1986年 华伦.docx

1986年 华伦.docx

《1986年 华伦.docx》由会员分享，可在线阅读，更多相关《1986年 华伦.docx（57页珍藏版）》请在冰点文库上搜索。

1986年华伦

BERKSHIREHATHAWAYINC.

SHAREHOLDERLETTERS

March4,1986

CHAIRMAN’SLETTERS1986

TotheShareholdersofBerkshireHathawayInc.:

Ourgaininnetworthduring1986was$492.5million,or

26.1%.Overthelast22years（thatis,sincepresentmanagement

tookover）,ourper-sharebookvaluehasgrownfrom$19.46to

$2,073.06,or23.3%compoundedannually.Boththenumeratorand

denominatorareimportantintheper-sharebookvalue

calculation:

duringthe22-yearperiodourcorporatenetworth

hasincreased10,600%whilesharesoutstandinghaveincreased

lessthan1%.

InpastreportsIhavenotedthatbookvalueatmost

companiesdifferswidelyfromintrinsicbusinessvalue-the

numberthatreallycountsforowners.Inourowncase,however,

bookvaluehasservedformorethanadecadeasareasonableif

somewhatconservativeproxyforbusinessvalue.Thatis,our

businessvaluehasmoderatelyexceededourbookvalue,withthe

ratiobetweenthetworemainingfairlysteady.

Thegoodnewsisthatin1986ourpercentagegainin

businessvalueprobablyexceededthebookvaluegain.Isay

"probably"becausebusinessvalueisasoftnumber:

inourown

case,twoequallywell-informedobserversmightmakejudgments

morethan10%apart.

Alargemeasureofourimprovementinbusinessvalue

relativetobookvaluereflectstheoutstandingperformanceof

keymanagersatourmajoroperatingbusinesses.Thesemanagers-

theBlumkins,MikeGoldberg,theHeldmans,ChuckHuggins,Stan

Lipsey,andRalphSchey-haveovertheyearsimprovedthe

earningsoftheirbusinessesdramaticallywhile,exceptinthe

caseofinsurance,utilizinglittleadditionalcapital.This

accomplishmentbuildseconomicvalue,or"Goodwill,"thatdoes

notshowupinthenetworthfigureonourbalancesheet,norin

ourper-sharebookvalue.In1986thisunrecordedgainwas

substantial.

Somuchforthegoodnews.Thebadnewsisthatmy

performancedidnotmatchthatofourmanagers.Whiletheywere

doingasuperbjobinrunningourbusinesses,Iwasunableto

skillfullydeploymuchofthecapitaltheygenerated.

CharlieMunger,ourViceChairman,andIreallyhaveonly

twojobs.Oneistoattractandkeepoutstandingmanagerstorun

ourvariousoperations.Thishasn’tbeenallthatdifficult.

Usuallythemanagerscamewiththecompanieswebought,having

demonstratedtheirtalentsthroughoutcareersthatspannedawide

varietyofbusinesscircumstances.Theyweremanagerialstars

longbeforetheyknewus,andourmaincontributionhasbeento

notgetintheirway.Thisapproachseemselementary:

ifmyjob

weretomanageagolfteam-andifJackNicklausorArnold

Palmerwerewillingtoplayforme-neitherwouldgetalotof

directivesfrommeabouthowtoswing.

Someofourkeymanagersareindependentlywealthy（wehope

theyallbecomeso）,butthatposesnothreattotheircontinued

interest:

theyworkbecausetheylovewhattheydoandrelishthe

thrillofoutstandingperformance.Theyunfailinglythinklike

owners（thehighestcomplimentwecanpayamanager）andfindall

aspectsoftheirbusinessabsorbing.

（OurprototypeforoccupationalfervoristheCatholic

tailorwhousedhissmallsavingsofmanyyearstofinancea

pilgrimagetotheVatican.Whenhereturned,hisparishhelda

specialmeetingtogethisfirst-handaccountofthePope."Tell

us,"saidtheeagerfaithful,"justwhatsortoffellowishe?

"

Ourherowastednowords:

"He’saforty-four,medium."）

CharlieandIknowthattherightplayerswillmakealmost

anyteammanagerlookgood.Wesubscribetothephilosophyof

Ogilvy&Mather’sfoundinggenius,DavidOgilvy:

"Ifeachofus

hirespeoplewhoaresmallerthanweare,weshallbecomea

companyofdwarfs.But,ifeachofushirespeoplewhoare

biggerthanweare,weshallbecomeacompanyofgiants."

Aby-productofourmanagerialstyleistheabilityitgives

ustoeasilyexpandBerkshire’sactivities.We’veread

managementtreatisesthatspecifyexactlyhowmanypeopleshould

reporttoanyoneexecutive,buttheymakelittlesensetous.

Whenyouhaveablemanagersofhighcharacterrunningbusinesses

aboutwhichtheyarepassionate,youcanhaveadozenormore

reportingtoyouandstillhavetimeforanafternoonnap.

Conversely,ifyouhaveevenonepersonreportingtoyouwhois

deceitful,ineptoruninterested,youwillfindyourselfwith

morethanyoucanhandle.CharlieandIcouldworkwithdouble

thenumberofmanagerswenowhave,solongastheyhadtherare

qualitiesofthepresentones.

Weintendtocontinueourpracticeofworkingonlywith

peoplewhomwelikeandadmire.Thispolicynotonlymaximizes

ourchancesforgoodresults,italsoensuresusan

extraordinarilygoodtime.Ontheotherhand,workingwith

peoplewhocauseyourstomachtochurnseemsmuchlikemarrying

formoney-probablyabadideaunderanycircumstances,but

absolutemadnessifyouarealreadyrich.

ThesecondjobCharlieandImusthandleistheallocation

ofcapital,whichatBerkshireisaconsiderablymoreimportant

challengethanatmostcompanies.Threefactorsmakethatso:

we

earnmoremoneythanaverage;weretainallthatweearn;and,we

arefortunatetohaveoperationsthat,forthemostpart,require

littleincrementalcapitaltoremaincompetitiveandtogrow.

Obviously,thefutureresultsofabusinessearning23%annually

andretainingitallarefarmoreaffectedbytoday’scapital

allocationsthanaretheresultsofabusinessearning10%and

distributinghalfofthattoshareholders.Ifourretained

earnings-andthoseofourmajorinvestees,GEICOandCapital

Cities/ABC,Inc.-areemployedinanunproductivemanner,the

economicsofBerkshirewilldeteriorateveryquickly.Ina

companyaddingonly,say,5%tonetworthannually,capital-

allocationdecisions,thoughstillimportant,willchangethe

company’seconomicsfarmoreslowly.

CapitalallocationatBerkshirewastoughworkin1986.We

didmakeonebusinessacquisition-TheFechheimerBros.

Company,whichwewilldiscussinalatersection.Fechheimeris

acompanywithexcellenteconomics,runbyexactlythekindof

peoplewithwhomweenjoybeingassociated.Butitisrelatively

small,utilizingonlyabout2%ofBerkshire’snetworth.

Meanwhile,wehadnonewideasinthemarketableequities

field,anareainwhichonce,onlyafewyearsago,wecould

readilyemploylargesumsinoutstandingbusinessesatvery

reasonableprices.Soourmaincapitalallocationmovesin1986

weretopayoffdebtandstockpilefunds.Neitherisafate

worsethandeath,buttheydonotinspireustodohandsprings

either.IfCharlieandIweretodrawblanksforafewyearsin

ourcapital-allocationendeavors,Berkshire’srateofgrowth

wouldslowsignificantly.

Wewillcontinuetolookforoperatingbusinessesthatmeet

ourtestsand,withluck,willacquiresuchabusinessevery

coupleofyears.Butanacquisitionwillhavetobelargeifit

istohelpourperformancematerially.Undercurrentstock

marketconditions,wehavelittlehopeoffindingequitiestobuy

forourinsurancecompanies.Marketswillchangesignificantly-

youcanbesureofthatandsomedaywewillagaingetourturn

atbat.However,wehaven’tthefaintestideawhenthatmight

happen.

Itcan’tbesaidtoooften（althoughI’msureyoufeelI’ve

tried）that,evenunderfavorableconditions,ourreturnsare

certaintodropsubstantiallybecauseofourenlargedsize.We

havetoldyouthatwehopetoaverageareturnof15%onequity

andwemaintainthathope,despitesomenegativetaxlawchanges

describedinalatersectionofthisreport.Ifweareto

achievethisrateofreturn,ournetworthmustincrease$7.2

billioninthenexttenyears.Againofthatmagnitudewillbe

possibleonlyif,beforetoolong,wecomeupwithafewverybig

（andgood）ideas.CharlieandIcan’tpromiseresults,butwedo

promiseyouthatwewillkeepoureffortsfocusedonourgoals.

SourcesofReportedEarnings

Thetableonthenextpageshowsthemajorsourcesof

Berkshire’sreportedearnings.Thistablediffersinseveral

waysfromtheonepresentedlastyear.Wehaveaddedfournew

linesofbusinessbecauseoftheScottFetzerandFechheimer

acquisitions.InthecaseofScottFetzer,thetwomajorunits

acquiredwereWorldBookandKirby,andeachispresented

separately.FourteenotherbusinessesofScottFetzerare

aggregatedinScottFetzer-DiversifiedManufacturing.SF

FinancialGroup,acreditcompanyholdingbothWorldBookand

Kirbyreceivables,isincludedin"Other."Thisyear,because

Berkshireissomuchlarger,wealsohaveeliminatedseparate

reportingforseveralofoursmallerbusinesses.

Inthetable,amortizationofGoodwillisnotcharged

againstthespecificbusinessesbut,forreasonsoutlinedinthe

Appendixtomyletterinthe1983AnnualReport,isaggregatedas

aseparateitem.（ACompendiumofearlierletters,includingthe

Goodwilldiscussion,isavailableuponrequest.）BoththeScott

FetzerandFechheimeracquisitionscreatedaccountingGoodwill,

whichiswhytheamortizationchargeforGoodwillincreasedin

1986.

Additionally,theScottFetzeracquisitionrequiredother

majorpurchase-priceaccountingadjustments,asprescribedby

generallyacceptedaccountingprinciples（GAAP）.TheGAAP

figures,ofcourse,aretheonesusedinourconsolidated

financialstatements.But,inourview,theGAAPfiguresarenot

necessarilythemostusefulonesforinvestorsormanagers.

Therefore,thefiguresshownforspecificoperatingunitsare

earningsbeforepurchase