The General Stock Market in 1960
A year ago, I commented on the somewhat faulty picture presented in 1959 by the Dow-Jones Industrial Average which had advanced from 583 to 679, or 16.4%. Although practically all investment companies showed gains for a year, less than 10% of them were able to match or better the record of Industrial Average. The Dow-Jones Utility Average had a small decline and Railroad Average recorded a substantial one.
去年，我指出道瓊斯工業(yè)平均指數(shù)有16.4%的漲幅，從583點漲到679點，但卻與市場真實情況背道而馳。雖然所有的投資機構(gòu)那一年都顯示盈利，但是達到或者超過道瓊斯指數(shù)漲幅的公司卻不到10%。道瓊斯公共事業(yè)平均指數(shù)有所下跌而鐵路平均指數(shù)卻下跌顯著。
In 1960, the picture was reversed. The Industrial Average declined from 679 to 616, or 9.3%. Adding back the dividends which would have been received through ownership of the Average still left it with an overall loss of 6.3%. On the other hand, the Utility Average showed a good gain and, while all the results are not now available, my guess is that about 90% of all investment companies out-performed the Industrial Average. The majority of investment companies appear to have ended the year with overall results in the range of plus or minus 5%. On the New York Stock Exchange, 653 common stocks registered losses for the year while 404 showed gains.
在1960年，情況反轉(zhuǎn)了。工業(yè)指數(shù)從679點跌到616點，有9.3%的跌幅。算上股利總體下跌也應(yīng)該有6.3%。 另一方面，公共事業(yè)平均指數(shù)卻漲幅顯著，同時雖然全部結(jié)果沒有出來，我猜有90%的投資公司表現(xiàn)要好于工業(yè)平均指數(shù)。大多數(shù)投資公司的表現(xiàn)應(yīng)該在+/-5%之間。在紐約證交所，去年有653只股票下跌，404只股票上漲。
Results in 1960:
1960年表現(xiàn)
My continual objective in managing partnership funds is to achieve a long-term performance record superior to that of the Industrial Average. I believe this Average, over a period of years, will more or less parallel the results of leading investment companies. Unless we do achieve this superior performance there is no reason for existence of the partnerships.
我管理合伙基金的一貫?zāi)繕?biāo)是長期的收益要好于工業(yè)指數(shù)。我相信長期來看，工業(yè)指數(shù)的回報率最終會或多或少和頭部的投資公司水平持平。如果我們不以超越指數(shù)為目標(biāo)，我們的合伙基金又有何存在的意義？
However, I have pointed out that any superior record which we might accomplish should not be expected to be evidence by a relatively constant advantage in performance compared to Average. Rather it is likely that if such an advantage is achieved, it will be through better-than-average performance in stable or declining markets and average or perhaps even poorer-than-average performance in rising markets.
但是，正如我之前所說，我們曾經(jīng)取得過的任何成績都不能佐證我們可以持續(xù)跑贏指數(shù)。如果我們期望達到長期收益率超越指數(shù)的目標(biāo)，應(yīng)該通過以下方法實現(xiàn)：1, 在盤整或者熊市時超越市場平均回報; 2, 在牛市大漲時和市場持平或者略低于市場。
I would consider a year in which we declined 15% and the Average 30% to be much superior to a year when both we and the Average advanced 20%. Over a period of time there are going to be good and bad years; there is nothing to be gained by getting enthused or depressed about the sequence in which they occur. The important thing is to be beating par; a four on a par thee hole is not as good as a five on a par five hole and it is unrealistic to assume we are not going to have our share of both par three's and par five's.
如果某年我們下跌了15%而指數(shù)下跌了30%，我會覺得該年的表現(xiàn)要更好于我們和指數(shù)都上漲了20%。長期來看，市場起起伏伏，情緒隨著市場的漲跌而時而興奮時而沮喪是毫無意義的。像高爾夫球一樣，關(guān)鍵是低于標(biāo)準(zhǔn)桿的成績完成球道。在標(biāo)準(zhǔn)桿三桿的球道以四桿完成明顯不如以標(biāo)準(zhǔn)桿完成五桿的球道。同時，假設(shè)我們只會在三桿或者五桿的球道打球是不現(xiàn)實的。（什么情況都有可能碰到？不能假設(shè)只有好事發(fā)生？）
The above does of philosophy is being dispensed since we have a number of new partners this year and I want to make sure they understand my objectives, my measure of attainment of these objectives, and some of my known limitations.
今年我們又多了幾位新合伙人，因此我重申以上的投資理念而且希望他們能夠理解我的目標(biāo)，我實現(xiàn)這些目標(biāo)的方法以及我的一些認(rèn)知局限。
With this background it is not unexpected that 1960 was a better-than-average year for us. As contrasted with an overall loss of 6.3% for the industrial Average, we had a 22.8% gain for the seven partnerships operating throughout the year. Our results for the four complete years of partnership operation after expenses but before interest to limited partners or allocation to the general partner are:
有了以上的闡述，我們在1960年優(yōu)于市場平均的表現(xiàn)就一點也不意外了。相比于工業(yè)平均指數(shù)總體下跌了6.3%，我們一個合伙人基金一年一整年獲得了22.8%的收益。以下是四個年度合伙人收益表現(xiàn)，統(tǒng)計扣除了運營支出，但是包含了給有限合伙人的利息和一般合伙人的分紅：
It should be emphasized again that these are the net results to the partnership; ?the net results to the limited partners would depend on the partnership agreement that they had selected.
需要強調(diào)的是這個表是合伙公司的凈利潤結(jié)果，對于有限合伙人的凈利潤要根據(jù)他們在簽訂合伙協(xié)議時選定的條款來計算。
The overall gain or loss is computed on a market to market basis. After allowing for any money added or withdrawn, such a method gives results based upon what would have beed realized upon liquidation of the partnership at the beginning of the year and what would have been realized upon liquidation gains or losses and is different , of course, from our tax results which value securities at cost and realize gains or losses only when securities are actually sold.
總體的損益是根據(jù)市場價格來計算的。自從開始允許任意資金加入和撤出之后，這種計算方法是統(tǒng)計基于合伙公司在年初年末清算價值的改變。而清算價值的增減必然和我們納稅金額不一致，因為只有在股票售出并減去購買股票成本之后的損益才需要交稅。
On a compounded basis, the cumulative results have been:
復(fù)合收益率如下：
Although four years is entirely too short a period from which to make deductions, what evidence there is points toward confirming the proposition that our results should be relatively better in moderately declining or static markets. To the extent that this is true, it indicates that our portfolio may be more conservatively, although decidedly less conventionally, invested than if we owned "blue-chip" securities. During a strongly rising market for the latter, we might have real difficulty in matching their performance.
盡管短短四年的結(jié)果不足以作出任何推斷，但是從目前的數(shù)據(jù)中我們可以得出結(jié)論：我們的投資組合在盤整或者下跌的市場中表現(xiàn)相對出色。上述的結(jié)論也表明我們的投資組合相比于投資所謂“藍籌”股雖然不那么傳統(tǒng)但也更保守謹(jǐn)慎。在市場火爆藍籌股暴漲時，要趕上他們的確有點難。
Multiplicity of Partnerships:
合伙公司間的不同
A preceding table shows that the family is growing. There has been no partnership which has had a consistently superior or inferior record compared to our group average, but there has been some variance each year despite my efforts to keep all partnerships invested in the same securities and in about the same proportions. This variation, of course, could be eliminated by combining the present partnerships into one large partnership. Such a move would also eliminate much detail and moderate amount of expense.
從表1可以看出合伙公司的個數(shù)在增加。目前沒有任何一個合伙公司的收益持續(xù)好于或者遜于平均水平，盡管我盡量使每個合伙公司都按照相同的比例投資相同的股票，不過他們每年的收益多寡都有不同。如果我們將目前的合伙公司合并，就不會有這些差別而且會省去很多瑣碎的費用。
Frankly, I am hopeful of doing something along this line in the next few years. The problem is that various partners have expressed preferences for varying partnership arrangements. Nothing will be done without unanimous consent of partners.
坦白說，我希望能在未來幾年將所有的合伙公司合并。問題在于很多合伙人表示更希望合伙公司分開管理。在所有合伙人達成統(tǒng)一意見前什么都不會變。
Advance Payments:
預(yù)付款
Several partners have inquired about adding money during the year to their partnership. Although an exception has been made, it is too difficult to amend partnership agreements during mid-year where we have more than one family represented among the limited partners. Therefore, in mixed partnerships an additional interest can only be acquired at the end of the year.
好幾位合伙人詢問有關(guān)在年中給合伙企業(yè)增資的問題。雖然有此先例，但是我們無法在年中修改合伙協(xié)議，尤其當(dāng)有限合伙人中有不止一個家庭。因此，在混合合伙人公司增資帶來的額外利息只能在年末一次付清。
We do accept advance payments during the year toward partnership interest and pay interest at 6% on this payment from the time received until the end of the year. At that time, subject to amendment of the agreement by the partners, the payment plus interest is added to the partnership capital and thereafter participates in profits and losses.
我們接受年中的增資，并且對該項增資以年息6%支付利息，起息日從增資之日起直到年末。到年末，我們將修改合伙人協(xié)議，屆時增資數(shù)額和相應(yīng)利息總金額將被記入合伙公司的本金并從此計算損益。
Sanborn Map:
桑伯恩地圖公司：
Last year mention was made of an investment which accounted for a very high and unusual proportion (35%) of our net assets along with the comment that I have some hope this investment would be concluded in 1960. This hope is materialized. The history of an investment of this magnitude may be of interest you.
去年我有提到一筆占我們資產(chǎn)總量35%的投資，并且期望這筆投資能在1960年獲利。今年這個愿望達成了。我想各位一定對這筆投資的來龍去脈很感興趣。
Sanborn Map Co. is engaged in the publication and continuous revision of extremely detailed maps of all cities of the United States. For example, the volumes mapping Omaha would weigh perhaps fifty pounds and provide minute details on each structure. The map would be revised by the paste-over method showing new construction, changed occupancy, new fire protection facilities, changed structural materials, etc. These revisions would be done approximately annually and a new map would be published every twenty or thirty years when further pasteovers became impractical. The cost of keeping the map revised to an Omaha customer would run around $100 per year.
桑伯恩地圖公司致力于出版美國所有城市的精確地圖，并且持續(xù)不斷的細化更新。例如，奧巴馬市的地圖就將近50磅重，對于每個設(shè)施都提供了細致的描述。地圖會使用黏貼的方式來更新建筑，房屋所有權(quán)的變更，新的消防設(shè)施，建筑材料的更換，等等。差不多每年更新一次，同時當(dāng)無法再通過黏貼方式更新地圖時，會出新的一版地圖，差不多每二十年或者三十年會再版一次。每年Omaha地圖更新的費用是$100.
This detailed information showing diameter of water mains underlying streets, location of fire hydrants, composition of roof, etc., was primarily of use to fire insurance companies. Their underwriting departments, located in a central office, could evaluate business by agents nationally. The theory was that a picture was worth a thousand words and such evaluation would decide whether the risk was properly rated, the degree of conflagration exposure in an area, advisable reinsurance procedure, etc. The bulk of Sanborn's business was done with about thirty insurance companies although maps were also sold to customers outside the insurance industry such as public utilities, mortgage companies, and taxing authorities.
地下水管的直徑，消防栓的位置，房屋頂頂材料結(jié)構(gòu)，等等這些詳細的信息主要被經(jīng)營火災(zāi)險的保險公司使用。在（保險）公司總部的承保部門會全國范圍內(nèi)評估他們的生意。一圖勝千言，保險公司會根據(jù)這些地圖來評估風(fēng)險是否計算正確，某個地區(qū)會發(fā)生多大規(guī)模的火災(zāi)，以及建議的續(xù)保流程，等等。桑伯恩公司的主要生意伙伴是三十幾家保險公司，雖然他們也把地圖賣給非保險業(yè)的客戶，比如公共部門，貸款公司和稅務(wù)部門。
For seventy-five years the business operated in a more or less monopolistic manner, with profits realized in every year accompanied by almost complete immunity to recession and lack of need for any sales effort. In the earlier years of the business, the insurance industry became fearful that Sanborn's profits would become too great and placed a number of prominent insurance men on Sanborn's board of directors to act in a watch-dog capacity.
過去75年的時間里，這個生意以近乎壟斷的方式在運營，每年盈利毫無衰退的跡象同時也完全不用到處推銷產(chǎn)品。在早些年，保險公司害怕桑伯恩公司利潤太高，因此以監(jiān)管的目的在桑伯斯董事會安排了很多重要人員。
In the?early 1950’s a competitive method of under-writing known as "carding" made inroads on Sanborn’s?business and after-tax profits of the map business fell from an average annual level of over $500,000 in the late 1930's to under $100,000 in 1958 and 1959. Considering the upward bias in the economy during this period, this amounted to an almost complete elimination of what had been sizable, stable earning power.
在二十世紀(jì)中葉，另外一種更有效的記錄方法名叫“Line Carding”讓桑伯恩公司的地圖生意從1930年末的$500,000利潤降到1958-1959年的不到$100,000。考慮到在這段時間經(jīng)濟景氣上行，這個曾經(jīng)盈利可觀并穩(wěn)定的生意已經(jīng)全軍覆沒了。
However, during the early 1930's Sanborn had begun to accumulate an investment portfolio. There were no capital requirements to the business so that any retained earnings could be devoted to this project. Over a period of time, about $2.5 million was invested, roughly half in bonds and half in stocks. Thus, in the last decade particularly, the investment portfolio blossomed while the operating map business wilted.
然而，從1930年早期桑伯恩公司就開始累積投資。由于自身的生意不需要任何資金的投入，所以保留盈余都投入到了這個項目中。過了一段時間，投入了差不多兩千五百萬美元，債券股票差不多一半一半。因此，特別是過去十年，雖然地圖生意日漸萎縮，投資收益開花結(jié)果。
Let me give you some idea of the extreme divergence of these two factors. In 1938 when the Dow-Jones Industrial Average was in the 100-120 range, Sanborn sold at $110 per share. In 1958 with the Average in the 550 area, Sanborn sold at $45 per share. Yet during that same period the value of the Sanborn investment portfolio increased from about $20 per share to $65 per share. This means, in effect, that the buyer of Sanborn stock in 1938 was placing a positive valuation of $90 per share on the map business ($110 less the $20 value of the investments unrelated to the map business) in a year of depressed business and stock market conditions. In the tremendously more vigorous climate of 1958 the same map business was evaluated at a minus $20 with the buyer of the stock unwilling to pay more than 70 cents on the dollar for the investment portfolio with the map business thrown in for nothing.
讓我來給你們分析一下兩個因素的極端差別。在1938年當(dāng)?shù)拉偹怪笖?shù)是100-120的時候，桑伯恩公司股價是110美元一股。到了1958年指數(shù)在550區(qū)間的時候，桑伯恩卻賣在45美元美股。然而在相同的時期桑伯恩公司的投資組合價值從每股$20上漲到了每股$65。這意味著，在1938年桑伯恩股票購買者為它的地圖生意付了$90每股（$110股價中有$20是和地圖生意無關(guān)的），然而這一年無論是股票市場還是公司的生意都開始萎靡不振。在市場一片向好的1958年，相同的地圖生意卻作價負(fù)$20/股。僅按照公司投資組合的市價（地圖業(yè)務(wù)一文不值）來計算，當(dāng)前股票差不多也是按7折左右的價格在出售，然而投資者卻不買賬。
How could this come about? Sanborn in 1958 as well as 1938 possessed a wealth of information of substantial value to the insurance industry. To reproduce the detailed information they had gathered over the years would?have cost tens of millions of dollars. Despite “carding” over $500 million of fire premiums were?underwritten by?“mapping” companies. However, the means of selling and packaging Sanborn’s product, information had?remained unchanged throughout the year and finally this inertia was reflected in the earnings.
怎么會這樣呢？桑伯恩公司在1958年所擁有的信息對于保險業(yè)的價值和在1938年并無差別。復(fù)制他們這么多年積累的信息需要耗費上千萬美元。盡管有“Carding”的競爭，還是有超過五億美元的火險是由地圖公司負(fù)責(zé)的。然而，桑伯斯公司的產(chǎn)品和資訊的銷售，分銷方法長期停滯不前的情況最終反映在了公司收入的減少上。
The very fact that the investment portfolio had done so well served to minimize in the eyes of most directors the need for rejuvenation of the map business. Sanborn had a sales volume of about $2 million per year and owned about $7 million worth of marketable securities. The income from the investment portfolio was substantial, the business had no possible financial worries, the insurance companies were satisfied with the price paid for maps, and the stockholders still received dividends. However, these dividends were cut five times in eight years although I could never find any record of suggestions pertaining to cutting salaries or director's and committee fees.
正是由于在投資上的巨大成功導(dǎo)致大多數(shù)董事會成員目光短淺對于重振地圖業(yè)務(wù)毫無興趣。桑伯恩公司每年有200萬美元的銷售收入并且擁有市值700萬美元的股票。投資收入豐厚，公司沒有任何財務(wù)風(fēng)險，保險公司對于地圖售價十分滿意同時股東每年也有分紅。但是，盡管在過去八年中股東分紅已經(jīng)降低了五次，董事會的工資和委員會費用卻毫無削減的跡象。
Prior to my entry on the Board, of the fourteen directors, nine were prominent men from the insurance industry who combined held 46 shares of stock out of 105,000 shares outstanding. Despite their top positions with very large companies which would suggest the financial wherewithal to make at least a modest commitment, the largest holding in this group was ten shares. In several cases, the insurance companies these men ran owned small blocks of stock but these were token investments in relation to the portfolios in which they were held. For the past decade the insurance companies had been only sellers in any transactions involving Sanborn stock.
再我加入董事會之前，總共有14位董事，有九位來自于保險公司管理層，他們總共占有105,000流通股中的46股。雖然他們在大公司里擔(dān)任重要職位有足夠財務(wù)資源來進行至少適當(dāng)?shù)耐顿Y，但是他們中最多的持股人卻只有10股的份額。與他們所擁有的投資組合相比，保險公司占的這點股份僅僅是象征性的投資。過去十年中保險公司是桑伯恩公司股票的唯一賣家。
The tenth director was the company attorney, who held ten shares. The eleventh was a banker with ten shares who recognized the problems of the company, actively pointed them out, and later added to his holdings. The next two directors were the top officers of Sanborn who owned about 300 shares combined. The officers were capable, aware of the problems of the business, but kept in a subservient role by the Board of Directors. The final member of our cast was a son of a deceased president of Sanborn. The widow owned about 15,000 shares of stock.
第十位董事是公司律師，有十股。第十一位董事是一個銀行家也有十股，他察覺到并且積極指出公司的問題所在而且隨后增持公司股票。之后兩位董事是公司管理層，總共有300股。這兩位高管了解公司的問題但是卻一直在董事會中和稀泥。最后一位董事是亡故的桑伯恩執(zhí)行長官的兒子，他的媽媽擁有15,000股。
In late 1958, the son, unhappy with the trend of the business, demanded the top position in the company, was turned down, and submitted his resignation, which was accepted. Shortly thereafter we made a bid to his mother for her block of stock, which was accepted. At the time there were two other large holdings, one of about 10,000 shares (dispersed among customers of a brokerage firm) and one of about 8,000. These people were quite unhappy with the situation and desired a separation of the investment portfolio from the map business, as did we.
在1958年末，兒子十分不滿當(dāng)前公司的現(xiàn)狀和未來，要求掌管公司被拒絕，繼憤而辭職卻被批準(zhǔn)。不久之后，她的母親接受了我們購買她手中的股份的提議。當(dāng)時有另外兩個大股東，其中一位是經(jīng)紀(jì)行擁有1萬股分散在不同的客戶手中，另外一位擁有8000股。這些股東也非常不滿當(dāng)前公司的狀況，和我們一樣希望股票投資收益要從地圖生意中剝離出來。
Subsequently our holdings (including associates) were increased through open market purchases to about 24,000 shares and the total represented by the three groups increased to 46,000 shares. We hoped to separate the two businesses, realize the fair value of the investment portfolio and work to re-establish the earning power of the map business. There appeared to be a real opportunity to multiply map profits through utilization of Sanborn's wealth of raw material in conjunction with electronic means of converting this data to the most usable form for the customer.
隨后我們（包括合作伙伴），通過在流通市場的收集，持股達到24,000股，并且和另外兩家合力占股46,000。我們希望將兩個生意分開計算，一方面投資組合的合理價值體現(xiàn)出來，另一方面致力于恢復(fù)地圖業(yè)務(wù)的盈利能力。如果能夠?qū)⑸２鲗氋F的地圖原始資料數(shù)字化從而更好地服務(wù)于客戶相信利潤可以成倍上漲。
There was considerable opposition on the Board to change of any type, particularly when initiated by an outsider, although management was in complete accord with our plan and a similar plan had been recommended by Booz, Allen & Hamilton (Management Experts). To avoid a proxy fight (which very probably would not have been forthcoming and which we would have been certain of winning) and to avoid time delay with a large?portion of Sanborn’s money tied up in blue-chip stocks which I didn’t care for at current prices, a plan was?evolved taking out all stockholders at fair value who wanted out. The SEC ruled favorably on the fairness of the plan. About 72% of the Sanborn stock, involving 50% of the 1,600 stockholders, was exchanged for portfolio securities at fair value. The map business was left with over $l,25 million in government and municipal bonds as a reserve fund, and a potential corporate capital gains tax of over $1 million was eliminated. The remaining stockholders were left with a slightly improved asset value, substantially higher earnings per share, and an increased dividend rate.
盡管公司管理層完全同意我們的提議并且管理專家Booz, Allen&Hamilton也提出相似的計劃，公司的改變?nèi)匀皇艿綇娏业牡种疲绕洚?dāng)改變是由外人發(fā)起的時候。為了避免代理權(quán)之爭（盡管很有可能不會發(fā)生，而且我們大概率會贏得代理權(quán)）以及盡快將桑伯恩公司大部分資產(chǎn)以當(dāng)前的股價售出從而和藍籌股割離開，我們提出了一個讓股東在合理的價格退出的計劃。證券交易委員會對這一計劃的公正性表示贊同。桑伯恩72%的股票，1600名股東中的一半人將手中的股票以公平的價格換成了公司投資組合中的其他股票。地圖出版業(yè)只剩下125萬美元的市政以及國債作為準(zhǔn)備金，以及潛在的100多萬美元的收入稅減免。留下的股東資產(chǎn)價值有所上升，大幅提升了每股收益以及獲得了更高的分紅比例。
Necessarily, the above little melodrama is a very abbreviated description of this investment operation. However, it does point up the necessity for secrecy regarding our portfolio operations as well as the futility of measuring?our results over a short span of time such as a year. Such control situations may occur very infrequently. Our bread-and-butter business is buying undervalued securities and selling when the undervaluation is corrected along with investment in special situations where the profit is dependent on corporate rather than market action. To the extent that partnership funds continue to grow, it is possible that more opportunities will be available in?“control situations.”
必須得指出，上述的小情節(jié)是對投資運營十分精簡的表述。但是同樣體現(xiàn)了對我們投資操作保密的重要性以及僅僅以極短的時間比如一年來衡量投資表現(xiàn)的無效性。這種全局操控的情況非常少見，我們主營業(yè)務(wù)業(yè)務(wù)還是購買低估的股票并等到估值恢復(fù)的時候賣出和投資一些利潤來自于公司運營而不是市場的機會。隨著合伙公司規(guī)模越來越大，很有可能會有越來越多的全局操控的投資案例。
The auditors should be mailing your financial statement and tax information within about a week. If you have any questions at all regarding either their report or this letter, be sure to let me know.
審計師會在一周內(nèi)將財務(wù)結(jié)算單和稅務(wù)信息寄出。如果對他們的報表或者這封信有任何疑問，請聯(lián)系我。
Warren E. Buffett 1-30-61
