Thus, we faced a miserable choice: huge capital investment would have helped to keep our textile business alive, but would have left us with terrible returns on ever-growing amounts of capital. After the investment, moreover, the foreign competition would still have retained a major, continuing advantage in labor costs. A refusal to invest, however, would make us increasingly non-competitive, even measured against domestic textile manufacturers. I always thought myself in the position described by Woody Allen in one of his movies: 「More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray we have the wisdom to choose correctly.」
因此，我們面臨著一個悲慘的選擇：巨額資本投資會使紡織業得以存活，但同時會使我們不斷增長的資本回報慘淡。每次投資過後，依然要面對來自國外低成本的強力競爭。但是如果不繼續投資，則將使得我們變得沒有競爭力，甚至是在國內紡織行業來看。我經常按照Woody Allen在他的電影中所描述的那樣設想自己「與歷史上任何時期相比，人類面對著一個十字路口。一條路指向絕境與無望，而另一條則完全不同。讓我們祈禱我們有智慧去做出正確的選擇。」
For an understanding of how the to-invest-or-not-to-invest dilemma plays out in a commodity business, it is instructive to look at Burlington Industries, by far the largest U.S. textile company both 21 years ago and now. In 1964 Burlington had sales of $1.2 billion against our $50 million. It had strengths in both distribution and production that we could never hope to match and also, of course, had an earnings record far superior to ours. Its stock sold at 60 at the end of 1964; ours was 13.
想要瞭解在商品化產業下如何在投資或不投資的兩難境地中勝出，去看看Burlinton Industries是很有指導意義的，其在21年前以及現在都一直是美國最大的紡織公司。在1964年的時候，Burlington就擁有12億美元的銷量，而我們那時只有5千萬。它在銷售渠道以及產品方面都具有我們望塵莫及的優勢，當然收益也遠遠超過我們。1964年年底，它的股票為每股60美元，而我們只有13美元。
Burlington made a decision to stick to the textile business, and in 1985 had sales of about $2.8 billion. During the 1964-85 period, the company made capital expenditures of about $3 billion, far more than any other U.S. textile company and more than $200-per-share on that $60 stock. A very large part of the expenditures, I am sure, was devoted to cost improvement and expansion. Given Burlington's basic commitment to stay in textiles, I would also surmise that the company's capital decisions were quite rational.
Burlington做出堅守紡織業的決定，在1985年其銷量大約為28億。在1964-1985年期間，該公司總計投入資本30億美元，遠遠超出其他美國紡織公司也遠高於每股200美元的淨資本，其市場售價只有60美元。我很確信很大一部分資本都投入到成本改善以及擴張之上。如果Burlington要一直堅守在紡織業，那我便可推測該公司的資本決策是非常明智的。
Nevertheless, Burlington has lost sales volume in real dollars and has far lower returns on sales and equity now than 20 years ago. Split 2-for-1 in 1965, the stock now sells at 34 -- on an adjusted basis, just a little over its $60 price in 1964. Meanwhile, the CPI has more than tripled. Therefore, each share commands about one-third the purchasing power it did at the end of 1964. Regular dividends have been paid but they, too, have shrunk significantly in purchasing power.
雖然如此，但Burlington的銷量用真實美元（扣除通脹影響）來衡量的話已然在下滑，與20年前相比，無論是銷售淨利率還是淨資產收益率也都在下降。該公司現在股價為34美元，考慮到1965年每兩股配一股，大約略高於1964年每股60美元。而與此同時，CPI大約漲了3倍。因此，每一股的購買力縮水至1964年的三分之一。每年正常發放的股利同樣的道理在購買力方面也大大縮水了。
This devastating outcome for the shareholders indicates what can happen when much brain power and energy are applied to a faulty premise. The situation is suggestive of Samuel Johnson's horse: 「A horse that can count to ten is a remarkable horse - not a remarkable mathematician.」 Likewise, a textile company that allocates capital brilliantly within its industry is a remarkable textile company - but not a remarkable business.
這個對股東而言非常慘痛的結果說明了如果將腦力與精力投入到一個錯誤的行業將回帶來什麼。這種情況就像是Samuel Johnson的那匹馬一樣：「一匹馬頂十匹馬，就是一匹好馬，但卻不是了不起的數學家。」同樣的，一家紡織公司將資本不斷投入一個行業是一家了不起的傑出的紡織公司，但卻不是一筆好生意。
My conclusion from my own experiences and from much observation of other businesses is that a good managerial record (measured by economic returns) is far more a function of what business boat you get into than it is of how effectively you row (though intelligence and effort help considerably, of course, in any business, good or bad). Some years ago I wrote: 「When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.」 Nothing has since changed my point of view on that matter. Should you find yourself in a chronically-leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
就我自己的經驗以及多年對其他產業的觀察來說，我的結論就是優異的記錄（通過經濟回報來衡量）的功能是比起多麼高效地划船，你選擇怎樣一條船更加重要（儘管對任何企業來說，無論好壞，才智與努力也非常重要）。一些年前我曾寫到：「當一個蜚聲在外的管理者遇到一家不具前景且經濟基礎較差的公司時，將是企業沒有任何變化。」現在我的觀點也沒有任何改變。如果你發現自己正在一所一點點漏水的船上，花費精力去換一艘船可能比花費精力去補漏洞更加有效。
* * *
There is an investment postscript in our textile saga. Some investors weight book value heavily in their stock-buying decisions (as I, in my early years, did myself). And some economists and academicians believe replacement values are of considerable importance in calculating an appropriate price level for the stock market as a whole. Those of both persuasions would have received an education at the auction we held in early 1986 to dispose of our textile machinery.
有關我們投資紡織業冒險故事還有後續。一些投資者在做出買入股票的決定時重視賬面價值（如我在早年所做的）。而一些經濟學家和學者卻認為重置價值對於整個市場而言用來計算的合適的價格水平更為重要。這兩個派別都將因為1986年我們處置紡織設備的拍賣會而受到教育。
The equipment sold (including some disposed of in the few months prior to the auction) took up about 750,000 square feet of factory space in New Bedford and was eminently usable. It originally cost us about $13 million, including $2 million spent in 1980-84, and had a current book value of $866,000 (after accelerated depreciation). Though no sane management would have made the investment, the equipment could have been replaced new for perhaps $30-$50 million.
出售的設備（包括在拍賣會前幾個月處置的設備）佔New Bedford工廠用地75萬英呎，幾乎沒有用處。原值為一千三百萬美元，包括在1980-1984年間投入的兩百萬美元，現在賬面價值為八十六萬六千美元（加速折舊後）。儘管沒有人笨到會繼續投資，但是更換新的設備需要三千到五千萬。
Gross proceeds from our sale of this equipment came to $163,122. Allowing for necessary pre- and post-sale costs, our net was less than zero. Relatively modern looms that we bought for $5,000 apiece in 1981 found no takers at $50. We finally sold them for scrap at $26 each, a sum less than removal costs.
我們的設備售出後總共帶來十六萬三千多美元的銷量。只夠支付必要的售前售後成本，我們的淨回報幾乎為零。在1981年花五千美元一件買入的較為現代的紡紗賣50美元還找不到買主，我們最終按照26美元賣出，連搬運工的工資都不夠支付。
Ponder this: the economic goodwill attributable to two paper routes in Buffalo - or a single See's candy store - considerably exceeds the proceeds we received from this massive collection of tangible assets that not too many years ago, under different competitive conditions, was able to employ over 1,000 people.
想想這個：兩家Buffalo報攤或者一家See』s糖果店的商譽收入都要原超出我們從不多年前大量累積有形資產的所得到的，在不同的競爭環境下，後者早些時候卻可以一次僱傭1000個員工。
three Very Good Businesses (and a Few Thoughts About Incentive Compensation)
三個非常棒的公司（以及一些關於補償激勵的思考）
When I was 12, I lived with my grandfather for about four months. A grocer by trade, he was also working on a book and each night he dictated a few pages to me. The title - brace yourself - was 「How to Run a Grocery Store and a Few Things I Have Learned About Fishing」. My grandfather was sure that interest in these two subjects was universal and that the world awaited his views. You may conclude from this section's title and contents that I was overexposed to Grandpa's literary style (and personality).
我12歲的時候，和我的祖父一起住了幾個月。他開了一家雜貨店，並且在寫一本書，沒晚他都會讀幾頁給我聽。書名是如何「如何經營一家雜貨店和我想到的關於釣魚的一些事」。我的祖父非常確信關於這兩件事的興趣是普遍的而且全世界都會認同他的觀點。你可能從這一節的標題以及內容中得出這樣的結論：我完全繼承了我祖父的文學風格（以及性格）。
I am merging the discussion of Nebraska Furniture Mart, See's Candy Shops, and Buffalo Evening News here because the economic strengths, weaknesses, and prospects of these businesses have changed little since I reported to you a year ago. The shortness of this discussion, however, is in no way meant to minimize the importance of these businesses to us: in 1985 they earned an aggregate of $72 million pre-tax. Fifteen years ago, before we had acquired any of them, their aggregate earnings were about $8 million pre-tax.
我把Nebraska家具店、See』s糖果店以及Buffalo晚報放在一起討論，因為其經濟優勢、弱勢以及前景與我一年前所報告的都變化不大。然而這一節討論縮短並不意味著這些行業對我們的重要性降低：在1985年他們總夠賺的七千二百萬的稅前收益。十五年前，在我們收購他們之前，稅前總收益僅為八百萬美元。
While an increase in earnings from $8 million to $72 million sounds terrific - and usually is - you should not automatically assume that to be the case. You must first make sure that earnings were not severely depressed in the base year. If they were instead substantial in relation to capital employed, an even more important point must be examined: how much additional capital was required to produce the additional earnings?
從八百萬美元到七千二百萬美元聽起來很嚇人，而通常的情況是你不該機械地思考這一案例。你首先必須確定這些收益按照基年計算沒有被大量低估。如果他們相對於投入的資本而言也是巨額的，那麼有更為重要的一點需要檢驗：額外收益需要多少額外的資本來獲得？
In both respects, our group of three scores well. First, earnings 15 years ago were excellent compared to capital then employed in the businesses. Second, although annual earnings are now $64 million greater, the businesses require only about $40 million more in invested capital to operate than was the case then.
從各個方面來說，我們這三家公司都得分良好。首先與15年投入的資本相比前其收益良好。其次，儘管現在擁有年六千四百萬的巨額收益，但僅需四千萬美元的額外資本投入。
The dramatic growth in earning power of these three businesses, accompanied by their need for only minor amounts of capital, illustrates very well the power of economic goodwill during an inflationary period (a phenomenon explained in detail in the 1983 annual report). The financial characteristics of these businesses have allowed us to use a very large portion of the earnings they generate elsewhere. Corporate America, however, has had a different experience: in order to increase earnings significantly, most companies have needed to increase capital significantly also. The average American business has required about $5 of additional capital to generate an additional $1 of annual pre-tax earnings. That business, therefore, would have required over $300 million in additional capital from its owners in order to achieve an earnings performance equal to our group of three.
這三家公司在收益能力方面顯著的成長，與其所需的小額的資本投入相比，正說明了在通脹期間其良好的商譽（這種現象在1983年年報中有詳細解釋）。而這些公司的財務特點允許我們使用他們所賺取大部分的收益。然而美國公司有著完全不同的情景：為了使得收益大幅上漲，大部分的公司需要大額投入資本。每家美國公司平均需要投入5美元的額外資本來獲取平均1美元的稅前收益。因此一些公司需要從其股東處得到三億的額外資本投入來取得和我們這三家公司相同的收益表現。
When returns on capital are ordinary, an earn – more – by – putting – up - more record is no great managerial achievement. You can get the same result personally while operating from your rocking chair. just quadruple the capital you commit to a savings account and you will quadruple your earnings. You would hardly expect hosannas for that particular accomplishment. Yet, retirement announcements regularly sing the praises of CEOs who have, say, quadrupled earnings of their widget company during their reign - with no one examining whether this gain was attributable simply to many years of retained earnings and the workings of compound interest.
當資本報酬率一般，這種通過不斷投入資本的方式獲得的記錄在冊的收益的上升不再是管理的成就。你自己坐在搖椅上就可以取得同樣的結果，僅僅就是把存在銀行賬戶裡的錢翻倍，這樣你就可以取得翻倍的利益收益。你將很難期望通過這種成就而收穫掌聲。但是在某位CEO的歌功頌德的退休儀式上，他只會宣稱在其就任期間收益翻倍，而不解釋這些收益是否是由多年留存收益以及複利的結合而得到的。
If the widget company consistently earned a superior return on capital throughout the period, or if capital employed only doubled during the CEO's reign, the praise for him may be well deserved. But if return on capital was lackluster and capital employed increased in pace with earnings, applause should be withheld. A savings account in which interest was reinvested would achieve the same year-by-year increase in earnings - and, at only 8% interest, would quadruple its annual earnings in 18 years.
如果一定期間內一家公司持續獲得高於平均水平的資本回報，或者在CEO在任期間資本投入只是翻倍，那麼對其的讚頌還是值得的。但是如果資本回報水平平平又或者資本投入增長的速度高於收益，那麼需要保留掌聲。一個儲蓄賬戶在其利息被再投資的情況下也將產生每年相同的收益增長，而在8%的利率水平下，18年後其收益將翻倍。
The power of this simple math is often ignored by companies to the detriment of their shareholders. Many corporate compensation plans reward managers handsomely for earnings increases produced solely, or in large part, by retained earnings - i.e., earnings withheld from owners. For example, ten-year, fixed-price stock options are granted routinely, often by companies whose dividends are only a small percentage of earnings.
這種簡單的數學運算經常被公司所忽略而損害了股東的權益。許多公司補貼計劃獎勵經理人就是因為其個人創造的收益增長，或者很大一部分因為其留存收益，即從股東那裡收回的收益。舉個例子，一個10年期，固定價格的股票期權經常通常被授予那些經理人，而這些公司通常只拿出其收益的一小部分來分派股利。
An example will illustrate the inequities possible under such circumstances. Let's suppose that you had a $100,000 savings account earning 8% interest and 「managed」 by a trustee who could decide each year what portion of the interest you were to be paid in cash. Interest not paid out would be 「retained earnings」 added to the savings account to compound. And let's suppose that your trustee, in his superior wisdom, set the 「pay-out ratio」 at one-quarter of the annual earnings.
這個例子說明了在這類情況下隱藏的不公平性。讓我們假設如果你擁有一個10萬美元的存款賬戶，年收益率8%，通過託管人管理，其可以決定你每年從利息收入中提取多少現金。沒有支付的利息部分將會作為留存收益投入存款賬戶中。讓我們再次假設如果你是託管人的話，運用他的高超智慧，決定每年收益的支付比率為四分之一。
Under these assumptions, your account would be worth $179,084 at the end of ten years. Additionally, your annual earnings would have increased about 70% from $8,000 to $13,515 under this inspired management. And, finally, your 「dividends」 would have increased commensurately, rising regularly from $2,000 in the first year to $3,378 in the tenth year. Each year, when your manager's public relations firm prepared his annual report to you, all of the charts would have had lines marching skyward.
在這些假設之下，你的賬戶在十年後將價值十七萬九千多。此外你的年收入通過這種激勵人心的管理將會上漲70%，從八千美元上漲到一萬三千多美元。而最終你的「股利」將會相同比例的上漲，從最初的每年兩千美元到第十個年頭的三千三百多。每一年當你的管理人的公共關係公司遞交年度報告給你的時候，所有的表格的數字都一飛衝天。