| Annual Percentage Change | ||
| Year | in Per-Share Market Value of Berkshire | in S&P 500 with Dividends Included |
| 1965 | 49.5 | 10.0 |
| 1966 | (3.4) | (11.7) |
| 1967 | 13.3 | 30.9 |
| 1968 | 77.8 | 11.0 |
| 1969 | 19.4 | (8.4) |
| 1970 | (4.6) | 3.9 |
| 1971 | 80.5 | 14.6 |
| 1972 | 8.1 | 18.9 |
| 1973 | (2.5) | (14.8) |
| 1974 | (48.7) | (26.4) |
| 1975 | 2.5 | 37.2 |
| 1976 | 129.3 | 23.6 |
| 1977 | 46.8 | (7.4) |
| 1978 | 14.5 | 6.4 |
| 1979 | 102.5 | 18.2 |
| 1980 | 32.8 | 32.3 |
| 1981 | 31.8 | (5.0) |
| 1982 | 38.4 | 21.4 |
| 1983 | 69.0 | 22.4 |
| 1984 | (2.7) | 6.1 |
| 1985 | 93.7 | 31.6 |
| 1986 | 14.2 | 18.6 |
| 1987 | 4.6 | 5.1 |
| 1988 | 59.3 | 16.6 |
| 1989 | 84.6 | 31.7 |
| 1990 | (23.1) | (3.1) |
| 1991 | 35.6 | 30.5 |
| 1992 | 29.8 | 7.6 |
| 1993 | 38.9 | 10.1 |
| 1994 | 25.0 | 1.3 |
| 1995 | 57.4 | 37.6 |
| 1996 | 6.2 | 23.0 |
| 1997 | 34.9 | 33.4 |
| 1998 | 52.2 | 28.6 |
| 1999 | (19.9) | 21.0 |
| 2000 | 26.6 | (9.1) |
| 2001 | 6.5 | (11.9) |
| 2002 | (3.8) | (22.1) |
| 2003 | 15.8 | 28.7 |
| 2004 | 4.3 | 10.9 |
| 2005 | 0.8 | 4.9 |
| 2006 | 24.1 | 15.8 |
| 2007 | 28.7 | 5.5 |
| 2008 | (31.8) | (37.0) |
| 2009 | 2.7 | 26.5 |
| 2010 | 21.4 | 15.1 |
| 2011 | (4.7) | 2.1 |
| 2012 | 16.8 | 16.0 |
| 2013 | 32.7 | 32.4 |
| 2014 | 27.0 | 13.7 |
| 2015 | (12.5) | 1.4 |
| 2016 | 23.4 | 12.0 |
| 2017 | 21.9 | 21.8 |
| 2018 | 2.8 | (4.4) |
| 2019 | 11.0 | 31.5 |
| Compounded Annual Gain – 1965-2019 | 20.3% | 10.0% |
| Overall Gain – 1964-2019 | 2,744,062% | 19,784% |
Note: Data are for calendar years with these exceptions: 1965 and 1966, year ended 9/30; 1967, 15 months ended 12/31.
BERKSHIRE HATHAWAY INC.
To the Shareholders of Berkshire Hathaway Inc.:
Berkshire earned \$81.4 billion in 2019 according to generally accepted accounting principles (commonly called “GAAP”). The components of that figure are \$24 billion of operating earnings, \$3.7 billion of realized capital gains and a \$53.7 billion gain from an increase in the amount of net unrealized capital gains that exist in the stocks we hold. Each of those components of earnings is stated on an after-tax basis.
That \$53.7 billion gain requires comment. It resulted from a new GAAP rule, imposed in 2018, that requires a company holding equity securities to include in earnings the net change in the unrealized gains and losses of those securities. As we stated in last year's letter, neither Charlie Munger, my partner in managing Berkshire, nor I agree with that rule.
The adoption of the rule by the accounting profession, in fact, was a monumental shift in its own thinking. Before 2018, GAAP insisted – with an exception for companies whose business was to trade securities – that unrealized gains within a portfolio of stocks were never to be included in earnings and unrealized losses were to be included only if they were deemed “other than temporary.” Now, Berkshire must enshrine in each quarter’s bottom line – a key item of news for many investors, analysts and commentators – every up and down movement of the stocks it owns, however capricious those fluctuations may be.
Berkshire’s 2018 and 2019 years glaringly illustrate the argument we have with the new rule. In 2018, a down year for the stock market, our net unrealized gains decreased by \$20.6 billion, and we therefore reported GAAP earnings of only \$4 billion. In 2019, rising stock prices increased net unrealized gains by the aforementioned \$53.7 billion, pushing GAAP earnings to the \$81.4 billion reported at the beginning of this letter. Those market gyrations led to a crazy 1,900% increase in GAAP earnings!
Meanwhile, in what we might call the real world, as opposed to accounting-land, Berkshire's equity holdings averaged about \$200 billion during the two years, and the intrinsic value of the stocks we own grew steadily and substantially throughout the period.
Charlie and I urge you to focus on operating earnings – which were little changed in 2019 – and to ignore both quarterly and annual gains or losses from investments, whether these are realized or unrealized.
Our advising that in no way diminishes the importance of these investments to Berkshire. Over time, Charlie and I expect our equity holdings – as a group – to deliver major gains, albeit in an unpredictable and highly irregular manner. To see why we are optimistic, move on to the next discussion.
The Power of Retained Earnings
In 1924, Edgar Lawrence Smith, an obscure economist and financial advisor, wrote Common Stocks as Long Term Investments, a slim book that changed the investment world. Indeed, writing the book changed Smith himself, forcing him to reassess his own investment beliefs.
Going in, he planned to argue that stocks would perform better than bonds during inflationary periods and that bonds would deliver superior returns during deflationary times. That seemed sensible enough. But Smith was in for a shock.
His book began, therefore, with a confession: “These studies are the record of a failure – the failure of facts to sustain a preconceived theory.” Luckily for investors, that failure led Smith to think more deeply about how stocks should be evaluated.
For the crux of Smith's insight, I will quote an early reviewer of his book, none other than John Maynard Keynes: “I have kept until last what is perhaps Mr. Smith’s most important, and is certainly his most novel, point. Well-managed industrial companies do not, as a rule, distribute to the shareholders the whole of their earned profits. In good years, if not in all years, they retain a part of their profits and put them back into the business. Thus there is an element of compound interest (Keynes’ italics) operating in favour of a sound industrial investment. Over a period of years, the real value of the property of a sound industrial is increasing at compound interest, quite apart from the dividends paid out to the shareholders.”
And with that sprinkling of holy water, Smith was no longer obscure.
It's difficult to understand why retained earnings were unappreciated by investors before Smith's book was published. After all, it was no secret that mind-boggling wealth had earlier been amassed by such titans as Carnegie, Rockefeller and Ford, all of whom had retained a huge portion of their business earnings to fund growth and produce ever-greater profits. Throughout America, also, there had long been small-time capitalists who became rich following the same playbook.
Nevertheless, when business ownership was sliced into small pieces – “stocks” – buyers in the pre-Smith years usually thought of their shares as a short-term gamble on market movements. Even at their best, stocks were considered speculations. Gentlemen preferred bonds.
Though investors were slow to wise up, the math of retaining and reinvesting earnings is now well understood. Today, school children learn what Keynes termed “novel”: combining savings with compound interest works wonders.
* * * * * * * * * * * *
At Berkshire, Charlie and I have long focused on using retained earnings advantageously. Sometimes this job has been easy – at other times, more than difficult, particularly when we began working with huge and ever-growing sums of money.
In our deployment of the funds we retain, we first seek to invest in the many and diverse businesses we already own. During the past decade, Berkshire’s depreciation charges have aggregated \$65 billion whereas the company’s internal investments in property, plant and equipment have totaled \$121 billion. Reinvestment in productive operational assets will forever remain our top priority.
In addition, we constantly seek to buy new businesses that meet three criteria. First, they must earn good returns on the net tangible capital required in their operation. Second, they must be run by able and honest managers. Finally, they must be available at a sensible price.
When we spot such businesses, our preference would be to buy 100% of them. But the opportunities to make major acquisitions possessing our required attributes are rare. Far more often, a fickle stock market serves up opportunities for us to buy large, but non-controlling, positions in publicly-traded companies that meet our standards.
Whichever way we go – controlled companies or only a major stake by way of the stock market – Berkshire’s financial results from the commitment will in large part be determined by the future earnings of the business we have purchased. Nonetheless, there is between the two investment approaches a hugely important accounting difference, essential for you to understand.
In our controlled companies, (defined as those in which Berkshire owns more than 50% of the shares), the earnings of each business flow directly into the operating earnings that we report to you. What you see is what you get.
In the non-controlled companies, in which we own marketable stocks, only the dividends that Berkshire receives are recorded in the operating earnings we report. The retained earnings? They're working hard and creating much added value, but not in a way that deposits those gains directly into Berkshire's reported earnings.
At almost all major companies other than Berkshire, investors would not find what we'll call this “non-recognition of earnings” important. For us, however, it is a standout omission, of a magnitude that we lay out for you below.
Here, we list our 10 largest stock-market holdings of businesses. The list distinguishes between their earnings that are reported to you under GAAP accounting – these are the dividends Berkshire receives from those 10 investees – and our share, so to speak, of the earnings the investees retain and put to work. Normally, those companies use retained earnings to expand their business and increase its efficiency. Or sometimes they use those funds to repurchase significant portions of their own stock, an act that enlarges Berkshire’s share of the company’s future earnings.
| Company | Yearend Ownership | Berkshire’s Share (in millions) | |
| Dividends(1) | Retained Earnings(2) | ||
| American Express | 18.7% | $ 261 | $ 998 |
| Apple | 5.7% | 773 | 2,519 |
| Bank of America | 10.7% | 682 | 2,167 |
| Bank of New York Mellon | 9.0% | 101 | 288 |
| Coca-Cola | 9.3% | 640 | 194 |
| Delta Airlines | 11.0% | 114 | 416 |
| J.P. Morgan Chase | 1.9% | 216 | 476 |
| Moody’s | 13.1% | 55 | 137 |
| U.S. Bancorp | 9.7% | 251 | 407 |
| Wells Fargo | 8.4% | 705 | 730 |
| Total | $3,798 | $8,332 | |
(1) Based on current annual rate.
(2) Based on 2019 earnings minus common and preferred dividends paid.
Obviously, the realized gains we will eventually record from partially owning each of these companies will not neatly correspond to “our” share of their retained earnings. Sometimes, alas, retentions produce nothing. But both logic and our past experience indicate that from the group we will realize capital gains at least equal to – and probably better than – the earnings of ours that they retained. (When we sell shares and realize gains, we will pay income tax on the gain at whatever rate then prevails. Currently, the federal rate is 21%.)
It is certain that Berkshire's rewards from these 10 companies, as well as those from our many other equity holdings, will manifest themselves in a highly irregular manner. Periodically, there will be losses, sometimes company-specific, sometimes linked to stock-market swoons. At other times – last year was one of those – our gain will be outsized. Overall, the retained earnings of our investees are certain to be of major importance in the growth of Berkshire's value.
Mr. Smith got it right.
Non-Insurance Operations
Tom Murphy, a valued director of Berkshire and an all-time great among business managers, long ago gave me some important advice about acquisitions: “To achieve a reputation as a good manager, just be sure you buy good businesses.”
Over the years Berkshire has acquired many dozens of companies, all of which I initially regarded as “good businesses.” Some, however, proved disappointing; more than a few were outright disasters. A reasonable number, on the other hand, have exceeded my hopes.
In reviewing my uneven record, I’ve concluded that acquisitions are similar to marriage: They start, of course, with a joyful wedding – but then reality tends to diverge from pre-nuptial expectations. Sometimes, wonderfully, the new union delivers bliss beyond either party’s hopes. In other cases, disillusionment is swift. Applying those images to corporate acquisitions, I’d have to say it is usually the buyer who encounters unpleasant surprises. It’s easy to get dreamy-eyed during corporate courtships.
Pursuing that analogy, I would say that our marital record remains largely acceptable, with all parties happy with the decisions they made long ago. Some of our tie-ups have been positively idyllic. A meaningful number, however, have caused me all too quickly to wonder what I was thinking when I proposed.
Fortunately, the fallout from many of my errors has been reduced by a characteristic shared by most businesses that disappoint: As the years pass, the “poor” business tends to stagnate, thereupon entering a state in which its operations require an ever-smaller percentage of Berkshire’s capital. Meanwhile, our “good” businesses often tend to grow and find opportunities for investing additional capital at attractive rates. Because of these contrasting trajectories, the assets employed at Berkshire’s winners gradually become an expanding portion of our total capital.
As an extreme example of those financial movements, witness Berkshire's original textile business. When we acquired control of the company in early 1965, this beleaguered operation required nearly all of Berkshire's capital. For some time, therefore, Berkshire's non-earning textile assets were a huge drag on our overall returns. Eventually, though, we acquired a spread of “good” businesses, a shift that by the early 1980s caused the dwindling textile operation to employ only a tiny portion of our capital.
Today, we have most of your money deployed in controlled businesses that achieve good-to-excellent returns on the net tangible assets each requires for its operations. Our insurance business has been the superstar. That operation has special characteristics that give it a unique metric for calibrating success, one unfamiliar to many investors. We will save that discussion for the next section.
In the paragraphs that follow, we group our wide array of non-insurance businesses by size of earnings, after interest, depreciation, taxes, non-cash compensation, restructuring charges – all of those pesky, but very real, costs that CEOs and Wall Street sometimes urge investors to ignore. Additional information about these operations can be found on pages K-6 – K-21 and pages K-40 – K-52.
Our BNSF railroad and Berkshire Hathaway Energy (“BHE”) – the two lead dogs of Berkshire’s non-insurance group – earned a combined \$8.3 billion in 2019 (including only our 91% share of BHE), an increase of 6% from 2018.
Our next five non-insurance subsidiaries, as ranked by earnings (but presented here alphabetically), Clayton Homes, International Metalworking, Lubrizol, Marmon and Precision Castparts, had aggregate earnings in 2019 of \$4.8 billion, little changed from what these companies earned in 2018.
The next five, similarly ranked and listed (Berkshire Hathaway Automotive, Johns Manville, NetJets, Shaw and TTI) earned \$1.9 billion last year, up from the \$1.7 billion earned by this tier in 2018.
The remaining non-insurance businesses that Berkshire owns – and there are many – had aggregate earnings of \$2.7 billion in 2019, down from \$2.8 billion in 2018.
Our total net income in 2019 from the non-insurance businesses we control amounted to \$17.7 billion, an increase of 3% from the \$17.2 billion this group earned in 2018. Acquisitions and dispositions had almost no net effect on these results.
* * * * * * * * * * * *
I must add one final item that underscores the wide scope of Berkshire's operations. Since 2011, we have owned Lubrizol, an Ohio-based company that produces and markets oil additives throughout the world. On September 26, 2019, a fire originating at a small next-door operation spread to a large French plant owned by Lubrizol.
The result was significant property damage and a major disruption in Lubrizol's business. Even so, both the company's property loss and business-interruption loss will be mitigated by substantial insurance recoveries that Lubrizol will receive.
But, as the late Paul Harvey was given to saying in his famed radio broadcasts, “Here’s the rest of the story.” One of the largest insurers of Lubrizol was a company owned by . . . uh, Berkshire.
In Matthew 6:3, the Bible instructs us to “Let not the left hand know what the right hand doeth.” Your chairman has clearly behaved as ordered.
Property/Casualty Insurance
Our property/casualty (“P/C”) insurance business has been the engine propelling Berkshire’s growth since 1967, the year we acquired National Indemnity and its sister company, National Fire & Marine, for \$8.6 million. Today, National Indemnity is the largest P/C company in the world as measured by net worth. Insurance is a business of promises, and Berkshire’s ability to honor its commitments is unmatched.
One reason we were attracted to the P/C business was the industry's business model: P/C insurers receive premiums upfront and pay claims later. In extreme cases, such as claims arising from exposure to asbestos, or severe workplace accidents, payments can stretch over many decades.
This collect-now, pay-later model leaves P/C companies holding large sums – money we call “float” – that will eventually go to others. Meanwhile, insurers get to invest this float for their own benefit. Though individual policies and claims come and go, the amount of float an insurer holds usually remains fairly stable in relation to premium volume. Consequently, as our business grows, so does our float. And how it has grown, as the following table shows:
| Year | Float (in millions) |
| 1970 | $ 39 |
| 1980 | 237 |
| 1990 | 1,632 |
| 2000 | 27,871 |
| 2010 | 65,832 |
| 2018 | 122,732 |
| 2019 | 129,423 |
We may in time experience a decline in float. If so, the decline will be very gradual – at the outside no more than 3% in any year. The nature of our insurance contracts is such that we can never be subject to immediate or near-term demands for sums that are of significance to our cash resources. That structure is by design and is a key component in the unequaled financial strength of our insurance companies. That strength will never be compromised.
If our premiums exceed the total of our expenses and eventual losses, our insurance operation registers an underwriting profit that adds to the investment income the float produces. When such a profit is earned, we enjoy the use of free money – and, better yet, get paid for holding it.
For the P/C industry as a whole, the financial value of float is now far less than it was for many years. That's because the standard investment strategy for almost all P/C companies is heavily – and properly – skewed toward high-grade bonds. Changes in interest rates therefore matter enormously to these companies, and during the last decade the bond market has offered pathetically low rates.
Consequently, insurers suffered, as year by year they were forced – by maturities or issuer-call provisions – to recycle their “old” investment portfolios into new holdings providing much lower yields. Where once these insurers could safely earn 5 cents or 6 cents on each dollar of float, they now take in only 2 cents or 3 cents (or even less if their operations are concentrated in countries mired in the never-never land of negative rates).
Some insurers may try to mitigate their loss of revenue by buying lower-quality bonds or non-liquid “alternative” investments promising higher yields. But those are dangerous games and activities that most institutions are ill-equipped to play.
Berkshire's situation is more favorable than that of insurers in general. Most important, our unrivaled mountain of capital, abundance of cash and a huge and diverse stream of non-insurance earnings allow us far more investment flexibility than is generally available to other companies in the industry. The many choices open to us are always advantageous – and sometimes have presented us with major opportunities.
Our P/C companies have meanwhile had an excellent underwriting record. Berkshire has now operated at an underwriting profit for 16 of the last 17 years, the exception being 2017, when our pre-tax loss was a whopping \$3.2 billion. For the entire 17-year span, our pre-tax gain totaled \$27.5 billion, of which \$400 million was recorded in 2019.
That record is no accident: Disciplined risk evaluation is the daily focus of our insurance managers, who know that the rewards of float can be drowned by poor underwriting results. All insurers give that message lip service. At Berkshire it is a religion, Old Testament style.
As I have repeatedly done in the past, I will emphasize now that happy outcomes in insurance are far from a sure thing: We will most certainly not have an underwriting profit in 16 of the next 17 years. Danger always lurks.
Mistakes in assessing insurance risks can be huge and can take many years – even decades – to surface and ripen. (Think asbestos.) A major catastrophe that will dwarf hurricanes Katrina and Michael will occur – perhaps tomorrow, perhaps many decades from now. “The Big One” may come from a traditional source, such as wind or earthquake, or it may be a total surprise involving, say, a cyber attack having disastrous consequences beyond anything insurers now contemplate. When such a mega-catastrophe strikes, Berkshire will get its share of the losses and they will be big – very big. Unlike many other insurers, however, handling the loss will not come close to straining our resources, and we will be eager to add to our business the next day.
* * * * * * * * * * * *
Close your eyes for a moment and try to envision a locale that might spawn a dynamic P/C insurer. New York? London? Silicon Valley?
How about Wilkes-Barre?
Late in 2012, Ajit Jain, the invaluable manager of our insurance operations, called to tell me that he was buying a tiny company – GUARD Insurance Group – in that small Pennsylvania city for \$221 million (roughly its net worth at the time). He added that Sy Foguel, GUARD's CEO, was going to be a star at Berkshire. Both GUARD and Sy were new names to me.
Bingo and bingo: In 2019, GUARD had premium volume of \$1.9 billion, up 379% since 2012, and also delivered a satisfactory underwriting profit. Since joining Berkshire, Sy has led the company into both new products and new regions of the country and has increased GUARD's float by 265%.
In 1967, Omaha seemed an unlikely launching pad for a P/C giant. Wilkes-Barre may well deliver a similar surprise.
Berkshire Hathaway Energy
Berkshire Hathaway Energy is now celebrating its $20^{\text{th}}$ year under our ownership. That anniversary suggests that we should be catching up with the company's accomplishments.
We'll start with the topic of electricity rates. When Berkshire entered the utility business in 2000, purchasing $76\%$ of BHE, the company's residential customers in Iowa paid an average of 8.8 cents per kilowatt-hour (kWh). Prices for residential customers have since risen less than $1\%$ a year, and we have promised that there will be no base rate price increases through 2028. In contrast, here's what is happening at the other large investor-owned Iowa utility: Last year, the rates it charged its residential customers were $61\%$ higher than BHE's. Recently, that utility received a rate increase that will widen the gap to $70\%$ .
The extraordinary differential between our rates and theirs is largely the result of our huge accomplishments in converting wind into electricity. In 2021, we expect BHE's operation to generate about 25.2 million megawatt-hours of electricity (MWh) in Iowa from wind turbines that it both owns and operates. That output will totally cover the annual needs of its Iowa customers, which run to about 24.6 million MWh. In other words, our utility will have attained wind self-sufficiency in the state of Iowa.
In still another contrast, that other Iowa utility generates less than $10\%$ of its power from wind. Furthermore, we know of no other investor-owned utility, wherever located, that by 2021 will have achieved a position of wind self-sufficiency. In 2000, BHE was serving an agricultural-based economy; today, three of its five largest customers are high-tech giants. I believe their decisions to site plants in Iowa were in part based upon BHE's ability to deliver renewable, low-cost energy.
Of course, wind is intermittent, and our blades in Iowa turn only part of the time. In certain periods, when the air is still, we look to our non-wind generating capacity to secure the electricity we need. At opposite times, we sell the excess power that wind provides us to other utilities, serving them through what's called “the grid.” The power we sell them supplants their need for a carbon resource – coal, say, or natural gas.
Berkshire Hathaway now owns 91% of BHE in partnership with Walter Scott, Jr. and Greg Abel. BHE has never paid Berkshire Hathaway a dividend since our purchase and has, as the years have passed, retained \$28 billion of earnings. That pattern is an outlier in the world of utilities, whose companies customarily pay big dividends – sometimes reaching, or even exceeding, 80% of earnings. Our view: The more we can invest, the more we like it.
Today, BHE has the operating talent and experience to manage truly huge utility projects – requiring investments of \$100 billion or more – that could support infrastructure benefitting our country, our communities and our shareholders. We stand ready, willing and able to take on such opportunities.
Investments
Below we list our fifteen common stock investments that at yearend had the largest market value. We exclude our Kraft Heinz holding – 325,442,152 shares – because Berkshire is part of a control group and therefore must account for this investment on the “equity” method. On its balance sheet, Berkshire carries the Kraft Heinz holding at a GAAP figure of \$13.8 billion, an amount that represents Berkshire’s share of the audited net worth of Kraft Heinz at December 31, 2019. Please note, though, that the market value of our shares on that date was only \$10.5 billion.
| Shares* | Company | Percentage of Company Owned | 12/31/19 Cost** | Market |
| (in millions) | ||||
| 151,610,700 | American Express Company | 18.7 | $ 1,287 | $ 18,874 |
| 250,866,566 | Apple Inc. | 5.7 | 35,287 | 73,667 |
| 947,760,000 | Bank of America Corp. | 10.7 | 12,560 | 33,380 |
| 81,488,751 | The Bank of New York Mellon Corp. | 9.0 | 3,696 | 4,101 |
| 5,426,609 | Charter Communications, Inc. | 2.6 | 944 | 2,632 |
| 400,000,000 | The Coca-Cola Company | 9.3 | 1,299 | 22,140 |
| 70,910,456 | Delta Air Lines, Inc. | 11.0 | 3,125 | 4,147 |
| 12,435,814 | The Goldman Sachs Group, Inc. | 3.5 | 890 | 2,859 |
| 60,059,932 | JPMorgan Chase & Co. | 1.9 | 6,556 | 8,372 |
| 24,669,778 | Moody’s Corporation | 13.1 | 248 | 5,857 |
| 46,692,713 | Southwest Airlines Co. | 9.0 | 1,940 | 2,520 |
| 21,938,642 | United Continental Holdings Inc. | 8.7 | 1,195 | 1,933 |
| 149,497,786 | U.S. Bancorp | 9.7 | 5,709 | 8,864 |
| 10,239,160 | Visa Inc. | 0.6 | 349 | 1,924 |
| 345,688,918 | Wells Fargo & Company | 8.4 | 7,040 | 18,598 |
| Others*** | 28,215 | 38,159 | ||
| Total Equity Investments Carried at Market | $110,340 | $248,027 | ||
* Excludes shares held by pension funds of Berkshire subsidiaries.
** This is our actual purchase price and also our tax basis.
*** Includes \$10 billion investment in Occidental Petroleum Corporation consisting of preferred stock and warrants to buy common stock.
Charlie and I do not view the \$248 billion detailed above as a collection of stock market wagers – dalliances to be terminated because of downgrades by “the Street,” an earnings “miss,” expected Federal Reserve actions, possible political developments, forecasts by economists or whatever else might be the subject du jour.
What we see in our holdings, rather, is an assembly of companies that we partly own and that, on a weighted basis, are earning more than 20% on the net tangible equity capital required to run their businesses. These companies, also, earn their profits without employing excessive levels of debt.
Returns of that order by large, established and understandable businesses are remarkable under any circumstances. They are truly mind-blowing when compared to the returns that many investors have accepted on bonds over the last decade - $2 \frac{1}{2}\%$ or even less on 30-year U.S. Treasury bonds, for example.
Forecasting interest rates has never been our game, and Charlie and I have no idea what rates will average over the next year, or ten or thirty years. Our perhaps jaundiced view is that the pundits who opine on these subjects reveal, by that very behavior, far more about themselves than they reveal about the future.
What we can say is that if something close to current rates should prevail over the coming decades and if corporate tax rates also remain near the low level businesses now enjoy, it is almost certain that equities will over time perform far better than long-term, fixed-rate debt instruments.
That rosy prediction comes with a warning: Anything can happen to stock prices tomorrow. Occasionally, there will be major drops in the market, perhaps of 50% magnitude or even greater. But the combination of The American Tailwind, about which I wrote last year, and the compounding wonders described by Mr. Smith, will make equities the much better long-term choice for the individual who does not use borrowed money and who can control his or her emotions. Others? Beware!
The Road Ahead
Three decades ago, my Midwestern friend, Joe Rosenfield, then in his 80s, received an irritating letter from his local newspaper. In blunt words, the paper asked for biographical data it planned to use in Joe's obituary. Joe didn't respond. So? A month later, he got a second letter from the paper, this one labeled “URGENT.”
Charlie and I long ago entered the urgent zone. That's not exactly great news for us. But Berkshire shareholders need not worry: Your company is $100\%$ prepared for our departure.
The two of us base our optimism upon five factors. First, Berkshire's assets are deployed in an extraordinary variety of wholly or partly-owned businesses that, averaged out, earn attractive returns on the capital they use. Second, Berkshire's positioning of its “controlled” businesses within a single entity endows it with some important and enduring economic advantages. Third, Berkshire's financial affairs will unfailingly be managed in a manner allowing the company to withstand external shocks of an extreme nature. Fourth, we possess skilled and devoted top managers for whom running Berkshire is far more than simply having a high-paying and/or prestigious job. Finally, Berkshire's directors – your guardians – are constantly focused on both the welfare of owners and the nurturing of a culture that is rare among giant corporations. (The value of this culture is explored in Margin of Trust, a new book by Larry Cunningham and Stephanie Cuba that will be available at our annual meeting.)
Charlie and I have very pragmatic reasons for wanting to assure Berkshire's prosperity in the years following our exit: The Mungers have Berkshire holdings that dwarf any of the family's other investments, and I have a full $99\%$ of my net worth lodged in Berkshire stock. I have never sold any shares and have no plans to do so. My only disposal of Berkshire shares, aside from charitable donations and minor personal gifts, took place in 1980, when I, along with other Berkshire stockholders who elected to participate, exchanged some of our Berkshire shares for the shares of an Illinois bank that Berkshire had purchased in 1969 and that, in 1980, needed to be offloaded because of changes in the bank holding company law.
Today, my will specifically directs its executors – as well as the trustees who will succeed them in administering my estate after the will is closed – not to sell any Berkshire shares. My will also absolves both the executors and the trustees from liability for maintaining what obviously will be an extreme concentration of assets.
The will goes on to instruct the executors – and, in time, the trustees – to each year convert a portion of my A shares into B shares and then distribute the Bs to various foundations. Those foundations will be required to deploy their grants promptly. In all, I estimate that it will take 12 to 15 years for the entirety of the Berkshire shares I hold at my death to move into the market.
Absent my will's directive that all my Berkshire shares should be held until their scheduled distribution dates, the “safe” course for both my executors and trustees would be to sell the Berkshire shares under their temporary control and reinvest the proceeds in U.S. Treasury bonds with maturities matching the scheduled dates for distributions. That strategy would leave the fiduciaries immune from both public criticism and the possibility of personal liability for failure to act in accordance with the “prudent man” standard.
I myself feel comfortable that Berkshire shares will provide a safe and rewarding investment during the disposal period. There is always a chance – unlikely, but not negligible – that events will prove me wrong. I believe, however, that there is a high probability that my directive will deliver substantially greater resources to society than would result from a conventional course of action.
Key to my “Berkshire-only” instructions is my faith in the future judgment and fidelity of Berkshire directors. They will regularly be tested by Wall Streeters bearing fees. At many companies, these super-salesmen might win. I do not, however, expect that to happen at Berkshire.
Boards of Directors
In recent years, both the composition of corporate boards and their purpose have become hot topics. Once, debate about the responsibilities of boards was largely limited to lawyers; today, institutional investors and politicians have weighed in as well.
My credentials for discussing corporate governance include the fact that, over the last 62 years, I have served as a director of 21 publicly-owned companies (listed below). In all but two of them, I have represented a substantial holding of stock. In a few cases, I have tried to implement important change.
During the first 30 or so years of my services, it was rare to find a woman in the room unless she represented a family controlling the enterprise. This year, it should be noted, marks the $100^{\text{th}}$ anniversary of the $19^{\text{th}}$ Amendment, which guaranteed American women the right to have their voices heard in a voting booth. Their attaining similar status in a board room remains a work in progress.
Over the years, many new rules and guidelines pertaining to board composition and duties have come into being. The bedrock challenge for directors, nevertheless, remains constant: Find and retain a talented CEO – possessing integrity, for sure – who will be devoted to the company for his/her business lifetime. Often, that task is hard. When directors get it right, though, they need to do little else. But when they mess it up, . . . . .
Audit committees now work much harder than they once did and almost always view the job with appropriate seriousness. Nevertheless, these committees remain no match for managers who wish to game numbers, an offense that has been encouraged by the scourge of earnings “guidance” and the desire of CEOs to “hit the number.” My direct experience (limited, thankfully) with CEOs who have played with a company’s numbers indicates that they were more often prompted by ego than by a desire for financial gain.
Compensation committees now rely much more heavily on consultants than they used to. Consequently, compensation arrangements have become more complicated – what committee member wants to explain paying large fees year after year for a simple plan? – and the reading of proxy material has become a mind-numbing experience.
One very important improvement in corporate governance has been mandated: a regularly-scheduled “executive session” of directors at which the CEO is barred. Prior to that change, truly frank discussions of a CEO’s skills, acquisition decisions and compensation were rare.
Acquisition proposals remain a particularly vexing problem for board members. The legal orchestration for making deals has been refined and expanded (a word aptly describing attendant costs as well). But I have yet to see a CEO who craves an acquisition bring in an informed and articulate critic to argue against it. And yes, include me among the guilty.
Overall, the deck is stacked in favor of the deal that's coveted by the CEO and his/her obliging staff. It would be an interesting exercise for a company to hire two “expert” acquisition advisors, one pro and one con, to deliver his or her views on a proposed deal to the board – with the winning advisor to receive, say, ten times a token sum paid to the loser. Don’t hold your breath awaiting this reform: The current system, whatever its shortcomings for shareholders, works magnificently for CEOs and the many advisors and other professionals who feast on deals. A venerable caution will forever be true when advice from Wall Street is contemplated: Don’t ask the barber whether you need a haircut.
Over the years, board “independence” has become a new area of emphasis. One key point relating to this topic, though, is almost invariably overlooked: Director compensation has now soared to a level that inevitably makes pay a subconscious factor affecting the behavior of many non-wealthy members. Think, for a moment, of the director earning \$250,000-300,000 for board meetings consuming a pleasant couple of days six or so times a year. Frequently, the possession of one such directorship bestows on its holder three to four times the annual median income of U.S. households. (I missed much of this gravy train: As a director of Portland Gas Light in the early 1960s, I received \$100 annually for my service. To earn this princely sum, I commuted to Maine four times a year.)
And job security now? It's fabulous. Board members may get politely ignored, but they seldom get fired. Instead, generous age limits – usually 70 or higher – act as the standard method for the genteel ejection of directors.
Is it any wonder that a non-wealthy director (“NWD”) now hopes – or even yearns – to be asked to join a second board, thereby vaulting into the \$500,000-600,000 class? To achieve this goal, the NWD will need help. The CEO of a company searching for board members will almost certainly check with the NWD’s current CEO as to whether NWD is a “good” director. “Good,” of course, is a code word. If the NWD has seriously challenged his/her present CEO’s compensation or acquisition dreams, his or her candidacy will silently die. When seeking directors, CEOs don’t look for pit bulls. It’s the cocker spaniel that gets taken home.
Despite the illogic of it all, the director for whom fees are important – indeed, craved – is almost universally classified as “independent” while many directors possessing fortunes very substantially linked to the welfare of the corporation are deemed lacking in independence. Not long ago, I looked at the proxy material of a large American company and found that eight directors had never purchased a share of the company’s stock using their own money. (They, of course, had received grants of stock as a supplement to their generous cash compensation.) This particular company had long been a laggard, but the directors were doing wonderfully.
Paid-with-my-own-money ownership, of course, does not create wisdom or ensure business smarts. Nevertheless, I feel better when directors of our portfolio companies have had the experience of purchasing shares with their savings, rather than simply having been the recipients of grants.
* * * * * * * * * * * *
Here, a pause is due: I'd like you to know that almost all of the directors I have met over the years have been decent, likable and intelligent. They dressed well, made good neighbors and were fine citizens. I've enjoyed their company. Among the group are some men and women that I would not have met except for our mutual board service and who have become close friends.
Nevertheless, many of these good souls are people whom I would never have chosen to handle money or business matters. It simply was not their game.
They, in turn, would never have asked me for help in removing a tooth, decorating their home or improving their golf swing. Moreover, if I were ever scheduled to appear on Dancing With the Stars, I would immediately seek refuge in the Witness Protection Program. We are all duds at one thing or another. For most of us, the list is long. The important point to recognize is that if you are Bobby Fischer, you must play only chess for money.
At Berkshire, we will continue to look for business-savvy directors who are owner-oriented and arrive with a strong specific interest in our company. Thought and principles, not robot-like “process,” will guide their actions. In representing your interests, they will, of course, seek managers whose goals include delighting their customers, cherishing their associates and acting as good citizens of both their communities and our country.
Those objectives are not new. They were the goals of able CEOs sixty years ago and remain so. Who would have it otherwise?
Short Subjects
In past reports, we've discussed both the sense and nonsense of stock repurchases. Our thinking, boiled down: Berkshire will buy back its stock only if a) Charlie and I believe that it is selling for less than it is worth and b) the company, upon completing the repurchase, is left with ample cash.
Calculations of intrinsic value are far from precise. Consequently, neither of us feels any urgency to buy an estimated \$1 of value for a very real 95 cents. In 2019, the Berkshire price/value equation was modestly favorable at times, and we spent \$5 billion in repurchasing about 1% of the company.
Over time, we want Berkshire's share count to go down. If the price-to-value discount (as we estimate it) widens, we will likely become more aggressive in purchasing shares. We will not, however, prop the stock at any level.
Shareholders having at least \$20 million in value of A or B shares and an inclination to sell shares to Berkshire may wish to have their broker contact Berkshire's Mark Millard at 402-346-1400. We request that you phone Mark between 8:00-8:30 a.m. or 3:00-3:30 p.m. Central Time, calling only if you are ready to sell.
* * * * * * * * * * * *
In 2019, Berkshire sent \$3.6 billion to the U.S. Treasury to pay its current income tax. The U.S. government collected \$243 billion from corporate income tax payments during the same period. From these statistics, you can take pride that your company delivered 1 $\frac{1}{2}$ % of the federal income taxes paid by all of corporate America.
Fifty-five years ago, when Berkshire entered its current incarnation, the company paid nothing in federal income tax. (For good reason, too: Over the previous decade, the struggling business had recorded a net loss.) Since then, as Berkshire retained nearly all of its earnings, the beneficiaries of that policy became not only the company's shareholders but also the federal government. In most future years, we both hope and expect to send far larger sums to the Treasury.
* * * * * * * * * * * *
On pages A-2 – A-3, you will find details about our annual meeting, which will be held on May 2, 2020. Yahoo, as usual, will be streaming the event worldwide. There will be one important change, however, in our format: I’ve had suggestions from shareholders, media and board members that Ajit Jain and Greg Abel – our two key operating managers – be given more exposure at the meeting. That change makes great sense. They are outstanding individuals, both as managers and as human beings, and you should hear more from them.
Shareholders who this year send a question to be asked by our three long-serving journalists may specify that it be posed to Ajit or Greg. They, like Charlie and me, will not have even a hint of what the questions will be.
The journalists will alternate questions with those from the audience, who also can direct questions to any of the four of us. So polish up your zingers.
* * * * * * * * * * * *
On May 2 $^{nd}$ , come to Omaha. Meet your fellow capitalists. Buy some Berkshire products. Have fun. Charlie and I – along with the entire Berkshire gang – are looking forward to seeing you.
February 22, 2020
Warren E. Buffett
Chairman of the Board
| 年度百分比变化 | ||
| 年份 | 伯克希尔每股市场价值 | 含股息标普500 |
| 1965 | 49.5 | 10.0 |
| 1966 | (3.4) | (11.7) |
| 1967 | 13.3 | 30.9 |
| 1968 | 77.8 | 11.0 |
| 1969 | 19.4 | (8.4) |
| 1970 | (4.6) | 3.9 |
| 1971 | 80.5 | 14.6 |
| 1972 | 8.1 | 18.9 |
| 1973 | (2.5) | (14.8) |
| 1974 | (48.7) | (26.4) |
| 1975 | 2.5 | 37.2 |
| 1976 | 129.3 | 23.6 |
| 1977 | 46.8 | (7.4) |
| 1978 | 14.5 | 6.4 |
| 1979 | 102.5 | 18.2 |
| 1980 | 32.8 | 32.3 |
| 1981 | 31.8 | (5.0) |
| 1982 | 38.4 | 21.4 |
| 1983 | 69.0 | 22.4 |
| 1984 | (2.7) | 6.1 |
| 1985 | 93.7 | 31.6 |
| 1986 | 14.2 | 18.6 |
| 1987 | 4.6 | 5.1 |
| 1988 | 59.3 | 16.6 |
| 1989 | 84.6 | 31.7 |
| 1990 | (23.1) | (3.1) |
| 1991 | 35.6 | 30.5 |
| 1992 | 29.8 | 7.6 |
| 1993 | 38.9 | 10.1 |
| 1994 | 25.0 | 1.3 |
| 1995 | 57.4 | 37.6 |
| 1996 | 6.2 | 23.0 |
| 1997 | 34.9 | 33.4 |
| 1998 | 52.2 | 28.6 |
| 1999 | (19.9) | 21.0 |
| 2000 | 26.6 | (9.1) |
| 2001 | 6.5 | (11.9) |
| 2002 | (3.8) | (22.1) |
| 2003 | 15.8 | 28.7 |
| 2004 | 4.3 | 10.9 |
| 2005 | 0.8 | 4.9 |
| 2006 | 24.1 | 15.8 |
| 2007 | 28.7 | 5.5 |
| 2008 | (31.8) | (37.0) |
| 2009 | 2.7 | 26.5 |
| 2010 | 21.4 | 15.1 |
| 2011 | (4.7) | 2.1 |
| 2012 | 16.8 | 16.0 |
| 2013 | 32.7 | 32.4 |
| 2014 | 27.0 | 13.7 |
| 2015 | (12.5) | 1.4 |
| 2016 | 23.4 | 12.0 |
| 2017 | 21.9 | 21.8 |
| 2018 | 2.8 | (4.4) |
| 2019 | 11.0 | 31.5 |
| 1965-2019年复合年增长率 | 20.3% | 10.0% |
| 1964-2019年总增长率 | 2,744,062% | 19,784% |
注：数据按日历年计算，但以下年份除外：1965年和1966年为截至9月30日的年度；1967年为截至12月31日的15个月。
伯克希尔·哈撒韦公司
致伯克希尔·哈撒韦公司的股东：
按照美国通用会计准则（通常称为"GAAP"），伯克希尔2019年盈利814亿美元。这个数字的构成是：240亿美元经营利润、37亿美元已实现资本利得，以及我们所持股票中净未实现资本利得增加带来的537亿美元收益。以上每一项收益数据均为税后口径。
那537亿美元的收益需要解释一下。它源于2018年生效的一项新GAAP规定——要求持有权益证券的公司将那些证券未实现损益的净变动计入收益。正如我们去年信中所说，无论是和我一起管理伯克希尔的合伙人Charlie Munger，还是我本人，都不认同这条规定。
会计行业采纳这一规则，实际上标志着其自身思维的重大转变。2018年之前，美国通用会计准则坚持——除了以交易证券为主业的公司例外——股票投资组合中的未实现收益永远不计入利润，而未实现损失只有在被认定为“非暂时性”时才计入。现在，伯克希尔必须在每个季度的净利润（对许多投资者、分析师和评论员来说是关键信息）中，把所持股票的每一次涨跌都写进去，无论这些波动多么反复无常。
伯克希尔2018年和2019年的情况，生动地说明了我们与新规则的分歧。2018年股市下跌，我们的净未实现收益减少了206亿美元，因此我们报告GAAP利润只有40亿美元。2019年股价上涨，净未实现收益增加了前述的537亿美元，将GAAP利润推高到本信开头报告的814亿美元。这些市场动荡导致GAAP利润疯狂增长了1900%！
与此同时，在我们可以称之为现实世界（而非会计世界）的地方，伯克希尔在这两年期间平均持有约2000亿美元的股票权益，而我们持有的股票的内在价值在这段时间稳步且大幅增长。
查理和我敦促你们关注经营利润——2019年变化不大——并忽略来自投资（无论实现还是未实现）的季度和年度损益。
我们的建议绝没有削弱这些投资对伯克希尔的重要性。随着时间的推移，查理和我预计我们的股票投资组合——作为一个整体——将带来可观收益，尽管方式不可预测且极不规律。要了解我们为何乐观，请看下一部分讨论。
留存收益的力量
1924年，一位不怎么知名的经济学家兼金融顾问埃德加·劳伦斯·史密斯写了一本薄薄的书《普通股作为长期投资》，这本书改变了投资世界。事实上，写这本书也改变了史密斯本人，迫使他重新评估自己的投资信念。
一开始，他打算论证通货膨胀时期股票会跑赢债券，而通货紧缩时期债券会带来更优的回报。这听起来很有道理。但史密斯却大吃一惊。
因此，他的书以一段坦白开头：“这些研究是失败的记录——事实未能支撑先入为主的理论。”幸运的是，对投资者来说，这次失败让史密斯更深入地思考了股票应该如何评估。
关于史密斯洞察的核心，我要引用他书的一位早期评论者，不是别人，正是约翰·梅纳德·凯恩斯：“我把史密斯先生最重要也无疑最新颖的观点留到最后说。管理良好的实业公司，通常不会将全部盈利分配给股东。在好年份（如果不是所有年份），它们会保留一部分利润并重新投入业务。因此，有一种复利（凯恩斯加了斜体）在有利于稳健的工业投资运作。经过若干年，稳健工业企业的财产实际价值会以复利增长，而且这跟向股东支付的股息无关。”
经过这一番“洒圣水”般的加持，史密斯不再是无名之辈了。
很难理解在史密斯的书出版之前，投资者为何不重视留存收益。毕竟，卡内基、洛克菲勒和福特等巨头早就积累了令人瞠目的财富，这一点并非秘密——他们都保留了很大一部分营业收益，用于为增长提供资金，并创造更大的利润。在美国各地，也一直有小资本家遵循同样的策略发家致富。
尽管如此，当企业所有权被切成小片——也就是"股票"时，在史密斯之前的年代，买家通常把自己的持股视为对市场波动的短期赌博。股票即使在最好的情况下，也被当作投机品。绅士们更喜欢债券。
虽然投资者醒悟得慢，但留存并再投资盈利的数学原理如今已广为人知。今天，小学生都懂得凯恩斯所谓的"新奇事物"：储蓄与复利结合会创造奇迹。
在伯克希尔，查理和我长期专注于将留存收益用于有利可图之处。有时这项工作轻而易举，有时却异常艰难——尤其当我们管理的资金规模越来越大，增长越来越快时。
在部署留存资金时，我们首先寻求投资于自己已拥有的众多不同业务。过去十年，伯克希尔的折旧费用累计达650亿美元，而公司在物业、厂房和设备上的内部投资总额则为1210亿美元。对生产性运营资产的再投资将永远是我们最优先的事项。
此外，我们不断寻找符合三个标准的新收购标的。第一，它们必须在运营所需的净有形资本上获得良好回报；第二，它们必须由能干且诚实的经理人管理；第三，它们必须能以合理的价格买下。
当我们发现这样的企业时，首选是100%收购。但符合我们要求的大型收购机会极为罕见。更多时候，反复无常的股票市场会给我们机会，以买下符合标准的上市公司的大量非控股股份。
无论采用哪种方式——控股公司，还是通过股市持有重要股份——伯克希尔从该投资中获得的财务结果，很大程度上取决于我们买入的企业未来的盈利。然而，这两种投资方式之间存在一个极为重要的会计差异，你必须理解。
在我们的控股公司中（定义为伯克希尔持股超过50%的企业），每家企业的盈利直接计入我们向你们报告的经营利润。你看到的就是你得到的。
在非控股公司中（我们持有可交易股票），只有伯克希尔收到的股息才记入我们报告的经营利润。而那些留存收益呢？它们正努力创造大量额外价值，但不会以直接计入伯克希尔报告利润的方式体现出来。
在伯克希尔之外，几乎所有大公司的投资者都不会觉得这种"不确认收益"有多重要。但对我们而言，这是一个显著的信息缺失，其规模之大，我们在下面为你详细说明。
以下我们列出十大股票持仓企业。这份清单区分了根据美国通用会计准则向你们报告的收益（即伯克希尔从这10家被投公司收到的股息）与我们所享有的、被投公司留存并用于再投资的收益份额。通常情况下，这些公司会利用留存收益扩大业务、提高效率。有时它们也会用这些资金回购自身大量股份，这相当于扩大了伯克希尔在它们未来盈利中所占的份额。
| 公司 | 年末持股比例 | 伯克希尔应占份额（单位：百万美元） | |
| 股息(1) | 留存收益(2) | ||
| American Express（美国运通） | 18.7% | $ 261 | $ 998 |
| Apple（苹果） | 5.7% | 773 | 2,519 |
| Bank of America（美国银行） | 10.7% | 682 | 2,167 |
| Bank of New York Mellon（纽约梅隆银行） | 9.0% | 101 | 288 |
| Coca-Cola（可口可乐） | 9.3% | 640 | 194 |
| Delta Airlines（达美航空） | 11.0% | 114 | 416 |
| J.P. Morgan Chase（摩根大通） | 1.9% | 216 | 476 |
| Moody's（穆迪） | 13.1% | 55 | 137 |
| U.S. Bancorp（美国合众银行） | 9.7% | 251 | 407 |
| Wells Fargo（富国银行） | 8.4% | 705 | 730 |
| 合计 | $3,798 | $8,332 | |
(1) 按当前年化利率计算。
(2) 基于2019年盈利减去已支付的普通股和优先股股息。
显然，我们最终从部分持有这些公司中实现的已实现收益，不会与"我们"应占的留存收益精确对应。哎，有时候留存收益一分钱也产生不了。但无论从逻辑上还是从我们的过往经验来看，这群公司最终带给我们的资本利得，至少不会低于——很可能还会超过——它们为我们留存的那部分盈利。（当我们卖出股票实现收益时，将按当时的税率缴纳所得税。当前联邦税率为21%。）
可以肯定的是，伯克希尔从这10家公司以及我们持有的其他大量股权中获得的回报，将以极不规则的方式体现。时不时会有亏损，有些是公司自身的问题，有些则与股市大跌有关。另一些时候——去年就是其中之一——我们的收益会格外丰厚。总体来说，被投资公司的留存收益对伯克希尔价值的增长至关重要。
史密斯先生说对了。
非保险业务运营
Tom Murphy（汤姆·墨菲）是伯克希尔一位宝贵的董事，也是商业管理史上最杰出的人物之一。他很久以前就给了我一条关于收购的重要建议："要想赢得优秀管理者的名声，只要确保你买的是好生意就行。"
多年来，伯克希尔收购了数十家公司，最初我都把它们看作"好生意"。但有些令人失望，更有不少是彻底的失败。另一方面，也有相当一部分超出了我的预期。
回顾这段参差不齐的记录，我得出结论：收购就像婚姻——当然，都始于一场欢乐的婚礼——但之后现实往往与婚前的预期相左。有时候，奇妙的是，新的结合带来的幸福超出了双方的期望。另一些时候，幻灭来得很快。把这些比喻用到企业收购上，我得说，通常都是买方遇到不愉快的意外。企业在"恋爱"期间，很容易变得想入非非。
顺着这个类比往下说，我得承认，我们的"婚姻"记录总体还算可以接受，各方都对多年前做出的决定感到满意。有些联姻简直是田园诗般美满。但也有相当一部分，让我很快就纳闷自己求婚的时候到底在想些什么。
幸运的是，我所犯的许多错误带来的负面影响，被大多数令人失望的企业所共有的一个特征所减轻：随着时间推移，“差”企业往往会停滞不前，进而进入一种所需运营资本占伯克希尔总资本比重越来越小的状态。与此同时，我们的“好”企业往往倾向于增长，并找到以有吸引力的回报率追加投资的机会。由于这两种截然不同的轨迹，伯克希尔赢家们所运用的资产逐渐成为我们总资本中不断扩大的部分。
作为这种财务变迁的极端例子，请看伯克希尔最初的纺织业务。1965年初我们收购该公司控股权时，这个陷入困境的业务占用了伯克希尔几乎全部资本。因此，在相当长一段时间内，伯克希尔不赚钱的纺织资产是我们整体回报的巨大拖累。不过，最终我们收购了一系列“好”企业，这种转变到20世纪80年代初，使日渐萎缩的纺织业务仅占用了我们资本的极小部分。
如今，你们的大部分资金部署在我们控制的、在运营所需的净有形资产上实现良好到卓越回报的企业中。我们的保险业务一直是超级明星。该业务具有特殊特征，使其拥有一种独特的成功衡量指标，这一指标对许多投资者而言并不熟悉。我们将把这个话题留到下一部分讨论。
在随后的段落中，我们将伯克希尔旗下种类繁多的非保险业务按盈利规模分组——这些盈利已扣除利息、折旧、税费、非现金补偿、重组费用等所有令人生厌但却非常真实的成本，而CEO和华尔街有时会怂恿投资者忽略这些成本。关于这些业务的更多信息，请参见第K-6至K-21页以及第K-40至K-52页。
我们的BNSF铁路公司和伯克希尔·哈撒韦能源公司（"BHE"）——伯克希尔非保险业务中的两大领头羊——2019年合计盈利83亿美元（仅计入我们持有的BHE 91%的份额），较2018年增长6%。
接下来按盈利排名的五家非保险子公司（但此处以字母顺序列出）：Clayton Homes、International Metalworking、Lubrizol、Marmon和Precision Castparts，2019年合计盈利48亿美元，与2018年这些公司的盈利水平基本持平。
再往后五家，同样按排名和字母顺序列出（伯克希尔·哈撒韦汽车公司、Johns Manville、NetJets、Shaw和TTI），去年盈利19亿美元，高于2018年该梯队的17亿美元。
伯克希尔拥有的其余非保险业务（数量众多）2019年合计盈利27亿美元，低于2018年的28亿美元。
2019年，我们控制的非保险业务总净利润达到177亿美元，较2018年该组别的172亿美元增长3%。收购和处置对这些结果几乎没有净影响。
我必须再补充一点，以突显伯克希尔业务范围的广泛性。自2011年以来，我们拥有Lubrizol，这是一家总部位于俄亥俄州、在全球生产和销售润滑油添加剂的公司。2019年9月26日，一场源自隔壁小厂的大火蔓延至Lubrizol在法国的一家大型工厂。
结果是重大财产损失和Lubrizol业务的大规模中断。即便如此，该公司的财产损失和业务中断损失都将通过Lubrizol将获得的大额保险赔付得到缓解。
但是，正如已故的Paul Harvey在他著名的广播节目中常说的那样，“还有故事的其余部分。”Lubrizol最大的保险公司之一，是一家由……呃，伯克希尔拥有的公司。
《马太福音》第6章第3节教导我们：“不要叫左手知道右手所做的。”你们的董事长显然已按吩咐行事。
财产/意外险
我们的财产/意外险（P/C）业务自1967年以来一直是推动伯克希尔增长的引擎——那一年，我们以860万美元收购了National Indemnity及其姊妹公司National Fire & Marine。如今，按净值计算，National Indemnity是全球最大的财产/意外险公司。保险是一桩承诺的生意，而伯克希尔履行承诺的能力无人能及。
我们当初被财产/意外险业务吸引的一个原因是这个行业的商业模式：财产/意外险公司先收保费，后理赔。在极端情况下，比如石棉暴露或严重工伤事故引发的索赔，支付可能延续数十年。
这种"先收钱、后付钱"的模式让财产/意外险公司手里握有大笔资金——我们称之为"浮存金"——这些钱最终要付给别人。与此同时，保险公司可以用这笔浮存金为自己谋利。虽然单张保单和单个理赔来来去去，但保险公司持有的浮存金总额通常与保费规模保持相当稳定的比例。因此，随着我们的业务增长，浮存金也会增长。它到底增长了多少，请看下表：
| 年份 | 浮存金（单位：百万美元） |
| 1970 | $ 39 |
| 1980 | 237 |
| 1990 | 1,632 |
| 2000 | 27,871 |
| 2010 | 65,832 |
| 2018 | 122,732 |
| 2019 | 129,423 |
我们未来可能会经历浮存金下降。即便下降，也会非常缓慢——在任何一年里，最多不会超过3%。我们保险合同的性质决定了，我们永远不会面临立即或短期内对我们现金资源有重大影响的资金兑付要求。这种结构是刻意设计的，也是我们保险公司无可匹敌的财务实力的关键要素。这种实力绝不会被削弱。
如果我们的保费超过费用加最终损失的总和，保险业务就会产生承销利润，这笔利润再加上浮存金产生的投资收益。当我们赚到这个利润时，我们等于在享用免费资金——而且更妙的是，别人还得付钱让我们持有它。
对整个财产/意外险行业而言，浮存金的财务价值现在比过去许多年都低得多。这是因为几乎所有财产/意外险公司的标准投资策略都严重——而且是合理地——偏向高等级债券。因此，利率变化对这些公司至关重要，而在过去十年里，债券市场的利率低得可怜。
结果，保险公司日子难过：年复一年，他们被迫——因为债券到期或发行人赎回条款——将"旧"投资组合重新投资到收益率低得多的新资产中。曾经这些保险公司每美元浮存金可以稳稳赚到5美分或6美分，现在只能拿到2美分或3美分（如果业务集中在那些深陷负利率迷幻之乡的国家，收益甚至更低）。
有些保险公司可能会试图通过购买低等级债券或流动性差的"另类"投资来弥补收入损失，这些投资承诺更高的收益率。但那是危险的游戏，大多数机构根本没有能力参与。
伯克希尔的处境比一般保险公司更有利。最重要的是，我们无与伦比的资本高山、充裕的现金以及庞大且多元的非保险收入来源，让我们在投资灵活性上远远超过行业内的其他公司。我们面前众多的选择总是有利的——有时还会带来重大机遇。
我们的财产/意外险公司在此期间取得了优异的承销业绩。过去17年中，伯克希尔有16年实现承销盈利，唯一的例外是2017年，当年我们的税前亏损高达32亿美元。在这17年的跨度内，我们的税前收益总计275亿美元，其中2019年录得4亿美元。
这一成绩绝非偶然：严格的承销风险评估是我们保险经理们每天的工作重心，他们深知浮存金的回报可能被糟糕的承销业绩所淹没。所有保险公司都对此口头附和，但在伯克希尔，这是信仰——旧约式的信仰。
正如我过去反复强调的，我现在再次指出：保险业的如意结局远非板上钉钉。未来17年中，我们绝不可能有16年保持承销盈利。危险始终潜伏。
评估保险风险的错误可能极其严重，并且需要多年——甚至数十年——才能浮出水面并充分显现。（想想石棉案。）一场规模远超飓风卡特里娜和迈克尔的重大灾难将会发生——也许明天，也许数十年后。"终极风暴"可能来自传统源头，比如狂风或地震，也可能完全出乎意料，比如一场网络攻击，其灾难性后果超出任何保险公司目前的想象。当这样的超级巨灾降临时，伯克希尔将承担其应得的损失份额，而且损失会很大——非常大。然而，与许多其他保险公司不同，处理这些损失绝不会让我们的资源捉襟见肘，而且我们会在第二天就急于扩充业务。
闭上眼，稍作想象，哪里可能孕育出一家生机勃勃的财产/意外险公司？纽约？伦敦？硅谷？
那威尔克斯-巴里呢？
2012年末，我们保险业务中不可或缺的经理Ajit Jain打电话告诉我，他正以2.21亿美元（大致相当于当时的净资产）收购宾夕法尼亚州那座小城里的一家小公司——GUARD保险集团。他还说，GUARD的首席执行官Sy Foguel将成为伯克希尔的明星。GUARD和Sy对我来说都是新名字。
中了，又中了：2019年，GUARD的保费规模达到19亿美元，较2012年增长379%，同时实现了令人满意的承销利润。自从加入伯克希尔以来，Sy带领公司进入了新产品领域和新的地区市场，并将GUARD的浮存金提升了265%。
1967年，奥马哈看起来不太可能成为一家财产/意外险巨头的发射台。而威尔克斯-巴里很可能带来类似的惊喜。
伯克希尔·哈撒韦能源公司
伯克希尔·哈撒韦能源公司今年庆祝了我们在其所有权的20周年。这个周年纪念提示我们，应该梳理一下该公司取得的成就。
我们先从电价谈起。2000年伯克希尔进入公用事业领域时，以76%的持股收购了BHE，当时该公司在爱荷华州的居民客户平均每千瓦时支付8.8美分。此后，居民客户电价每年上涨不到1%，并且我们承诺到2028年不会上调基础电价。相比之下，爱荷华州另一家大型投资者所有的公用事业公司的情况如何呢？去年，它向居民客户收取的电价高出BHE 61%。最近，那家公用事业公司又获得了一次电价上调，差距将扩大到70%。
我们与他们之间电价上的巨大差异，主要源于我们在将风能转化为电力方面取得的巨大成就。2021年，我们预计BHE在爱荷华州通过其拥有并运营的风力涡轮机发电约2520万兆瓦时。这一产出将完全覆盖其爱荷华州客户约2460万兆瓦时的年度需求。换句话说，我们在该州的公用事业公司已经实现了风力自给自足。
在另一个对比中，爱荷华州另一家公用事业公司来自风电的发电量不到10%。此外，我们不知道还有哪家投资者所有的公用事业公司——无论位于何处——到2021年能实现风电自给自足。2000年，BHE服务的是农业经济；如今，其五大客户中有三家是高科技巨头。我认为他们决定在爱荷华建厂，部分原因正是BHE能够提供可再生、低成本的能源。
当然，风能是间歇性的，我们在爱荷华的叶片只有部分时间转动。某些时段，当风平浪静时，我们依靠非风电产能来确保所需的电力。相反的时候，我们将风电提供的多余电力出售给其他公用事业公司，通过所谓的“电网”为他们供电。我们卖给他们的电力取代了他们对碳资源（比如煤炭或天然气）的需求。
Berkshire Hathaway（伯克希尔·哈撒韦）现在与Walter Scott, Jr.和Greg Abel合伙持有BHE 91%的股份。自我们购入以来，BHE从未向Berkshire Hathaway支付过股息，年复一年，它留存了280亿美元的收益。这种模式在公用事业领域堪称异类，因为该行业的公司通常支付高额股息——有时甚至达到或超过盈利的80%。我们的看法是：能投的钱越多，我们越喜欢。
如今，BHE拥有运营人才和经验，能够管理真正大型的公用事业项目——需投资1000亿美元或更多——这些项目可以支持有益于我们国家、社区和股东的基础设施。我们随时准备好、乐意且有能力抓住这类机会。
投资
下面列出我们在年末市值最大的十五只普通股投资。我们排除了卡夫亨氏（Kraft Heinz）持股——325,442,152股——因为Berkshire是一个控制集团的一部分，因此必须按“权益法”核算这项投资。在其资产负债表上，Berkshire按美国通用会计准则（GAAP）将卡夫亨氏持股记为138亿美元，这个数字代表Berkshire在2019年12月31日卡夫亨氏经审计净资产中所占的份额。但请注意，当日我们股份的市值仅为105亿美元。
| 持股数量* | 公司 | 持股比例 | 12/31/19 成本** | 市值 |
| （单位：百万美元） | ||||
| 151,610,700 | American Express Company | 18.7% | $1,287 | $18,874 |
| 250,866,566 | Apple Inc. | 5.7% | 35,287 | 73,667 |
| 947,760,000 | Bank of America Corp. | 10.7% | 12,560 | 33,380 |
| 81,488,751 | The Bank of New York Mellon Corp. | 9.0% | 3,696 | 4,101 |
| 5,426,609 | Charter Communications, Inc. | 2.6% | 944 | 2,632 |
| 400,000,000 | The Coca-Cola Company | 9.3% | 1,299 | 22,140 |
| 70,910,456 | Delta Air Lines, Inc. | 11.0% | 3,125 | 4,147 |
| 12,435,814 | The Goldman Sachs Group, Inc. | 3.5% | 890 | 2,859 |
| 60,059,932 | JPMorgan Chase & Co. | 1.9% | 6,556 | 8,372 |
| 24,669,778 | Moody’s Corporation | 13.1% | 248 | 5,857 |
| 46,692,713 | Southwest Airlines Co. | 9.0% | 1,940 | 2,520 |
| 21,938,642 | United Continental Holdings Inc. | 8.7% | 1,195 | 1,933 |
| 149,497,786 | U.S. Bancorp | 9.7% | 5,709 | 8,864 |
| 10,239,160 | Visa Inc. | 0.6% | 349 | 1,924 |
| 345,688,918 | Wells Fargo & Company | 8.4% | 7,040 | 18,598 |
| 其他*** | 28,215 | 38,159 | ||
| 按市值计价的股权投资合计 | $110,340 | $248,027 | ||
* 不含伯克希尔子公司养老基金持有的股份。
* 这是我们的实际买入价，也是计税基础。
** 包括对西方石油公司（Occidental Petroleum Corporation）的100亿美元投资，由优先股和购买普通股的认股权证构成。
查理和我没有把上述2,480亿美元看作是一堆股市赌注——不会因为"华尔街"下调评级、盈利"不及预期"、美联储可能的动向、潜在的政治变化、经济学家的预测，或任何其他时下热门话题就戛然而止的调情戏码。
我们在这些持股中看到的，是一个由我们部分拥有的公司组成的集合。这些公司，按权重计算，其运营所需的有形净资产收益率超过20%。而且，它们赚取利润时并没有使用过高的杠杆。
大型、成熟且易于理解的企业，能取得如此回报率，在任何情况下都堪称卓越。而如果将它与过去十年许多投资者在债券上接受的回报率——比如30年期美国国债仅为2.5%甚至更低——相比，那简直是令人惊叹。
预测利率从来不是我们的游戏。查理和我不知道未来一年、十年或三十年利率的平均水平会是多少。我们或许有点愤世嫉俗的看法是：那些就这些话题发表高论的权威们，他们的这种行为本身，暴露出的关于他们自己的信息，远比他们揭示的未来信息要多。
我们能说的是：如果未来几十年利率大致维持在目前水平，并且企业税率也保持在当前企业所享受的低位，那么几乎可以肯定，长期来看，股票的表现将远远优于长期固定利率债务工具。
那个乐观的预测附带着一条警告：股票价格明天什么都有可能发生。偶尔，市场会出现大幅下跌，幅度或许达到50%甚至更高。但"美国顺风"（去年我写过这个话题）与史密斯先生所描述的复利奇迹相结合，将使股票成为那些不使用杠杆、又能控制住自己情绪的个人的长期更优之选。其他人？当心！
前路
三十年前，我中西部的朋友乔·罗森菲尔德（Joe Rosenfield），当时已年过八旬，收到当地报社一封令人恼火的信。报社用直白的措辞，索要一些计划用于他讣告的生平资料。乔没有回复。然后呢？一个月后，他又收到报社的第二封信，这一封标注着"紧急"。
查理和我早就进入了紧急地带。这对我们来说可算不上什么好消息。但伯克希尔的股东们不必担心：你们的公司已经为我们的离场做好了100%的准备。
我们两人的乐观基于五个因素。第一，伯克希尔的资产配置在极其多样的全资或部分持股企业中，平均而言，这些企业从所投入的资本中获得了可观的回报。第二，伯克希尔将其"控制类"企业置于单一实体之下的布局，赋予了它一些重要且持久的经济优势。第三，伯克希尔的财务事务将始终以一种令公司能够抵御极端外部冲击的方式管理。第四，我们拥有一批技艺精湛且忠诚的高层管理者，对他们而言，经营伯克希尔远不止是一份高薪和/或声望高的工作。最后，伯克希尔的董事们——你们的守护者——始终专注于所有者福祉和一种在大公司中罕见的文化的培育。（这种文化的价值在拉里·坎宁安（Larry Cunningham）与斯蒂芬妮·库巴（Stephanie Cuba）合著的新书《信任边际》（Margin of Trust）中有深入探讨，该书将在我们的年会上发售。）
查理和我在确保伯克希尔在我们退场后的岁月里持续繁荣方面有着非常务实的理由：芒格家族持有的伯克希尔股票远超家族其他任何投资的规模，而我个人净资产的整整99%都投在伯克希尔的股票上。我从未卖出过一股，也没有计划这样做。我唯一一次处置伯克希尔股票——除了慈善捐赠和小额个人赠予——发生在1980年，当时我与其他选择参与的伯克希尔股东一起，将我们的一部分伯克希尔股票换成了伊利诺伊州一家银行的股份，这家银行是伯克希尔在1969年收购的，并在1980年因银行控股公司法变更而需要剥离。
如今，我的遗嘱明确指示其执行人——以及遗嘱关闭后负责管理遗产的继任受托人——不得出售任何伯克希尔股票。我的遗嘱还免除了执行人和受托人对维持这种明显极端集中的资产可能产生的任何责任。
遗嘱还进一步指示执行人——以及随后的受托人——每年将一部分A类股转换为B类股，然后将这些B类股分配给各基金会。这些基金会将被要求及时使用其拨款。总体而言，我估计我去世时所持有的伯克希尔股票全部进入市场需要12到15年的时间。
假如我的遗嘱没有指令要求所有伯克希尔股票必须持有至预定分配日期，那么对于执行人和受托人而言，"安全"的做法是在他们临时控制期间卖出伯克希尔股票，并将收益再投资于期限与预定分配日期相匹配的美国国债。这种策略将使受托人免于公众批评，也免于因未能按照"审慎人"标准行事而承担个人责任的风险。
我本人感到放心，伯克希尔的股票在处置期内会是一项安全且回报丰厚的投资。总有一种可能——虽非大概率，但也不可忽视——事态发展会证明我的判断有误。但我相信，相较于常规做法，我的指示有极大概率会为社会贡献远超其所得的资源。
我“仅持伯克希尔”指令的关键，在于我对伯克希尔董事们未来的判断力和忠诚度满怀信心。他们将会不断被华尔街索取费用的推销员们试探。在很多公司，这些超级推销员或许会得逞。然而，我不认为这会在伯克希尔发生。
董事会
近年来，公司董事会的构成及其职责都成了热门话题。曾经，关于董事会责任的讨论主要局限于律师圈子；如今，机构投资者和政治家也加入了讨论。
我讨论公司治理的资历之一是，在过去的62年里，我曾在21家上市公司（详见下附清单）担任董事。除了两家之外，我在这21家公司中都代表了大量持股。在少数案例中，我曾试图推动重要的变革。
在我任职的头30年左右，会议室里鲜有女性，除非她代表控制该企业的家族。值得一提的是，今年是美国宪法第十九修正案通过100周年，该修正案保障了美国女性在投票中发声的权利。但在董事会会议室中争取类似地位，仍是一项未竟之业。
多年来，关于董事会构成和职责的许多新规则和指引已经出台。然而，董事们的根本挑战始终不变：找到并留住一位才华横溢、为人正直、愿将职业生涯奉献给公司的CEO。这项任务常常很艰难。但一旦董事们做对了，他们几乎无需再做别的事。而一旦搞砸了，那后果……
如今审计委员会的工作比过去勤奋得多，也几乎总是以应有的严肃态度对待职责。然而，面对那些希望操纵数字的管理者，这些委员会仍然难以匹敌——这种不当行为因盈利“指引”的祸害以及CEO们“达到目标”的渴望而受到怂恿。我直接接触过（所幸有限）那些玩弄公司数字的CEO，我的经验表明，他们通常是受自尊心驱使，而非对金钱的渴望。
如今薪酬委员会对顾问的依赖比过去严重得多。结果，薪酬安排变得越来越复杂——哪个委员会成员愿意年年解释为什么为一个简单薪酬计划支付大笔费用呢？——而阅读股东委托书材料也成了令人头脑麻木的经历。
公司治理中一项非常重要的改进已被强制要求：定期举行董事“高管会议”，CEO不得参加。在这一改动之前，对CEO的能力、收购决策和薪酬进行真正坦诚的讨论非常罕见。
收购提案仍然是董事会成员一个特别棘手的问题。进行交易的法律编排已经变得精细且扩大了（这个词也同样恰当地描述了伴随的成本）。但我还没有见过一个渴望收购的CEO会请来一位知情且能言善辩的批评者来反对这项收购。是的，我也是有过错的人之一。
总体而言，一切条件都对CEO及其言听计从的团队所垂涎的并购案有利。对公司而言，一个有趣的练习是：聘请两位"专家"并购顾问——一位支持、一位反对——向董事会陈述他们对拟议交易的看法，然后让胜出的顾问获得相当于失败方象征性报酬十倍的奖金。别指望这种改革能实现：现行制度无论对股东有何缺陷，对CEO以及众多靠并购盛宴养肥的顾问和其他专业人士来说，都运作得堪称完美。但凡考虑华尔街的建议，一句古老的告诫永远适用：别问理发师你是否该理发了。
多年来，董事会"独立性"已成为新的关注重点。然而，与此相关的一个关键点几乎总被忽略：董事薪酬现已飙升至如此之高的水平，以至于薪酬不可避免地成为影响许多非富裕董事行为的潜意识因素。试想一下，一位董事每年大约参加六次董事会，每次享受惬意的两天会议，便能赚取25万至30万美元。通常情况下，担任一家公司的董事，其收入就相当于美国家庭年收入中位数的三到四倍。（我错过了这趟肥差：上世纪60年代初，我在波特兰煤气灯公司担任董事时，每年只拿100美元服务费。为了赚这笔"巨款"，我每年要往返缅因州四次。）
那现在的职位安全感呢？简直棒极了。董事们可能会被礼貌地忽略，但很少被解雇。相反，宽裕的年龄限制——通常70岁或更高——才是让董事体面退出的标准方式。
一个非富裕董事（NWD）现在希望——甚至渴望——受邀加入第二家董事会，从而跃入50万至60万美元的级别，这有什么奇怪吗？为了实现这一目标，NWD需要帮助。一家正在寻找董事会成员的公司的CEO，几乎一定会向NWD的现任CEO求证：这位NWD是不是一位"好"董事。"好"当然是个暗号。如果NWD曾对现任CEO的薪酬或并购梦想提出过严肃质疑，那么他的候选人资格就会悄无声息地消失。在物色董事时，CEO们找的不是斗牛犬。能被带回家的，是那只可卡犬。
尽管这一切不合逻辑，但那些对费用很重要——实际上渴望费用——的董事几乎无一例外地被归类为"独立"；而许多其财富与公司福祉紧密相连的董事却被认为缺乏独立性。不久前，我查阅了一家大公司的股东委托书，发现八位董事从未用自己的钱购买过一股公司股票。（当然，他们曾获得股票赠予，作为巨额现金薪酬的补充。）这家公司长期业绩不佳，但董事们却过得风生水起。
当然，用自己的钱买来的持股并不能带来智慧，也不能保证商业头脑。不过，当我们投资组合公司的董事是用自己的积蓄购买股票，而不仅仅是接受赠予时，我感觉会好一些。
在此，我想稍作停顿：想告诉你们，这些年来我遇到过的几乎所有董事都是正派、可爱、聪明的人。他们衣着得体，是好邻居，也是好公民。我很享受与他们相处。其中有些人，如果不是因为共同担任董事，我本不会结识，如今却成了亲密朋友。
然而，这些善良的人中，有许多是我永远不会选择去打理钱财或处理商业事务的。那根本不是他们的强项。
他们当然也绝不会请我帮忙拔牙、装修房子或者改善高尔夫挥杆动作。而且，如果有朝一日我要上《与星共舞》节目，我会立刻申请加入证人保护计划。我们每个人总有一些方面是废物。对大多数人来说，这张清单还很长。关键是要认识到：如果你是鲍比·费舍尔（Bobby Fischer），你就只该靠下棋赚钱。
在伯克希尔，我们将继续寻找有商业头脑、以所有者为导向、且对我们公司有强烈具体兴趣的董事。指导他们行动的是思想和原则，而不是机器人般的“流程”。在代表你们的利益时，他们当然会寻找那些目标包括取悦客户、珍惜伙伴、并成为所在社区和国家好公民的管理者。
这些目标并不新鲜。六十年前，有能力的CEO们就在追求这些目标，今天依然如此。谁会不这么想呢？
简短话题
在过去的报告中，我们讨论过股份回购的合理与荒谬之处。概括一下我们的想法：伯克希尔只有在以下两个条件都满足时才会回购自己的股票：a）查理和我认为股价低于其价值；b）回购完成后公司仍有充足的现金。
内在价值的计算远非精确。因此，我俩都没有任何紧迫感，要用实实在在的95美分去买估计价值1美元的东西。2019年，伯克希尔的股价/价值关系偶尔略占优势，我们花了50亿美元回购了公司约1%的股份。
随着时间的推移，我们希望伯克希尔的股份数量下降。如果（我们估算的）价格相对于价值的折扣扩大，我们很可能会更积极地购买股份。不过，我们不会在任何价位支撑股价。
持有价值至少2000万美元A类或B类股份、并有意愿向伯克希尔出售股份的股东，可让经纪人联系伯克希尔的马克·米勒德（Mark Millard），电话：402-346-1400。我们请您在上午8:00-8:30或下午3:00-3:30（中部时间）致电马克，且仅当您准备出售时再拨。
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2019年，伯克希尔向美国财政部缴纳了36亿美元的当期所得税。同期，美国政府从企业所得税中征收了2430亿美元。从这些数据中，您可以自豪地知道，贵公司贡献了全美企业联邦所得税的1.5%。
55年前，当伯克希尔进入当前形态时，公司没有缴纳任何联邦所得税。（理由也很充分：在过去十年中，这家挣扎中的企业录得了净亏损。）自那以后，由于伯克希尔几乎保留了全部收益，这一政策的受益者不仅是公司股东，还有联邦政府。在未来的大多数年份中，我们都希望并期待向财政部缴纳远为更多的税款。
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在A-2至A-3页，您将看到关于我们年度股东大会的详细信息，会议将于2020年5月2日举行。雅虎（Yahoo）将一如既往地在全球范围内直播此次活动。不过，我们的会议形式将有一个重要变化：我收到了股东、媒体和董事会成员的建议，希望让我们的两位核心运营经理——阿吉特·贾因（Ajit Jain）和格雷格·阿贝尔（Greg Abel）——在会上有更多曝光。这一变化很有道理。他们都是杰出的人，无论是作为管理者还是作为个人，你们应该更多听到他们的声音。
今年向我们的三位资深记者提问的股东，可以指定问题由阿吉特或格雷格回答。他们和我们俩一样，对问题内容也毫不知情。
记者们将与现场观众交替提问，观众也可以向我们在座的四人中的任何一位提问。所以，请准备好你们的犀利问题吧。
5月2日，来奥马哈吧。见见你的资本家朋友们。买点伯克希尔的产品。玩得开心。查理和我——以及伯克希尔的所有伙伴——都期待着见到你们。
2020年2月22日
Warren E. Buffett
董事会主席