Berkshire's Performance vs. the S&P 500
| 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 |
| 2020 | 2.4 | 18.4 |
| Compounded Annual Gain – 1965-2020 | 20.0% | 10.2% |
| Overall Gain – 1964-2020 | 2,810,526% | 23,454% |
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 \$42.5 billion in 2020 according to generally accepted accounting principles (commonly called “GAAP”). The four components of that figure are \$21.9 billion of operating earnings, \$4.9 billion of realized capital gains, a \$26.7 billion gain from an increase in the amount of net unrealized capital gains that exist in the stocks we hold and, finally, an \$11 billion loss from a write-down in the value of a few subsidiary and affiliate businesses that we own. All items are stated on an after-tax basis.
Operating earnings are what count most, even during periods when they are not the largest item in our GAAP total. Our focus at Berkshire is both to increase this segment of our income and to acquire large and favorably-situated businesses. Last year, however, we met neither goal: Berkshire made no sizable acquisitions and operating earnings fell 9%. We did, though, increase Berkshire's per-share intrinsic value by both retaining earnings and repurchasing about 5% of our shares.
The two GAAP components pertaining to capital gains or losses (whether realized or unrealized) fluctuate capriciously from year to year, reflecting swings in the stock market. Whatever today's figures, Charlie Munger, my long-time partner, and I firmly believe that, over time, Berkshire's capital gains from its investment holdings will be substantial.
As I’ve emphasized many times, Charlie and I view Berkshire’s holdings of marketable stocks – at yearend worth \$281 billion – as a collection of businesses. We don’t control the operations of those companies, but we do share proportionately in their long-term prosperity. From an accounting standpoint, however, our portion of their earnings is not included in Berkshire’s income. Instead, only what these investees pay us in dividends is recorded on our books. Under GAAP, the huge sums that investees retain on our behalf become invisible.
What's out of sight, however, should not be out of mind: Those unrecorded retained earnings are usually building value – lots of value – for Berkshire. Investees use the withheld funds to expand their business, make acquisitions, pay off debt and, often, to repurchase their stock (an act that increases our share of their future earnings). As we pointed out in these pages last year, retained earnings have propelled American business throughout our country's history. What worked for Carnegie and Rockefeller has, over the years, worked its magic for millions of shareholders as well.
Of course, some of our investees will disappoint, adding little, if anything, to the value of their company by retaining earnings. But others will over-deliver, a few spectacularly. In aggregate, we expect our share of the huge pile of earnings retained by Berkshire's non-controlled businesses (what others would label our equity portfolio) to eventually deliver us an equal or greater amount of capital gains. Over our 56-year tenure, that expectation has been met.
The final component in our GAAP figure – that ugly \$11 billion write-down – is almost entirely the quantification of a mistake I made in 2016. That year, Berkshire purchased Precision Castparts (“PCC”), and I paid too much for the company.
No one misled me in any way – I was simply too optimistic about PCC's normalized profit potential. Last year, my miscalculation was laid bare by adverse developments throughout the aerospace industry, PCC's most important source of customers.
In purchasing PCC, Berkshire bought a fine company – the best in its business. Mark Donegan, PCC's CEO, is a passionate manager who consistently pours the same energy into the business that he did before we purchased it. We are lucky to have him running things.
I believe I was right in concluding that PCC would, over time, earn good returns on the net tangible assets deployed in its operations. I was wrong, however, in judging the average amount of future earnings and, consequently, wrong in my calculation of the proper price to pay for the business.
PCC is far from my first error of that sort. But it's a big one.
Two Strings to Our Bow
Berkshire is often labeled a conglomerate, a negative term applied to holding companies that own a hodge-podge of unrelated businesses. And, yes, that describes Berkshire – but only in part. To understand how and why we differ from the prototype conglomerate, let's review a little history.
Over time, conglomerates have generally limited themselves to buying businesses in their entirety. That strategy, however, came with two major problems. One was unsolvable: Most of the truly great businesses had no interest in having anyone take them over. Consequently, deal-hungry conglomerateurs had to focus on so-so companies that lacked important and durable competitive strengths. That was not a great pond in which to fish.
Beyond that, as conglomerateurs dipped into this universe of mediocre businesses, they often found themselves required to pay staggering “control” premiums to snare their quarry. Aspiring conglomerateurs knew the answer to this “overpayment” problem: They simply needed to manufacture a vastly overvalued stock of their own that could be used as a “currency” for pricey acquisitions. (“I’ll pay you \$10,000 for your dog by giving you two of my \$5,000 cats.”)
Often, the tools for fostering the overvaluation of a conglomerate's stock involved promotional techniques and “imaginative” accounting maneuvers that were, at best, deceptive and that sometimes crossed the line into fraud. When these tricks were “successful,” the conglomerate pushed its own stock to, say, 3x its business value in order to offer the target 2x its value.
Investing illusions can continue for a surprisingly long time. Wall Street loves the fees that deal-making generates, and the press loves the stories that colorful promoters provide. At a point, also, the soaring price of a promoted stock can itself become the “proof” that an illusion is reality.
Eventually, of course, the party ends, and many business “emperors” are found to have no clothes. Financial history is replete with the names of famous conglomerateurs who were initially lionized as business geniuses by journalists, analysts and investment bankers, but whose creations ended up as business junkyards.
Conglomerates earned their terrible reputation.
* * * * * * * * * * * *
Charlie and I want our conglomerate to own all or part of a diverse group of businesses with good economic characteristics and good managers. Whether Berkshire controls these businesses, however, is unimportant to us.
It took me a while to wise up. But Charlie – and also my 20-year struggle with the textile operation I inherited at Berkshire – finally convinced me that owning a non-controlling portion of a wonderful business is more profitable, more enjoyable and far less work than struggling with 100% of a marginal enterprise.
For those reasons, our conglomerate will remain a collection of controlled and non-controlled businesses. Charlie and I will simply deploy your capital into whatever we believe makes the most sense, based on a company's durable competitive strengths, the capabilities and character of its management, and price.
If that strategy requires little or no effort on our part, so much the better. In contrast to the scoring system utilized in diving competitions, you are awarded no points in business endeavors for “degree of difficulty.” Furthermore, as Ronald Reagan cautioned: “It’s said that hard work never killed anyone, but I say why take the chance?”
The Family Jewels and How We Increase Your Share of These Gems
On page A-1 we list Berkshire's subsidiaries, a smorgasbord of businesses employing 360,000 at yearend. You can read much more about these controlled operations in the 10-K that fills the back part of this report. Our major positions in companies that we partly own and don't control are listed on page 7 of this letter. That portfolio of businesses, too, is large and diverse.
Most of Berkshire's value, however, resides in four businesses, three controlled and one in which we have only a $5.4\%$ interest. All four are jewels.
The largest in value is our property/casualty insurance operation, which for 53 years has been the core of Berkshire. Our family of insurers is unique in the insurance field. So, too, is its manager, Ajit Jain, who joined Berkshire in 1986.
Overall, the insurance fleet operates with far more capital than is deployed by any of its competitors worldwide. That financial strength, coupled with the huge flow of cash Berkshire annually receives from its non-insurance businesses, allows our insurance companies to safely follow an equity-heavy investment strategy not feasible for the overwhelming majority of insurers. Those competitors, for both regulatory and credit-rating reasons, must focus on bonds.
And bonds are not the place to be these days. Can you believe that the income recently available from a 10-year U.S. Treasury bond – the yield was 0.93% at yearend – had fallen 94% from the 15.8% yield available in September 1981? In certain large and important countries, such as Germany and Japan, investors earn a negative return on trillions of dollars of sovereign debt. Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future.
Some insurers, as well as other bond investors, may try to juice the pathetic returns now available by shifting their purchases to obligations backed by shaky borrowers. Risky loans, however, are not the answer to inadequate interest rates. Three decades ago, the once-mighty savings and loan industry destroyed itself, partly by ignoring that maxim.
Berkshire now enjoys \$138 billion of insurance “float” – funds that do not belong to us, but are nevertheless ours to deploy, whether in bonds, stocks or cash equivalents such as U.S. Treasury bills. Float has some similarities to bank deposits: cash flows in and out daily to insurers, with the total they hold changing very little. The massive sum held by Berkshire is likely to remain near its present level for many years and, on a cumulative basis, has been costless to us. That happy result, of course, could change – but, over time, I like our odds.
I have repetitiously – some might say endlessly – explained our insurance operation in my annual letters to you. Therefore, I will this year ask new shareholders who wish to learn more about our insurance business and “float” to read the pertinent section of the 2019 report, reprinted on page A-2. It’s important that you understand the risks, as well as the opportunities, existing in our insurance activities.
Our second and third most valuable assets – it’s pretty much a toss-up at this point – are Berkshire’s 100% ownership of BNSF, America’s largest railroad measured by freight volume, and our 5.4% ownership of Apple. And in the fourth spot is our 91% ownership of Berkshire Hathaway Energy (“BHE”). What we have here is a very unusual utility business, whose annual earnings have grown from \$122 million to \$3.4 billion during our 21 years of ownership.
I'll have more to say about BNSF and BHE later in this letter. For now, however, I would like to focus on a practice Berkshire will periodically use to enhance your interest in both its “Big Four” as well as the many other assets Berkshire owns.
* * * * * * * * * * * *
Last year we demonstrated our enthusiasm for Berkshire's spread of properties by repurchasing the equivalent of 80,998 “A” shares, spending \$24.7 billion in the process. That action increased your ownership in all of Berkshire's businesses by 5.2% without requiring you to so much as touch your wallet.
Following criteria Charlie and I have long recommended, we made those purchases because we believed they would both enhance the intrinsic value per share for continuing shareholders and would leave Berkshire with more than ample funds for any opportunities or problems it might encounter.
In no way do we think that Berkshire shares should be repurchased at simply any price. I emphasize that point because American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked. Our approach is exactly the reverse.
Berkshire's investment in Apple vividly illustrates the power of repurchases. We began buying Apple stock late in 2016 and by early July 2018, owned slightly more than one billion Apple shares (split-adjusted). Saying that, I'm referencing the investment held in Berkshire's general account and am excluding a very small and separately-managed holding of Apple shares that was subsequently sold. When we finished our purchases in mid-2018, Berkshire's general account owned $5.2\%$ of Apple.
Our cost for that stake was \$36 billion. Since then, we have both enjoyed regular dividends, averaging about \$775 million annually, and have also – in 2020 – pocketed an additional \$11 billion by selling a small portion of our position.
Despite that sale – voila! – Berkshire now owns 5.4% of Apple. That increase was costless to us, coming about because Apple has continuously repurchased its shares, thereby substantially shrinking the number it now has outstanding.
But that's far from all of the good news. Because we also repurchased Berkshire shares during the $2 \frac{1}{2}$ years, you now indirectly own a full $10\%$ more of Apple's assets and future earnings than you did in July 2018.
This agreeable dynamic continues. Berkshire has repurchased more shares since yearend and is likely to further reduce its share count in the future. Apple has publicly stated an intention to repurchase its shares as well. As these reductions occur, Berkshire shareholders will not only own a greater interest in our insurance group and in BNSF and BHE, but will also find their indirect ownership of Apple increasing as well.
The math of repurchases grinds away slowly, but can be powerful over time. The process offers a simple way for investors to own an ever-expanding portion of exceptional businesses.
And as a sultry Mae West assured us: “Too much of a good thing can be . . . wonderful.”
Investments
Below we list our fifteen common stock investments that at yearend were our largest in 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 that investment using the “equity” method. On its balance sheet, Berkshire carries the Kraft Heinz holding at a GAAP figure of \$13.3 billion, an amount that represents Berkshire’s share of the audited net worth of Kraft Heinz on December 31, 2020. Please note, though, that the market value of our shares on that date was only \$11.3 billion.
| Shares* | Company | Percentage of Company Owned | 12/31/20 Cost** | Market (in millions) |
| 25,533,082 | AbbVie Inc. | 1.4 | $2,333 | $2,736 |
| 151,610,700 | American Express Company | 18.8 | 1,287 | 18,331 |
| 907,559,761 | Apple Inc. | 5.4 | 31,089 | 120,424 |
| 1,032,852,006 | Bank of America Corp. | 11.9 | 14,631 | 31,306 |
| 66,835,615 | The Bank of New York Mellon Corp. | 7.5 | 2,918 | 2,837 |
| 225,000,000 | BYD Co. Ltd. | 8.2 | 232 | 5,897 |
| 5,213,461 | Charter Communications, Inc. | 2.7 | 904 | 3,449 |
| 48,498,965 | Chevron Corporation | 2.5 | 4,024 | 4,096 |
| 400,000,000 | The Coca-Cola Company | 9.3 | 1,299 | 21,936 |
| 52,975,000 | General Motors Company | 3.7 | 1,616 | 2,206 |
| 81,304,200 | Itochu Corporation | 5.1 | 1,862 | 2,336 |
| 28,697,435 | Merck & Co., Inc. | 1.1 | 2,390 | 2,347 |
| 24,669,778 | Moody’s Corporation | 13.2 | 248 | 7,160 |
| 148,176,166 | U.S. Bancorp | 9.8 | 5,638 | 6,904 |
| 146,716,496 | Verizon Communications Inc. | 3.5 | 8,691 | 8,620 |
| Others*** | 29,458 | 40,585 | ||
| Total Equity Investments Carried at Market | $108,620 | $281,170 |
* Excludes shares held by pension funds of Berkshire subsidiaries.
** This is our actual purchase price and also our tax basis.
*** Includes a \$10 billion investment in Occidental Petroleum, consisting of preferred stock and warrants to buy common stock, a combination now being valued at \$9 billion.
A Tale of Two Cities
Success stories abound throughout America. Since our country's birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer's experience with something old.
Charlie and I journeyed throughout the nation to join with many of these individuals or their families. On the West Coast, we began the routine in 1972 with our purchase of See's Candy. A full century ago, Mary See set out to deliver an age-old product that she had reinvented with special recipes. Added to her business plan were quaint stores staffed by friendly salespeople. Her first small outlet in Los Angeles eventually led to several hundred shops, spread throughout the West.
Today, Mrs. See's creations continue to delight customers while providing life-long employment for thousands of women and men. Berkshire's job is simply not to meddle with the company's success. When a business manufactures and distributes a non-essential consumer product, the customer is the boss. And, after 100 years, the customer's message to Berkshire remains clear: "Don't mess with my candy." (The website is https://www.sees.com/; try the peanut brittle.)
Let's move across the continent to Washington, D.C. In 1936, Leo Goodwin, along with his wife, Lillian, became convinced that auto insurance – a standardized product customarily purchased from agents – could be sold directly at a much lower price. Armed with \$100,000, the pair took on giant insurers possessing 1,000 times or more their capital. Government Employees Insurance Company (later shortened to GEICO) was on its way.
By luck, I was exposed to the company's potential a full 70 years ago. It instantly became my first love (of an investment sort). You know the rest of the story: Berkshire eventually became the $100\%$ owner of GEICO, which at 84 years of age is constantly fine-tuning – but not changing – the vision of Leo and Lillian.
There has been, however, a change in the company's size. In 1937, its first full year of operation, GEICO did \$238,288 of business. Last year the figure was \$35 billion.
* * * * * * * * * * * *
Today, with much of finance, media, government and tech located in coastal areas, it's easy to overlook the many miracles occurring in middle America. Let's focus on two communities that provide stunning illustrations of the talent and ambition existing throughout our country.
You will not be surprised that I begin with Omaha.
In 1940, Jack Ringwalt, a graduate of Omaha's Central High School (the alma mater as well of Charlie, my dad, my first wife, our three children and two grandchildren), decided to start a property/casualty insurance company funded by \$125,000 in capital.
Jack's dream was preposterous, requiring his pipsqueak operation – somewhat pompously christened as National Indemnity – to compete with giant insurers, all of which operated with abundant capital. Additionally, those competitors were solidly entrenched with nationwide networks of well-funded and long-established local agents. Under Jack's plan, National Indemnity, unlike GEICO, would itself use whatever agencies deigned to accept it and consequently enjoy no cost advantage in its acquisition of business. To overcome those formidable handicaps, National Indemnity focused on “odd-ball” risks, which were deemed unimportant by the “big boys.” And, improbably, the strategy succeeded.
Jack was honest, shrewd, likeable and a bit quirky. In particular, he disliked regulators. When he periodically became annoyed with their supervision, he would feel an urge to sell his company.
Fortunately, I was nearby on one of those occasions. Jack liked the idea of joining Berkshire, and we made a deal in 1967, taking all of 15 minutes to reach a handshake. I never asked for an audit.
Today National Indemnity is the only company in the world prepared to insure certain giant risks. And, yes, it remains based in Omaha, a few miles from Berkshire's home office.
Over the years, we have purchased four additional businesses from Omaha families, the best known among them being Nebraska Furniture Mart (“NFM”). The company’s founder, Rose Blumkin (“Mrs. B”), arrived in Seattle in 1915 as a Russian emigrant, unable to read or speak English. She settled in Omaha several years later and by 1936 had saved \$2,500 with which to start a furniture store.
Competitors and suppliers ignored her, and for a time their judgment seemed correct: World War II stalled her business, and at yearend 1946, the company’s net worth had grown to only \$72,264. Cash, both in the till and on deposit, totaled \$50 (that’s not a typo).
One invaluable asset, however, went unrecorded in the 1946 figures: Louie Blumkin, Mrs. B's only son, had rejoined the store after four years in the U.S. Army. Louie fought at Normandy's Omaha Beach following the D-Day invasion, earned a Purple Heart for injuries sustained in the Battle of the Bulge, and finally sailed home in November 1945.
Once Mrs. B and Louie were reunited, there was no stopping NFM. Driven by their dream, mother and son worked days, nights and weekends. The result was a retailing miracle.
By 1983, the pair had created a business worth \$60 million. That year, on my birthday, Berkshire purchased 80% of NFM, again without an audit. I counted on Blumkin family members to run the business; the third and fourth generation do so today. Mrs. B, it should be noted, worked daily until she was 103 – a ridiculously premature retirement age as judged by Charlie and me.
NFM now owns the three largest home-furnishings stores in the U.S. Each set a sales record in 2020, a feat achieved despite the closing of NFM's stores for more than six weeks because of COVID-19.
A post-script to this story says it all: When Mrs. B's large family gathered for holiday meals, she always asked that they sing a song before eating. Her selection never varied: Irving Berlin's “God Bless America.”
* * * * * * * * * * * *
Let's move somewhat east to Knoxville, the third largest city in Tennessee. There, Berkshire has ownership in two remarkable companies – Clayton Homes (100% owned) and Pilot Travel Centers (38% owned now, but headed for 80% in 2023).
Each company was started by a young man who had graduated from the University of Tennessee and stayed put in Knoxville. Neither had a meaningful amount of capital nor wealthy parents.
But, so what? Today, Clayton and Pilot each have annual pre-tax earnings of more than \$1 billion. Together they employ about 47,000 men and women.
Jim Clayton, after several other business ventures, founded Clayton Homes on a shoestring in 1956, and “Big Jim” Haslam started what became Pilot Travel Centers in 1958 by purchasing a service station for \$6,000. Each of the men later brought into the business a son with the same passion, values and brains as his father. Sometimes there is a magic to genes.
“Big Jim” Haslam, now 90, has recently authored an inspirational book in which he relates how Jim Clayton’s son, Kevin, encouraged the Haslams to sell a large portion of Pilot to Berkshire. Every retailer knows that satisfied customers are a store’s best salespeople. That’s true when businesses are changing hands as well.
* * * * * * * * * * * *
When you next fly over Knoxville or Omaha, tip your hat to the Claytons, Haslams and Blumkins as well as to the army of successful entrepreneurs who populate every part of our country. These builders needed America's framework for prosperity – a unique experiment when it was crafted in 1789 – to achieve their potential. In turn, America needed citizens like Jim C., Jim H., Mrs. B and Louie to accomplish the miracles our founding fathers sought.
Today, many people forge similar miracles throughout the world, creating a spread of prosperity that benefits all of humanity. In its brief 232 years of existence, however, there has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country's economic progress has been breathtaking.
Beyond that, we retain our constitutional aspiration of becoming “a more perfect union.” Progress on that front has been slow, uneven and often discouraging. We have, however, moved forward and will continue to do so.
Our unwavering conclusion: Never bet against America.
The Berkshire Partnership
Berkshire is a Delaware corporation, and our directors must follow the state's laws. Among them is a requirement that board members must act in the best interest of the corporation and its stockholders. Our directors embrace that doctrine.
In addition, of course, Berkshire directors want the company to delight its customers, to develop and reward the talents of its 360,000 associates, to behave honorably with lenders and to be regarded as a good citizen of the many cities and states in which we operate. We value these four important constituencies.
None of these groups, however, have a vote in determining such matters as dividends, strategic direction, CEO selection, or acquisitions and divestitures. Responsibilities like those fall solely on Berkshire's directors, who must faithfully represent the long-term interests of the corporation and its owners.
Beyond legal requirements, Charlie and I feel a special obligation to the many individual shareholders of Berkshire. A bit of personal history may help you to understand our unusual attachment and how it shapes our behavior.
* * * * * * * * * * * *
Before my Berkshire years, I managed money for many individuals through a series of partnerships, the first three of those formed in 1956. As time passed, the use of multiple entities became unwieldy and, in 1962, we amalgamated 12 partnerships into a single unit, Buffett Partnership Ltd. (“BPL”).
By that year, virtually all of my own money, and that of my wife as well, had become invested alongside the funds of my many limited partners. I received no salary or fees. Instead, as the general partner, I was compensated by my limited partners only after they secured returns above an annual threshold of 6%. If returns failed to meet that level, the shortfall was to be carried forward against my share of future profits. (Fortunately, that never happened: Partnership returns always exceeded the 6% “bogey.”) As the years went by, a large part of the resources of my parents, siblings, aunts, uncles, cousins and in-laws became invested in the partnership.
Charlie formed his partnership in 1962 and operated much as I did. Neither of us had any institutional investors, and very few of our partners were financially sophisticated. The people who joined our ventures simply trusted us to treat their money as we treated our own. These individuals – either intuitively or by relying on the advice of friends – correctly concluded that Charlie and I had an extreme aversion to permanent loss of capital and that we would not have accepted their money unless we expected to do reasonably well with it.
I stumbled into business management after BPL acquired control of Berkshire in 1965. Later still, in 1969, we decided to dissolve BPL. After yearend, the partnership distributed, pro-rata, all of its cash along with three stocks, the largest by value being BPL's $70.5\%$ interest in Berkshire.
Charlie, meanwhile, wound up his operation in 1977. Among the assets he distributed to partners was a major interest in Blue Chip Stamps, a company his partnership, Berkshire and I jointly controlled. Blue Chip was also among the three stocks my partnership had distributed upon its dissolution.
In 1983, Berkshire and Blue Chip merged, thereby expanding Berkshire's base of registered shareholders from 1,900 to 2,900. Charlie and I wanted everyone – old, new and prospective shareholders – to be on the same page.
Therefore, the 1983 annual report – up front – laid out Berkshire’s “major business principles.” The first principle began: “Although our form is corporate, our attitude is partnership.” That defined our relationship in 1983; it defines it today. Charlie and I – and our directors as well – believe this dictum will serve Berkshire well for many decades to come.
* * * * * * * * * * * *
Ownership of Berkshire now resides in five large “buckets,” one occupied by me as a “founder” of sorts. That bucket is certain to empty as the shares I own are annually distributed to various philanthropies.
Two of the remaining four buckets are filled by institutional investors, each handling other people's money. That, however, is where the similarity between those buckets ends: Their investing procedures could not be more different.
In one institutional bucket are index funds, a large and mushrooming segment of the investment world. These funds simply mimic the index that they track. The favorite of index investors is the S&P 500, of which Berkshire is a component. Index funds, it should be emphasized, own Berkshire shares simply because they are required to do so. They are on automatic pilot, buying and selling only for “weighting” purposes.
In the other institutional bucket are professionals who manage their clients' money, whether those funds belong to wealthy individuals, universities, pensioners or whomever. These professional managers have a mandate to move funds from one investment to another based on their judgment as to valuation and prospects. That is an honorable, though difficult, occupation.
We are happy to work for this “active” group, while they meanwhile search for a better place to deploy the funds of their clientele. Some managers, to be sure, have a long-term focus and trade very infrequently. Others use computers employing algorithms that may direct the purchase or sale of shares in a nano-second. Some professional investors will come and go based upon their macro-economic judgments.
Our fourth bucket consists of individual shareholders who operate in a manner similar to the active institutional managers I’ve just described. These owners, understandably, think of their Berkshire shares as a possible source of funds when they see another investment that excites them. We have no quarrel with that attitude, which is similar to the way we look at some of the equities we own at Berkshire.
All of that said, Charlie and I would be less than human if we did not feel a special kinship with our fifth bucket: the million-plus individual investors who simply trust us to represent their interests, whatever the future may bring. They have joined us with no intent to leave, adopting a mindset similar to that held by our original partners. Indeed, many investors from our partnership years, and/or their descendants, remain substantial owners of Berkshire.
A prototype of those veterans is Stan Truhlsen, a cheerful and generous Omaha ophthalmologist as well as personal friend, who turned 100 on November 13, 2020. In 1959, Stan, along with 10 other young Omaha doctors, formed a partnership with me. The docs creatively labeled their venture Emdee, Ltd. Annually, they joined my wife and me for a celebratory dinner at our home.
When our partnership distributed its Berkshire shares in 1969, all of the doctors kept the stock they received. They may not have known the ins and outs of investing or accounting, but they did know that at Berkshire they would be treated as partners.
Two of Stan's comrades from Emdee are now in their high-90s and continue to hold Berkshire shares. This group's startling durability – along with the fact that Charlie and I are 97 and 90, respectively – serves up an interesting question: Could it be that Berkshire ownership fosters longevity?
* * * * * * * * * * * *
Berkshire's unusual and valued family of individual shareholders may add to your understanding of our reluctance to court Wall Street analysts and institutional investors. We already have the investors we want and don't think that they, on balance, would be upgraded by replacements.
There are only so many seats – that is, shares outstanding – available for Berkshire ownership. And we very much like the people already occupying them.
Of course, some turnover in “partners” will occur. Charlie and I hope, however, that it will be minimal. Who, after all, seeks rapid turnover in friends, neighbors or marriage?
In 1958, Phil Fisher wrote a superb book on investing. In it, he analogized running a public company to managing a restaurant. If you are seeking diners, he said, you can attract a clientele and prosper featuring either hamburgers served with a Coke or a French cuisine accompanied by exotic wines. But you must not, Fisher warned, capriciously switch from one to the other: Your message to potential customers must be consistent with what they will find upon entering your premises.
At Berkshire, we have been serving hamburgers and Coke for 56 years. We cherish the clientele this fare has attracted.
The tens of millions of other investors and speculators in the United States and elsewhere have a wide variety of equity choices to fit their tastes. They will find CEOs and market gurus with enticing ideas. If they want price targets, managed earnings and “stories,” they will not lack suitors. “Technicians” will confidently instruct them as to what some wiggles on a chart portend for a stock’s next move. The calls for action will never stop.
Many of those investors, I should add, will do quite well. After all, ownership of stocks is very much a “positive-sum” game. Indeed, a patient and level-headed monkey, who constructs a portfolio by throwing 50 darts at a board listing all of the S&P 500, will – over time – enjoy dividends and capital gains, just as long as it never gets tempted to make changes in its original “selections.”
Productive assets such as farms, real estate and, yes, business ownership produce wealth – lots of it. Most owners of such properties will be rewarded. All that’s required is the passage of time, an inner calm, ample diversification and a minimization of transactions and fees. Still, investors must never forget that their expenses are Wall Street’s income. And, unlike my monkey, Wall Streeters do not work for peanuts.
When seats open up at Berkshire – and we hope they are few – we want them to be occupied by newcomers who understand and desire what we offer. After decades of management, Charlie and I remain unable to promise results. We can and do, however, pledge to treat you as partners.
And so, too, will our successors.
A Berkshire Number that May Surprise You
Recently, I learned a fact about our company that I had never suspected: Berkshire owns American-based property, plant and equipment – the sort of assets that make up the “business infrastructure” of our country – with a GAAP valuation exceeding the amount owned by any other U.S. company. Berkshire’s depreciated cost of these domestic “fixed assets” is \$154 billion. Next in line on this list is AT&T, with property, plant and equipment of \$127 billion.
Our leadership in fixed-asset ownership, I should add, does not, in itself, signal an investment triumph. The best results occur at companies that require minimal assets to conduct high-margin businesses – and offer goods or services that will expand their sales volume with only minor needs for additional capital. We, in fact, own a few of these exceptional businesses, but they are relatively small and, at best, grow slowly.
Asset-heavy companies, however, can be good investments. Indeed, we are delighted with our two giants – BNSF and BHE: In 2011, Berkshire’s first full year of BNSF ownership, the two companies had combined earnings of \$4.2 billion. In 2020, a tough year for many businesses, the pair earned \$8.3 billion.
BNSF and BHE will require major capital expenditures for decades to come. The good news is that both are likely to deliver appropriate returns on the incremental investment.
Let's look first at BNSF. Your railroad carries about $15\%$ of all non-local ton-miles (a ton of freight moved one mile) of goods that move in the United States, whether by rail, truck, pipeline, barge or aircraft. By a significant margin, BNSF's loads top those of any other carrier.
The history of American railroads is fascinating. After 150 years or so of frenzied construction, skullduggery, overbuilding, bankruptcies, reorganizations and mergers, the railroad industry finally emerged a few decades ago as mature and rationalized.
BNSF began operations in 1850 with a 12-mile line in northeastern Illinois. Today, it has 390 antecedents whose railroads have been purchased or merged. The company's extensive lineage is laid out at http://www.bnsf.com/bnsf-resources/pdf/about-bnsf/History_and_Legacy.pdf.
Berkshire acquired BNSF early in 2010. Since our purchase, the railroad has invested \$41 billion in fixed assets, an outlay \$20 billion in excess of its depreciation charges. Railroading is an outdoor sport, featuring mile-long trains obliged to reliably operate in both extreme cold and heat, as they all the while encounter every form of terrain from deserts to mountains. Massive flooding periodically occurs. BNSF owns 23,000 miles of track, spread throughout 28 states, and must spend whatever it takes to maximize safety and service throughout its vast system.
Nevertheless, BNSF has paid substantial dividends to Berkshire – \$41.8 billion in total. The railroad pays us, however, only what remains after it both fulfills the needs of its business and maintains a cash balance of about \$2 billion. This conservative policy allows BNSF to borrow at low rates, independent of any guarantee of its debt by Berkshire.
One further word about BNSF: Last year, Carl Ice, its CEO, and his number two, Katie Farmer, did an extraordinary job in controlling expenses while navigating a significant downturn in business. Despite a $7\%$ decline in the volume of goods carried, the two actually increased BNSF's profit margin by 2.9 percentage points. Carl, as long planned, retired at yearend and Katie took over as CEO. Your railroad is in good hands.
BHE, unlike BNSF, pays no dividends on its common stock, a highly-unusual practice in the electric-utility industry. That Spartan policy has been the case throughout our 21 years of ownership. Unlike railroads, our country's electric utilities need a massive makeover in which the ultimate costs will be staggering. The effort will absorb all of BHE's earnings for decades to come. We welcome the challenge and believe the added investment will be appropriately rewarded.
Let me tell you about one of BHE's endeavors – its \$18 billion commitment to rework and expand a substantial portion of the outdated grid that now transmits electricity throughout the West. BHE began this project in 2006 and expects it to be completed by 2030 – yes, 2030.
The advent of renewable energy made our project a societal necessity. Historically, the coal-based generation of electricity that long prevailed was located close to huge centers of population. The best sites for the new world of wind and solar generation, however, are often in remote areas. When BHE assessed the situation in 2006, it was no secret that a huge investment in western transmission lines had to be made. Very few companies or governmental entities, however, were in a financial position to raise their hand after they tallied the project's cost.
BHE's decision to proceed, it should be noted, was based upon its trust in America's political, economic and judicial systems. Billions of dollars needed to be invested before meaningful revenue would flow. Transmission lines had to cross the borders of states and other jurisdictions, each with its own rules and constituencies. BHE would also need to deal with hundreds of landowners and execute complicated contracts with both the suppliers that generated renewable power and the far-away utilities that would distribute the electricity to their customers. Competing interests and defenders of the old order, along with unrealistic visionaries desiring an instantly-new world, had to be brought on board.
Both surprises and delays were certain. Equally certain, however, was the fact that BHE had the managerial talent, the institutional commitment and the financial wherewithal to fulfill its promises. Though it will be many years before our western transmission project is completed, we are today searching for other projects of similar size to take on.
Whatever the obstacles, BHE will be a leader in delivering ever-cleaner energy.
The Annual Meeting
Last year, on February 22 $^{nd}$ , I wrote you about our plans for a gala annual meeting. Within a month, the schedule was junked.
Our home office group, led by Melissa Shapiro and Marc Hamburg, Berkshire's CFO, quickly regrouped. Miraculously, their improvisations worked. Greg Abel, one of Berkshire's Vice Chairmen, joined me on stage facing a dark arena, 18,000 empty seats and a camera. There was no rehearsal: Greg and I arrived about 45 minutes before “showtime.”
Debbie Bosanek, my incredible assistant who joined Berkshire 47 years ago at age 17, had put together about 25 slides displaying various facts and figures that I had assembled at home. An anonymous but highly-capable team of computer and camera operators projected the slides onto the screen in proper order.
Yahoo streamed the proceedings to a record-sized international audience. Becky Quick of CNBC, operating from her home in New Jersey, selected questions from thousands that shareholders had earlier submitted or that viewers had emailed to her during the four hours Greg and I were on stage. See's peanut brittle and fudge, along with Coca-Cola, provided us with nourishment.
This year, on May 1 $^{st}$ , we are planning to go one better. Again, we will rely on Yahoo and CNBC to perform flawlessly. Yahoo will go live at 1 p.m. Eastern Daylight Time (“EDT”). Simply navigate to https://finance.yahoo.com/brklivestream.
Our formal meeting will commence at 5:00 p.m. EDT and should finish by 5:30 p.m. Earlier, between 1:30-5:00, we will answer your questions as relayed by Becky. As always, we will have no foreknowledge as to what questions will be asked. Send your zingers to BerkshireQuestions@cnbc.com. Yahoo will wrap things up after 5:30.
And now – drum roll, please – a surprise. This year our meeting will be held in Los Angeles . . . and Charlie will be on stage with me offering answers and observations throughout the 3 $^{1/2}$ -hour question period. I missed him last year and, more important, you clearly missed him. Our other invaluable vice-chairmen, Ajit Jain and Greg Abel, will be with us to answer questions relating to their domains.
Join us via Yahoo. Direct your really tough questions to Charlie! We will have fun, and we hope you will as well.
Better yet, of course, will be the day when we see you face to face. I hope and expect that will be in 2022. The citizens of Omaha, our exhibiting subsidiaries and all of us at the home office can't wait to get you back for an honest-to-God annual meeting, Berkshire-style.
February 27, 2021
Warren E. Buffett
Chairman of the Board
伯克希尔业绩 vs. 标普500
| 年度百分比变化 | ||
| 年份 | 伯克希尔每股市场价值 | 标普500含股息 |
| 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 |
| 2020 | 2.4 | 18.4 |
| 年化复合收益率 – 1965-2020 | 20.0% | 10.2% |
| 整体收益率 – 1964-2020 | 2,810,526% | 23,454% |
注：数据对应日历年，以下年份除外：1965和1966年截至9月30日；1967年截至12月31日（15个月）。
伯克希尔·哈撒韦公司
致伯克希尔·哈撒韦公司股东：
按照美国通用会计准则（通常简称"GAAP"），伯克希尔2020年盈利425亿美元。这个数字包含四个部分：219亿美元经营利润、49亿美元已实现资本收益、因我们持有的股票中未实现资本收益净额增加带来的267亿美元收益，以及我们旗下几家子公司及联营企业资产减值造成的110亿美元亏损。以上各项均为税后数据。
运营利润才是最重要的，即使在它们并非GAAP总额中最大项目的时期也是如此。我们在伯克希尔的重点既是增加这部分收入，也是收购大型且定位良好的企业。然而去年，这两个目标我们都没能实现：伯克希尔没有进行大规模收购，运营利润下降了9%。不过，我们确实通过留存收益和回购约5%的股份，提高了伯克希尔的每股内在价值。
GAAP中涉及资本利得或损失（无论是已实现还是未实现）的两个组成部分每年都变化无常，反映了股市的波动。无论今天的数据如何，我的长期合伙人Charlie Munger和我都坚信，随着时间的推移，伯克希尔从其投资持仓中获得的资本利得将是可观的。
正如我多次强调的，Charlie和我将伯克希尔持有的可交易股票——年底价值2810亿美元——视为一家企业的集合。我们不控制这些公司的运营，但按比例分享它们的长期繁荣。然而从会计角度来看，我们享有的那部分收益并未计入伯克希尔的收入。相反，只有这些被投资公司向我们支付的股息才记入账簿。根据GAAP，被投资公司为我们保留的巨额留存收益就变得不可见了。
但看不见的，不应该被遗忘：那些未记录的留存收益通常正在为伯克希尔积累价值——大量价值。被投资公司利用留存的资金来扩展业务、进行收购、偿还债务，并且经常回购自己的股票（这会增加我们对它们未来收益的份额）。正如我们去年在这些信中所指出的，留存收益在美国历史上的商业发展中起到了推动作用。对卡内基和洛克菲勒有效的东西，多年来也为数百万股东发挥了魔力。
当然，我们的一些被投资公司会令人失望，通过留存收益对公司价值的增加微乎其微，甚至毫无贡献。但其他公司会超额回报，其中少数会非常出色。总的来说，我们预期伯克希尔非控股企业（别人会称之为我们的股票投资组合）所留存的那一大笔收益份额，最终将为我们带来同等或更多的资本利得。在我们56年的任期内，这一预期一直得以实现。
我们GAAP数字中的最后一个组成部分——那笔难看的110亿美元减记——几乎完全是我在2016年犯下的一个错误的量化。那一年，伯克希尔收购了Precision Castparts（“PCC”），而我为这家公司支付的价格过高。
没有人以任何方式误导我——我只是对PCC的正常化盈利潜力过于乐观了。去年，我的误算被整个航空航天行业的不利发展暴露无遗，而该行业正是PCC最重要的客户来源。
收购PCC时，伯克希尔买入了一家好公司——它所在行业中最好的。PCC的CEO Mark Donegan是一位充满热情的管理者，他持续将与我们收购前同样的精力投入到业务中。有他掌舵，我们很幸运。
我相信我当时判断PCC会随着时间推移，在其运营中投入的有形资产净额上获得良好回报，这个结论是对的。但我错了，错在判断未来平均收益的金额上，从而也错算了对这家企业应付的合理价格。
PCC远不是我犯的第一个此类错误。但这是一个大错误。
我们的两把弓
伯克希尔常被贴上“综合性企业”的标签，这是一个用于描述持有五花八门不相关业务的控股公司的负面术语。是的，这描述了伯克希尔——但只是部分。要理解我们为何以及如何与典型的综合性企业不同，让我们回顾一点历史。
长期以来，综合企业集团通常只收购完整的公司。但这种策略存在两大难题。其一无解：真正伟大的企业大多无意被任何人收购。因此，渴望交易的集团主理人只能盯着那些缺乏重要且持久竞争优势的平庸公司——这可算不上一片好渔场。
此外，当集团主理人涉足这片平庸企业之海时，他们往往发现自己需要支付惊人的“控制权”溢价才能捕获猎物。心怀野心的集团主理人知道如何解决这个“溢价”问题：他们只需制造出自家被严重高估的股票，用作高溢价收购的“货币”。（“我付你一万美元买你的狗，方法是用两只我报价五千美元的猫来换。”）
促成集团股票高估的手段，常常涉及宣传技巧和“富有想象力”的会计操作——往好里说这是欺骗，有时则直接越界成了欺诈。当这些把戏“成功”时，集团把自己的股价推高到，比方说，企业价值的三倍，然后给目标公司两倍其价值的报价。
投资幻象可以持续出奇地久。华尔街热爱交易带来的手续费，媒体则热爱那些花哨推手们提供的故事。而且，被炒作的股票价格本身，也常常成为“证明”幻象即是现实的证据。
当然，派对终有散场时，许多商业“皇帝”被发现其实没穿衣服。金融史上充斥着知名集团主理人的名字——他们最初被记者、分析师和投资银行家奉为商业天才，但最终他们创造的东西却成了商业垃圾场。
综合企业集团落得了如此糟糕的名声。
查理和我希望我们的综合企业集团拥有或部分持有一系列具备良好经济特征和优秀管理层的多元化业务。然而，伯克希尔是否控制这些企业，对我们来说并不重要。
我花了一些时间才醒悟过来。但查理——以及我在伯克希尔继承的纺织业务中挣扎的二十年——最终让我明白，持有一家伟大企业的非控股部分，比与一家边缘企业100%的控股权苦苦挣扎更赚钱、更愉快，也省事得多。
出于这些原因，我们的综合企业集团将继续由控股和非控股业务组成。查理和我只会根据一家公司的持久竞争优势、管理层的能力和品格以及价格，将你们的资本配置到我们认为最有意义的地方。
如果这种策略几乎不需要我们付出任何努力，那就更好了。与跳水比赛的评分体系不同，在商业活动中，你并不会因为“难度系数”而加分。此外，正如罗纳德·里根警告的那样：“据说努力工作不会害死人，但我说为什么要冒这个险呢？”
核心资产及我们如何增加你在这些宝石中的份额
在第A-1页，我们列出了伯克希尔的子公司——这是一份由36万名员工（截至年底）组成的业务自助餐。你可以在本报告后半部分的10-K年报中读到更多关于这些控股业务的内容。我们在部分持股但不控制的公司中的主要仓位，列于本信函的第7页。这部分业务组合同样庞大且多元。
然而，伯克希尔的大部分价值存在于四项业务之中：三项控股，一项我们仅持有$5.4\%$的权益。这四项都是宝石。
按价值计算，规模最大的是我们的财产/意外险业务，53年来它一直是伯克希尔的核心。我们的保险家族在保险领域独树一帜，其掌舵人Ajit Jain亦是如此，他于1986年加入伯克希尔。
总体而言，我们的保险舰队所动用的资本远超全球任何竞争对手。这种财务实力，加上伯克希尔每年从非保险业务获得的巨额现金流，使我们的保险公司能够安全地遵循重仓股权的投资策略，这是绝大多数保险公司无法做到的。那些竞争对手，出于监管和信用评级的考虑，必须聚焦于债券。
而债券如今已不是该待的地方。你能相信吗？最近10年期美国国债的收益率——年末时为0.93%——已从1981年9月的15.8%暴跌了94%？在德国和日本等一些重要大国，投资者持有数万亿美元的主权债券竟获得负收益。全球的固定收益投资者——无论是养老金、保险公司还是退休人员——都面临着黯淡的未来。
一些保险公司以及其他债券投资者，可能会试图通过将资金转而投向那些不可靠借款人支持的债券，来勉强提升目前可怜的回报。然而，冒险放贷并非应对低利率的良策。三十年前，曾经强大的储蓄贷款行业就因部分忽视了这条准则而自毁前程。
伯克希尔目前拥有1380亿美元的保险"浮存金"——这些资金虽不属于我们，却仍可由我们调配，无论是投资债券、股票，还是美国国债等现金等价物。浮存金与银行存款有些相似：资金每日流入流出保险公司，但其持有的总额变化极小。伯克希尔持有的这笔巨额浮存金很可能在未来多年保持在当前水平附近，并且累积来看，对我们而言一直是没有成本的。当然，这种令人满意的结果可能会改变——但随着时间的推移，我乐见我们的胜算。
我在每年的致股东信中，都重复——有人可能认为没完没了——解释过我们的保险业务。因此，今年我想请那些希望进一步了解我们保险业务和"浮存金"的新股东，阅读2019年年报中重印于A-2页的相关部分。理解我们保险业务中存在的风险与机遇，对你很重要。
按价值计算，我们的第二和第三大资产——目前两者难分伯仲——是伯克希尔100%拥有的BNSF（按货运量计美国最大的铁路公司），以及我们持有的5.4%苹果股份。排在第四位的是我们91%拥有的伯克希尔·哈撒韦能源公司（BHE）。我们这里拥有的是一家非常不寻常的公用事业公司，在我们持股的21年里，其年收益已从1.22亿美元增长至34亿美元。
关于BNSF和BHE，我稍后会在信中详述。不过现在，我想先聚焦于伯克希尔将定期采用的一种做法，以提升你对"四巨头"以及伯克希尔拥有的众多其他资产的兴趣。
去年，我们通过回购相当于80,998股"A"股，为此耗资247亿美元，以此彰显了我们对伯克希尔资产组合的热情。这一行动使你在伯克希尔所有业务中的持股比例增加了5.2%，而你甚至无需掏一分钱腰包。
遵循查理和我长期以来推荐的标准，我们进行了这些回购，因为我们相信，它们既能提高持续股东每股的内在价值，又能让伯克希尔留出足够充裕的资金，以应对未来可能遇到的任何机遇或问题。
我们绝不认为伯克希尔的股票应该在任何价格下都进行回购。我强调这一点，是因为美国CEO们有一个令人尴尬的记录：他们在股价上涨时投入的公司回购资金远多于股价暴跌时。我们的做法恰恰相反。
伯克希尔对苹果公司的投资生动地展示了回购的力量。我们于2016年底开始买入苹果股票，到2018年7月初，已持有略超过10亿股苹果股票（经拆股调整）。需要说明的是，这里指的是伯克希尔总账户持有的投资，不包括随后卖出的一个规模很小、单独管理的苹果持仓。2018年中期完成买入后，伯克希尔的总账户持有苹果5.2%的股份。
我们这笔持仓的成本是360亿美元。此后，我们既定期获得了股息，平均每年约7.75亿美元，还在2020年通过出售一小部分持仓额外获得110亿美元。
尽管有那次出售——瞧！——伯克希尔现在持有苹果5.4%的股份。这一增加对我们来说是零成本的，原因是苹果持续回购自己的股票，从而大幅减少了其流通股数量。
但这还不是全部好消息。因为在过去两年半里，我们也回购了伯克希尔的股票，所以你们现在间接拥有的苹果资产和未来收益，比2018年7月时多了整整10%。
这种令人愉快的动态仍在延续。伯克希尔在年底之后又回购了更多股票，并且未来很可能进一步减少其股份数量。苹果也已公开表示有回购其股票的意图。随着这些股份的减少，伯克希尔的股东不仅将拥有我们保险集团以及BNSF和BHE的更大权益，还会发现他们对苹果的间接所有权也在增加。
回购的数学效应虽然缓慢消磨，但随着时间的推移可以产生强大的力量。这个过程为投资者提供了一种简单的方法，让他们拥有优秀企业不断扩张的份额。
正如风情万种的Mae West向我们保证的那样：“好事太多……也可以是美妙的。”
投资
下面列出我们在年末按市值计算的十五大普通股投资。我们排除了持有的卡夫亨氏股份——325,442,152股——因为伯克希尔是控股集团的一部分，因此必须使用“权益”法对该投资进行核算。在资产负债表上，伯克希尔按美国通用会计准则的金额133亿美元计入卡夫亨氏持仓，该金额代表了伯克希尔在2020年12月31日经审计的卡夫亨氏净资产中所占份额。但请注意，我们股票在那一天的市场价值仅为113亿美元。
| 持股数量* | 公司 | 持股比例 | 2020年12月31日成本** | 市值（百万美元） |
| 25,533,082 | AbbVie Inc.（艾伯维公司） | 1.4 | $2,333 | $2,736 |
| 151,610,700 | American Express Company（美国运通公司） | 18.8 | 1,287 | 18,331 |
| 907,559,761 | Apple Inc.（苹果公司） | 5.4 | 31,089 | 120,424 |
| 1,032,852,006 | Bank of America Corp.（美国银行） | 11.9 | 14,631 | 31,306 |
| 66,835,615 | The Bank of New York Mellon Corp.（纽约梅隆银行） | 7.5 | 2,918 | 2,837 |
| 225,000,000 | BYD Co. Ltd.（比亚迪股份有限公司） | 8.2 | 232 | 5,897 |
| 5,213,461 | Charter Communications, Inc.（特许通讯公司） | 2.7 | 904 | 3,449 |
| 48,498,965 | Chevron Corporation（雪佛龙公司） | 2.5 | 4,024 | 4,096 |
| 400,000,000 | The Coca-Cola Company（可口可乐公司） | 9.3 | 1,299 | 21,936 |
| 52,975,000 | General Motors Company（通用汽车公司） | 3.7 | 1,616 | 2,206 |
| 81,304,200 | Itochu Corporation（伊藤忠商事） | 5.1 | 1,862 | 2,336 |
| 28,697,435 | Merck & Co., Inc.（默克公司） | 1.1 | 2,390 | 2,347 |
| 24,669,778 | Moody’s Corporation（穆迪公司） | 13.2 | 248 | 7,160 |
| 148,176,166 | U.S. Bancorp（美国合众银行） | 9.8 | 5,638 | 6,904 |
| 146,716,496 | Verizon Communications Inc.（威瑞森通信公司） | 3.5 | 8,691 | 8,620 |
| 其他*** | 29,458 | 40,585 | ||
| 按市值计量的股权投资总额 | $108,620 | $281,170 |
* 不包括伯克希尔子公司养老基金持有的股份。
* 这是我们实际买入价格，也是税基。
** 包括对西方石油（Occidental Petroleum）的100亿美元投资，由优先股和购买普通股的认股权证构成，目前该组合估值90亿美元。
双城记
美国遍地都是成功故事。自建国以来，怀揣创意与抱负、往往只有微薄资本的普通人，通过创造新事物或改进旧事物的客户体验，实现了超越梦想的成功。
查理和我曾走遍美国，去拜访这些成功人士或他们的家人。在西海岸，我们从1972年收购喜诗糖果（See's Candy）开始这一惯例。整整一个世纪前，Mary See 着手推出一款用特制配方重新打造的老字号产品。她的商业计划里还有古色古香的店铺，由友善的店员经营。她在洛杉矶的第一家小门店最终演变成遍布西部的数百家店铺。
如今，喜诗夫人的作品依然让顾客欣喜，同时为成千上万的男女提供了终身职业。伯克希尔的职责就是不干涉这家公司的成功。当一家企业制造和分销的是非必需消费品时，顾客就是老板。一百年后，顾客给伯克希尔的信息依然明确：“别碰我的糖果。”（网址是 https://www.sees.com/；试试花生脆糖。）
让我们横跨大陆来到华盛顿特区。1936年，Leo Goodwin 和妻子 Lillian 确信，汽车保险——这种通常通过代理人购买的标准化产品——可以通过直接销售以低得多的价格提供。两人带着10万美元，向资本规模超过他们一千倍甚至更多的保险巨头发起了挑战。政府雇员保险公司（Government Employees Insurance Company，后简称为 GEICO）就此启程。
靠运气，我在整整70年前就接触到了这家公司的潜力。它立刻成了我的初恋（投资意义上的那种）。后面的故事你们都知道：伯克希尔最终成了GEICO的100%所有者，这家已经84岁的公司一直在微调——但从未改变——利奥和莉莲的愿景。
不过，公司的体量发生了翻天覆地的变化。1937年，GEICO开业第一个完整年度，做了238,288美元的生意。去年，这个数字是350亿美元。
如今，金融、媒体、政府和科技行业大多集中在沿海地区，人们很容易忽视美国腹地正在发生的无数奇迹。让我们聚焦两个社区，它们惊人地展现了遍布我们国家的才华与抱负。
你们不会惊讶我先从奥马哈说起。
1940年，杰克·林沃尔特——奥马哈中央高中的毕业生（也是查理、我父亲、我第一任妻子、我们三个孩子和两个孙辈的母校）——决定创办一家财产/意外险公司，启动资金12.5万美元。
杰克的梦想荒谬无比：他那家小得可怜的公司（被相当自命不凡地命名为国民赔偿保险公司）要与资金充裕的保险巨头竞争。况且，那些竞争对手根基稳固，拥有全国性的网络，由资金雄厚、历史悠久的本地代理商构成。按照杰克的计划，国民赔偿与GEICO不同，它只能依靠任何愿意接纳它的代理机构，因此在获取业务上毫无成本优势。为了克服这些巨大劣势，国民赔偿专注于“怪胎”风险——那些被“大玩家”们认为无关紧要的风险。而不可思议的是，这策略居然成功了。
杰克诚实、精明、讨人喜欢，还有点古怪。他尤其讨厌监管机构。当他时不时被监管搞得恼火时，就会萌生卖掉公司的冲动。
幸运的是，有一次他发作时我正好在场。杰克喜欢加入伯克希尔的想法，1967年我们做了一笔交易，只用了15分钟就握手成交。我从未要求过审计。
如今，国民赔偿是全球唯一一家准备承保某些巨型风险的公司。没错，它仍然扎根在奥马哈，离伯克希尔总部只有几英里。
这些年来，我们从奥马哈家族手里又收购了四家企业，其中最著名的是内布拉斯加家具城（NFM）。这家公司的创始人罗斯·布卢姆金（人称“B太太”）1915年作为俄罗斯移民抵达西雅图，不会读写英语。几年后她在奥马哈定居，到1936年攒够了2,500美元，开了一家家具店。
竞争对手和供应商都不把她当回事，有段时间他们的判断似乎没错：二战拖垮了她的生意，到1946年底，公司净资产才增长到72,264美元。收银台和银行里的现金总共只有50美元（没写错）。
然而，1946年的账上漏记了一项无价之宝：B太太的独子路易·布卢姆金在美国陆军服役四年后，回到了店里。路易在诺曼底登陆日后在奥马哈海滩战斗，在突出部战役中受伤获得紫心勋章，最终于1945年11月乘船回家。
一旦B太太和路易重聚，内布拉斯加家具城就势不可挡了。被梦想驱动，母子俩日日夜夜、周末无休地工作。结果是一个零售业的奇迹。
到1983年，这对母子已打造出一家价值6000万美元的企业。那年我生日那天，伯克希尔买下了内布拉斯加家具城80%的股份，又一次没有审计。我指望布卢姆金家族成员来经营这家企业；如今第三代和第四代仍在打理。值得一提的是，B太太一直工作到103岁——按查理和我的标准，这退休年龄荒唐得离谱。
NFM 如今拥有美国最大的三家家居用品卖场。2020年，每家店的销售额都创下了纪录——这一成就来之不易，因为NFM的门店曾因新冠疫情关闭超过六周。
这则故事的后记说明了一切：当B夫人的大家族在节假日聚餐时，她总是要求大家先唱一首歌再吃饭。她选的歌从未变过：欧文·伯林的《天佑美国》。
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让我们往东移一点，到田纳西州第三大城市诺克斯维尔。在那里，伯克希尔拥有两家杰出公司的所有权——克莱顿房屋（100%控股）和飞行员旅行中心（目前已控股38%，2023年将增至80%）。
这两家公司都是由一位从田纳西大学毕业后留在诺克斯维尔的小伙子创立的。两人既没有多少资本，也没有富有的父母。
但那又怎样？如今，克莱顿和飞行员每年各自获得超过10亿美元的税前利润，合计雇佣约47,000名员工。
吉姆·克莱顿在从事过其他几桩生意后，于1956年白手起家创办了克莱顿房屋；"大吉姆"哈斯拉姆则在1958年花6000美元买下了一个加油站，一步步发展成了如今的飞行员旅行中心。两位创始人都后来带儿子进入了企业——这些儿子和父亲一样，有着同样的激情、价值观和头脑。有时候，基因真的有魔力。
"大吉姆"哈斯拉姆（现年90岁）最近出版了一本励志书，书中讲到吉姆·克莱顿的儿子凯文如何鼓励哈斯拉姆家族将飞行员的大量股份出售给伯克希尔。每个零售商都知道，满意的客户是店里最好的推销员——企业易主时也是如此。
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下次你飞越诺克斯维尔或奥马哈时，别忘了向克莱顿家族、哈斯拉姆家族和布鲁姆金家族，以及遍布美国各地的众多成功创业者们脱帽致敬。这些建设者需要美国所提供的繁荣框架——这个框架在1789年制定时是一场独一无二的实验——来发挥他们的潜力。反过来，美国也需要像吉姆·克莱顿、吉姆·哈斯拉姆、B夫人和路易这样的公民，来实现我们的开国先贤所追求的伟大奇迹。
如今，世界各地的人们也在创造着类似的奇迹，推动着造福全人类的繁荣。然而，在短短232年的历史中，还没有哪个地方能像美国这样，成为释放人类潜能的孵化器。尽管遭遇过几次严重的打断，我国经济的进步仍令人叹为观止。
除此之外，我们仍然保留着宪法中"建设更完善的联邦"的理想。这方面的进步缓慢、不均衡，且常常令人气馁。但我们一直在向前迈进，并将继续努力。
我们的结论坚定不移：永远不要做空美国。
伯克希尔的合伙关系
伯克希尔是一家特拉华州的公司，我们的董事必须遵守该州的法律。其中一条要求董事会成员必须以公司及其股东的最佳利益行事。我们的董事们拥护这一原则。
当然，除此之外，伯克希尔的董事们也希望公司能让客户满意，发展和奖励其36万名员工的才能，对贷款人保持诚信，并在我们所经营的众多城市和州中成为好公民。我们珍视这四类重要的利益相关方。
不过，这些群体中没有一个能投票决定股息、战略方向、CEO人选、收购或剥离等事项。这类责任完全落在伯克希尔的董事肩上，他们必须忠实地代表公司及其所有者的长期利益。
除了法律规定之外，查理和我对伯克希尔的众多个人股东怀有一种特殊的责任感。一点个人历史可能有助于你理解我们这种不寻常的感情，以及它如何影响我们的行为。
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在我执掌伯克希尔之前，我通过一系列合伙企业为许多人管理资金，最早的三家成立于1956年。随着时间的推移，管理多个实体变得笨拙，于是在1962年，我将12家合伙企业合并为一个实体——巴菲特合伙有限公司（简称“BPL”）。
到那一年，我几乎所有的个人资金，以及我妻子的资金，都和我众多有限合伙人的资金一起投入了合伙企业。我不拿薪水或费用。相反，作为普通合伙人，我只有在有限合伙人获得超过每年6%的门槛回报后，才能从他们那里获得报酬。如果回报未能达到这个水平，差额将结转，从我自己未来的利润份额中扣除。（幸运的是，这从未发生：合伙企业的回报总是超过6%的“门槛”。）随着时间推移，我父母、兄弟姐妹、叔伯姑姨、堂表亲戚及姻亲的大部分资源都投入了合伙企业。
Charlie 在1962年成立了自己的合伙企业，运作方式和我类似。我们俩都没有任何机构投资者，我们的合伙人中也几乎没有金融方面经验丰富的人。加入我们事业的人们只是相信我们会像对待自己的钱一样对待他们的钱。这些人——要么凭直觉，要么靠朋友的建议——正确地推断出 Charlie 和我对永久性资本损失极度厌恶，而且除非我们预期能做得相当好，否则我们不会接受他们的钱。
1965年 BPL 收购了伯克希尔的控股权后，我偶然踏入了企业管理领域。再后来，在1969年，我们决定解散 BPL。年底后，合伙企业按比例分配了所有现金和三只股票，其中价值最大的是 BPL 持有的伯克希尔 $70.5\%$ 的权益。
与此同时，Charlie 在1977年结束了他的合伙企业。他向合伙人分配的资产中包括蓝筹印花公司（Blue Chip Stamps）的重要权益，这家公司由他的合伙企业、伯克希尔和我共同控制。蓝筹印花也是我的合伙企业解散时分配的三只股票之一。
1983年，伯克希尔与蓝筹印花合并，伯克希尔的注册股东基础从1,900人扩大到2,900人。Charlie 和我想让所有人——老股东、新股东和潜在股东——都能达成共识。
因此，1983年的年报在最前面列出了伯克希尔的“主要经营原则”。第一条原则写道：“虽然我们的形式是公司，但我们的态度是合伙企业。”这定义了我们在1983年的关系，至今依然如此。Charlie 和我——以及我们的董事——都相信，这条准则在未来几十年里将继续为伯克希尔带来好处。
伯克希尔的所有权现在分布在五个大“桶”里，其中一个由我占据，算是个“创始人”。这个桶注定会随着我持有的股份每年分配给各个慈善机构而逐渐清空。
另外四个桶中，有两个由机构投资者占据，它们管理着别人的钱。然而，这两个桶的相似之处仅限于此：它们的投资流程可谓大相径庭。
一个机构桶里是指数基金，这是投资世界中庞大且迅速增长的部分。这些基金只是简单模仿它们追踪的指数。指数投资者最青睐的是标普500指数，伯克希尔是其中的成分股。需要强调的是，指数基金持有伯克希尔的股票仅仅是因为它们必须这样做。它们处于自动驾驶状态，买卖股票只是为了“权重调整”目的。
另一个机构桶里是专业投资经理，他们管理客户的资金，无论这些资金属于富裕个人、大学、养老金领取者还是其他人。这些专业经理人的职责是，根据自己对估值和前景的判断，将资金从一个投资标的转移到另一个。这是一项光荣但艰难的行业。
我们很乐意为这个"活跃型"群体工作，同时他们在为旗下客户寻找更好的资金配置之处。当然，有些管理人着眼长期，交易极少；另一些则使用算法驱动的电脑，可能在纳秒级完成买卖指令。还有些专业投资者会根据宏观经济判断来决定进进出出。
我们的第四类股东，是那些行事方式与我刚描述的活跃型机构管理人相仿的个人投资者。可以理解的是，当他们看到另一个令自己心动的投资机会时，会把手里的伯克希尔股票视为可能的资金源。对这种态度我们没有异议——这就像我们看待伯克希尔持有的某些股票一样。
尽管如此，查理和我还是凡人，如果我们对第五类股东没有特别的亲近感，那就说不过去了：这超过一百万的个人投资者，无论未来如何，都单纯地信任我们会代表他们的利益。他们加入我们就不曾想过离开，拥有的心态与当年我们的原始合伙人如出一辙。事实上，当年合伙时期的许多投资者，以及/或者他们的后代，至今仍是伯克希尔的重要股东。
这些老股东中的典型代表是Stan Truhlsen——一位开朗大方的奥马哈眼科医生，也是我的私人朋友，他于2020年11月13日满100岁。1959年，Stan与其他十名奥马哈年轻医生一起与我成立了一个合伙公司。他们颇有创意地将自己的企业命名为Emdee, Ltd.。每年，他们都会携配偶到我家参加庆祝晚宴。
1969年我们的合伙企业分配伯克希尔股票时，这些医生全都保留了分到的股票。他们可能不懂投资或会计的门道，但他们知道，在伯克希尔，他们会被当作合伙人对待。
Emdee中Stan的两位战友现在已年近100岁，仍持有伯克希尔股票。这个群体惊人的长寿——再加上查理和我分别97岁和90岁——引出一个有趣的问题：难道持有伯克希尔股票能延年益寿？
伯克希尔这个不寻常且珍视的个人股东大家庭，可能有助于你理解我们为何不愿讨好华尔街分析师和机构投资者。我们已经有了我们想要的投资者，总体而言，我们不认为换一批人会更好。
可供伯克希尔股东拥有的"座位"——即流通股——就那么多。我们非常喜欢已经坐在上面的这些人。
当然，"合伙人"之间会出现一些更迭。但查理和我希望这种更迭尽可能少。毕竟，谁希望朋友、邻居或婚姻快速更替呢？
1958年，Phil Fisher写了一本关于投资的绝佳著作。书中，他将经营一家上市公司比作经营一家餐厅。他说，如果你想招揽食客，你可以靠汉堡配可乐吸引顾客并生意兴隆，也可以靠法式大餐配异国佳酿；但Fisher警告说，你绝不能随心所欲地从一种切换到另一种：你传递给潜在顾客的信息，必须与他们走进你店里所见到的相一致。
在伯克希尔，我们已经卖汉堡和可乐卖了56年。我们珍视这种食物所吸引来的顾客。
美国及其他地方的数千万其他投资者和投机者，有五花八门的股票选择来满足各自口味。他们会找到CEO和市场大师提供诱人的主意。如果他们想要目标价、粉饰的利润和"故事"，不乏追求者。"技术派"会信心满满地告诉他们，图表上的某种波动预示着股票下一步会怎么走。行动呼吁永远不会停歇。
我应该补充一句，这些投资者中，很多人会做得相当不错。毕竟，持有股票在很大程度上是一场“正和”游戏。事实上，一只耐心而头脑冷静的猴子，如果它向一份列有全部标普500成分股的目标板扔50支飞镖来构建投资组合，只要它从未受诱惑去改变自己最初的“选择”，那么随着时间的推移，它就能享受到股息和资本收益。
像农场、房地产这样的生产性资产——没错，还有企业所有权——都能创造财富，而且创造很多。这类资产的大多数所有者都会得到回报。所需要的只是时间的流逝、内心的平静、充分的分散化，以及尽量少的交易和费用。不过，投资者绝不能忘记：他们的开销就是华尔街的收入。而不同于我的那只猴子，华尔街人士可不是为了花生（区区小钱）而工作的。
当伯克希尔出现席位空缺时——我们希望这种情况很少——我们希望占据这些席位的是那些理解并渴望我们所提供的东西的新合伙人。经过几十年的管理，查理和我仍然无法对结果做出承诺。但是，我们可以而且确实承诺：像对待合伙人一样对待你们。
我们的继任者也会如此。
一个可能让你惊讶的伯克希尔数字
最近，我了解到一个关于我们公司的事实，这是我之前从未料到的：伯克希尔拥有位于美国的房产、厂房和设备——这类资产构成了我们国家的“商业基础设施”——按照美国通用会计准则（GAAP）的估值，其金额超过了美国任何其他公司。伯克希尔这些国内“固定资产”的折余成本为1540亿美元。在这份清单上紧随其后的是AT&T，其房产、厂房和设备为1270亿美元。
我应该补充一句，我们在固定资产所有权方面的领先地位，本身并不预示着投资上的胜利。最佳业绩出现在那些需要最少资产来经营高利润业务的公司——它们提供的商品或服务只需少量追加资本就能扩大销量。事实上，我们确实拥有几家这样的卓越企业，但它们相对较小，而且充其量只能缓慢增长。
然而，重资产公司也可以是好的投资。事实上，我们对旗下的两大巨头——BNSF（北伯林顿铁路公司）和BHE（伯克希尔哈撒韦能源公司）——感到非常满意：2011年，即伯克希尔拥有BNSF的第一个完整年度，这两家公司的合计盈利为42亿美元。2020年，对许多企业来说都是艰难的一年，这两家公司的盈利为83亿美元。
BNSF和BHE在未来几十年里将需要大量的资本支出。好消息是，两者在增量投资上都有可能带来适当的回报。
我们先来看BNSF。你的这条铁路承载了美国所有非本地货物吨英里（一吨货物移动一英里）的大约15%，这些货物无论通过铁路、卡车、管道、驳船还是飞机运输。BNSF的运量显著超过任何其他承运商。
美国铁路的历史令人着迷。经过大约150年的疯狂建设、阴谋诡计、过度建设、破产、重组和并购，铁路行业终于在几十年前走向成熟和理性化。
BNSF于1850年开始运营，当时在伊利诺伊州东北部有一条12英里长的线路。如今，它拥有390个前身机构，这些机构的铁路已被收购或合并。该公司的广泛谱系详见 http://www.bnsf.com/bnsf-resources/pdf/about-bnsf/History_and_Legacy.pdf。
伯克希尔在2010年初收购了BNSF。自我们收购以来，该铁路公司已在固定资产上投资了410亿美元，这笔支出比其折旧费用高出200亿美元。铁路是一项户外运动，其特点是长达一英里的列车必须在严寒和酷热中可靠运行，同时还要穿越从沙漠到山地的各种地形。大规模洪水时有发生。BNSF拥有23,000英里的轨道，遍布28个州，必须不惜一切代价，在其庞大的系统中最大化安全和服务。
尽管如此，北伯林顿铁路公司（BNSF）已向伯克希尔支付了巨额股息——总计418亿美元。不过，铁路公司只有在满足自身业务需求并维持约20亿美元现金余额后，才会向我们支付股息。这种保守政策使得BNSF能够以低利率借款，且无需伯克希尔为其债务提供任何担保。
关于BNSF再说一句：去年，其首席执行官卡尔·艾斯（Carl Ice）和他的副手凯蒂·法默（Katie Farmer）在控制开支的同时，成功应对了业务的大幅下滑，表现十分出色。尽管货运量下降了7%，两人实际上将BNSF的利润率提升了2.9个百分点。卡尔按照长期计划在年底退休，凯蒂接任首席执行官。你们的铁路交到了可靠的人手里。
伯克希尔·哈撒韦能源公司（BHE）则与BNSF不同，它不对其普通股支付股息，这在电力公用事业行业是一种非常罕见的做法。在我们拥有BHE的21年里，这种朴素政策一直延续。与铁路不同，我国的电力公用事业需要进行大规模改造，最终成本将高得惊人。这一努力将消耗BHE未来几十年的全部收益。我们欣然接受这一挑战，并相信追加的投资将获得合理的回报。
让我讲一下BHE的一项努力——它承诺投入180亿美元，对目前贯穿西部的大部分陈旧电网进行改造和扩建。BHE于2006年启动该项目，预计在2030年完成——是的，2030年。
可再生能源的出现使我们的项目成为社会必需。历史上长期盛行的煤电发电厂通常位于人口密集中心附近。然而，风能和太阳能发电的新世界的最佳选址往往在偏远地区。当BHE在2006年评估形势时，人们已经清楚看到，必须对西部输电线路进行巨额投资。但很少有公司或政府实体在核算项目成本后，具备财力站出来承担。
需要指出的是，BHE做出推进决策的基础，是它对美国政治、经济和司法体系的信任。在获得可观的收入之前，需要投入数十亿美元。输电线路必须跨越州界和其他司法管辖区，每个地方都有自己的规则和利益相关者。BHE还需要与数百名土地所有者打交道，并与可再生能源供应商以及将电力分配给客户的遥远公用事业公司签订复杂的合同。相互竞争的利益方、旧秩序的捍卫者，以及那些希望一夜之间建成新世界的不切实际的幻想家，都必须被争取过来。
意外和延误在所难免。但同样确定的是，BHE拥有管理人才、制度承诺和财务实力来履行其承诺。虽然我们的西部输电项目还需多年才能完成，但今天我们已经在寻找类似规模的其他项目来承担。
无论遇到什么障碍，BHE都将在提供更清洁能源方面发挥引领作用。
年度股东大会
去年2月22日，我写信告诉你们关于盛大年度股东大会的计划。不到一个月，这个计划就被废除了。
以梅丽莎·夏皮罗（Melissa Shapiro）和伯克希尔首席财务官马克·汉堡（Marc Hamburg）为首的总部团队迅速重新集结。令人不可思议的是，他们的即兴应对竟然奏效了。伯克希尔副董事长之一格雷格·阿贝尔（Greg Abel）和我一起登上舞台，面对空荡荡的场馆、18000个空座位和一台摄像机。没有排练：格雷格和我在"开演"前大约45分钟到达。
Debbie Bosanek，我那位不可思议的助理，47年前她17岁就加入了伯克希尔，这次她准备了大约25张幻灯片，展示我在家整理的各种事实和数据。一支匿名但能力超强的电脑和摄像机操作团队按正确顺序将幻灯片投影到大屏幕上。
雅虎向创纪录规模的国际观众直播了整个过程。CNBC的Becky Quick从她在新泽西的家中操作，从股东们事先提交的数千条问题中，以及Greg和我上台那四小时里观众通过邮件发给她的问题中，精选出几个来提问。喜诗花生脆片和软糖，配上可口可乐，给我们提供了能量。
今年，我们计划在5月1日更上一层楼。我们将再次依靠雅虎和CNBC完美发挥。雅虎于美国东部夏令时间下午1点开始直播。只需访问 https://finance.yahoo.com/brklivestream。
我们的正式会议将于美国东部夏令时间下午5点开始，预计5点30分前结束。在此之前，下午1点30分到5点之间，我们将回答Becky转达的你们的问题。和往常一样，我们事先不知道会问什么问题。把你们的尖锐问题发到 BerkshireQuestions@cnbc.com。雅虎将在5点30分之后收尾。
现在——请击鼓——有个惊喜。今年我们的会议将在洛杉矶举行……而且Charlie将和我一起上台，在3个半小时的问答环节中提供答案和见解。去年我很想念他，更重要的是，你们显然也很想念他。我们的另外两位不可或缺的副董事长Ajit Jain和Greg Abel也会和我们一起，回答各自领域的问题。
通过雅虎加入我们吧。把你们最棘手的问题直接抛给Charlie！我们会玩得很开心，希望你们也如此。
当然，更美好的是我们终将面对面的那一天。我希望并期待那是在2022年。奥马哈的市民们、我们的参展子公司以及总部所有人，都迫不及待地欢迎你们回来，参加一个货真价实的、伯克希尔风格的年度股东大会。
2021年2月27日
Warren E. Buffett
董事会主席