In making the USAir purchase； your Chairman displayed exquisite timing： I plunged into the business at almost the exact moment that it ran into severe problems。 （No one pushed me； in tennis parlance； I mitted an 〃unforced error。〃） The pany's troubles were brought on both by industry conditions and by the post…merger difficulties it encountered in integrating Piedmont； an affliction I should have expected since almost all airline mergers have been followed by operational turmoil。
在投资美国航空时，本人在下我真是抓对了时点，我几乎是在航空业爆发严重的问题之前，跳进去这个产业，（没有人强迫我，如同在网球场上，我把它形容做是非受迫性失误），美国航空问题的发生，导因于产业本身的状况与对Piedmont购并后所产生的后遗症，这点我应该要早该预料到，因为几乎所有的航空业购并案最后的结果都是一团混乱。
In short order； Ed Colodny and Seth Schofield resolved the second problem： The airline now gets excellent marks for service。 Industry…wide problems have proved to be far more serious。 Since our purchase； the economics of the airline industry have deteriorated at an alarming pace； accelerated by the kamikaze pricing tactics of certain carriers。 The trouble this pricing has produced for all carriers illustrates an important truth： In a business selling a modity…type product； it's impossible to be a lot smarter than your dumbest petitor。
在这不久之后，Ed Colodny与Seth Schofield解决了第二个难题，美国航空现在的服务受到好评，不过整个产业所面临的问题却越来越严重，自从我们开始投资之后，航空业的状况便很急遽地恶化，尤其再加上某些业者自杀性的杀价竞争，这样的结果导致所有的航空业者都面临一项残酷的事实，在销售制式化商品的产业之中，你很难比最笨的竞争对手聪明到哪里去。
However； unless the industry is decimated during the next few years； our USAir investment should work out all right。 Ed and Seth have decisively addressed the current turbulence by making major changes in operations。 Even so； our investment is now less secure than at the time I made it。
不过除非在未来几年内，航空业全面地崩溃，否则我们在美国航空的投资应该能够确保安全无虞，Ed与Seth很果决地在营运上做了一些重大的改变来解决目前营运所面临的问题，虽然如此，我们的投资现在的情况比起当初还是差了一点。
Our convertible preferred stocks are relatively simple securities； yet I should warn you that； if the past is any guide； you may from time to time read inaccurate or misleading statements about them。 Last year； for example； several members of the press calculated the value of all our preferreds as equal to that of the mon stock into which they are convertible。 By their logic； that is； our Salomon preferred； convertible into mon at 38； would be worth 60％ of face value if Salomon mon were selling at 22。80。 But there is a small problem with this line of reasoning： Using it； one must conclude that all of the value of a convertible preferred resides in the conversion privilege and that the value of a non…convertible preferred of Salomon would be zero； no matter what its coupon or terms for redemption。
我们的可转换特别股算是相当单纯的投资工具，不过我还是必须警告各位，若是过去的经验有任何参考价值，大家可能还是会读到一些不正确或是误导的讯息，举例来说像去年，有几家报章杂志错误地将它们的价值与可以转换的普通股价格混为一谈，我们的所罗门特别股转换价格为38美元，根据它们的逻辑，由于所罗门普通股的现价为22。8美元，所以其可转换特别股的价值只有面额的60％，但这样的推论却有一个盲点，因为这样的说法表示所有的可转换特别股，其价值只在其所拥有的转换权利，至于所罗门不可转换的债券价值则为零，不管它所拥有的赎回条件为何。
The point you should keep in mind is that most of the value of our convertible preferreds is derived from their fixed…ine characteristics。 That means the securities cannot be worth less than the value they would possess as non…convertible preferreds and may be worth more because of their conversion options。
大家必须特别记住的一点是我们可转换特别股大部分的价值其实是来自于固定收益的特性，这意思是说这些有价证券的价值不可能低于一般不具转换权的特别股，相反地会因为它们拥有可转换的选择权而具有更高的价值。
I deeply regret having to end this section of the report with a note about my friend； Colman Mockler； Jr。； CEO of Gillette； who died in January。 No description better fitted Colman than 〃gentleman〃 … a word signifying integrity； courage and modesty。 Couple these qualities with the humor and exceptional business ability that Colman possessed and you can understand why I thought it an undiluted pleasure to work with him and why I； and all others who knew him； will miss Colman so much。
很遗憾我必须在报告末段以我的好朋友Colman Mockler…吉列的CEO在今年一月过世做为结尾，除了「绅士」这个代表品格、勇气与谦和的字，没有其它字更能贴切形容Colman这个人，除了这些特质之外，再加上他所拥有的幽默与超凡的经营能力，所以大家应该可以想象与他共事是多么令人感到愉快的一件事，这也是为何包含我在内的许多人，会对他感到特别怀念的缘故。
A few days before Colman died； Gillette was richly praised in a Forbes cover story。 Its theme was simple： The pany's success in shaving products has e not from marketing savvy （though it exhibits that talent repeatedly） but has instead resulted from its devotion to quality。 This mind…set has caused it to consistently focus its energies on ing up with something better； even though its existing products already ranked as the class of the field。 In so depicting Gillette； Forbes in fact painted a portrait of Colman。
在Colman死之前几天，吉列受到富比士以封面故事大加赞扬，标题很简单，这家公司在刮胡刀产业的成功，不单单只靠行销手段（虽然他们一再展现这方面的能力），同时更源自于他们对于品质的追求，这种心理建设使得他们持续将精力摆在推出更新更好的产品之上，虽然现有的产品已是市场上最经典的，富比士对于吉列的形容，就好象是在描述Colman本人一样。
Help！ Help！救命！救命！
Regular readers know that I shamelessly utilize the annual letter in an attempt to acquire businesses for Berkshire。 And； as we constantly preach at the Buffalo News； advertising does work： Several businesses have knocked on our door because someone has read in these pages of our interest in making acquisitions。 （Any good ad salesman will tell you that trying to sell something without advertising is like winking at a girl in the dark。）
熟悉的读者都知道我经常利用年报不顾廉耻地替Berkshire寻找合适的投资标的，此外我们也常常在水牛城报纸刊登广告征求投资标的，而如此的宣传做法确实也收到效果，有好几家企业收到我们相关的讯息后，上门前来（任何好的业务销售人员都会告诉你不靠广告卖东西就好象是在黑夜里对于女孩扎眼一样没有用）。
In Appendix B （on pages 26…27） I've reproduced the essence of a letter I wrote a few years back to the owner/manager of a desirable business。 If you have no personal connection with a business that might be of interest to us but have a friend who does； perhaps you can pass this report along to him。
附录B是我回信给一位可能的卖方的摘要，若是你知道那家企业可能会是我们有兴趣的标的，同时你有认识的朋友在那家企业，欢迎你直接将这份资料送给他参考。
Here's the sort of business we are looking for：
（1） Large purchases （at least 10 million of after…tax earnings）；
（2） Demonstrated consistent earning power （future projections are of little interest to us； nor are 〃turnaround〃 situations）；
（3） Businesses earning good returns on equity while employing little or no debt；
（4） Management in place （we can't supply it）； （5） Simple businesses （if there's lots of technology； we won't understand it）；
（6） An offering price （we don't want to waste our time or that of the seller by talking； even preliminarily； about a transaction when price is unknown）。
以下就是我们想要找的企业条件
（1）巨额交易（每年税后盈余至少有一千万美元）
（2）持续稳定获利（我们对有远景或具转机的公司没兴趣）
（3）高股东报酬率（并且甚少举债）
（4）具备管理阶层（我们无法提供）
（5）简单的企业（若牵涉到太多高科技，我们弄不懂）
（6）合理的价格（在价格不确定前，我们不希望浪费自己与对方太多时间）
We will not engage in unfriendly takeovers。 We can promise plete confidentiality and a very fast answer … customarily within five minutes … as to whether we're interested。 We prefer to buy for cash； but will consider issuing stock when we receive as much in intrinsic business value as we give。
我们不会进行敌意的购并，并承诺完全保密并尽快答复是否感兴趣（通常不超过五分钟） ，我们倾向采现金交易，除非我们所换得的内含价值跟我们付出的一样多，否则不考虑发行股份。
Our favorite form of purchase is one fitting the Blumkin… Friedman…Heldma