Translator’s Preface Buffett’s successful eight-character formula keeps pace with the times and creates a virtuous circle
Buffett’s famous saying “I am a good investor because I am a good entrepreneur; I am a good entrepreneur because I am a good investor” is a true portrayal of the combination of industry and capital .
In addition to keeping pace with the times in investment skills, I think there is another very important feature that is crucial to his success today-a virtuous circle. The virtuous circle is divided into two levels, one is a virtuous circle in finance; the other is a virtuous circle in interpersonal and social relations.
Persisting in dealing with the right people and the right companies, being kind to people, interacting positively, getting along with each other, respecting each other, complementing each other, and complementing each other are the keys to Buffett’s continued success for many years.
Opening Remarks Corporate Principles Related to Owners
At the end of each year, 98% of Berkshire’s list of outstanding shareholders is unchanged from the beginning of the year.
Under normal circumstances, the characteristics of a company determine the characteristics of its shareholders, as the saying goes, “Birds of a feather flock together, and people are divided into groups.” If a company is looking for short-term results or short-term stock price performance, the shareholders it attracts will be equally focused on short-term performance. If companies treat shareholders casually, they will get casual results.
We find it odd that some company’s management would like their company’s stock to be actively traded. What this argument actually means is that existing supporters are expected to ditch their company’s stock and replace it with someone else’s. Because the company’s shares are limited, only when someone goes out will someone come in, and these newcomers must have different expectations.
In 1983, I summarized 13 corporate principles related to owners, which I thought would help new shareholders understand our management thinking. Since they are called “principles”, all 13 of them are still valid today.
1. Although the organizational form is a corporation, we act as partners. Munger and I think of our shareholders as our partners, and ourselves as managing partners (because, for better or worse, we are proportionately controlling partners).
We want you to think of yourself as someone who truly owns part of the business long-term, like a farm or apartment that you and your family share.
If we have good long-term expectations for a stock, short-term price fluctuations mean nothing to us unless someone quotes us a very attractive price.
2. Most corporate board members view Berkshire as their own property, and a major part of their wealth is the value of their holdings in the company. In other words, we eat what we cook.
More than 90% of Munger’s family assets are placed in Berkshire stocks, while mine is 98% to 99%.
Munger and I cannot promise you results. But we can guarantee that as long as you are our partner, at any time, your financial assets and our own assets will maintain the same growth.
3. Our long-term economic objective (subject to limitations described below) is to maximize Berkshire’s average annual return on intrinsic value per share. We do not measure economic significance or performance by company size, but by growth per share.
4. In order to achieve our goals, our first choice is to directly hold a series of diversified enterprises, from which we can obtain stable cash flow and continuous capital return above the market average level. Our second choice is through our insurance companies, mainly looking for stocks that are easy to trade in the market, so as to hold stocks of some similar companies.
Generating good ideas as quickly as we generate cash flow is a challenge for us. In this sense, a depressed stock market is a good thing for us.
First, it allowed us to buy out the entire company at a lower price;
Second, the depressed market makes it easier for our insurance companies to buy stocks of some excellent companies, including companies in which we already own some stocks, at an attractive price;
Third, some good companies, such as Coca-Cola, continue to buy back their own stock, so they and we can buy stocks cheaper.
5. Due to the limitations of our business ownership method and traditional accounting methods, the earnings shown in the consolidated financial statements may not truly reflect our actual economic results. Charlie and I, being both owners and managers, would actually ignore the numbers provided by the consolidated financial statements.
6. The results of the book will not affect our operating and capital allocation decisions.
7. We use debt very sparingly. When we borrow, we try to fix the long-term interest rate. We would rather turn down some attractive opportunities than get overly indebted.
8. (Berkshire will continue to make acquisitions,) But management’s “vision list” will never cost shareholders money. We will not buy companies at high prices in pursuit of diversification at the expense of long-term economic results. We use your money as if it were our own, and weigh the value you get from these diversification efforts against the value you can get from investing directly.
9. We need to periodically reflect on policy based on results. We will look at the profits retained in the company. In the long run, for every dollar of profit retained, at least $1 of market value will be created.
10. We will only make acquisitions by issuing new shares if they are worth the money.
11. You should note that Munger and I have an attitude that is not conducive to our financial performance: We have no interest in selling the quality assets that Berkshire owns, no matter the price.
12. In the process of communicating with shareholders about the company’s operating conditions, we will report the good and bad points candidly and truthfully. Our policy is mainly to adopt the method of empathy. If I am in your position and want to know what is going on, we will not owe you a single iota.
13. Although we have an open and honest attitude, we will only discuss our securities market behavior within the scope of regulatory supervision. Because good investment ideas are so scarce, they are valuable and attract competition, just as good product or corporate merger ideas do.
14. We hope that during the period of holding stocks, shareholders can obtain income that is synchronized with the company’s intrinsic value per share.
15. We often compare the performance of Berkshire’s book value per share with the S&P 500 index, hoping to outperform the market in the long run, otherwise why should investors give us their money?
preface
Buffett believes that the company’s CEO has three differences compared with other employees:
(1) Compared with the assessment and measurement of ordinary employees, the means of assessing the CEO’s performance are insufficient, or they are more easily manipulated.
(2) In the management, the CEO occupies the highest position, so no one in a higher position supervises or evaluates him.
(3) Corporate boards are also unlikely to take on a supervisory role, since boards traditionally (in general) get along well with CEOs.
Buffett believes that the best way is to carefully select those shrewd and capable CEOs who can not be constrained by the shortcomings of the system.
The CEOs of Berkshire’s companies enjoy a unique work environment. The requirements they face are very simple. The enterprises they manage have only one shareholder;
② There is only one type of asset nature;
③The companies they manage will not be sold or merged, and will remain in their current state or even remain unchanged for a hundred years.
Finance and Investment
Many professors firmly believe that the market price of stocks has fully reflected the true value of the company, and the remaining risk is the risk of stock price fluctuations. The best way to manage the risk of stock price volatility is to invest in a diversified portfolio.
According to Buffett, the popularity of the beta approach ignores “a fundamental principle: It is better to be vaguely right than precisely wrong.”
All real investments must be based on an assessment of the relationship between price and value. Strategies that do not compare price to value are not investing at all, but speculation. Speculation is simply the hope that stock prices will go up, not based on the belief that you are paying less than you are getting.
common stock
He emphasized his mentality when buying stocks, “If we don’t plan to hold stocks because the exchange is closed, we won’t hold them even if the exchange opens.”
Unlike many other CEOs who want their company’s stock price to be as high as possible in the market, Buffett wants Berkshire’s stock price to be equal to its intrinsic value, or close to its intrinsic value-neither high nor low. If this can be done, it means that in the same time period, the company’s operating results will benefit the stock holders in the same time period. To maintain this effect requires a long-term, business-oriented shareholder group, rather than a short-term, stock market-oriented group.
Whether a company’s profits should be distributed or retained depends on the outcome of a test: Does every dollar of retained earnings create at least a dollar of market value? If it can, profits should be retained; if not, dividends should be distributed. This is the famous “1 dollar principle”. “Retained profits are reasonable only when the incremental income generated by retained profits is equal to or greater than the income distributed to investors.”
Buffett listed the reasons and conditions for Berkshire’s share repurchase: only when the stock price is significantly lower than its intrinsic value. This clearly shows that while Buffett may only have a rough feel for intrinsic value when Berkshire buys back at a discount, stockholders should be made aware of the value of their shares. The solution is: clear information disclosure, so that holders who sell stocks can make decisions on the basis of knowing sufficient information.
Stock splits are another common method used by many American companies in the capital market, but Buffett pointed out that this is harmful to the interests of shareholders. A stock split has three consequences:
(1) The spin-off increases transaction costs because the turnover rate after the spin-off increases.
(2) The spin-off will attract short-term customers who pay too much attention to the short-term rise and fall of market stock prices.
(3) Due to the impact of the above reasons, the spin-off will cause the stock price to deviate significantly from the intrinsic value of the company.
Buffett believes that selling shares of a company for less than it is worth is a crime for its existing shareholders.
Mergers and Acquisitions
Berkshire’s investment policy typically follows a two-pronged approach: acquiring all of its shares as a whole, or only a portion of them. The premise is that these enterprises have at least two points: (1) have excellent economic characteristics, that is, have the so-called “moat” competitive advantage. (2) Have a management team that Buffett and Munger like, trust, and appreciate. Contrary to common practice, Buffett sees no reason to pay a premium when making a blockbuster acquisition.
There are two types of businesses that are extremely scarce. The first category consists of the small number of businesses with moat characteristics—they can increase selling prices without reducing sales volume or market share, and only require endogenous incremental capital to increase both. Even with mediocre management, such companies with moats can provide high returns on capital. The second type of rare enterprise is that its executives have excellent management ability. They are good at tapping the potential of poorly run companies, accomplishing feats that are difficult for ordinary people to accomplish, and using their outstanding talents to release the hidden value of the company.
For those who acquire ordinary companies at a high premium, Buffett classifies the motivations of the management who lead the acquisition into three categories: the pleasure of acquisition, the pleasure of expanding the scale, and the excessive optimism about synergies.
Berkshire’s acquisitions have additional advantages: high-value stock payments and, after the acquisition, a high degree of autonomy for the company’s executives. Neither is common in acquisitions, Buffett said.
Valuation and Accounting
Buffett emphasized that useful financial statements should allow people to answer three basic questions about businesses: (1) What is the approximate value of a company. (2) Ability to realize the company’s future plans. (3) Management’s ability to operate the enterprise.
A common calculation used by Wall Street in valuing businesses is that cash flow equals (a) operating profit plus (b) depreciation expense and other non-cash charges. But Buffett doesn’t think that’s complete enough. He thinks it should be (a) operating profit plus (b) non-cash charges, minus (c) necessary reinvestments. Buffett defines (c) as “the average capitalized expenditure on plant and equipment necessary for a company to maintain its long-term competitiveness and output in the future.” Buffett refers to the result of “(a) + (b) – (c)” as “shareholder profit”.
A． Complete and fair information disclosure
At Berkshire, we usually put ourselves in the shoes of a shareholder and imagine what kind of information we should get if we were in the position of a shareholder, and we will disclose a complete report to shareholders from this perspective.
Munger and I both believe that it is deceptive and dangerous for CEOs to predict the growth rate of their companies.
Three suggestions for investors:
One, beware of companies that exhibit weak accounting.
Second, incomprehensible footnotes often indicate unreliable management. If you can’t read a note or other management explanation in a financial report, it’s usually because the CEOs don’t want you to understand it.
Third, be wary of companies that tout their earnings growth forecasts. Enterprises rarely develop smoothly in a calm and unexpected environment, and all profits are not predictable in a simple and smooth manner.
Munger and I not only don’t know how profitable Berkshire will be next year, but even the next quarter.
B． Board of Directors and Company Executives
The greatest irony is that an incompetent subordinate may easily lose his job, but an incompetent CEO is not.
However, a mediocre CEO can often get away with it because there are few metrics to measure the position.
In addition, there is another important difference between the boss and the grassroots subordinates that is often overlooked, that is, there is no immediate monitoring and review mechanism for the performance of the CEO.
Over a period spanning 40 years, I have served on the boards of 19 public companies (excluding Berkshire) and interacted with approximately 250 directors, most of whom fit within the meaning of “independent” as defined above . But the vast majority of them lack at least one of the three qualities I mentioned. As a result, their contribution to shareholder interests is very small, and often even negative.
By the standards of the Bible, Berkshire’s board of directors is exemplary: (a) each director has at least $4 million or more of his net worth in Berkshire; (b) no shares are based on stock (c) the remuneration received by the directors is extremely limited compared to their own annual income; (d) although we have a company compensation mechanism, we have not arranged any liability insurance for the directors. At Berkshire, directors stay in the same boat as all shareholders.
Our board now has 11 directors, each of whom, including family members, collectively owns more than $4 million worth of Berkshire stock, and has owned it for many years. Six of them have family holdings of at least several million shares, and the holding time even lasts for more than 30 years. At the same time, all directors’ shares are bought from the open market like other shareholders. We have never issued stock options or special shares. Munger and I like this way of holding shares with a clear conscience. After all, no one likes to have their rental car washed.
The bottom line for us directors is that if you win, they win big, and if you lose, they lose big. Our approach might be called owner capitalism. Other than that, we don’t know of a better way to maintain true independence.
Charlie and I only do two jobs, one of which is how to attract and retain great managers to run our different types of business operations
We only want to work with people we like and respect, which not only maximizes our chances of getting good results, but also gives us an extraordinary good time. On the contrary, working with a big turn off is like getting married for money, it’s a bad idea under any circumstances, especially if you’re already rich, and you’d be absolutely insane if you did it .
We give each manager a simple task of running the company in the following three situations. (1) You own 100% of the shares; (2) Treat the company as the only asset that you and your family own in the world, and have always owned; (3) For at least 100 years, you cannot sell the company or Merge with other companies.
Holders of most of our stock intend to hold it to the end of their lives, so we can tell our CEOs to focus on maximizing long-term value rather than next quarter’s earnings.
I believe the GEICO story is a good example of the strengths of the Berkshire approach. Munger and I never taught Tony how to run a company—never will, but we created an environment where he could use his genius where it mattered. He doesn’t have to spend his time and energy on board meetings, media meetings, presentations to investment banks, or financial analysts. Plus, he doesn’t have to spend time thinking about financing, credit ratings, or Wall Street expectations for earnings per share. Because of our unique company ownership structure, he also knew that this kind of operating result would last for decades. In this free environment, both Tony himself and the company can transform their infinite potential into corporate achievements.
C． Anxiety about corporate change
Hoping for synergies (this is a term widely used in the industry to explain acquisitions, otherwise meaningless)
The example of Burlington shows that when minds and energy are devoted to false premises, shareholders can get just such disastrous results.
In my own experience and observations of many other companies, a good management record (measured by financial returns) has more to do with what kind of boat you get on than how efficiently you row it. (Of course, in any business, for better or for worse, being smart and working hard helps). If you find yourself in a boat that is chronically leaky, the effort involved in changing the boat may be more productive than fixing the leak.
When the economic environment of an industry deteriorates, talented management can certainly slow down the deterioration of the company’s financial situation, but in the end the hero depends on the current situation, and outstanding management skills are still no match for the deterioration of the fundamentals of the environment. (A wise friend of mine told me long ago: “If you want to get a good name as a businessman, you have to be in a good trade.”)
F． Principles of Compensation for Corporate Executives
In a bank savings account, if the interest is not withdrawn and accumulated as the principal, it can earn interest at the same interest rate year after year. Even at an 8% interest rate, the principal can grow to its original size after 18 years four times.
It is an extremely incredible thing to grant long-term options to management when the company’s capital continues to increase. Any outsider who wants to acquire such an option should pay full compensation for the capital increase during the exercise period.
Those managements who have designed ten-year, fixed-strike price options for themselves and their peers are, first, completely ignorant of the fact that retained earnings accrue on their own; and second, they are ignorant of the cost of capital. As a result, these managements get paid like options on savings accounts where profits are supposed to accrue automatically.
First, stock options are supposed to be related to the overall performance of the company.
Second, options should be structured carefully.
Third, I would like to stress that some managers whom I greatly admire—whose track record of managing operations is far better than mine—disagree with me on fixed-price options. They’ve built a company culture where options have become a useful tool. Through their leadership and the power of example, and using stock options as a motivational tool, these managers believed that their colleagues also had a shareholder (owner) mindset.
G． Risk, Reputation and Oversight
For more than 25 years, I have been saying, “We can afford to lose money, even a lot of money, but we cannot afford to lose even a little bit of our reputation.” We must continue to measure every action, Not just whether these actions are legal, but also whether we would be happy if they were written about by an unfriendly but intelligent reporter and published on the front page of the national newspaper.
A lot of money goes to the courts and is earned through litigation. If in doubt about whether you are nearing the bottom line, just assume the money doesn’t belong to you and forget about it.
In my opinion, the audit committee can do this by asking auditors four questions, the answers to which are recorded and reported to shareholders. The four questions are:
(1) If the auditors were the only ones responsible for preparing the company’s financial statements, would their practices differ from those prepared for current management? this
(2) If the auditor is an investor, has he received any important information to help him understand the company’s financial performance during the reporting period?
(3) If the auditor himself is the CEO, has the company followed the internal audit process that it should have followed? If not, how is it different? Why?
(4) Did the auditor observe any actions—accounting or operational—that had the purpose and effect of shifting operating income or costs from one reporting period to another.
A． Mr. Market
We learned from Graham that the key to successful investing is to sell good companies when the market price is far below their value.
When investing, we think of ourselves as business analysts—not market analysts, not macroeconomic analysts, not even securities analysts.
Our approach works quite well in an actively traded market, as it periodically presents us with mouth-watering opportunities. It doesn’t matter whether there is a stock market or not, and we don’t feel ashamed if we hold stocks that have been suspended for a long time, like our World Book and Fechheimer holdings, even if there are no stock quotes. disturbed. Ultimately, our fate will depend on the fate of the companies we own, whether we own some or all of them.
If an investor wants to be successful, he must combine two abilities, one is the ability to judge excellent companies, and the other is the ability to isolate his own thinking and behavior from the highly contagious emotions pervading the market. In my own efforts to maintain this isolation, I have found it very useful to keep Graham’s concept of Mr. Market in mind.
As Ben Graham said: “In the short run, the market is a voting machine; but in the long run, the market is a weighing machine.” Satisfactory speed enhances intrinsic value. In fact, the perceived lag has a benefit too: it will give us the opportunity to buy more shares on the cheap.
It is important to emphasize that we do not sell stocks because their price has risen, or because we have held them for too long. We are perfectly willing to hold any stock, forever, as long as the company’s prospects for return on assets are satisfactory, management is competent and honest, and the market is not overvalued.
A little quiz: If you planned to eat hamburgers for life and didn’t grow your own beef, would you want the price of beef to be higher or lower? Similarly, if you need to buy a car from time to time, and you are not a car manufacturer, do you want the price of the car to be higher or lower? Clearly, the answers to these questions speak for themselves. Now, onto the final quiz: If five years into the future, you expect to be a “net saver,” do you want the stock market to be high or low during that time? Many investors err on the side of this question. Even if they are net buyers of stocks for many years to come, they will be elated when prices rise and depressed when prices fall. In fact, they rejoice that the price of the “hamburger” they are about to buy will increase. The reaction was incredible. Only those who intend to sell the stock in the near future should be happy to see the stock price rise, and potential future buyers should prefer the decline in the stock price. Key Words: Buyers Should Prefer Falling Shares
B． arbitrage
When evaluating an arbitrage condition, you must answer four questions: (1) What is the probability that the promised thing will happen? (2) How long can the funds you use for arbitrage last? (3) How likely is it that something better will happen? For example, someone makes a more competitive takeover offer. (4) What happens if some expected things don’t happen? These things include antitrust, financial mistakes, and more.
Berkshire’s arbitrage activity is different from that of many other arbitrageurs. First, the arbitrage activities we engage in each year are small but often large. A lot of other players in the industry, usually a lot of times, maybe 50 or more. If many things need to be done at the same time, it is like putting many soldering irons on fire at the same time, and people must spend a lot of time monitoring both the process of trading and the fluctuation of market share prices. This is not the model of life that Munger and I envision. (What’s the point of living if you’re just staring at the stock ticker all day just to make money?)
Another difference between us and other arbitrage traders is that we only trade based on publicly available information, we don’t buy or sell on rumors, and we don’t try to guess who is next for a takeover. We just read the news papers, think about a few big ideas, and act according to our own sense of probability.
C． Debunking Standard Dogma
When we own shares of great businesses with great management, our favorite holding time is forever. We are the polar opposite of those who rush to cash in on profits when their holdings do a little better, but hold on to those that don’t. Peter Lynch aptly likens this behavior to “cutting off the flowers and watering the weeds”.
We continue to believe that selling an interest in a business that has a clear business and continues to be great is clearly folly. Because, this type of company is simply hard to replace.
From our point of view, an investor’s real risk measurement is to assess whether the sum of the after-tax returns on his investment (including his sale proceeds) will bring him at least at the beginning of the investment during his expected holding period. Equal purchasing power, plus a reasonable interest rate factor.
As Justice Stewart found, what constitutes “obscenity” is indeed difficult to formulate precisely, but, he asserted: “When I see it, I know it.” — The real good investment opportunities are obvious.
We will stick to those industries that are easy to understand. A man with fair eyesight has no need to look for embroidery needles in haystacks.
By regularly investing in indices, a poorly informed investor can actually beat most investing experts. Interestingly, when “dumb” money admits its limitations, it ceases to be stupid.
If you are a knowledgeable investor who understands economics and can find five to ten reasonably priced companies with long-term competitive advantages, traditional diversification strategies are meaningless to you. It will only lower your return on investment and increase your risk.
We have always adhered to the principle of immobility, and this behavior expresses one of our views: the stock market is a place of constant repositioning, where money flows from the active to the patient.
We continue to look for large companies with understandable businesses, sustainable operations, coveted economic characteristics, and exceptionally talented and shareholder-oriented management. We must both buy at a reasonable price and have the business prove to be performing in line with our expectations.
“As time went by, I became more and more convinced that the right way to invest is to invest a substantial amount of money in companies that you know and have management you can trust.” There are very few different companies, and the belief that you can reduce risk is blind and wrong. A person’s knowledge and experience are bound to be limited. In a certain period of time, there are rarely more than two or three companies that make me feel fully confident.
Many well-known fund managers are now focusing on what other fund managers will do in the next few days, rather than focusing on what the company will do in the next few years.
D． “Value” Investing: Two Extra Words
In either case, we try to buy companies that have good economic prospects. Our goal is to discover great companies that are reasonably priced, not mediocre companies that are cheap.
The disadvantages of owning negotiable securities are sometimes outweighed by the enormous advantages. The stock market often presents us with the opportunity to purchase non-controlling portions of outstanding companies at ridiculously low prices, at prices significantly lower than the transfer of control. The price requested in the negotiation. For example, we bought shares of The Washington Post at $5.63 per share in 1973, and by 1987 had an operating profit of $10.30 per share (after taxes).
“We select negotiable securities in the same way that we evaluate a business for the purpose of acquiring an entire shareholding. We look for the following characteristics in the company: (1) we can understand; (2) have good long-term prospects; (3) have Honest and competent management; ④ can be bought at a very attractive price.”
First, we try to stick to what we think we know. This means that they must be fairly simple and have stable economic characteristics.
Second, and just as important, we insist on a margin of safety when buying.
E． smart investment
All you should consider is a company with a reasonable price tag, good quality, and competent and honest management. After that, all you need to do is to observe whether these qualities can be maintained.
As for advising an investor to sell his most successful investments simply because the gains they generated made up the bulk of his portfolio, that would be like asking the Bulls to sell Michael Jordan because his Scoring too many points, which of course is stupid, because he is too important to the entire team.
You’ll find companies and industries we like that are unlikely to experience major change. The reason for this is simple: Regardless of the type of investment, we look for companies that we believe will almost certainly still have a competitive advantage 10, 20 years from now. An industry with a rapidly changing environment may offer great opportunities for winning, but it doesn’t have the certainty we’re looking for.
As citizens, Munger and I welcome change, and fresh ideas, novel products, innovative processes, and things that improve the standard of living in our country are, of course, good. However, as investors, we treat fermenting, rapidly expanding and changing industries the same way we treat space exploration: We applaud, but we don’t participate in.
All you need is to be able to properly evaluate companies in your circle of competence. The size of this circle is not particularly important, however, knowing the margins of this circle is critical.
To invest successfully, you don’t need to know beta, efficient markets, modern portfolio theory, or emerging markets. In fact, you’d better not know these things at all.
In our opinion, students learning investment only need to learn two homework-how to evaluate the value of a company, and how to deal with market prices.
As an investor, your goal is very simple, that is, to buy an easy-to-understand company at a reasonable price, whose earnings are sure to increase significantly from today to the next 5, 10, and 20 years. As time goes by, you will find that there are not many companies that meet this standard. So, when you spot a business that meets the criteria, you should be buying big (rather than betting small).
Investors should keep in mind that excitement and cost are their enemies. If they persist in trying to time their participation in stocks, they should be fearful when others are greedy and greedy when others are fearful.
We want to have the ability to recognize when we are functioning well within our circle of competence and when we are approaching the boundaries of our circle of competence.
F． Picking up cigarette butts and inertial drive (institutional obsessive-compulsive disorder)
时间是优秀企业的朋友，是平庸企业的敌人。
我们可以说有所成就，这是因为我们专注于寻找那些可以跨越的1英尺跨栏，而不是我们具有了跨越7英尺跨栏的能力。
我们不希望与那些不值得尊敬的经理人为伍，无论其公司的前景多么诱人。与坏人打交道做成一笔好生意，在这方面我们从来没有成功过。
我们享受投资过程远胜于收获的结果，我们学会了与之朝夕相处。
G．生命与负债
多年以来，一些非常聪明的人们终于意识到，无论多么长的一串数字，只要乘上一个零，其结果一定等于零。
对于那些给伯克希尔的幸福造成丝毫危险的任何行为，芒格和我都毫无兴趣。我们俩加在一起已经有167岁了，从头再来不是我们的人生目标。
在时不时爆发的金融危机的插曲中，在其他人挣扎求生的时候，我们已经在财务上和心理上做好了出击的准备。这就是在2008年，在雷曼破产恐慌25天之后，我们投资156亿美元的原因。
A．三类投资资产
大多数此类基于货币的资产都被视为“安全的”。但事实上，它们属于最危险的资产，它们的贝塔值或许是零，但它们的风险却是巨大的。
政府决定货币的最终价值，系统性的力量会时时导致引发通货膨胀的政策。而这些政策会一次又一次失去控制。
即便是在美国，这么一个维持美元稳定的愿望如此强烈的地方，美元还是从1965年以来累计贬值了86%，那一年我刚接手管理伯克希尔公司。当年花1美元可以买到的东西，今天要花7美元以上。因此，即便一个不用交税的机构，也必须在同期从债券上获得4.3%的年化利息收入，才能维持其购买力不变。
尽管每张美元上都印着“我们信仰上帝”这句话，但实际上，掌控政府印钞机的，并非上帝之手，而是凡人之手。
我们工作中对于流动性的要求是200亿美元，我们的绝对底线是100亿美元。
华尔街人士谢尔比·库洛姆·戴维斯（Shelby Cullom Davis）多年以前的评论用在现在似乎也很合适：“债券在被推销时，说是可以提供无风险的回报，现在的定价却只剩下无回报的风险。”
关键词：没有任何产出的资产
我们在2008年听到人人都在说“现金为王”之时，恰恰是应该动用现金而不是持有现金的时候。与此类似，在20世纪80年代的初期，当我们听到人人在说“现金是垃圾”之时，那个时候，固定收益类投资产品正处于我们记忆中回报最具吸引力的时代。在这些历史场合中，盲从于羊群效应的投资者为寻求“舒服”而付出了沉重代价。
打个比方说，这些商业“奶牛”会存活上百年，会产出更多数量的“牛奶”。它们的价值并不取决于交换的媒介，而是取决于它们的产奶能力。
B．垃圾债券
由于银行业20∶1的杠杆特征，使得管理层的优点和缺点都得以放大。我们对于以“便宜”的价格购买一家糟糕的银行毫无兴趣。相反，我们仅仅对于以合理的价格购买管理优良的银行感兴趣。
IBM的托马斯J．沃森爵士（Thomas J. Watson Sr.）遵循同样的原则，他说：“我不是天才，我只是有几个优点，但我能坚守这些优点。”
我们喜欢在悲观的环境中做生意，不是因为我们喜欢悲观主义，而是因为我们喜欢悲观主义带来的价格。对于理性的买家而言，乐观主义才是敌人。
正如英国哲学家伯特兰·罗素（Bertrand Russell）对生活的观察结果，他这段话同样适用于金融界：“大多数人宁愿去死，也不愿意思考。很多人就是这样。”
通常而言，华尔街对于一个主意的热情并不取决于它的优点，而是取决于它能带来多少利益。这些根本不关心后果的人，他们考虑的只是如何将堆积如山的垃圾债券卖给那些不动脑子的人。市场上，从来不缺这两种人。
C．零息债券
每当一位投资银行家开始大谈EBDIT，或其他什么人创建了一套新的资本结构，无论是需要当前支付的利息，还是累积到后面需要一起支付的利息，他都支付不起，你应该赶快合上你的钱包。反过来，你可以建议这个推销员和他高薪聘请的团队，在零息债券到期足额偿还之前，不准拿走他们的酬金；换言之，只有在这些债券按期兑付后，他们才可以拿钱，这时，再看看他们对这类生意的热情还能持续多久。
D．优先股
这种所有航空公司都遭遇的价格问题，揭示了一个重要真理：当一个公司销售的是普通商品型产品（或服务）时，它不可能比最为愚蠢的竞争对手聪明多少。
E．衍生品
对于金融衍生品以及衍生品交易活动的看法，芒格和我是一致的：我们将其视为定时炸弹，无论是对交易的双方，还是对于整个经济体系。
衍生品合约的种类几乎没有范围限制，完全取决于人类的想象力
实际上，再保险行业与衍生品行业很类似，就像地狱，都是进去容易，但几乎不可能出来。举例来说，通用再保险证券公司到2002年底（关闭它的运营10个月之后），还有流落在外的14384件合约，涉及世界各地672个签约方。每一个合约都有一个或若干个参考变量，导致其合约价值波动不已，其中包括一些令人难以置信的复杂情况。要想给这些衍生品合约进行估值，即便是专业的审计师也会莫衷一是，分歧巨大。
近些年来，一些大规模的欺诈和类欺诈案都是由衍生品交易引发的。例如，在能源和电力行业，很多公司利用衍生品以及交易活动，在账面上创造出巨额“盈利”，直到它们试图将资产负债表上记录的与衍生品相关的应收账款转变为现金时，才最终东窗事发，根本无法实现。按市场结算真的变成了按神话结算。
衍生品的另一个问题是，它可能会使一个存在问题的公司由于原本不相关的因素加剧恶化。这种雪上加霜效应的发生，往往是因为很多衍生品合约要求公司信用等级一旦被调低，立即需要提供更多的担保给合约方。可以想见，一家公司因面临困境而遭到降级，与此同时，衍生品合约要求它立刻提供事先没有想到的、大量的现金作为担保。这种要求会将公司抛入流动性危机，在一些情况下，触发新一轮的降级。这就形成了恶性循环，使得公司最终崩溃。
在银行体系中，意识到连锁反应引发的严重问题，是美联储成立的原因之一。在美联储成立之前，一家体质欠佳的银行的倒闭有时会引发突然的、未有预期的流动性需求，这会导致原本健康的银行也出现问题。美联储现在将有问题的银行隔绝起来，以防止问题的蔓延
在保险行业或衍生品行业，没有一个类似美联储式的中央银行来防止多米诺骨牌效应的发生。在这些行业中，一些基本面良好的公司很有可能仅仅由于其他公司发生问题而受到拖累
衍生品业务这个妖怪已经从瓶子里跳了出来，这些工具在以各种形式自我繁衍、蔓延，直到有一天一些事件的爆发，令其危害显现。
我之所以每年都细述有关衍生品交易的经历，主要基于两个原因：
一个是让我感觉相当不快的个人原因。严酷的事实是，由于我没有马上采取行动结束通用再保险公司的衍生品交易业务，导致股东们损失了大笔金钱。
当一个问题发生时，无论是个人生活还是商业活动，行动的最佳时机就是马上行动。
第二个原因是，之所以一再阐述我们在这一领域遇到的问题，是希望我们的经历能够对经理人、审计师、监管层有所启发。在某种意义上，我们像是一只刚刚从这一商业煤矿坑区逃离出来的金丝雀，在断气的时候，为大家敲响警钟。
衍生品交易是危险的，因为它使用了极大的杠杆率，增加了我们整个金融体系的风险。它几乎让投资者难以理解，在分析我们最大的商业银行和投资银行时无从下手。它使得房利美（Fannie Mac）、房地美（Freddie Mac）这样的巨型公司多年来，进行了巨大的虚假的利润陈述。
一个正常的股票交易或债券交易，通常在几天之内会完成结算过程。交易的双方，一方得到现金，另一方得到证券。对手风险因此很快就会消失，这意味着信用风险是不会累积的。这种迅速结算的流程是维持市场诚信的关键。实际上，这是1995年纽交所和纳斯达克将结算流程从五天缩减为三天的一个原因。
衍生品合约的结算经常跨越数年甚至数十年的时间，交易双方相互之间彼此拖欠，累积了巨额的应收、应付权益。这些“纸上”的资产或负债，成为财报的重要组成部分，不但常常难以量化，而且需要很多年才能确认。
这些公司生存的第一法则是：一般的错误无人理会，只有犯下那些令人难以置信的错误才能得到政府的援助（正所谓“大而不倒”）。
F．外汇和国外权益
截至目前，大部分的外国投资者还是相当乐观，他们认定我们是花钱如流水的瘾君子，而且是极其富有的瘾君子。
G．房屋产权：实践和政策
居者有其屋，这当然是个美好的愿望，但不应该成为我们国家的首要目标。让购房者能待在他们的房屋里不毁约，才应该是目标。
A．交易的祸害：交易成本
我们的目标很简单：在别人贪婪的时候恐惧，在别人恐惧的时候贪婪。
A．交易的祸害：交易成本
我们会看到，公司的所有股份只不过在公司不同股东之间换手而已，没有资金来自外部。也就是说，所有股东作为一个整体所获得的财富，不可能多于公司本身所创造的财富。
关键词：产生摩擦成本的四个帮手
实际上，今天，类似上述描述中提到的摩擦成本，已经达到了所有美国公司盈利总和的20%。换言之，支付给各类帮手们的摩擦成本使得美国股市全体投资人只能获得他们本应获得盈利的80%，而如果投资人什么也不做，什么也不听，100%的盈利本来都应该属于他们。
投资者的整体回报，随着交易频率的上升而减少。
最终的结论：你们应该明白，我们并非为了追求伯克希尔股价的最大化而在纽交所上市。我们希望，在相似的经济环境中，伯克希尔在纽交所的股价表现也应该像在场外市场交易一样。在纽交所上市并非你买或卖的原因，它只是降低了你的成本，无论买卖。
B．吸引正确的投资者
与众多的上市公司相比较，我们的目标可能有两个不同之处。第一，我们不希望伯克希尔的股票价格越高越好。我们只希望股价能以内在价值为中心，窄幅波动即可
第二，我们希望股票的交易活动少之又少。试想一下，我们与几个合伙人经营一家不大的合伙公司，如果这些合伙人或他们的代理人动不动就想散伙，我们一定会感到失望。今天管理一家上市公司，我们也是同样的感觉。
对于那些希望自家股票交易活跃的CEO，我们无法理解，因为交易活跃就意味着公司的股东持续地离去。同样地，在其他一些机构，例如学校、俱乐部、教堂等，有哪一家机构的领导人为成员的离开而欢呼呢？
C．分红政策与股票回购
公司留存的每一美元，要为股东创造至少一美元市值。只有当留存收益作为再投资资本产生的增量收益等于或高于投资者通常可以获得的收益时，这种情况才应该发生。
应该提供给公众股东足够的信息，以帮助其估算公司的真实价值。否则，内部人士就可能利用某些优势，从那些不明真相的合伙人手中攫取利益，他们仅仅出一个零头就获得全部价值。
除非我们认为伯克希尔的股票价格远低于保守计算的内在价值，否则我们将不会回购股票。我们也不会谈论股价的升跌。
请清楚我们的观点：我们永远不会为了阻止伯克希尔股价下跌而进行回购。只有在我们相信回购活动是公司资金具有吸引力的去处之时，我们才会进行。最好，回购行为对于公司股票内在价值未来的成长性的影响微乎其微。
芒格和我认为回购的发生应该满足两个条件：首先，一家公司有充足的现金以备运营和流动性之需；其次，股价远低于保守计算的内在价值。
D．拆股与交易活动
过度活跃的股市是企业的扒手。
A．错误的动机和高昂的代价
在搜寻过程中，我们采取的方式就像一个人寻找合适的另一半一样：保持积极、兴趣、开放的心态，但不能着急。
我调整了策略，不再以上等的价格买中等的企业，取而代之的是，以中等的价格买上等的企业。
对于股东而言，哪一个目标才是管理层真心的追求：是管理版图的扩张，还是股东财富利益的维护？
如果一个CEO明显地看好一个并购项目，他的下属和顾问们都会千方百计地论证项目的可行性，无论任何价格都可以被论证为该项目的实施是理性的。
我们的目标是获得部分或整体的这样的公司，它们具有三个特征：①我们看得懂；②具有稳健良好的经济基础；③由我们喜欢、尊敬、信任的管理层运营。
D．稳定的收购政策
彼得·德鲁克与《时代》杂志的一次谈话中，点出了事情的实质：“我来告诉你一个秘密：做交易胜过干活。做交易是一件令人兴奋、愉快的事，而干活又脏又累。任何工作都主要是由大量的又脏又累的细节构成的，相比之下，做交易是如此的浪漫、性感。这就是为什么即便一些交易毫无意义，但还是有人做的原因。”
在此，我重申一下我们寻找目标公司的标准：
（1）规模够大。
（2）具有被验证了的持续盈利能力
（3）在负债极少或没有负债的情况下，公司具有良好的净资产回报率。
（4）具备管理层
（5）业务简明
（6）明确的报价
E．出售企业
伯克希尔是不同的买家，一个相当与众不同的买家。我们买进是为了持有，但我们在母公司层面没有——也不打算有管理团队，派驻被收购的公司出任管理层。我们拥有的所有企业都享有高度自治权。在大多数情况下，我们旗下很多重要公司的高管很多年都没有来过奥马哈（伯克希尔总部所在地），或者，我们压根就没有见过面。当我们收购一家公司后，卖家会继续以管理者的身份像出售之前一样管理企业，我们会适应他们的风格，而不是相反。
这就解释了，我们为何要求你们家族中的核心成员保留20%的股份。出于税务的目的，我们需要持有80%的股份以进行会计合并报表，这对我们很重要。留下的家族成员像主人一样管理企业，这对我们而言也非常重要。简单而言，除非现有的管理层愿意留下作我们的伙伴，否则我们就不会买这家企业。合同不能保证你持续的利益，而我们需要你的承诺。
伯克希尔的高管们有时会和我讨论他们的决策，有时不会，这取决于他们的个性，以及在某种程度上我们之间的私人关系。
F．有选择的买家
考虑到我们的这么多家公司，此时或彼时，它们的上上下下，早已在我们的预料范围之中，这对我们并无影响。（只是在那些投资银行家们为推销而进行的路演中，公司的盈利才是不断上升的。）我们不在乎过程的颠簸，我们要的是最终的、整体的胜利结果。
A．伊索寓言和失效的灌木丛理论
我知道你们中的很多人并不关心我们的财务数字，取而代之的，是持有伯克希尔的股票一动不动，因为你们知道：（1）芒格和我将我们的绝大部分身家都放在了伯克希尔。（2）我们认真经营企业，这样，你们的损失或所得会与我们的损益按照同比例变动。（3）到目前为止，我们的记录还令人满意。
关键词：赚投资者的钱，还是为投资者赚钱
B．内在价值、账面价值和市场价格
一个公司的内在价值是其存续期间所产生现金流的折现值。
价值是一个估计值，而不是一个精确的数字，此外，这个估计值应该随着利率的变化或未来现金流的预期修改而改变。
尽管内在价值的计算非常重要，但它却无法精确计算，甚至计算起来经常是伴有严重的错误。公司未来的不确定性越高，计算内在价值的出错偏差可能性就越大。在这一点上，伯克希尔具有一些优势：我们拥有多元化的、相对稳定的现金流，同时拥有极佳的流动性和极少的债务。这些都意味着，与绝大多数公司相比，伯克希尔的内在价值更容易准确地计算。
C．透视盈余
我们将这个简短的——而且非常简单的会计课程提供给你们，是因为伯克希尔在保险领域的很多投资都属于第三类，即持股在20%以下的情况。这些投资对象中的很多公司派发的分红只是它们盈利的一小部分，这意味着，我们账面上记录的盈利仅仅是它们真实盈利的一小部分。尽管我们的财报盈利反映的仅仅是收到的分红，但是，我们真实的经济实力取决于这些公司的盈利，而不是分红。
因此，伯克希尔留存盈余的价值并不取决于我们持有100%、50%、20%或1%股份的公司如何留存这些盈余，而是取决于如何运用这些留存盈余以及其运用的效益。
我们宁愿将盈利交由只持股10%公司的优秀经理人好好发挥，也不愿意交给潜质有限的经理人管理，哪怕这个经理人是我们自己。
最为极端的明显例子是大都会/ABC公司，我们持有这家公司17%的股份，相应的盈利约为8300万美元。但是，根据GAAP，伯克希尔的损益表中只能反映收到的分红53万美元（它派发60万美元红利，其中含税7万美元），余下的8200多万美元的留存利润，会继续为我们工作，但却不被记录在我们公司的账上。
管理层和投资者都一样，必须明白，会计数字仅仅是企业估值的开始，而不是结尾。
对于公司管理水平高低的主要测试标准，是运用权益资本取得回报率的高低（没有过度的财务杠杆、会计花招等等），而不是每股盈利的持续增长。以我们的观点看，如果公司管理层和金融分析师们可以修订他们对于每股盈利以及每年变化的强调，那么，很多公司就可被股东和大众更好地理解。
后记
我们迄今为止的表现来源于“双重”收益：（1）我们投资组合中所持有的公司，在内在价值提升方面的杰出贡献。（2）当股市适当地“修正”这些杰出公司的价格时，可以提升它们相对于平庸公司的估值，我们因此实现的额外收益。
我们进一步向你们承诺，我们个人财富的绝大多数都会集中在伯克希尔股票上。我们不会让你将投资的钱放在我们这里，而自己却将钱放在别处。
本文转自： https://ljf.com/2023/04/21/1244/
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