Topic: "Warren Buffett invests $6 billion in Japan's five biggest trading houses" (Read 524 times)

It could be argued as worse because the debt soft default though repaying nominal value while losing real value is borne by the Japanese citizens.   USA will see the whole world lose value for holding its debt, its partly why nobody wants to break ranks with the reserve currency because its obviously going to fall apart and lose alot of money, reset the economies they interact with.   When elected most choose to grin and bare the slow failure of sovereign default.   From what I can see the thread unwinding so that nothing holds and is inevitable in Japan or anywhere else just because economics is a study of natural phenomena not the ability gained to manipulate endlessly, ie. humans are fallible and economies are elemental.
  Anyhow the Yen and Japanese government are broke yes but Japan itself has a net trade balance but also declining demographic growth nationally.   The economy can be fixed over about 30 years but the debt will default and the currency will reset like the Rouble is equal to 10,000 of old Roubles which is default in all but name.   Soft default is when bankruptcy is not declared but no correct value is returned, so government pensions pay out but the age to claim is raised beyond life expectancy after a life time of contributions are made.   If we took a list of governments which have soft defaulted on pension plans and so chopped trillions off their obligations and debt without admitting failure, its probably more then a dozen including many of the worlds richest countries.

with a fund of $ 6 billion, if the funds were circulated in America, it would support a sluggish economy. but in fact Buffett chose to invest in Japan. so he has other plans, because America is a democracy so no one can prohibit him

Regarding the high debt-to-GDP level in Japan, there are two things to consider:

1. Most of the Japanese debt is being held by Japanese citizens. Only a very small fraction is being held by other governments and foreign citizens.
2. The interest rates on Japanese bonds remain one of the lowest in the world. Therefore the annual interest payments doesn't put a lot of burden on the government finances.

In simple words, Japan can have a higher debt to GDP ratio, because they can arrange loans at a very low interest rate and that too from their own citizens.

He .must have heard about the uk/Japan post brexit deal

WB is 90 years old now and the fund he controls is gigantic, 6bn should be a large amount but I dont think WB even decided this particular decision.   Its just about value, the gold mining firm is making such a large amount in margin profit its clear value buy.    Gold is not especially popular, its doubted because its risen so much but obviously in context this is due to the fall of the dollar standard being tied to anything fundamental and that trend is likely to continue.   So one of WB exec's made this decision and there was no great opposition as its valid risk trade with clear profit potential.   Same is probably true for Japan which has been quite unpopular at times, they have greater challenges imo but its a global economy and its possibly WB did not even use his cash but leveraged YEN which is set within QE program weakening just like dollar is likely weak vs gold in a trend of decline.

It is true that the unemployment rate in Japan is among the lowest in the world (only 2.9%), but it is also a fact that Japan has the highest debt-to-GDP ratio in the world. I would not agree that one such country can be considered "most stable and risk-free market", especially if they do not hold their destiny in their hands, but listen to the advice of others who have brought them into this situation.

But from an investor's perspective, profits can be made even in such a country, if you know where and when to invest.

There is nothing surprising with Warren's investments, he cares about money and money making money and loyalty of customers and that's about it. He finds stocks that either is undervalued compared to what the company has in assets which in today's world is not that much but back in the day there was a lot of them, let's say there is one company with 10 offices that worths 1 million dollars, but the stocks total 800k, you buy that share, obviously this could be bad example but you understand the logic.

Or you buy shares from stuff like geico which gets money from people all the time as insurance and makes profit with that money, or you invest into coca cola because let's be honest the whole world will continue to drink it. Dude actually makes very simple investments, but he does it for 20+ year plan, that is his thing.

Buffet is a great investor with an investment strategy that often anomalies the behavior of other large investors in the world. However, with his different investment strategies, Buffet has proven successful in developing his assets far beyond other stock investors. Buffett sees that investment must be made in a sector that investors truly understand to guarantee victory.

The quality of a business seen from the fundamental assets becomes the main aspect in making investment decisions and is a must. The purchase of shares is planned to invest forever, not for a moment's profit. Investment diversification is very risky, but opportunities do not come every time. Therefore, every golden opportunity must really be optimized. The stock price of a company does not represent the value of that company, so for investment, investors need to understand the company's performance. So its the reason Buffett invests in Japan.

I would agree with the last line of your post. Japan is likely to recover much faster, when compared to the other countries. Even now, the unemployment rate in Japan is much lower when compared to the other developed countries such as the United States and European Union. Japan remains the most stable and risk-free market out there for large-scale investors.

Warren Buffett has always said that he would invest in things, when other traders are running away from it. The smart thinking behind this is actually very clever, because he invest in markets when it is on a decline ...because he wants to buy at a very good price.

Before he buy anything, he looks at the "recovery potential" of that market and that is very important. Japan is basically a 1st world country with a very disciplined work force, unlike many 3rd world countries ..where corruption is rife and those markets would possibly take ages to recover after this pandemic.

He knows Japan will recover a lot quicker than most of these 3rd world markets, so his return on investment (ROI) will be much quicker.  

In the case of trading in Japan it has exported goods worth 1,012.98 million US dollars. Warren Buffett, an American citizen is recognized as one of the most successful businessmen in the world. He has been called the most successful investor of the twentieth century. Being associated with different companies the higher the amount of investment the higher the profit. In the new fiscal year Japan has invested about 1,046.28 million US dollars, which is why other countries are taking steps to join it.

In many ways, these Japanese trading companies are also well suited to billionaire investment standards Buffett. 4 out of 5 companies are trading much lower than their book value i.e. their capitalization is lower than their asset value. Some have large amounts of cash, like Mitsubishi. These companies' segments are also linked to the real economy, such as steel, shipping, cargo and retail.

It is interesting to watch him make decisions about investing money in shares of any campaign. He knows how to surprise with his decisions. I consider him a pretty wise person in this regard, because his fortune on the chart is constantly growing, just like the value of gold.

Seriously? I was thinking the opposite. Japan is the least volatile market out there and if he is investing there, that means that he is more interested in preserving his wealth rather than increasing it. Nowadays, he is not investing in blue-chip stocks. And his move away from the American stock market hints that he doesn't think that the current valuation is fair.

The older he got the more risky his investments became. I am not saying it is risky because of japan or anything, it could very well be a great investment, by all means if he did it that means it must be a good investment, however the "risky" part comes from the fact that back in the day he was a person who didn't invested into things he wasn't very well versed in, stuff like newspapers, shaving company, insurance and stuff like that were safe bets and he went with that, or even coca cola which he owns a huge lot of shares from, he invests into things he knows that are long term and profitable.

Now for the past 5 years or so he has started to invest into things he is not very well versed in for decades, he probably still studied them in depth but he hasn't studied them for decades like he did with his other investments.

Warren buffett is not an amateur business man, he is known for business per excellence, some one who is the seventh wealthiest person in the world, I believe for him to make an invest his finances into Japan's trade he must have genuine evidence of profitability, and as a matter of fact how many people here did he consulted before the made the ones he had and has he every cried to any that he lost a business before, it is too late for him to be afraid of taking such risk.

There are probably reason for this decision he made. My speculation is that this guy is a business minded person and it could be related to it that he sees huge ROI in the mining gold business he venture. Another thing is that it could be that he just wanted to live in Japan for good that is he transfer his investment or money in that country? LOL
Anyway, I agree to OP that with these big money involve it could bring down slightly the US economy. Imagine that is billion of dollars being invested outside the US, it is a huge money.

I wouldn't agree that WB has lost its sense of business, especially if you read what stompix found about this investment in Japan. Sometimes an investment does not have to bring direct or short-term profit, and all the companies you mentioned are not resilient to the changes caused by the recession, especially the helicopter money policy that could cost the United States dearly in the future.

https://bitcointalksearch.org/topic/m.55123201

Looks like the old man has lost his commonsense. He should have kept his investment with the US stocks. US technology stocks such as Google, FaceBook, Apple and Amazon have given anywhere from 50% to 100% returns, during the last 6 months. On the other hand, the Japanese stocks have remained mostly stable during the same period. He made a very bad decision this time.

Cash is king and Buffet as a real money owner understands the codes in the global economy. In Q1, Buffet released most of its shares and chose to hold cash, the goal is to have the freedom to spend in the midst of a pandemic and economic instability in many countries. Buffet invests with the aim of obtaining added value through the accumulated increase in the value of assets invested over a long period of time, even decades.
Japan is often Buffett's investment choice, in 2011, buffets also chose to invest in Japan.

Without always experiencing profits, some of Buffett's investments have resulted in losses, including when Buffett bought up shares in the oil and gas company ConocoPhillips.