Buffett & Berkshire buy stakes in Japanese companies

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Northern Flicker
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Buffett & Berkshire buy stakes in Japanese companies

Post by Northern Flicker »

It is not the first non-US investment for Berkshire, but acquiring a $6B stake in Japanese trading companies seems be a clear indication that Warren Buffett is no longer in the US-only camp for equity investment.
“I am delighted to have Berkshire Hathaway participate in the future of Japan,” Buffett said in the statement. “The five major trading companies have many joint ventures throughout the world and are likely to have more of these partnerships. I hope that in the future there may be opportunities of mutual benefit.”
https://www.bloomberg.com/news/articles ... -companies
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theorist
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by theorist »

Charlie Munger has been talking up Chinese equities and the future of investing in China for quite some time, so I’ve never thought of Berkshire leadership as US centric in their thinking (though the holdings, of course, have been). If you look at the P/B ratios of these Japanese holding companies, it looks like Berkshire found some deals in Japan that would be difficult to replicate here right now. 30 years of market stagnation may do wonders for value investing opportunities...
wanderer
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by wanderer »

Feels more like an investment in commodities (or at least their trading companies). Perhaps a return to "value" investing.
statefan03
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by statefan03 »

Also feels like a US inflation hedge.
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Northern Flicker
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by Northern Flicker »

statefan03 wrote: Mon Aug 31, 2020 12:50 pm Also feels like a US inflation hedge.
That should always be one of the top drivers of int'l diversification.
Risk is not a guarantor of return.
Robot Monster
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by Robot Monster »

Interesting comment from the Bloomberg article,

“I think this is a definite signal that Berkshire is more likely to examine and pursue potential investments internationally,” David Kass, a professor of finance at the University of Maryland’s Robert H. Smith School of Business, said. “This could be the beginning of the tip of an iceberg. There could be many more investments such as this.”
“I delight in what I fear.” ― Shirley Jackson
columbia
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by columbia »

Northern Flicker wrote: Mon Aug 31, 2020 11:40 am It is not the first non-US investment for Berkshire, but acquiring a $6B stake in Japanese trading companies seems be a clear indication that Warren Buffett is no longer in the US-only camp for equity investment.
“I am delighted to have Berkshire Hathaway participate in the future of Japan,” Buffett said in the statement. “The five major trading companies have many joint ventures throughout the world and are likely to have more of these partnerships. I hope that in the future there may be opportunities of mutual benefit.”
https://www.bloomberg.com/news/articles ... -companies
Do you own individual BRK stocks?
MotoTrojan
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by MotoTrojan »

Japan is by far my 2nd largest country-weighting, given my 35% ex-US stake is all in FNDC (37% Japan last I checked) and IVAL (>50% Japan). I'm happy to see this.
alluringreality
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by alluringreality »

Northern Flicker wrote: Mon Aug 31, 2020 12:53 pm
statefan03 wrote: Mon Aug 31, 2020 12:50 pm Also feels like a US inflation hedge.
That should always be one of the top drivers of int'l diversification.
Here are a few statements by David Swensen in Unconventional Success from my last listen:
"Investors in foreign equities assume foreign exchange risk as an unavoidable part of overseas equity exposure. Realistic investors expect foreign currency translation to neither add nor subtract from investment results."
"no one really knows where currencies will go. Sensible investors avoid speculating on currencies."
"Fortunately, finance theorists conclude that some measure of foreign exchange exposure adds to portfolio diversification."
"The tenuous link between domestic inflation and dollar-denominated returns of foreign stocks renders foreign equities useless as a hedge against inflation."
Targets: 15% I Bonds, 15% EE Bonds, 45% US Stock (Mid & Small Tilt), 25% Ex-US Stock (Small Tilt)
flaccidsteele
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by flaccidsteele »

I guess I technically have an allocation to international equities now 🤣
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
Robot Monster
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by Robot Monster »

alluringreality wrote: Mon Aug 31, 2020 1:36 pm
Northern Flicker wrote: Mon Aug 31, 2020 12:53 pm
statefan03 wrote: Mon Aug 31, 2020 12:50 pm Also feels like a US inflation hedge.
That should always be one of the top drivers of int'l diversification.
Here are a few statements by David Swensen in Unconventional Success from my last listen:
"Investors in foreign equities assume foreign exchange risk as an unavoidable part of overseas equity exposure..."
Did currency-hedged international stock funds not exist? Vanguard Global Minimum Volatility Fund seeks "to hedge away most of the currency exposure resulting from its foreign stock holdings."
“I delight in what I fear.” ― Shirley Jackson
columbia
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by columbia »

Robot Monster wrote: Mon Aug 31, 2020 2:09 pm
alluringreality wrote: Mon Aug 31, 2020 1:36 pm
Northern Flicker wrote: Mon Aug 31, 2020 12:53 pm
statefan03 wrote: Mon Aug 31, 2020 12:50 pm Also feels like a US inflation hedge.
That should always be one of the top drivers of int'l diversification.
Here are a few statements by David Swensen in Unconventional Success from my last listen:
"Investors in foreign equities assume foreign exchange risk as an unavoidable part of overseas equity exposure..."
Did currency-hedged international stock funds not exist? Vanguard Global Minimum Volatility Fund seeks "to hedge away most of the currency exposure resulting from its foreign stock holdings."

iShares certainly has them.
alluringreality
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by alluringreality »

Robot Monster wrote: Mon Aug 31, 2020 2:09 pm Did currency-hedged international stock funds not exist?
The book has a 2005 copyright. I'm not sure what international funds were available for retail investors at that time. He didn't consider hedged foreign bonds worth investment, and I can't say how he might comment on current investment options. I included that part mainly because I figure he's aware that foreign exchange risk can go either way.
Targets: 15% I Bonds, 15% EE Bonds, 45% US Stock (Mid & Small Tilt), 25% Ex-US Stock (Small Tilt)
Day9
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by Day9 »

As someone who invests heavily in foreign, value, and foreign value, I am eager to see this as a star sign of an impending reversal. But Buffet is not always right. Remember in 2012 Buffet made a splash by buying over 5% of IBM, touted as dipping his toe into tech for the first time ever, just like how this move is for international. IBM did extremely poorly compared to other big name tech stocks since 2012.
I'm just a fan of the person I got my user name from
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JoMoney
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by JoMoney »

Northern Flicker wrote: Mon Aug 31, 2020 11:40 am... seems be a clear indication that Warren Buffett is no longer in the US-only camp for equity investment...
Berkshire has long held positions in foreign stocks.
It hasn't changed Buffett's advice for how most people should invest.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Northern Flicker
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by Northern Flicker »

columbia wrote: Mon Aug 31, 2020 12:59 pm
Northern Flicker wrote: Mon Aug 31, 2020 11:40 am It is not the first non-US investment for Berkshire, but acquiring a $6B stake in Japanese trading companies seems be a clear indication that Warren Buffett is no longer in the US-only camp for equity investment.
“I am delighted to have Berkshire Hathaway participate in the future of Japan,” Buffett said in the statement. “The five major trading companies have many joint ventures throughout the world and are likely to have more of these partnerships. I hope that in the future there may be opportunities of mutual benefit.”
https://www.bloomberg.com/news/articles ... -companies
Do you own individual BRK stocks?
I do not own any individual stocks, whether BRK, individual stocks owned by BRK, or anything else.
Risk is not a guarantor of return.
Topic Author
Northern Flicker
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by Northern Flicker »

JoMoney wrote: Mon Aug 31, 2020 2:50 pm
Northern Flicker wrote: Mon Aug 31, 2020 11:40 am... seems be a clear indication that Warren Buffett is no longer in the US-only camp for equity investment...
Berkshire has long held positions in foreign stocks.
It hasn't changed Buffett's advice for how most people should invest.
But it does contradict the reason he has in the past given for offering that advice "Don't bet against the United States economy."
Risk is not a guarantor of return.
000
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by 000 »

I guess we can add International Stocks to Buffett's list of things that are "Good for me, but not thee".
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JoMoney
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by JoMoney »

Northern Flicker wrote: Mon Aug 31, 2020 4:12 pm
JoMoney wrote: Mon Aug 31, 2020 2:50 pm
Northern Flicker wrote: Mon Aug 31, 2020 11:40 am... seems be a clear indication that Warren Buffett is no longer in the US-only camp for equity investment...
Berkshire has long held positions in foreign stocks.
It hasn't changed Buffett's advice for how most people should invest.
But it does contradict the reason he has in the past given for offering that advice "Don't bet against the United States economy."
I don't think so. Buffett/BRK's holdings are still something like 90%+ and what he does as a active investor is not what he recommends most people do.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Ferdinand2014
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Re: Buffett & Berkshire buy stakes in Japanese companies

Post by Ferdinand2014 »

Northern Flicker wrote: Mon Aug 31, 2020 4:12 pm
JoMoney wrote: Mon Aug 31, 2020 2:50 pm
Northern Flicker wrote: Mon Aug 31, 2020 11:40 am... seems be a clear indication that Warren Buffett is no longer in the US-only camp for equity investment...
Berkshire has long held positions in foreign stocks.
It hasn't changed Buffett's advice for how most people should invest.
But it does contradict the reason he has in the past given for offering that advice "Don't bet against the United States economy."
Not at all, he very clearly believes in the future of the U.S. economy. He has stated so as recently as the last shareholder meeting in great detail. To invest in opportunities globally does not make it a mutually exclusive belief. He has purchased many international companies outright (in Germany and Israel for example) and has held stock in international companies such as Tesco (U.K), in the past.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
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