巴菲特1998年致股东的信（英文版）

Here is the full text of Buffett's 1998 letter to shareholders:

In 1998, Berkshire's net worth increased by $25.9 billion, or 48.3% per share - both Class A and Class B. Over the last 34 years, since the present management took over, book value per share has grown from $19 to $37,801, a compound annual growth rate of 24.7%.

Let me explain further. Because our stock currently sells well above its book value, whenever we issue new shares, whether for a cash offering or in a merger, our book value per share is immediately increased significantly. But in reality, we don't earn an extra dime. The truth is that such transactions have no immediate effect on our per - share intrinsic value. As I and my partner Charlie Munger have repeatedly emphasized, what really matters is the increase in intrinsic value, not book value. Although Berkshire's intrinsic value grew substantially in 1998, it was nowhere near the 48.3% increase in book value. Nevertheless, I must stress that our current intrinsic value is still much higher than our book value. (For an explanation of these terms, please refer to the Owner's Manual, where we set out the business principles relevant to owners.)

Looking ahead to 1999, we have the best combination of businesses and managers in Berkshire's history. The two companies we acquired in 1998, General Re and Executive Jet, are first - rate in every respect (more on this later), and the performance of our existing businesses has exceeded my expectations. GEICO Insurance has once again been remarkable. Of course, there is also bad news. Several large public companies in which we have significant investments have experienced operational problems that we did not anticipate, causing the performance of our stock investment portfolio to lag behind the S&P 500 index. Fortunately, the problems of these companies are only temporary, and Charlie and I believe that their long - term prospects remain very optimistic.

In the last three annual reports, we have provided a table that we believe best estimates Berkshire's intrinsic value. In this year's updated table, we have included the figures for General Re on a pro - forma basis, as if the company had been owned by us since the beginning of the year. The first column shows the amount of our per - share investment (including cash and cash equivalents, but excluding securities held by the financial products unit). The second column shows Berkshire's operating earnings per share from its core businesses, after deducting interest and operating expenses (but before deducting income taxes and purchase - method accounting adjustments). This figure has already deducted all dividend income, interest income, and capital gains from the investments in the first column. In fact, this table shows what Berkshire would look like if it were split into two parts: a holding company that holds our investment portfolio, and a for - profit company that operates all of our businesses and bears all of the costs and profits and losses.

Nevertheless, Charlie and I still hope to increase the company's value at an average annual rate of 15% in the future. We think this is the maximum possible. In the future, we may exceed 15% in some years, but we may also fall far short of this standard, or even experience negative growth, pulling down our average growth rate. In addition, you should know that an average annual growth rate of 15% means that our net worth must increase by $58 billion in the next five years. This is impossible without a few high - profile deals. Small businesses like popcorn stands won't do. And the current market environment is not conducive to our search for suitable large - scale acquisitions. However, we can assure you that we will be fully committed.

No matter what the future holds, I can assure you that as long as I am around, I will keep at least 99% of my net worth in Berkshire. As for how long that will be? Well, if there were 625 taxpayers like Berkshire and General Re in the United States, all other American companies and 270 million American citizens would no longer have to pay any federal income tax or any other form of federal tax (including social security or real estate taxes). So Berkshire's shareholders can be said to be "contributing to the country".

For Charlie and me, writing large - denomination checks with a long string of zeros doesn't bother us at all. Berkshire, as an American company, and we, as American citizens, have been able to thrive in this great country, which is impossible in other countries. I think if we were born in other parts of the world, no matter how hard we tried to avoid taxes, we would not be as rich as we are now (including other aspects of life). From another perspective, we feel very lucky to be able to pay a large sum of money to the government, rather than relying on the government to support us from time to time because of our disability or unemployment.
Berkshire really contributed to the national treasury last year. For example, in last year's General Re merger, we paid $30 million to the SEC as a fee for issuing new shares, setting a new record in the history of the SEC. Charlie and I have great respect for the efforts of the SEC on behalf of all investors. We just wish there were other ways to express our respect.
Due to GEICO's excellent performance and profitability in 1998, the company's dividend distribution also increased accordingly. A total of $103 million, or 32.3% of salaries, was shared by 9,313 employees who had worked for the company for more than one year. This proportion is one of the highest among all companies in the United States. (In addition, employees can also indirectly benefit from the company - sponsored pension shareholding plan.)

I strongly recommend that you read the speech of Chairman Levitt (you can find it on the SEC's official website at www.sec.gov) and support his efforts to ensure that American companies provide shareholders with accurate financial reports. Chairman Levitt's work may be very difficult, but there is no more important task.

Our website, www.berkshirehathaway.com, has become the most important source of information about our company. Unless otherwise requested, we will only release our quarterly reports through the website. Of course, we will still mail the annual report to shareholders as usual, which also includes an application form for receiving the 1999 quarterly reports.
When preparing the report, Charlie and I adhere to two simple principles: 1) We hope to provide you with all the information that we would like you to provide to us if our positions were reversed; 2) We hope that this information can reach everyone at the same time. The Internet has made it easier for us to achieve the second goal.
In another part of his speech, Chairman Levitt expressed regret about what he called "selective disclosure". His comment hit the nail on the head. Nowadays, many companies clearly favor Wall Street analysts and institutional investors, and their actions have gone beyond the bounds of fairness and reasonableness. This behavior puts the vast majority of other shareholders and the investing public at a disadvantage compared to the former.
At Berkshire, even the smallest shareholder who holds one Class B share is treated no differently from large institutional investors. Of course, we also welcome large institutional investors to become our shareholders. In fact, through the acquisition of General Re, many institutional investors have joined us. We also hope that these new shareholders will find that the shareholder manual and annual report we provide are more useful and inspiring than the information provided by the public relations departments of other companies. However, if shareholders or analysts want the company's earnings forecast, we can only ask them to directly refer to our publicly available documents.
This year, we plan to release the quarterly reports on the company's website on May 14, August 13, and November 12, respectively. We also plan to release the annual report on the website on Saturday, March 11, 2000, and mail it to all shareholders at the same time.
We will also immediately release relevant news on our website. That is to say, you don't need to rely on second - hand news digested by the media. You can easily read the original content directly through your computer at home.
Although my computer skills are quite poor, I am still pleased to report to you that our subsidiaries, including GEICO, Borsheims Jewelry, See's Candies, and the Buffalo News, are now engaged in a large amount of e - commerce activities through the Internet. We have also started selling relevant annuity products on the website. This business is mainly developed by Ajit Jain, who has contributed a large amount of profits to Berkshire in the past ten years. Whenever Charlie and I take a break, Ajit is always thinking about ways to increase Berkshire's value.

Approximately 97.5% of the outstanding shares participated in the 1998 Shareholder - Designated Contributions Program, and the total amount of donations was...

We give each manager a simple mission: Run your business as if: 1) you own 100% of it; 2) it is the only asset in the world that you and your family have or will ever have; and 3) you can't sell or merge it for at least a century. As a corollary, we tell them they should not let any of their decisions be affected even slightly by accounting considerations. We want our managers to think about what counts, not how it will be counted2.

Buffett also spent a significant amount of time writing about the problems with accounting and financial reporting2. He slammed the managements that purposefully work at manipulating numbers and deceiving investors2. "The scandal isn't in what's done that's illegal, but rather in what's legal," he said2. He noted that the distortion du jour is the "restructuring charge," an accounting entry that can, of course, be legitimate but that too often is a device for manipulating earnings2.

Indeed, in 1998, the leveraged and derivatives - heavy activities of a single hedge fund, Long - Term Capital Management, caused the Federal Reserve anxieties so severe that it hastily orchestrated a rescue effort3. In later Congressional testimony, Fed officials acknowledged that, had they not intervened, the outstanding trades of LTCM — a firm unknown to the general public and employing only a few hundred people — could well have posed a serious threat to the stability of American markets3.

In 1998, we acquired two outstanding companies, General Re and Executive Jet. General Re is a world - class reinsurance company, and Executive Jet is the largest operator in the fractional - ownership aircraft industry. We are very pleased to have them join the Berkshire family.

Our experience with GEICO further proves the effectiveness of Berkshire's management approach. Tony Nicely, the manager of GEICO, is doing an excellent job. He has built a high - quality team and is constantly expanding the company's market share while maintaining underwriting discipline. We will continue to support GEICO's development and help it achieve greater success.

Finally, I would like to thank all of our shareholders for their continued support and trust. We will continue to work hard to increase the value of Berkshire and provide shareholders with better returns.

Warren E. Buffett
Chairman of the Board

If you want to know more details, you can refer to the original letter on relevant official websites.