"Berkshire Hathaway’s strategy involved borrowing money in Japan at a mere 0.5% interest and investing in companies there that offered a 5% dividend yield.
“It was like having God just opening a chest and just pouring money into it,” Munger said.
Initially, Berkshire Hathaway declared a $6 billion investment across five Japanese trading houses — Itochu International Inc., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. Ltd. and Sumitomo Corp. Group — in August 2020. That investment has grown substantially and is now valued at approximately $17 billion, thanks in part to both additional share purchases and soaring stock prices of the companies involved.
Munger provided more detail on the mechanics of the investment, indicating it wasn’t an overnight success but rather a result of patient, incremental actions."
Trouble is Berkshire is so huge - it’s not enough to move the needle. Lemonade stands and $10 billion in Japanese trading houses won’t do.
Assuming there really is about $100 billion looking for a home, that is, which I doubt. Not that there’s $100 billion, I’m sure there is. I just doubt if it’s looking to go anywhere but treasuries.
I don’t think this could possibly be true. As usual, Berkshire is simply waiting for good opportunities to appear. And eventually they always appear. And if by chance, the economy has an episode of the doldrums, if the stock of Berkshire itself drops enough and remains low, perhaps some of the available capital will be deployed there. Patience is a very under-appreciated investing trait.
Wow. So even thought WEB tells shareholders float is free permanent capital, he is deploying them in instruments that can be liquidated very quickly, and with relative stable value (even though the fixed income this year doesn’t fit the stable value narrative).
Instead of float if you can flip it to claim paid, will this looks much different?
I would much rather Berkshire find good businesses to buy than to buy back its own stock. But, if it can’t find good businesses, I don’t know, maybe sometimes that’s the best use of their cash.
It is not clear to me what kind of businesses Berkshire even interested in or they can buy that would meaningfully move the needle. I think Buffett’s run is glorious, unparalleled in history. He can set the buyback on auto-pilot and enjoy his life or reading 10-k’s, 10-q’s
You may have your view, sure, but what he had achieved is something unique and extraordinary. It deserves respect. Hope you can look at his work holistically.
Any examples of a money manager or fund manager that beat the S&P500 over these 15 years? AFTER expenses, of course. And, to really be fair, you have to subtract out the annual taxes on distributions from the compounding over the 15 years.
Q: Do you think Berkshire Hathaway will make another big acquisition under you and Warren Buffett?
A: It’s at least 50/50. Venture capital has made it so difficult for everybody. They keep bidding the prices up and up and up, and of course that makes the results go down, down and down.
Q: If you were starting out today as an investor, are there any things you would do differently than you did back in the 1960s?
A: Conditions were quite different then, and there were a lot of what we used to call loaded laggards…. There were two or three times as much in assets per-share value as there was in stock-market value per share. Ben Graham taught us all to buy that kind of stuff. It was underpriced, and hold it as long as it was underpriced, then sell it when the price got more normal and buy another undervalued asset. And you could do that for about four decades in the aftermath of the 1930s Great Depression. That’s gone, all of that low-hanging fruit.
The 15 year performance Divi likes to harp on is entirely the result of Berkshire being overvalued 15 years ago. Go 16 years or 14 years and the comparison is even or favorable to Berkshire.
