Investing

Important negatives affecting our prospects today are: (1) a less attractive stock market than generally existed over the past 24 years; (2) higher…

As a partial offset to the drag that our growing capital base exerts upon returns, we have a very important advantage now that we lacked 24 years ago…

What counts, however, is intrinsic value - the figure indicating what all of our constituent businesses are rationally worth. With perfect foresight,…

Back when Berkshire's book value was $19.46, intrinsic value was somewhat less because the book value was entirely tied up in a textile business…

The rear-view mirror is one thing; the windshield is another. A large portion of our book value is represented by equity securities that, with…

We will keep most of our major holdings, regardless of how they are priced relative to intrinsic business value. This 'til- death-do-us-part attitude…

Last year we made a prediction: "A reduction [in Berkshire's net worth] is almost certain in at least one of the next three years." During much of…

Our growth rate was lackluster in 1990 because our four major common stock holdings, in aggregate, showed little change in market value. Last year…

Berkshire's 26-year record is meaningless in forecasting future results; so also, we hope, is the one-year record. We continue to aim for a 15%…

If we do attain that 15% average, our shareholders should fare well. However, Berkshire's corporate gains will produce an identical gain for a…

The size of our equity capital - which now totals $7.4 billion - makes it certain that we cannot maintain our past rate of gain or, for that matter,…

Charlie Munger, Berkshire's Vice Chairman, and I have set a goal of attaining a 15% average annual increase in Berkshire's intrinsic value. If our…

Our outsized gain in book value in 1991 resulted from a phenomenon not apt to be repeated: a dramatic rise in the price- earnings ratios of Coca-Cola…

Coca-Cola and Gillette are two of the best companies in the world and we expect their earnings to grow at hefty rates in the years ahead. Over time,…

During the year, Berkshire's net worth increased by $1.52 billion. More than 98% of this gain came from earnings and appreciation of portfolio…

Those two objectives do not necessarily go hand-in-hand as an amusing but value-destroying experience in our past illustrates. On that occasion, we…

You will remember that our goal is to increase our per-share intrinsic value - for which our book value is a conservative, but useful, proxy - at a…

You should keep at least three points in mind as you evaluate this data. The first point concerns the many businesses we operate whose annual…

1. The first negative was produced by a change in Generally Accepted Accounting Principles (GAAP) having to do with the taxes we accrue against…

3. Another 1993 change in GAAP affects the value at which we carry the securities that we own. In recent years, both the common stocks and certain…

4. Finally, we issued some stock last year. In a transaction described in last year's Annual Report, we issued 3,944 shares in early January, 1993…

Of course, it's per-share intrinsic value, not book value, that counts. Book value is an accounting term that measures the capital, including…

The problem is not that what has worked in the past will cease to work in the future. To the contrary, we believe that our formula - the purchase…

A fat wallet, however, is the enemy of superior investment results. And Berkshire now has a net worth of $11.9 billion compared to about $22…

We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago,…

But, surprise - none of these blockbuster events made the slightest dent in Ben Graham's investment principles. Nor did they render unsound the…

Our gain in net worth during 1995 was $5.3 billion, or 45.0%. Per-share book value grew by a little less, 43.1%, because we paid stock for two…

Even so, we do have a few advantages, perhaps the greatest being that we don't have a strategic plan. Thus we feel no need to proceed in an…

In making acquisitions, we have a further advantage: As payment, we can offer sellers a stock backed by an extraordinary collection of outstanding…

Concluding this little dissertation on acquisitions, I can't resist repeating a tale told me last year by a corporate executive. The business he grew…

Our gain in net worth during 1996 was $6.2 billion, or 36.1%. Per- share book value, however, grew by less, 31.8%, because the number of Berkshire…

The restatement was required because GEICO became a wholly-owned subsidiary of Berkshire on January 2, 1996, whereas it was previously classified…

I dwell on this rise in per-share book value because it roughly indicates our economic progress during the year. But, as Charlie Munger,…

For many years, we have listed these principles in the front of our annual report, but in this report, on pages 58 to 67, we reproduce the entire…

Given our gain of 34.1%, it is tempting to declare victory and move on. But last year's performance was no great triumph: Any investor can chalk up…

Gains in book value are, of course, not the bottom line at Berkshire. What truly counts are gains in per-share intrinsic business value. Ordinarily,…

For more explanation of the term, intrinsic value, you may wish to refer to our Owner's Manual, reprinted on pages 62 to 71. This manual sets forth…

In our last two annual reports, we furnished you a table that Charlie and I believe is central to estimating Berkshire's intrinsic value. In the…

施恩者，內不見己，外不見人，則斗粟可當萬鍾之惠； 利物者，計己之施，責人之報，雖百鎰難成一文之功。

勤者敏於德義，而世人借勤以濟其貧； 儉者淡於貨利，而世人假儉以飾其吝。 君子持身之符，反為小人營私之具矣。惜哉。

山林是勝地、一營戀便成市朝。 書畫是雅事、一貪癡便成商賈。 蓋心無染着、欲界是仙都。 心有係戀、樂境成苦海矣。

一日論為學工夫。 先生曰：「教人為學，不可執一偏。初學時：心猿意馬，拴縛不定，其所思慮，多是『人欲』一邊；故且教之靜坐、息思慮。久之，俟其心意稍定，只懸空靜守，如槁木死灰，亦無用；須教他省察克治。省察克治之功，則無時而可間。如去盜賊，須有個掃除廓清之意。無事時，將好色、好貨、好名等私，逐一追究搜尋…

澄曰：「好色、好利、好名等心，固是私欲。如閒思雜慮，如何亦謂之私欲？」 先生曰：「畢竟從好色、好利、好名等根上起，自尋其根便見。如汝心中決知是無有做劫盜的思慮，何也？以汝元無是心也。汝若於貨、色、名、利等心，一切皆如不做劫盜之心一般，都消滅了，光光只是心之本體，看有甚閒思慮？此便是『寂然不動』，便…

先生日：「聖人亦是『學知』，眾人亦是『生知』。」 問曰：「何如？」 曰：「這良知人人皆有，聖人只是保全無些障蔽，兢兢業業，亹亹翼翼，自然不息，便也是學；只是生的分數多，所以謂之『生知、安行』。眾人自孩提之童，莫不完具此知，只是障蔽多；然本體之知自難泯息，雖問學克冶，也只憑他；只是學的分數多，所以謂…

問：「聲、色、貨、利，恐良知亦不能無。」 先生曰：「固然。但初學用功，卻須掃除蕩滌，勿使留積。則適然來遇，始不為累，自然順而應之。良知只在聲、色、貨、利上用功，能致得良知精精明明、毫髮無蔽；則聲、色、貨、利之交，無非天則流行矣。」

使我介然有知，行於大道，唯施是畏。 大道甚夷，而民好徑。 朝甚除， 田甚蕪，倉甚虛； 服文綵，帶利劍，厭飲食，財貨有餘；是為盜夸。非道也哉！

未有上好仁而下不好義者也，未有好義其事不終者也，未有府庫財非其財者也。孟獻子曰：「畜馬乘，不察於雞豚；伐冰之家，不畜牛羊；百乘之家，不畜聚斂之臣。與其有聚斂之臣，寧有盗臣。」此謂國不以利爲利，以義爲利也。長國家而務財用者，必自小人矣。彼爲善之，小人之使爲國家，菑害並至；雖有善者，亦無如之何矣！此謂…

凡有地牧民者，務在四時，守在倉廩。國多財則遠者來，地辟舉則民留處，倉廩實則知禮節，衣食足則知榮辱，上服度則六親固，四維張則君令行。故省刑之要，在禁文巧；守國之度，在飾四維；順民之經，在明鬼神，祗山川，敬宗廟，恭祖舊。不務天時則財不生，不務地利則倉廩不盈。野蕪曠則民乃菅，上無量則民乃妄。文巧不禁則民…

國有四維。一維絶則傾，二維絶則危，三維絶則覆，四維絶則滅。傾可正也，危可安也，覆可起也，滅不可復錯也。何謂四維？一曰禮，二曰義，三曰廉，四曰恥。禮不踰節，義不自進，廉不蔽惡，恥不從枉。故不踰節則上位安，不自進則民無巧詐，不蔽惡則行自全，不從枉則邪事不生。

政之所興，在順民心；政之所廢，在逆民心。民惡憂勞，我佚樂之；民惡貧賤，我富貴之；民惡危墜，我存安之；民惡滅絶，我生育之。能佚樂之則民爲之憂勞，能富貴之則民爲之貧賤，能存安之則民爲之危墜，能生育之則民爲之滅絶。故刑罰不足以畏其意，殺戮不足以服其心。故刑罰繁而意不恐，則令不行矣。殺戮衆而心不服，則上位…

錯國於不傾之地，積於不涸之倉，藏於不竭之府，下令於流水之原。使民於不爭之官，明必死之路，開必得之門。不爲不可成，不求不可得，不處不可久，不行不可復。錯國於不傾之地者，授有德也。積於不涸之倉者，務五穀也。藏於不竭之府者，養桑麻、育六畜也。下令於流水之原者，令順民心也。使民於不爭之官者，使各爲其所長也…

以家爲鄉，鄉不可爲也。以鄉爲國，國不可爲也。以國爲天下，天下不可爲也。以家爲家，以鄉爲鄉，以國爲國，以天下爲天下。毋曰不同生，遠者不聽。毋曰不同鄉，遠者不行。毋曰不同國，遠者不從。如地如天，何私何親？如月如日，唯君之節。御民之轡，在上之所貴。道民之門，在上之所先。召民之路，在上之所好惡。故君求之則…

萬乘之國，兵不可以無主。土地博大，野不可以無吏。百姓殷衆，官不可以無長。操民之命，朝不可以無政。地博而國貧者，野不辟也。民衆而兵弱者，民無取也。故末產不禁則野不辟，賞罰不信則民無取。野不辟，民無取，外不可以應敵，內不可以固守。故曰：有萬乘之號，而無千乘之用，而求權之無輕，不可得也。

地辟而國貧者，舟輿飾，臺榭廣也。賞罰信而兵弱者，輕用衆，使民勞也。舟車臺榭廣，則賦斂厚矣。輕用衆，使民勞，則民力竭矣。賦斂厚則下怨上矣，民力竭則令不行矣。下怨上，令不行，而求敵之勿謀己，不可得也。

欲爲天下者，必重用其國。欲爲其國者，必重用其民。欲爲其民者，必重盡其民力。無以畜之，則往而不可止也。無以牧之，則處而不可使也。遠人至而不去，則有以畜之也。民衆而可一，則有以牧之也。見其可也，喜之有徵；見其不可也，惡之有刑。賞罰信於其所見，雖其所不見，其敢爲之乎！見其可也，喜之無徵；見其不可也，惡之…

地之生財有時，民之用力有倦，而人君之欲無窮，以有時與有倦，養無窮之君，而度量不生於其閒，則上下相疾也。是以臣有殺其君，子有殺其父者矣。故取於民有度，用之有止，國雖小必安。取於民無度，用之不止，國雖大必危。地之不辟者，非吾地也。民之不牧者，非吾民也。凡牧民者，以其所積者食之，不可不審也。其積多者其食…

野與市爭民，家與府爭貨，金與粟爭貴，鄉與朝爭治。故野不積草，農事先也；府不積貨，藏於民也；市不成肆，家用足也；朝不合衆，鄉分治也。故野不積草，府不積貨，市不成肆，朝不合衆，治之至也。人情不二，故民情可得而御也。審其所好惡，則其長短可知也；觀其交游，則其賢不肖可察也；二者不失，則民能可得而官也。地之…

上恃龜筮，好用巫醫，則鬼神驟崇。故功之不立，名之不章，爲之患者三：有獨王者，有貧賤者，有日不足者。一年之計，莫如樹穀；十年之計，莫如樹木；終身之計，莫如樹人。一樹一穫者，穀也；一樹十穫者，木也；一樹百穫者，人也。我苟種之，如神用之，舉事如神，唯王之門。

凡牧民者，使士無邪行，女無淫事。士無邪行，教也。女無淫事，訓也。教訓成俗而刑罰省，數也。凡牧民者，欲民之正也。欲民之正，則微邪不可不禁也。微邪者，大邪之所生也。微邪不禁，而求大邪之無傷國，不可得也。凡牧民者，欲民之有禮也。欲民之有禮，則小禮不可不謹也。小禮不謹於國，而求百姓之行大禮，不可得也。凡牧…

凡牧民者，欲民之可御也。欲民之可御，則法不可不審。法者，將立朝廷者也。將立朝廷者，則爵服不可不貴也。爵服加于不義，則民賤其爵服；民賤其爵服，則人主不尊；人主不尊，則令不行矣。法者，將用民力者也。將用民力者，則祿賞不可不重也。祿賞加于無功，則民輕其祿賞；民輕其祿賞，則上無以勸民；上無以勸民，則令不行…