只增加了2%。这些可获得的资金的增长不足以支付保险损失和其他费用。很显然，今年用于人身伤害的医疗费用、为了弥补所受痛苦或苦难支付的陪审团奖金以及对于汽车车身维修的费用在今年都大幅上涨。由于保费代表了销售收入，而后者代表了销售商品的成本，边际利润迅速变为负的了。
在我写这封报告时，这样的衰退仍在继续。很多大公司的赔款准备金仍在很大程度上低估，这意味着这些公司仍然低估了他们的真实损失。保险费率不仅应该大量增加以匹配每月增加的成本水平，还应该弥补目前出现的费用同收入的缺口。就目前来看，在承保人采取合适的定价行动之前，他们会遭受更为严重的承保业绩损失。
除了本土化公司以外，所有保险业务的主要领域都在今年带来了很糟糕的业绩。
对于国民保障公司直接运作是我们最大的保险活动领域，在经历了连续几年的高盈利之后，今年产生了近4%的承保损失。交易额一定程度上增加了，但是在利率更加合适之前我们并不期待这样的增加。在这一周期的一些时间点上，主要的保险公司发生亏损之后，历史表明我们会在补偿利率下获得业绩的回暖。这项业务是由最能干的承保人Phil Liesche主导的，员工都以追求高利润的职工组成，我们相信在未来的几年内它会带来极好地收入，正如它过去一样。在再保险业务中激烈的竞争对这行业里几乎每一个公司都造成了很大的损失。我们也不例外。
我们承保业务的损失大约超过了12%，这是一个惊人的数字，但是同行业平均水平相比一些差别。更令人担忧的是，1974年发生的保险业务重大事故的数量同往常差不多，确实没有发生什么特殊的灾难导致我们有这么可怜的盈利数据。当然，较普遍的是保险费率不足，尤其是在我们有重大风险的意外伤害领域。我们的再保险业务是由George Young运作的，他是一个非常有能力而且很勤奋的管理人。他取消了很多价格明显不足的合同，并没有采取措施来增加营业额，除了在那些保费收入与风险相当的领域。依照目前的利率水平，整个再保险行业或者是具体的我们公司的再保险业务很难在1975年获得盈利。
在John Ringwalt的领导下，我们的本土化公司在1974年业绩不错。看来我们正在发展一个健全的代理机构，在可接受的损失率下有能力获得业务。我们的费用率仍然很高，但是当运作发展到适度的经济规模下它就会降低。去年的报告中提到的德克萨斯州的问题正在改善。我们认为本土化业务的运作时我们未来最有前景的领域之一。
我们将家庭和汽车保险公司扩展到弗罗里达州的努力证明结果损失惨重。在这个州运作的承保业务的损失达到200万美元，这是1974年实现的损失中的一大部分。我们在1974年中期决定放弃弗罗里达州的市场，但是从那以后大量的损失仍然持续发生，这是因为保险合同的长期性以及未决赔款的不利发展。我们不能因为这个错误谴责外部的保险行业条件。回顾过去，很明显我们的管理层没有掌握这个地区运作所需的承保信息以及定价知识。在家庭和汽车保险营业额集中的库克县，也有很明确的证据指出在1974年保险费率是不足的。因此，保险费率在今年年中上涨，而竞争并没有跟上；结果，我们的竞争对手以我们认为不可能的价格从我们手中抢走了业务，我们在这一领域的交易额大幅下滑。
尽管在1974年、1975年在这个领域的基调是悲观的，但我们认为保险业务内在还是很吸引人的。我们在这个领域的整体已投资资本回报仍维持很高的水平，其中甚至包括了1974年较差的业绩。我们尽全力在计算损失和行政管理费用时实事求是。由于存在权责发生额，对于1974年银行和公司水平都产生了双重影响。
在目前货币市场条件下，我们预期1975年银行的盈利会下降，尽管我们相信它们同国内那些银行机构相比更有优势。
蓝筹印花公司
在1974年，我们增加了对蓝筹印花公司的持股，大约持有他们公司25.5%的流通股。整体来看，我们很看好蓝筹印花公司的业绩和它未来的前景。印花的销售持续大幅下跌，但是蓝筹印花公司的管理层在调整运营成本方面做得很好。子公司喜事糖果公司今年的业绩很好，而未来也有极好的前景。
你们的董事长是蓝筹印花公司的董事会成员，同时也是拥有64%控股子公司韦斯科金融公司的董事会成员，是喜事糖果公司的董事会主席。我们期望蓝筹印花公司会成为伯克希尔哈撒韦公司持续大量盈利能力的来源。
蓝筹印花公司的年报会在5月份发布，这里面包含截止到1975年3月1日年度财务状况，是由普华永道公司审计的。任何伯克希尔哈撒韦公司的股东想要获得一份蓝筹印花公司的年报，可以随时写信给Robert H. Bird先生，地址为加利福尼亚州洛杉矶市东南大街5801号，蓝筹印花公司秘书Robert H. Bird先生收，邮编90040
并购多元化零售公司
董事们已经同意了将多元化零售公司并入伯克希尔公司，条件是将其100万股流通股转换成195,000股伯克希尔的股票。鉴于多元化零售公司及其子公司已持有109,551股伯克希尔的股份，因此这笔交易带来的伯克希尔流通股份净增长不会超过85,449股。要完成这笔交易，还必须要获得各种各样的许可证明，委托资料在晚些时候会递交董事会投票决定。多元化零售公司经营着一家平价女士衣物连锁店，同时还经营者再保险业务。但在管理层看来，这家公司最重要的资产是占其股份16%的蓝筹印花邮票。
对于DRC公司的并购
正如之前通知你们的，之前提议的对于多元化零售公司的并购在1975年1月28日在各个董事会董事监督下中止了。我们仍旧认为这项收购是值得的，并希望在未来的某个时间重新开始这项收购。
内容来源：量化小兵sss、搜狐财经频道
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