伯克希尔·哈撒韦 1968 年股东信

Earnings in both textile and insurance operations improved somewhat during 1968. Total operating earnings in relation to stockholders investment still are not satisfactory, but we are expending every effort to bring them to the proper level.

Sales volume increased about 14% with good gains in both Home Fabrics and Menswear Linings. Over the years, these have been our most consistently profitable areas and their improvement in 1968 reflects strong efforts by Richard Bowen in Home Fabrics and Ralph Rigby in Menswear Linings. The Home Fabrics Division in 1969 will utilize new 150 inch Saurer looms, offering opportunities for expanding our style line. We hold options on additional looms, enabling expansion if profitable projections materialize.

Our Box Loom Division continued to present severe operating problems, as it has over many years. Our history in this area shows occasional periods of strong prices, regularly followed by heavy imports of goods, severe price cutting and curtailed operations. As a result of a careful survey of the future market for Box Loom greige goods and the investment required to service this market, it was decided to phase out our operation of such greige goods during 1969. After the transitional operating period has been completed and some loss has been sustained on the sale of fixed assets, we expect an improved over-all textile operating situation.

National Indemnity Company and National Fire & Marine Insurance Company continue their splendid operating performance under Jack Ringwalt. Premium volume increased only slightly in 1968, but more importantly, a good underwriting profit was again produced during a period when the property insurance industry operated at an underwriting loss. Investment income increased substantially in 1968, reflecting both a greater base of assets and higher yields on fixed income securities. Some capital gains again developed from our investments in common stocks.

The insurance companies continue to seek new areas for expansion, both at the direct level and possible in the reinsurance field. The emphasis continues, however, to be on underwriting at a profit rather than volume simply for the sake of size. Due to our policy of retaining all earnings in the insurance subsidiaries, we have substantially augmented their capital funds, increasing our ability to retain greater segments of our originated premium volume.

During 1968, we sold a portion of our marketable securities portfolio at a profit of approximately $1.5 million after tax. At the end of 1968, we had unrealized market appreciation of $6,400,000 in the balance of the portfolio. Such securities were held in marketable common stocks as a temporary investment, pending the utilization of the funds in acquisition or expansion of operating businesses consistent with our program for the development of greater and more diversified earning power.

Immediately after year end, we purchased all of the stock of Sun Newspapers, Inc. and Blacker Printing Company, Inc., which represents an initial entry into the publishing business. This purchase involved only a small portion of our funds available for acquisition. Sun Newspapers, Inc. publishes five weekly newspapers in the Omaha, Nebraska area, with paid circulation of about 50,000. A related printing business is conducted by Blacker Printing Company, Inc. This purchase, while small, has potential for future expansion. The operations will continue under the able management of Stanford Lipsey.

Kenneth V. Chace
President

[Letter written by Warren E. Buffett]