BUFFETT PARTNERSHIP, LTD. 810 KIEWIT PLAZA OMAHA 31, NEBRASKA
First Half Performance
During the first half of 1963, the Dow Jones Industrial Average (hereinafter called the "Dow") advanced from 652.10 to 706.88. If one had owned the Dow during this period, dividends of $10.66 would have been received, bringing the overall return from the Dow during the first half to plus 10.0%.
1963年上半年，道指從652.1點上漲到706.88點，同時在這段時間道指的持有者應該會收到10.66美元的股利。因此道指半年的收益應該在10%。
Our incantation has been: (1) that short-term results (less than three years) have little meaning, particularly in reference to an investment operation such as ours that devotes a portion of resources to control situations, and; (2) That our results relative to the Dow and other common-stock-form media, will be better in declining markets and may well have a difficult time just matching such media in bubbling markets.
重申我們的宗旨：（1）那種短期的收益表現（小于三年）都沒有任何參考價值，特別是當我們有相當大的一部分投資都放在了控股公司的運作上；（2）我們相對于道指的優勢只會在熊市中體現，而在這種泡沫市場中差強人意。
Nevertheless, our first-half performance, excluding any change in Dempster valuation (and its valuation did change --I'm saving this for dessert later in the letter) was plus 14%. This 14% is computed on total net assets (not non-Dempster assets) and is after expenses, but before monthly payments (to those who take them) to partners and allocation to the General Partner. Such allocations are academic on an interim basis, but if we were also plus 14% at yearend, the first 6% would be allocated to partners according to their capital, plus three- quarters of the balance of 8% (14% -6%), or an additional 6%, giving the limited partners a plus 12% performance.
不管怎樣，我們上半年的收益是+14%，其中為考慮進Dempster估值的變化（其估值的確有變化--我稍后會講到）。這14%是記入了所有扣除費用后的整體凈值（其中包括了Dempster的資產），但是沒有扣除給每股月撤資的合伙人，以及給一般合伙人的分紅。這種分紅是一種純數學上的計算。如果年底我們的收益仍為14%，那么我們將前6%按照所有合伙人的占股比例分配給大家，剩下的盈利8%（14%-6%）中的3/4，也就是6%，分配給有限合伙人，也就是他們當年的收益是12%。
Despite the relatively pleasant results of the first half the admonitions stated two paragraphs earlier hold in full force. At plus 14% versus plus 10% for the Dow, this six months has been a less satisfactory period than the first half of 1962 when we were minus 7.5% versus minus 21.7% for the Dow. You should completely understand our thinking in this regard which has been emphasized in previous letters.
盡管上半年的收益看起來不錯，但是前兩段的陳述依然有效。14% vs 道指10% 的收益對比遠沒有1962年-7.5% vs 道指-21.7%的結果讓我滿意。如果各位讀過之前的信件就一定會明白其中的含義。
During the first half we had an average net investment in "generals" (long positions in generals minus short positions in generals) of approximately 5,275,000. Our overall gain from this net investment in generals (for a description of our investment categories see the last annual letter) was about $1,100,000 for a percentage gain from this category of roughly 21%. This again illustrates the extent to which the allocation of our resources among various categories affects short-term results. In 1962 the generals were down for the year and only an outstanding performance by both of the other two categories, "work-outs" and "controls," gave us our unusually favorable results for that year.
上半年我們在股票市場的平均投資（多頭頭寸減去空頭頭寸）應該在526.5萬美元。在該項投資類別中上半年的收益應有110萬美元，大約21%。這再次說明了我們在不同類別之間的資源分配對短期結果的影響程度。1962年，股票市場大幅下跌的時候，其他兩種類別卻帶來了超額收益，套利和控股公司在那一年帶來了異常優異的結果。
Now this year, our work-outs have done poorer than the Dow and have been a drag on performance, as they are expected to be in rising markets. While it would be very nice to be 100% in generals in advancing markets and 100% in work-outs in declining markets, I make no attempt to guess the course of the stock market in such a manner. We consider all three of our categories to be good businesses on a long-term basis, although their short- term price behavior characteristics differ substantially in various types of markets. We consider attempting to gauge stock market fluctuations to be a very poor business on a long-term basis and are not going to be in it, either directly or indirectly through the process of trying to guess which of our categories is likely to do best in the near future.
今年由于市場火爆，我們的套利收益要遜于道指從而拖累了整體的表現。盡管我們期望能在牛市全部投資到股票市場，熊市再轉移到套利賬戶，但是市場是無法預測的。而且三種類別的投資都是著眼于長期的優質的資產，盡管他們的表現會在短期受市場的影響。在我看來預測股票市場的波動長期來看是十分差勁的投資，我們不會直接或者間接地預測市場估計哪種類別的投資在未來表現更好。
Investment Companies
其他投資公司
Shown below are the usual statistics on a cumulative basis for the Dow and Buffett Partnership. Ltd. (including predecessor partnerships) as well as for the two largest open-end (mutual funds) and two largest closed-end investment companies following a diversified common-stock investment policy:
下表以累積收益的方式統計了道指，巴菲特合伙公司以及四個投資股票市場的基金：兩個最大的開放式基金和兩個最大的封閉式基金的表現：
Footnotes:
(1) Computed from changes in asset value plus any distributions to holders of record during year.
(2) From 1963 Moody's Bank & Finance Manual for 1957-62. Estimated for first half 1963.
(3) 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.
(4) For 1957-61 computed on basis of preceding column of partnership results allowing for allocation to general partner based upon present partnership agreement.
腳注：
- 市值的計算是每年的資產價值加上股利；
- 1957-1962年的數據來自于穆迪的“銀行和金融手冊”，1963年上半年的數據是估計值；
- 1957-1961年的數據基于修改前的有限合伙人協議全年經營的結果，扣除所有費用但未將股利和一般合伙人的分配協議計算進去；
- 1957-1961年的數據是根據前一欄的業績推算，并依據新的合伙協議算入給一般合伙人的配額。
The results continue to show that the most highly paid and respected investment advice has difficulty matching the performance of an unmanaged index of blue-chip stocks. This in no sense condemns these institutions or the investment advisers and trust departments whose methods, reasoning, and results largely parallel such investment companies. These media perform a substantial service to millions of investors in achieving adequate diversification, providing convenience and peace of mind, avoiding issues of inferior quality, etc. However, their services do not include (and in the great majority of cases, are not represented to include) the compounding of money at a rate greater than that achieved by the general market.
結果顯示即便是收費最高最受大家信任的投資咨詢公司想要追上藍籌指數的收益都很難。所以不要因為其方法，推理和結果很大程度上和這些投資公司相似而去譴責那些投資顧問，機構或者是信托部門。這些機構為數百萬投資者提供了大量的服務，實現了多元化，給大家提供了便捷，并在收益很差的時候給大家做心理按摩等等，然而，他們的服務并不包括（在大多數情況下，不代表包括）累積收益超過一般股票市場。
Our partnership's fundamental reason for existence is to compound funds at a better-than-average rate with less exposure to long-term loss of capital than the above investment media. We certainly cannot represent that we will achieve this goal. We can and do say that if we don't achieve this goal over any reasonable period excluding an extensive speculative boom, we will cease operation.
我們的合伙公司存在的意義就在于累積收益要好于一般股票市場，同時比其他投資公司更低可能地降低長期投資損失風險。我們當然不能保證會實現這個目標，但可以做到的是如果在任何合理的時間段（不包括廣泛的投機熱潮期）我們無法達成這個目標，就關門大吉。
Dempster Mill Manufacturing Company
DMM公司
In our most recent annual letter, I described Harry Bottle as the “man of the year”. If this was an understatement.
也許大家沒注意，在去年的股東信里，我把Harry Bottle稱為年度最佳。
Last year Harry did an extraordinary job of converting unproductive assets into cash which we then, of course, began to invest in undervalued securities. Harry has continued this year to turn under-utilized assets into cash, but in addition, he has made the remaining needed assets productive. Thus we have had the following transformation in balance sheets during the last nineteen months:
去年，Harry完美地將非生產性資產變成了現金，之后我們將這些資金投資到了一些低估的股票之中。Harry今年繼續將未充分利用的資產轉變成現金，同時他也致力于將所需資產更高效地利用起來。我們便有了過去十九個月資產負債表的變化：
I have included above the conversion factors we have previously used in valuing Dempster for B.P.L. purposes to reflect estimated immediate sale values of non-earning assets.
表格中包含之前在計算每股價值時設置的轉換率，考慮的是如果要將Dempster的非盈利資產急售時的折扣率，因此總體比較保守。
As can be seen, Harry has converted the assets at a much more favorable basis than was implied by my valuations. This largely reflects Harry's expertise and, perhaps, to a minor degree my own conservatism in valuation.
可以看出，Harry 在資產轉換效率要遠遠高于我的保守估計。這其實更加體現了Harry的專業能力并非我的估計過于保守。
As can also be seen, Dempster earned a very satisfactory operating profit in the first half (as well as a substantial unrealized gain in securities) and there is little question that the operating business, as now conducted, has at least moderate earning power on the vastly reduced assets needed to conduct it. Because of a very important- seasonal factor and also the presence of a tax carry forward, however, the earning power is not nearly what might be inferred simply by a comparison of the 11/30/62 and 6/30/63 balance sheets. Partly because of this seasonality, but more importantly, because of possible developments in Dempster before 1963 yearend, we have left our Dempster holdings at the same $51.26 valuation used at yearend 1962 in our figures for B.P.L’s first half. However, I would be very surprised if it does not work out higher than this figure at yearend.
同樣可以看出，Dempster在上半年營收也非常不錯(也包括很多未兌現的證券收益)，而且毫無疑問在大幅降低了生產資產后，目前的收益能力至少是中等。由于季節對銷售影響巨大而且年底還有稅務的問題，我們不能簡單地使用11/30/62和6/30/63兩張資產負債表來評價其盈利能力。部分是因為季節銷售問題，但更重要的是相信1963 年年底之前登Dempster的很可能發展更好，因此我們將Dempster的估值按照1962 年年底相同的 51.26 美元計入B.P.L（BUFFETT PARTNERSHIP, LTD. ）上半年的數據中。 但是，如果它在年底沒有超過這個數字，我會感到非常驚訝。
One sidelight for the fundamentalists in our group: B.P.L. owns 71.7% of Dempster acquired at a cost of 1,262,577.27. On June 30, 1963 Dempster had a small safe deposit box at the Omaha National Bank containing securities worth 2,028,415.25. Our 71.7% share of 2,028,415.25 amounts to 1,454,373.70. Thus, everything above ground (and part of it underground) is profit. My security analyst friends may find this a rather primitive method of accounting, but I must confess that I find a bit more substance in this fingers and toes method than in any prayerful reliance that someone will pay me 35 times next year's earnings.
一個基本事實：B.P.L 擁有Dempster 71.7%的所有權，投入資金1,262,577.27 美元。在6月30日，Dempster在奧馬哈國家銀行的一個保險柜中存入了價值2,028,415.25的證券。所以2,028,415.25的71.7%是屬于B.P.L的，也就是1,454,373.70美元。除此之外，所有剩下的正資產都是收益（當然還有些負資產）。做證券分析朋友一定覺得這種算法太原始了。但是我必須坦白我更喜歡用這種掰手指的計算方法得到的結果，而不是祈禱市場上有誰愿意以35倍PE來買我的股票。
Advance Payments and Advance Withdrawals
提前打款和提前提款
We accept advance payments from partners and prospective partners at 6% interest from date of receipt until the end of the year. While there is no obligation to convert the payment to a partnership interest at the end of the year, this should be the intent at the time of payment.
我們接受合伙人的提前打款，在收到款項之日起至年底，我們將按照6%的利率計息。這部分的資金在當年年底不會按照合伙企業的收益分配給合伙人，各位在打款前應該知曉。
Similarly, we allow partners to withdraw up to 20% of their partnership account prior to yearend and charge them 6% from date of withdrawal until yearend when it is charged against their capital account. Again, it is not intended that partners use US like a bank, but that they use the withdrawal right for unanticipated need for funds.
相似地，我們允許合伙人在年底前最多提款投資金額的20%，同時也會向這部分資金按照6%的利息收取費用，費用將會從剩下的賬戶中扣除。再次說明，我們不希望各位合伙人把我們當銀行來對待，但是他們的確有權提款來應急使用。
The willingness to both borrow and lend at 6% may seem "un-Buffett-like.” We look at the withdrawal right as a means of giving some liquidity for unexpected needs and, as a practical matter, are reasonably sure it will be far more than covered by advance payments.
以6%的年利率，無論是借出還是借入資金都不像是巴菲特的作風。先看提款，我們將其視為給合伙人應急而提供的流動資金，而且從實施來看，每年提前存入的資金足以覆蓋取出的數額。
Why then the willingness to pay 6% for advance payment money when we can borrow from commercial banks at substantially lower rates? For example, in the first half we obtained a substantial six-month bank loan at 4%. The answer is that we expect on a long-term basis to earn better than 6% (the general partner's allocation is zero unless we do although it is largely a matter of chance whether we achieve the 6% figure in any short period. Moreover, I can adopt a different attitude in the investment of money that can be expected to soon be a part of our equity capital than I can on short-term borrowed money. The advance payments have the added advantage to us of spreading the investment of new money over the year, rather than having it hit us all at once in January. On the other hand, 6% is more than can be obtained in short-term dollar secure investments by our partners, so I consider it mutually profitable. On June 30, 1963 we had advance withdrawals of 21,832.00 and advance payments of $562,437.11.
那么為何要給提前存款6%的利率呢，明明可以用更低的利率在商業銀行借款。在今年上半年，我們以4%的利率向銀行借了一大筆錢。答案是長期來看，我們相信收益會好于6%，而且還有0成本的可能，雖然短期內能有6%的收益是看運氣的。不僅如此，相比于短期借款，這些資金可以用于不同的投資策略。提前存款能夠幫助我們在一整年里有源源不斷的資金進行投資，而不是只在每年一月收到一大筆款項。反過來來說，合伙人很難找到短期保證有6%收益的投資機會，所以我相信這是雙贏的結果。截止到1963年6月30日，提前支取的款項是21,832.00美元，提前存入的資金是562,437.11美元。
Taxes
稅務問題
There is some possibility that we may have fairly substantial realized gains this year. Of course, this may not materialize at all and actually does not have anything to do with our investment performance this year. I am an outspoken advocate of paying large amounts of income taxes -- at low rates. A tremendous number of fuzzy, confused investment decisions are rationalized through so-called "tax considerations.”
我們今年有可能會有巨額的已實現收益。當然，現在還沒有發生，而且這對我們今年的投資收益并無影響。我曾公開表示支持所得稅--以較低的稅率。有大量模糊、混亂的投資決策通過所謂的“稅收考慮”得以合理化。
My net worth is the market value of holdings less the tax payable upon sale. The liability is just as real as the asset unless the value of the asset declines (ouch), the asset is given away (no comment), or I die with it. The latter course of action would appear to at least border on a Pyrrhic victory.
我的凈資產是持股的市場價值減去出售時應繳納的稅款。負債和資產一樣真實，除非資產的價值下降（哎喲），資產被贈予（無話可說），或者我死了。最后一個選擇好像有點得不償失。
Investment decisions should be made on the basis of the most probable compounding of after-tax net worth with minimum risk. Any isolation of low-basis securities merely freezes a portion of net worth at a compounding factor identical with the assets isolated. While this may work out either well or badly in individual cases, it is a nullification of investment management. The group experience holding various low basis securities will undoubtedly approximate group experience on securities as a whole, namely compounding at the compounding rate of the Dow. We do not consider this the optimum in after-tax compounding rates.
投資決策應該是最大化稅后凈值和最小化風險的結合。任何單獨考慮/計算低成本高價值股票的計算復合收益，等同于將一部分資產凍結/或者單獨考慮余下的資產。該計算方法在不同的情形下結果有好有壞，這是一種無效化的投資管理方法。投資組合中如果包含了很多不同種類的低成本高價值股票，那么毫無疑問組合的整體收益將和股票正相關，換句話說就是和道指相似。我們不認為這是稅后復利的最佳選擇。
I have said before that if earnings from the partnership can potentially amount to a sizable portion of your total taxable income, the safe thing to do is to estimate this year the same tax you incurred last year. If you do this, you cannot run into penalties. In any event, tax liabilities for those who entered the partnership on 1/1/63 will be minimal because of the terms of our partnership agreement first allocating capital gains to those having an interest in unrealized appreciation.
我曾提過，如果合伙企業的收益占您總體應納稅額的大部分，那么比較安全的做法就是今年以和去年相同的額度交稅。這樣您不會收到任何處罰。不論什么情況，在1/1/63年新加入的合伙人將會享受最優稅率，因為合伙企業協議寫明合伙人的第一筆資金收入將按照未實現收入計入。
As in past years, we will have a letter out about November 1st (to partners and those who have indicated an interest to me by that time in becoming partners) with the amendment to the partnership agreement, commitment letter for 1964, estimate of the 1963 tax situation, etc.
與往年一樣，我們將在 11 月 1 日左右發出一封信（致合伙人和當時對我表示有興趣成為合伙人的人），其中包含對合伙協議的修正、1964 年的承諾函、1963 年的估計稅務情況等。
My closing plea for questions regarding anything not clear always draws a blank. Maybe no one reads this far. Anyway, the offer is still open.
我從未收到任何合伙人的疑問，也許沒人能讀到這里吧。無論如何，歡迎提問
Cordially, Warren E. Buffett
low basis implies that a particular stock has a significantly higher market value than its tax cost.
low-basis 意味著股票當前的市值遠遠高于購買時的價格
