跳至主要内容

巴菲特致股东信-1973年

 笔记:

  • 在上一年度预测的今年竞争加剧导致利润下滑,真的发生了

翻译Link:

  • 雪球:https://xueqiu.com/6217262310/131257618
  • 备份:https://archive.ph/KIfdT

原文:

To the Stockholders of Berkshire Hathaway Inc.:

Our financial results for 1973 were satisfactory, with operating earnings of $11,930,592, producing a return of 17.4% on beginning stockholders' equity.

Although operating earnings improved from $11.43 to $12.18 per share, earnings on equity decreased from the 19.8% of 1972. This decline occurred because the gain in earnings was not commensurate with the increase in shareholders' investment. We had forecast in last year's report that such a decline was likely. Unfortunately, our forecast proved to be correct.

Our textile, banking, and most insurance operations had good years, but certain segments of the insurance business turned in poor results. Overall, our insurance business continues to be a most attractive area in which to employ capital.

Management's objective is to achieve a return on capital over the long term which averages somewhat higher than that of American industry generally—while utilizing sound accounting and debt policies. We have achieved this goal in the last few years, and are trying to take those steps which will enable us to maintain this performance in the future. Prospects for 1974 indicate some further decline in rate of return on our enlarged capital base.

Textile Operations

Textile demand remained unusually strong throughout 1973. Our main problems revolved around shortages of fiber, which complicated operations and resulted in something less than full utilization of loom capacity. Prices of some fibers skyrocketed during the year. Cost of Living Council regulations prevented the pricing of many finished products at levels of some of our competitors. However, profits were reasonably commensurate with our capital investment, although below those that apparently might have been achieved had we been able to price at market levels. The textile business has been highly cyclical and price controls may haveserved to cut down some of the hills while still leaving us with the inevitable valleys. Because of the extraordinary price rises in raw materials during 1973, which show signs of continuing in 1974, we have elected to adopt the "lifo" method of inventory pricing. This method more nearly matches current costs against current revenues, and minimizes inventory "profits" included in reported earnings.

Further information on this change is included in the footnotes to our financial statements.

Insurance Operations

During 1973, Jack Ringwalt retired as President of National Indemnity Company after an absolutely brilliant record since founding the business in 1940. He was succeeded by Phil Liesche who, fortunately for us, possesses the same underwriting and managerial philosophy that worked

so well for Jack. Our traditional business, specialized auto and general liability lines conducted through National Indemnity Company and National Fire and Marine Insurance Company, had an exceptionally fine underwriting year during 1973. Weagain experienced a decline in volume.

Competition was intense, and we passed up the chance to match rate-cutting by more optimistic underwriters. There currently are faint indications that some of these competitors are learning of the inadequacy of their rates (and also of their loss reserves) which may result in easing of market pressures as the year develops. If so, we may again experience volume increases.

Our reinsurance operation had a somewhat similar year—good underwriting experience, but difficulty in maintaining previous volume levels. This operation, guided by the tireless and well- directed efforts of George Young,has been a major profit producer since its inception in 1969. Our "home state" insurance companies made excellent progress in Nebraska and Minnesota, with both good growth in volume and acceptable loss ratios. We began operations late in the year in Iowa. To date, our big problem has been Texas. In that state we virtually had to start over during 1973 as the initial management we selected proved incapable of underwriting successfully. The Texas experience has been expensive, and we still have our work cut out for us. Overall, however, the home state operation appears to have a promising potential.

Our specialized urban auto operation, Home and Automobile Insurance Company, experienced very poor underwriting in Chicago during 1973. It would appear that rates are inadequate in our primary Cook County marketing area, although the current energy situation confuses the picture. The question is whether possible lowered accident frequency because of reduced driving will more than offset continuing inflation in medical and repair costs, as well as jury awards. We believe that inflation will hurt us more than reduced driving will help us, but some of our competitors appear to believe otherwise. Home and Auto expanded into Florida and California during the year, but it is too early to know how these moves will prove out financially.

A contributing factor in our unsatisfactory earnings at Home and Auto during 1973 was an accounting system which was not bringing information to management on a sufficiently timely basis. On the investment side of our insurance operation, we made substantial additional commitments in common stocks during 1973. We had significant unrealized depreciation—over $12 million— in our common stock holdings at year-end, as indicated in our financial statements. Nevertheless, we believe that our common stock portfolio at cost represents good value in terms of intrinsic business worth. In spite of the large unrealized loss at year-end, we would expect satisfactory results from the portfolio over the longer term.

Banking Operations

The Illinois National Bank & Trust Co. of Rockford again had a record year in 1973. Average deposits were approximately $130 million, of which approximately 60% were time deposits. Interest rates were increased substantially in the important consumer savings area when regulatory maximums were raised at mid-year. Despite this mix heavily weighted toward interest bearing deposits, our operating earnings after taxes (including a new Illinois state income tax) were again

over 2.1% of average deposits. We continue to be the largest bank in Rockford. We continue to maintain unusual liquidity. We continue to meet the increasing loan demands of our customers. And we continue to maintain our unusual profitability. This is a direct tribute to the abilities of Gene Abegg, Chairman, who has been running the Bank since it opened its doors in 1931, and Bob Kline, our President.

Merger With Diversified Retailing Company, Inc.

Your Directors have approved the merger of Diversified Retailing Company, Inc. into Berkshire Hathaway Inc. on terms involving issuance of 195,000 shares of Berkshire stock for the 1,000,000 shares of Diversified stock outstanding. Because Diversified and its subsidiaries own 109,551 shares of Berkshire, the net increase in the number of shares of Berkshire outstanding after giving effect to this transaction will not exceed 85,449. Variousregulatory approvals must be obtained before this merger can be completed, and proxy material will be submitted to you later this year so that you may vote upon it. Diversified Retailing Company, Inc., though subsidiaries, operates a chain of popular-priced women's apparel stores and also conducts a reinsurance business. In the opinion of management, its most important asset is 16% of the stock of Blue Chip Stamps.

Blue Chip Stamps

Our holdings of stock in Blue Chip Stamps at year-end amounted to approximately 19% of that company's outstanding shares. Since year-end, we have increased our holdings so that they now represent approximately 22.5%: implementation of the proposed merger with Diversified Retailing Company, Inc. would increase this figure to about 38.5%.

Our equity in earnings of Blue Chip Stamps became significant for the first time in 1973, and posed an accounting question as to just what period's earnings should be recognized by Berkshire Hathaway Inc. as applicable to the financial statements covered by this annual report. Blue Chip's fiscal year ends on the Saturday closest to February 28, or two months after the fiscal year-end of Berkshire Hathaway Inc. Or, viewed alternatively, their year ends ten months prior to Berkshire Hathaway's. An acceptable accounting choice for us, and one which, if made, would not have required an auditor's disclaimer as to scope, was to recognize in our 1973 income an equity of $632,000 in Blue Chip's earnings for their year ended March 3, 1973 with regard to the fewer shares of Blue Chip we owned during this earlier period. But such an approach seemed at odds with reality, and would have meant a ten month lag each year in the future. Therefore, we chose to reflect as 1973 income our equity of $1,008,000 in Blue Chip's earnings based upon unaudited interim earnings through November as publicly reported by Blue Chip Stamps and with regard to our shareholdings during 1973.

Because we made this choice of unaudited but current figures, as opposed to the alternative of audited but far from current figures, Peat, Marwick, Mitchell & Co. were unable to express an opinion on our 1973 earnings attributable to Blue Chip Stamps.

The annual report of Blue Chip Stamps, which will contain financial statements for the year

ending March 2, 1974 audited by Price, Waterhouse and Company, will be available in early May. Any shareholder of Berkshire Hathaway Inc. who desires an annual report of Blue Chip Stamps may obtain it at that time by writing Mr. Robert H. Bird, Secretary, Blue Chip Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040. Blue Chip's trading stamp business has declined drastically over the past year or so, but it has important sources of earning power in its See's Candy Shops subsidiary as well as Wesco Financial Corporation, a 54% owned subsidiary engaged in the savings and loan business. We expect Blue Chip Stamps to achieve satisfactory earnings in future years related to capital employed, although certainly at a much lower level than would have been achieved if the trading stamp business had been maintained at anything close to former levels.

Your Chairman is on the Board of Directors of Blue Chip Stamps, as well as Wesco Financial Corporation, and is Chairman of the Board of See's Candy Shops Incorporated. Operating management of all three entities is in the hands of firstclass, able, experienced executives.

Sun Newspapers, Inc.

In the 1969 annual report we commented on the purchase of Sun Newspapers Inc., a group of weekly papers published in the metropolitan Omaha area. Since that time we have not commented on their operations in the text of our annual reports, nor have we consolidated their financial results since the operation, because of the small investment involved, has been "financially insignificant." During 1973 it was made quite apparent that such insignificance did not extend to publishing quality. On May 7th Sun Newspapers was awarded a Pulitzer Prize for local investigative reporting (the first time in history that a weekly had won in this category) for its special section of March 30,1972 relating to Boys Town. We reported the extraordinary contrast between decreasing services and mounting wealth that had taken place since Father Flanagan's death in 1948.

In addition to the Pulitzer Prize, the reporting job also won the Public Service Award of Sigma Delta Chi, the national society of professional journalists, as well as seven other national awards. Our congratulations go to Paul Williams, Editor, and Stan Lipsey, Publisher, as well as the entire editorial staff of Sun Newspapers for their achievement, which vividly illustrated that size need not be equated with significance in publishing.

Warren E. Buffett Chairman of the Board March 29,1974


Popular posts from 产品随想的博客

《逢いたくていま》──仁医主题曲

原始链接: 听歌学日语 | 唱哭很多人的《逢いたくていま》 あ いたくていま - MISIA 现在好想见你- MISIA 初 はじ めて 出会 であ った 日 ひ のこと  覚 おぼ えてますか 第一次相遇的那天 你是不是还记得呢?   過 す ぎ 行 ゆ く 日 ひ の 思 おも い 出 で を  忘 わす れずにいて 那些过去日子的回忆 我一直没有有忘记   あなたが 見 み つめた  全 すべ てを  感 かん じていたくて 凝视着你 这一切的全部 我都想要感觉   空 そら を 見上 みあ げた 抬头仰望天空   今 いま はそこで  私 わたし を  見守 みまも っているの? 你到现在是否还在那里守护着我?   教 おし えて… 请你告诉我 今 いま   逢 あ いたいあなたに 现在好想见你 伝 つた えたい 事 こと がたくさんある 有好多想要告訴你的事情   ねえ  逢 あ いたい  逢 あ いたい 呐 好想见你 好想见你   気 き づけば  面影 おもかげ   探 さが して  悲 かな しくて 如果能注意到的话 你的面容 是在寻找着 还是悲伤着 どこにいるの?  抱 だ きしめてよ 到底在哪里呢? 好想抱紧你 私 わたし はここにいるよ ずっと 我 会一直在这里 一直等你 もう 二度 にど と 逢 あ えないことを  知 し っていたなら 如果能早点知道 已经再也无法相见   繋 つな いだ 手 て をいつまでも  離 はな さずにいた 我会牵在一起的手 永远都不会放开   『ここにいて』と そう 素直 すなお に  泣 な いていたなら 如果当初诚实哭泣地告诉你『留在我身边』的话   今 いま もあなたは  変 か わらぬまま 现在的你是否也依然不变地   私 わたし の 隣 とな りで ...

Interview with Steve Jobs, WGBH, 1990

Interviewer: what is it about this machine? Why is this machine so interesting? Why has it been so influential? Jobs: Ah ahm, I'll give you my point of view on it. I remember reading a magazine article a long time ago ah when I was ah twelve years ago maybe, in I think it was Scientific American . I'm not sure. And the article ahm proposed to measure the efficiency of locomotion for ah lots of species on planet earth to see which species was the most efficient at getting from point A to point B. Ah and they measured the kilocalories that each one expended. So ah they ranked them all and I remember that ahm...ah the Condor, Condor was the most efficient at [CLEARS THROAT] getting from point A to point B. And humankind, the crown of creation came in with a rather unimpressive showing about a third of the way down...

犀流研习班第十期001-2讲听课笔记

一. 杂谈   1. Max  逼真的效果图和视频   2. SU  显示模式,费力可以作出好看的效果图   3. Maya  支持Nurbs,但不快捷,对CAD导出也不方便

产品随想 | 周刊 第69期:Do not go gentle into that good night

Products Windows Apps That Amaze Us   https://amazing-apps.gitbook.io/windows-apps-that-amaze-us/ 令人精细的Windows App 文物出版社   https://book.douban.com/press/2456/ 这是一个宝藏出版社,出品书籍质量非常高,大开眼界 blind   https://www.teamblind.com/ 老外的匿名职场社交工具,挺有意思,看看硅谷的meme 中国科学技术大学测速网站   https://test.ustc.edu.cn/ 看着还不错,挺靠谱的 底层代码是LibreSpeed   https://github.com/librespeed/speedtest 能不能好好说话?   https://github.com/itorr/nbnhhsh 也是我的一个痛点 Tree Style Tab (aka TST)   https://github.com/piroor/treestyletab 一个超强的浏览器扩展插件,树状呈现浏览器标签 Failory Pitch Decks   https://www.failory.com/pitch-deck 超级多的融资计划投资板,Pitch Book AutoCut   https://github.com/mli/autocut 用文本编辑器剪视频 全网漫游指南   https://tagly.notion.site/tagly/a333efd8c3e54e12b123acd541e8d3e6 数字时代的指引,希望他们成功 IT eBooks   https://it-ebooks.info/ IT书籍下载 ToastFish   https://github.com/Uahh/ToastFish 一个利用摸鱼时间背单词的软件。 利用Win10通知栏,出现、背单词 Ideas 沈向洋:IDEA 如何找到创新的「甜区」   https://mp.weixin.qq.com/s/OlI5VUxQKU_ijWZClQCG0Q AIGC How Did Nor...

产品随想 | 周刊 第115期:2024.5.16 Great libraries build communities

Loop   https://github.com/MrKai77/Loop Loop is a macOS app that simplifies window management for you! 我的电视 my-tv   https://github.com/lizongying/my-tv 我的电视 电视直播软件,安装即可使用 When we think about this technology, we need to put human dignity, human well-being—human jobs—in the center of consideration. ————Fei-Fei Li Author Talks: Dr. Fei-Fei Li sees ‘worlds’ of possibilities in a multidisciplinary approach to AI   https://www.mckinsey.com/featured-insights/mckinsey-on-books/author-talks-dr-fei-fei-li-sees-worlds-of-possibilities-in-a-multidisciplinary-approach-to-ai Randy Ubillos   https://apple.fandom.com/wiki/Randy_Ubillos Randall Hayes "Randy" Ubillos is the original software engineer behind Adobe Premiere and Final Cut Pro. 影响全球视频制作的男人, Reminders MenuBar   https://github.com/DamascenoRafael/reminders-menubar Simple macOS menu bar application to view and interact with reminders. Developed with SwiftUI and using Apple Reminders as a source. Bad libraries build colle...

产品爱好者周刊 第36期:走进Linux

Products OpenShot   https://github.com/OpenShot/openshot-qt OpenShot Video Editor is an award-winning free and open-source video editor for Linux, Mac, and Windows 开源的视频剪辑工具,跨平台 Run   https://github.com/The-Run-Philosophy-Organization/run 润学全球官方指定GITHUB,整理润学宗旨、纲领、理论和各类润之实例 Dozer   https://github.com/Mortennn/Dozer Hide menu bar icons on macOS ThisIsWin11   https://github.com/builtbybel/ThisIsWin11 Win11的隐私保护 RoundedTB   https://github.com/torchgm/RoundedTB Add margins, rounded corners and segments to your taskbars! Droptop Four   https://github.com/Droptop-Four/Basic-Version Droptop Four is the fourth iteration of the popular dropdown app launcher for Windows & Rainmeter. LibreTube   https://github.com/Libre-tube/LibreTube An alternative frontend for YouTube, for Android. nheko   https://github.com/Nheko-Reborn/nheko Quaternion   https://github.com/quotient-im/Quaternion 多平台的Matrix客户端 FluffyChat   https://fluffychat.im/ Phone端的Matrix...

Apple's One-Dollar-a-Year Man, By Steve Jobs, 2000

(FORTUNE Magazine) – Now that Steve Jobs has showed his hand on Apple's Internet and system software strategies and dropped the "interim" from his title, other questions loom. He's always denied it, but isn't it true that his old company, Next, did wind up taking over Apple? Will there ever be an encore to the 15-year-old Macintosh? Short of that, does Apple have any plans to jump into the "Internet appliance" fray? Will Apple ever build computers for business people again? And what, pray tell, does Steve think of all these young Internet zillionaires? Let's ask. Practically every technology that your old company, Next, possessed when Apple acquired it in 1997 is now being used by Apple in some strategic way. This must seem like sweet vindication.  The thing about Next was that we produced something that was truly brilliant for an audience that our heart really wasn't into selling to--namely, the enterprise. I suppose if you were wr...

产品随想 | 周刊 第43期:历史上的今天

Products Huberman Lab   https://hubermanlab.com/ 一款聚焦于健康的播客 今日热榜   https://tophub.today/ 聚合展示,国内各热门榜单,对跟进热点非常有帮助,热点运营的好帮手 SketchyBar   https://github.com/FelixKratz/SketchyBar A highly customizable macOS status bar replacement Mac菜单栏定制 自定义程度很高,看作者展示的案例,暂时没想出这样的好处(不过应用本身的编辑,确实也没啥意义)生命在于折腾吧! Thanks-Mirror   https://github.com/eryajf/Thanks-Mirror 整理记录各个包管理器,系统镜像,以及常用软件的好用镜像,Thanks Mirror。 Musicn   https://github.com/zonemeen/musicn 一个下载高品质音乐的命令行工具,音乐来源: 咪咕 Planet Minecraft A creative Minecraft community fansite sharing maps, minecraft skins, resource packs, servers, mods, and more. 里面有很多动人的故事 可能是世界上最大的Minecraft社区,从2010年至今 The Uncensored Library   https://www.uncensoredlibrary.com/en blockworks   https://www.blockworks.uk/ "Distinctive maps for Minecraft that have educated players and risen to the level of art" 游戏也可以让人有更高的实现,而不仅仅是沉迷其中,国外游戏厂商比我们做的好太多 Minecraft_Memory_Bypass_GUI   https://github.com/xingchuanzhen/Minecraft_Memory_Bypass_GUI 绕过Minecraft...

Steve Jobs: `There's Sanity Returning', 1998

Nobody can doubt the charisma of Steven P. Jobs. The interim CEO of Apple Computer Inc., who returned to the company last July after his ignominious 1985 ouster, has brought back his legendary vision, impatience, and infectious passion for the Macintosh. Jobs spoke to Business Week Correspondent Andy Reinhardt in Apple's stark, fourth-floor boardroom, just after the company rolled out its new software strategy on May 11. Note: This is an extended, online-only version of the Q&A that appears in the May 25, 1998, issue of Business Week. Q: Now that you've introduced the new, bold-looking iMac, are you going to do some radically different products? A: There's a lot of talk about such things -- about handhelds, set-top boxes. A lot of computer companies have been searching for a consumer product. My view is that the personal computer has been the most successful consumer product of the last 10 years. What we have to do, what the industry stopp...

有关密码学 Cryptography

% Crypto 101 % CUI Hao 密码学 Cryptography 加密 :军事、商业保密、身份认证、日记... 计算机出现前:加密 人类语言文字 。 计算机出现后:加密比特流(ASCII文本、网络协议) 古典替换式密码 凯撒密码 文本中每个字母在字母表上后移 k 个位置。 ATTACK -> DWWDFN (k=3) IBM -> HAL (k=-1) 改进 重新排列 字母表(单字母替换): alphabet: ABCDEFGHIJKLMNOPQRSTUVWXYZ map to: RCPWUXNQBZFMYTLIEGVDJOAKHS example: ATTACK -> RDDRPF "密码组合"有 26! 种之多。 维吉尼亚密码 每k个字母一组,与长度k的密码做 加法 : ATTACKATDAWN (plaintext) + LEMONLEMONLE (key: LEMON) = LXFOPVEFRNHR (ciphertext) 多个字母的凯撒密码。 替换式密码 substitution cipher 单字母替换/多字母替换/密码本... 加密算法:映射 密码:描述映射关系 解密算法:反过来映射 另一种设计方案 也许是中国人发明的吧: 群书万卷常暗诵, 主人顾盼千金重。 药物楚老渔商市, 丸剑跳踯霜雪浮。 移位式密码 ( transposition cipher ) 列移位密码 按密码重新排列文本各列,然后竖着读出来: KEY: 6 3 2 4 1 5 TEXT: W E A R E D     CT:     I S C O V E ==> EVLNEACDTKESEAQROFOJDEECUWIREE     R E D F L E     E A T O N C     E Q K J E U     (WE ARE DISCOVERED. FLEE AT ONCE) ...