BUFFETT PARTNERSHIP, LTD. 810 KIEWIT PLAZA OMAHA 31, NEBRASKA

November 1, 1962

TO MY PARTNERS FOR 1963:

致1963年合伙人：

Here we go on the annual paper flurry. Two copies of an amended partnership agreement for 1963 are enclosed. The one with the General Provisions attached is to be kept by you and the other single-page agreement should be returned. There are no substantive changes of any sort from last year's agreement. This amendment is merely to allow for a few new partners and in several places to reword in clearer (we hope) language provisions of the present agreement. Practically all of the rewording is in General Provision 5 (paragraph 7 in last year's agreement). Rather than have a separate amending document, we have incorporated the changes into one complete document embodying the entire agreement.

開(kāi)始年底繁瑣的文書(shū)工作了艰垂。隨信附上兩份修改過(guò)將在1963年實(shí)施的合伙人協(xié)議。包含了若干細(xì)則的一份請(qǐng)各位保管回右，一份單頁(yè)的同意書(shū)請(qǐng)寄回囚枪。新的協(xié)議和去年沒(méi)有什么大的變化。這份協(xié)議僅僅允許一些新的合伙人加入爬虱，并且重新調(diào)整了若干條款的遣詞以期更加準(zhǔn)確神郊〖タ悖基本所有的更改都在細(xì)則5（對(duì)應(yīng)去年協(xié)議的第7段）。我們將更改合并到一個(gè)的完整文件中而非另起草一份修訂稿痰催。

We are also enclosing two commitment letters (one for you--one to be returned) on which you are to indicate your wishes regarding additions or withdrawals at January 1st. We would like to have the agreement and the commitment letter back by December 1st. However, the commitment letter can be amended right up until the end of the year (not after) so if you should have a change of plans and you have already mailed us your commitment letter, all you have to do is get in touch with me, and I will make whatever changes you desire.

我們同時(shí)附帶了兩份關(guān)于在1月1日增持或者撤資的承諾書(shū)（一份自留一份寄回）兜辞。我希望在12月1日前收到各位的協(xié)議和承諾書(shū)迎瞧。當(dāng)然，承諾書(shū)的內(nèi)容在年底前的任何時(shí)間都可以更改弦疮，如果你已經(jīng)寄出承諾書(shū)夹攒，只需要直接聯(lián)系我就行，任何更改都可以胁塞。

Any withdrawals will be paid immediately after January 1st. Any additions must reach us by January 10 , and
should they be paid in during November, they will take on the status of advance payments and draw interest at the rate of 6% until yearend.

所有的撤資會(huì)立即在1月1日支付咏尝。增資則需要在1月10日前到賬。如果在今年十一月到賬啸罢，那么這筆錢(qián)將會(huì)被當(dāng)作預(yù)付款以6%的年利率编检，按比例支付其到年底的利息。

Please be sure the signature on your partnership agreement is notarized. Partners in Omaha may obtain the notarization at our office if they wish. Also, be sure to let us know by an appropriate circle on the commitment letter whether you wish to receive monthly payments in 1963. In order to be sure everyone understands this, let me again state that these monthly payments are in no sense guaranteed earnings or anything of the sort. They represent a convenient form of regular withdrawal, which to the extent we earn better than 6% are payments from earnings, and to the extent we don't, are payments from capital.

請(qǐng)確保您的合伙協(xié)議上的簽名經(jīng)過(guò)公證扰才。 各位合伙人如果愿意允懂，可以在我們的辦公室獲得公證。同時(shí)請(qǐng)?jiān)诔兄Z書(shū)上注明是否愿意在1963年收取月付款衩匣。為了確保各位明白蕾总，請(qǐng)?jiān)试S我再次澄清這筆付款和當(dāng)年的盈利毫無(wú)關(guān)系。這只是一種定期撤資的方法琅捏。如果當(dāng)年收益超過(guò)6%生百，那么就從收益中扣除；若收益低于6%柄延，款項(xiàng)就會(huì)從本金中取蚀浆。

Complete tax information for your 1962 return will be in your hands by January 20th. If you should need an estimate of your tax position before that time, let me know and I will give you a rough idea. We will also send out a short letter on taxes in late December.

1962年的稅務(wù)信息將會(huì)在1月20日送達(dá)各位手中。如果需要在那之前知道大致的稅率搜吧，請(qǐng)?zhí)崆奥?lián)系市俊，我會(huì)給出大致的范圍。在12月底會(huì)有一封關(guān)于稅率的短信寄出滤奈。

Having read this far, you are entitled to a report on how we have done to date in 1962. For the period ending October 31st, the Dow-Jones Industrials showed an overall loss, including dividends received, of approximately 16.8%. We intend to use the same method or valuing our controlling interest in Dempster Mill Manufacturing at this yearend that we did at the end of last year. This involved applying various discounts to the balance sheet items to reflect my opinion as to what could be realized on a very prompt sale. Last year this involved a 40% discount on inventories, a 15% discount on receivables, estimated auction value of fixed assets, etc., which led to an approximate value or $35.00 per share.

從這里開(kāi)始摆昧，我們將大致介紹在1962年的投資表現(xiàn)。直到10月31日蜒程，道指總體收益在-16.8%绅你。對(duì)于控股公司Dempster Mill Manufacturing （DMM）我們使用和去年相同的估值方法。該方法對(duì)于資產(chǎn)負(fù)債表上的各個(gè)條目的價(jià)值都打了很大的折扣以便能及時(shí)出手搞糕。對(duì)于去年資產(chǎn)負(fù)債表勇吊，對(duì)于存貨價(jià)值按照60%計(jì)算曼追，對(duì)于應(yīng)收賬款85%窍仰，固定資產(chǎn)以拍賣價(jià)格計(jì)算，等等礼殊，總計(jì)大概$35/股驹吮。

The successful conversion of substantial portions of the assets of Dempster to cash, at virtually 100 cents on the dollar, has been the high point of 1962. For example, inventory of 4.2 million at last yearend will probably be about 1.9 million this yearend, reducing the discount on this item by about 920,000 (40% of 2.3 million reduction). I will give this story my full journalistic treatment in my annual letter. Suffice to say at this point that applying the same discounts described above will probably result in a yearend value of at least 50.00 per share. The extent of the asset conversion job can perhaps best be illustrated in a sentence by pointing out that whereas we had 166,000 of cash and 2,315,000 of liabilities at November 30, 1961 (Dempster fiscal yearend), we expect this year to have about $1 million in cash and investments (of the type the Partnership buys) against total liabilities of 250,000. Prospects for further improvement in this situation in 1963 appear good, and we expect a substantially expanded investment portfolio in Dempster next year.

今年最大的收獲是成功地將Dempster的大多固定資產(chǎn)等價(jià)轉(zhuǎn)換成現(xiàn)金（基本上就是100美分換1美元）针史。例如：存貨從去年的420萬(wàn)美元降到190萬(wàn)美元，因此去年的折價(jià)92萬(wàn)美元將會(huì)以現(xiàn)金形式計(jì)入到今年的價(jià)值中（230萬(wàn)美元的40%）碟狞。我將會(huì)在年度股東信里面仔細(xì)聊聊這個(gè)故事啄枕。僅從這一項(xiàng)折價(jià)的回歸就可以使我們的年末價(jià)值達(dá)到$50/股。下面這句話可以清楚地概括我們今年資產(chǎn)轉(zhuǎn)換工作：在1961年11月20日（Dempster 財(cái)報(bào)日）我們有16.6萬(wàn)現(xiàn)金和231.5萬(wàn)負(fù)債族沃，在今年我們擁有1百萬(wàn)的現(xiàn)金和投資等價(jià)物以及25萬(wàn)元的負(fù)債频祝。可預(yù)測(cè)地1963年這部分資產(chǎn)的變化會(huì)比今年更好脆淹，我相信明年在Dempster上面的投資收益會(huì)顯著增加常空。

Valuing Dempster at $50 per share, our overall gain (before any payments to partners) to October 31st for the Partnership has been 5.5%. This 22.3 percentage-points advantage over the Dow, if maintained until the end of the year, will be among the largest we have ever had. About 60% of this advantage was accomplished by the portfolio other than Dempster, and 40% was the result of increased value at Dempster.

按照$50/股的價(jià)格計(jì)算Dempster的價(jià)值，我們截止10月31日合伙企業(yè)總體收益為5.5%（不算任何合伙人支付款）盖溺±觳冢總共領(lǐng)先道指22.3個(gè)百分點(diǎn)，這是我們歷史最佳成績(jī)烘嘱。優(yōu)勢(shì)中有60%來(lái)自投資組合昆禽，40%來(lái)自Dempster的凈值增加。

I want all partners and prospective partners to realize the results described above are distinctly abnormal and will recur infrequently, if at all. This performance is mainly the result of having a large portion of our money in controlled assets and workout situations rather than general market situations at a time when the Dow declined substantially. If the Dow had advanced materially in 1962, we could have looked very bad on a relative basis, and our success to date in 1962 certainly does not reflect any ability on my part to guess the market (I never try), but merely reflects the fact that the high prices of generals partially forced me into other categories or investment. If the Dow had continued to soar, we would have been low man on the totem pole. We fully expect to have years when our method of operation will not even match the results of the Dow, although obviously I don't expect this on any long-term basis or I would throw in the towel and buy the Dow.

我希望所有的合伙人和未來(lái)的合伙人了解以上的投資結(jié)果是非常少見(jiàn)而且很有可能無(wú)法再現(xiàn)蝇庭。之所以能超越道指這么多醉鳖，是由于我們大多數(shù)的資產(chǎn)都在控股公司和套利中而非股票市場(chǎng)，正好道指有了大幅下挫遗契。如果在1962年道指大幅上漲辐棒，我們相對(duì)的收益就會(huì)很難看，同時(shí)1962年收益的大勝絕不是因?yàn)槲页晒Φ仡A(yù)測(cè)了市場(chǎng)（從未試過(guò)）牍蜂，僅僅是因?yàn)槟壳肮善笔袌?chǎng)的高位促使我去尋找其他的投資種類漾根。如果道指繼續(xù)高歌猛進(jìn)，那我們一定會(huì)是圖騰柱上那個(gè)矮子鲫竞。我們對(duì)投資收益遜于道指有充分的預(yù)期辐怕，但是顯然不希望長(zhǎng)期被道指超越，否則我就撂挑子去買(mǎi)指數(shù)了从绘。

I’ll cut this sermon short with the conclusion that I certainly do not want anyone to think that the pattern of the last few years is likely to be repeated; I expect future performance to reflect much smaller advantages on average over the Dow.

長(zhǎng)話短說(shuō)寄疏，衷心的希望各位不要覺(jué)得過(guò)去幾年的超額收益是可復(fù)制的，我預(yù)計(jì)未來(lái)的投資表現(xiàn)相對(duì)于道指的優(yōu)勢(shì)會(huì)小的多僵井。

Each letter ends with the request that you let me know about anything that isn't clear. Please be sure that you do this. We are all geared up with secretarial help, a new typewriter, etc., and we want to be sure that this letter and agreement are understood by all.

每封信的最后都希望各位可以問(wèn)我一些問(wèn)題陕截，請(qǐng)各位確保會(huì)這么做。我們?cè)黾恿嗣貢?shū)服務(wù)批什，新打字機(jī)等等农曲，衷心希望各位能完全理解新合約和這封信的內(nèi)容。

Cordially,
Warren E. Buffett