BUFFETT PARTNERSHIP, LTD. 810 KIEWIT PLAZA OMAHA 31, NEBRASKA
First Half Performance
During the first half of 1963, the Dow Jones Industrial Average (hereinafter called the "Dow") advanced from 652.10 to 706.88. If one had owned the Dow during this period, dividends of $10.66 would have been received, bringing the overall return from the Dow during the first half to plus 10.0%.
1963年上半年，道指从652.1点上涨到706.88点，同时在这段时间道指的持有者应该会收到10.66美元的股利。因此道指半年的收益应该在10%。
Our incantation has been: (1) that short-term results (less than three years) have little meaning, particularly in reference to an investment operation such as ours that devotes a portion of resources to control situations, and; (2) That our results relative to the Dow and other common-stock-form media, will be better in declining markets and may well have a difficult time just matching such media in bubbling markets.
重申我们的宗旨：（1）那种短期的收益表现（小于三年）都没有任何参考价值，特别是当我们有相当大的一部分投资都放在了控股公司的运作上；（2）我们相对于道指的优势只会在熊市中体现，而在这种泡沫市场中差强人意。
Nevertheless, our first-half performance, excluding any change in Dempster valuation (and its valuation did change --I'm saving this for dessert later in the letter) was plus 14%. This 14% is computed on total net assets (not non-Dempster assets) and is after expenses, but before monthly payments (to those who take them) to partners and allocation to the General Partner. Such allocations are academic on an interim basis, but if we were also plus 14% at yearend, the first 6% would be allocated to partners according to their capital, plus three- quarters of the balance of 8% (14% -6%), or an additional 6%, giving the limited partners a plus 12% performance.
不管怎样，我们上半年的收益是+14%，其中为考虑进Dempster估值的变化（其估值的确有变化--我稍后会讲到）。这14%是记入了所有扣除费用后的整体净值（其中包括了Dempster的资产），但是没有扣除给每股月撤资的合伙人，以及给一般合伙人的分红。这种分红是一种纯数学上的计算。如果年底我们的收益仍为14%，那么我们将前6%按照所有合伙人的占股比例分配给大家，剩下的盈利8%（14%-6%）中的3/4，也就是6%，分配给有限合伙人，也就是他们当年的收益是12%。
Despite the relatively pleasant results of the first half the admonitions stated two paragraphs earlier hold in full force. At plus 14% versus plus 10% for the Dow, this six months has been a less satisfactory period than the first half of 1962 when we were minus 7.5% versus minus 21.7% for the Dow. You should completely understand our thinking in this regard which has been emphasized in previous letters.
尽管上半年的收益看起来不错，但是前两段的陈述依然有效。14% vs 道指10% 的收益对比远没有1962年-7.5% vs 道指-21.7%的结果让我满意。如果各位读过之前的信件就一定会明白其中的含义。
During the first half we had an average net investment in "generals" (long positions in generals minus short positions in generals) of approximately 5,275,000. Our overall gain from this net investment in generals (for a description of our investment categories see the last annual letter) was about $1,100,000 for a percentage gain from this category of roughly 21%. This again illustrates the extent to which the allocation of our resources among various categories affects short-term results. In 1962 the generals were down for the year and only an outstanding performance by both of the other two categories, "work-outs" and "controls," gave us our unusually favorable results for that year.
上半年我们在股票市场的平均投资（多头头寸减去空头头寸）应该在526.5万美元。在该项投资类别中上半年的收益应有110万美元，大约21%。这再次说明了我们在不同类别之间的资源分配对短期结果的影响程度。1962年，股票市场大幅下跌的时候，其他两种类别却带来了超额收益，套利和控股公司在那一年带来了异常优异的结果。
Now this year, our work-outs have done poorer than the Dow and have been a drag on performance, as they are expected to be in rising markets. While it would be very nice to be 100% in generals in advancing markets and 100% in work-outs in declining markets, I make no attempt to guess the course of the stock market in such a manner. We consider all three of our categories to be good businesses on a long-term basis, although their short- term price behavior characteristics differ substantially in various types of markets. We consider attempting to gauge stock market fluctuations to be a very poor business on a long-term basis and are not going to be in it, either directly or indirectly through the process of trying to guess which of our categories is likely to do best in the near future.
今年由于市场火爆，我们的套利收益要逊于道指从而拖累了整体的表现。尽管我们期望能在牛市全部投资到股票市场，熊市再转移到套利账户，但是市场是无法预测的。而且三种类别的投资都是着眼于长期的优质的资产，尽管他们的表现会在短期受市场的影响。在我看来预测股票市场的波动长期来看是十分差劲的投资，我们不会直接或者间接地预测市场估计哪种类别的投资在未来表现更好。
Investment Companies
其他投资公司
Shown below are the usual statistics on a cumulative basis for the Dow and Buffett Partnership. Ltd. (including predecessor partnerships) as well as for the two largest open-end (mutual funds) and two largest closed-end investment companies following a diversified common-stock investment policy:
下表以累积收益的方式统计了道指，巴菲特合伙公司以及四个投资股票市场的基金：两个最大的开放式基金和两个最大的封闭式基金的表现：
Footnotes:
(1) Computed from changes in asset value plus any distributions to holders of record during year.
(2) From 1963 Moody's Bank & Finance Manual for 1957-62. Estimated for first half 1963.
(3) For 1957-61 consists of combined results of all predecessor limited partnerships operating throughout entire year after all expenses but before distributions to partners or allocations to the general partner.
(4) For 1957-61 computed on basis of preceding column of partnership results allowing for allocation to general partner based upon present partnership agreement.
脚注：
- 市值的计算是每年的资产价值加上股利；
- 1957-1962年的数据来自于穆迪的“银行和金融手册”，1963年上半年的数据是估计值；
- 1957-1961年的数据基于修改前的有限合伙人协议全年经营的结果，扣除所有费用但未将股利和一般合伙人的分配协议计算进去；
- 1957-1961年的数据是根据前一栏的业绩推算，并依据新的合伙协议算入给一般合伙人的配额。
The results continue to show that the most highly paid and respected investment advice has difficulty matching the performance of an unmanaged index of blue-chip stocks. This in no sense condemns these institutions or the investment advisers and trust departments whose methods, reasoning, and results largely parallel such investment companies. These media perform a substantial service to millions of investors in achieving adequate diversification, providing convenience and peace of mind, avoiding issues of inferior quality, etc. However, their services do not include (and in the great majority of cases, are not represented to include) the compounding of money at a rate greater than that achieved by the general market.
结果显示即便是收费最高最受大家信任的投资咨询公司想要追上蓝筹指数的收益都很难。所以不要因为其方法，推理和结果很大程度上和这些投资公司相似而去谴责那些投资顾问，机构或者是信托部门。这些机构为数百万投资者提供了大量的服务，实现了多元化，给大家提供了便捷，并在收益很差的时候给大家做心理按摩等等，然而，他们的服务并不包括（在大多数情况下，不代表包括）累积收益超过一般股票市场。
Our partnership's fundamental reason for existence is to compound funds at a better-than-average rate with less exposure to long-term loss of capital than the above investment media. We certainly cannot represent that we will achieve this goal. We can and do say that if we don't achieve this goal over any reasonable period excluding an extensive speculative boom, we will cease operation.
我们的合伙公司存在的意义就在于累积收益要好于一般股票市场，同时比其他投资公司更低可能地降低长期投资损失风险。我们当然不能保证会实现这个目标，但可以做到的是如果在任何合理的时间段（不包括广泛的投机热潮期）我们无法达成这个目标，就关门大吉。
Dempster Mill Manufacturing Company
DMM公司
In our most recent annual letter, I described Harry Bottle as the “man of the year”. If this was an understatement.
也许大家没注意，在去年的股东信里，我把Harry Bottle称为年度最佳。
Last year Harry did an extraordinary job of converting unproductive assets into cash which we then, of course, began to invest in undervalued securities. Harry has continued this year to turn under-utilized assets into cash, but in addition, he has made the remaining needed assets productive. Thus we have had the following transformation in balance sheets during the last nineteen months:
去年，Harry完美地将非生产性资产变成了现金，之后我们将这些资金投资到了一些低估的股票之中。Harry今年继续将未充分利用的资产转变成现金，同时他也致力于将所需资产更高效地利用起来。我们便有了过去十九个月资产负债表的变化：
I have included above the conversion factors we have previously used in valuing Dempster for B.P.L. purposes to reflect estimated immediate sale values of non-earning assets.
表格中包含之前在计算每股价值时设置的转换率，考虑的是如果要将Dempster的非盈利资产急售时的折扣率，因此总体比较保守。
As can be seen, Harry has converted the assets at a much more favorable basis than was implied by my valuations. This largely reflects Harry's expertise and, perhaps, to a minor degree my own conservatism in valuation.
可以看出，Harry 在资产转换效率要远远高于我的保守估计。这其实更加体现了Harry的专业能力并非我的估计过于保守。
As can also be seen, Dempster earned a very satisfactory operating profit in the first half (as well as a substantial unrealized gain in securities) and there is little question that the operating business, as now conducted, has at least moderate earning power on the vastly reduced assets needed to conduct it. Because of a very important- seasonal factor and also the presence of a tax carry forward, however, the earning power is not nearly what might be inferred simply by a comparison of the 11/30/62 and 6/30/63 balance sheets. Partly because of this seasonality, but more importantly, because of possible developments in Dempster before 1963 yearend, we have left our Dempster holdings at the same $51.26 valuation used at yearend 1962 in our figures for B.P.L’s first half. However, I would be very surprised if it does not work out higher than this figure at yearend.
同样可以看出，Dempster在上半年营收也非常不错(也包括很多未兑现的证券收益)，而且毫无疑问在大幅降低了生产资产后，目前的收益能力至少是中等。由于季节对销售影响巨大而且年底还有税务的问题，我们不能简单地使用11/30/62和6/30/63两张资产负债表来评价其盈利能力。部分是因为季节销售问题，但更重要的是相信1963 年年底之前登Dempster的很可能发展更好，因此我们将Dempster的估值按照1962 年年底相同的 51.26 美元计入B.P.L（BUFFETT PARTNERSHIP, LTD. ）上半年的数据中。 但是，如果它在年底没有超过这个数字，我会感到非常惊讶。
One sidelight for the fundamentalists in our group: B.P.L. owns 71.7% of Dempster acquired at a cost of 1,262,577.27. On June 30, 1963 Dempster had a small safe deposit box at the Omaha National Bank containing securities worth 2,028,415.25. Our 71.7% share of 2,028,415.25 amounts to 1,454,373.70. Thus, everything above ground (and part of it underground) is profit. My security analyst friends may find this a rather primitive method of accounting, but I must confess that I find a bit more substance in this fingers and toes method than in any prayerful reliance that someone will pay me 35 times next year's earnings.
一个基本事实：B.P.L 拥有Dempster 71.7%的所有权，投入资金1,262,577.27 美元。在6月30日，Dempster在奥马哈国家银行的一个保险柜中存入了价值2,028,415.25的证券。所以2,028,415.25的71.7%是属于B.P.L的，也就是1,454,373.70美元。除此之外，所有剩下的正资产都是收益（当然还有些负资产）。做证券分析朋友一定觉得这种算法太原始了。但是我必须坦白我更喜欢用这种掰手指的计算方法得到的结果，而不是祈祷市场上有谁愿意以35倍PE来买我的股票。
Advance Payments and Advance Withdrawals
提前打款和提前提款
We accept advance payments from partners and prospective partners at 6% interest from date of receipt until the end of the year. While there is no obligation to convert the payment to a partnership interest at the end of the year, this should be the intent at the time of payment.
我们接受合伙人的提前打款，在收到款项之日起至年底，我们将按照6%的利率计息。这部分的资金在当年年底不会按照合伙企业的收益分配给合伙人，各位在打款前应该知晓。
Similarly, we allow partners to withdraw up to 20% of their partnership account prior to yearend and charge them 6% from date of withdrawal until yearend when it is charged against their capital account. Again, it is not intended that partners use US like a bank, but that they use the withdrawal right for unanticipated need for funds.
相似地，我们允许合伙人在年底前最多提款投资金额的20%，同时也会向这部分资金按照6%的利息收取费用，费用将会从剩下的账户中扣除。再次说明，我们不希望各位合伙人把我们当银行来对待，但是他们的确有权提款来应急使用。
The willingness to both borrow and lend at 6% may seem "un-Buffett-like.” We look at the withdrawal right as a means of giving some liquidity for unexpected needs and, as a practical matter, are reasonably sure it will be far more than covered by advance payments.
以6%的年利率，无论是借出还是借入资金都不像是巴菲特的作风。先看提款，我们将其视为给合伙人应急而提供的流动资金，而且从实施来看，每年提前存入的资金足以覆盖取出的数额。
Why then the willingness to pay 6% for advance payment money when we can borrow from commercial banks at substantially lower rates? For example, in the first half we obtained a substantial six-month bank loan at 4%. The answer is that we expect on a long-term basis to earn better than 6% (the general partner's allocation is zero unless we do although it is largely a matter of chance whether we achieve the 6% figure in any short period. Moreover, I can adopt a different attitude in the investment of money that can be expected to soon be a part of our equity capital than I can on short-term borrowed money. The advance payments have the added advantage to us of spreading the investment of new money over the year, rather than having it hit us all at once in January. On the other hand, 6% is more than can be obtained in short-term dollar secure investments by our partners, so I consider it mutually profitable. On June 30, 1963 we had advance withdrawals of 21,832.00 and advance payments of $562,437.11.
那么为何要给提前存款6%的利率呢，明明可以用更低的利率在商业银行借款。在今年上半年，我们以4%的利率向银行借了一大笔钱。答案是长期来看，我们相信收益会好于6%，而且还有0成本的可能，虽然短期内能有6%的收益是看运气的。不仅如此，相比于短期借款，这些资金可以用于不同的投资策略。提前存款能够帮助我们在一整年里有源源不断的资金进行投资，而不是只在每年一月收到一大笔款项。反过来来说，合伙人很难找到短期保证有6%收益的投资机会，所以我相信这是双赢的结果。截止到1963年6月30日，提前支取的款项是21,832.00美元，提前存入的资金是562,437.11美元。
Taxes
税务问题
There is some possibility that we may have fairly substantial realized gains this year. Of course, this may not materialize at all and actually does not have anything to do with our investment performance this year. I am an outspoken advocate of paying large amounts of income taxes -- at low rates. A tremendous number of fuzzy, confused investment decisions are rationalized through so-called "tax considerations.”
我们今年有可能会有巨额的已实现收益。当然，现在还没有发生，而且这对我们今年的投资收益并无影响。我曾公开表示支持所得税--以较低的税率。有大量模糊、混乱的投资决策通过所谓的“税收考虑”得以合理化。
My net worth is the market value of holdings less the tax payable upon sale. The liability is just as real as the asset unless the value of the asset declines (ouch), the asset is given away (no comment), or I die with it. The latter course of action would appear to at least border on a Pyrrhic victory.
我的净资产是持股的市场价值减去出售时应缴纳的税款。负债和资产一样真实，除非资产的价值下降（哎哟），资产被赠予（无话可说），或者我死了。最后一个选择好像有点得不偿失。
Investment decisions should be made on the basis of the most probable compounding of after-tax net worth with minimum risk. Any isolation of low-basis securities merely freezes a portion of net worth at a compounding factor identical with the assets isolated. While this may work out either well or badly in individual cases, it is a nullification of investment management. The group experience holding various low basis securities will undoubtedly approximate group experience on securities as a whole, namely compounding at the compounding rate of the Dow. We do not consider this the optimum in after-tax compounding rates.
投资决策应该是最大化税后净值和最小化风险的结合。任何单独考虑/计算低成本高价值股票的计算复合收益，等同于将一部分资产冻结/或者单独考虑余下的资产。该计算方法在不同的情形下结果有好有坏，这是一种无效化的投资管理方法。投资组合中如果包含了很多不同种类的低成本高价值股票，那么毫无疑问组合的整体收益将和股票正相关，换句话说就是和道指相似。我们不认为这是税后复利的最佳选择。
I have said before that if earnings from the partnership can potentially amount to a sizable portion of your total taxable income, the safe thing to do is to estimate this year the same tax you incurred last year. If you do this, you cannot run into penalties. In any event, tax liabilities for those who entered the partnership on 1/1/63 will be minimal because of the terms of our partnership agreement first allocating capital gains to those having an interest in unrealized appreciation.
我曾提过，如果合伙企业的收益占您总体应纳税额的大部分，那么比较安全的做法就是今年以和去年相同的额度交税。这样您不会收到任何处罚。不论什么情况，在1/1/63年新加入的合伙人将会享受最优税率，因为合伙企业协议写明合伙人的第一笔资金收入将按照未实现收入计入。
As in past years, we will have a letter out about November 1st (to partners and those who have indicated an interest to me by that time in becoming partners) with the amendment to the partnership agreement, commitment letter for 1964, estimate of the 1963 tax situation, etc.
与往年一样，我们将在 11 月 1 日左右发出一封信（致合伙人和当时对我表示有兴趣成为合伙人的人），其中包含对合伙协议的修正、1964 年的承诺函、1963 年的估计税务情况等。
My closing plea for questions regarding anything not clear always draws a blank. Maybe no one reads this far. Anyway, the offer is still open.
我从未收到任何合伙人的疑问，也许没人能读到这里吧。无论如何，欢迎提问
Cordially, Warren E. Buffett
low basis implies that a particular stock has a significantly higher market value than its tax cost.
low-basis 意味着股票当前的市值远远高于购买时的价格