以下是1962年巴菲特致股东的信英文版全文：
To the Partners
Principal Items of the Partnership Agreement
Our total net worth increased approximately 5.5% for the ten months of 1962. As was the case last year, this performance is partially a function of our concentrated position in a non-publicly-owned business – Dempster Mill. As Dempster is carried at $50 per share in our partnership accounts, it is not reflected in the market price of the partnership units. When we refer to “general market” in the following analysis, we normally mean the index as measured by the Dow-Jones Industrial Average. The Dow-Jones began the year at 731, bottomed at 535 in June, and closed out 1962 at 652. The 1960 close was 616. The market, therefore, has experienced much activity during the past two years, but we still find ourselves in a market not too far removed from that of 1959 and 1960.
Yearly Results:
| Over-all Results Partnership Limited Partners | |:---|:---|:---| | Year from Dow | Results (1) | Results (2) | | 1957 – 8.4% | +10.4% | 9.3% | | 1958 +38.5 | +40.9 | 32.2 | | 1959 +20.0 | +25.9 | 20.9 | | 1960 – 6.2 | +22.8 | 18.6 | | 1961 +22.4 | +45.9 | 35.9 | | 1962 – 7.6 | +13.9 | 11.9 |
Compound Annual Rate of Return:
| 8.3 | 26.0 | 21.1 |
Results of Other Investment Operations
Over the years, I have frequently stated that I would expect us to have a better relative performance in “poor” market years and a poorer relative performance in “good” market years. Our experience in 1962 certainly lived up to this prediction. As indicated in the yearly results table above, we also had a good relative performance in the 1957 bear market. The following table shows the results of the two largest open-end funds and the two largest closed-end funds. The open-end funds are Mass. Investors Trust and Stock Fund of America. The closed-end funds are Tri-Continental and American Investment Co.
| YEARLY RESULTS |
|---|
| Yr Mass. Inv. Investors |
| Trust (1) Stock (1) Lehman (2) Tri-Cont. (2) Dow Partners |
| 57 -11.4% -12.4% -11.4% – 2.4% – 8.4% +9.3 |
| 58 +42.7 +47.5 +40.8 +33.2 +38.5 +32.2 |
| 59 +9.0 +10.3 +8.1 +8.4 +20.0 +20.9 |
| 60 – 1.0 -0.6 +2.5 +2.8 – 6.2 +18.6 |
| 61 +25.6 +24.9 +23.6 +22.5 +22.4 +35.9 |
| 62 – 9.8 -13.4 -13.0 -10.0 – 7.6 +11.9 |
The Joys of Compounding
| 5% | 10% | 15% | |
|---|---|---|---|
| 10 years | $162,889 | $259,374 | $404,553 |
| 20 years | 265,328 | 672,748 | 1,636,640 |
| 30 years | 432,191 | 1,744,930 | 6,621,140 |
The above table shows the growth of $100,000 at 5%, 10%, and 15% compound interest for 10, 20, and 30 years.
Our Operating Methods (As Described in Previous Letters)
Dempster Mill Manufacturing Company
In 1962, our most dramatic out-performance related to our control position in Dempster Mill Manufacturing Company. Dempster manufactures farm equipment in the sub-$1,000 price range, primarily consisting of irrigation equipment. The company was operating at a loss, with low inventory turnover and stagnant sales. We acquired a controlling interest in Dempster in August 1961, at an average price of approximately $28 per share. When you purchase a controlling interest in a company, the market price becomes irrelevant; the critical factor is the intrinsic value of the business.
After taking control, we attempted to reduce costs, cut general and administrative expenses, and improve capital efficiency. However, all of these efforts proved futile. Six months later, we realized that more drastic changes were necessary.
A friend introduced us to Harry Bottle, and with his help, everything fell into place. He not only achieved our goals but also delivered several pleasant surprises.
The company currently holds securities valued at approximately $35 per share, and the manufacturing operations are valued at about $16 per share.
Warren Buffett
January 18, 1963
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巴菲特 1962年致股东的信（中文版）
