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On May 4, 2024, it is known as the "Spring Festival Gala in the investment community".OnlinecasinofreespinsnodepositBuffett's shareholders' meeting will be held as scheduled.
The Berkshire Hathaway shareholders' meeting (Buffett shareholders' meeting), the annual event of the investment community, will be held in Omaha, USA on May 4, 2024. Among them, Buffett's investment in Japanese stocks is a hot topic in the market. Buffett began to invest in five major Japanese trading houses in August 2020 and greatly increased his positions in the first half of 2023.
What is the logic behind this move? What other Japanese stock companies are worth paying attention to besides the five major trading houses? Let's talk about Ba Lao's vision on the eve of Buffett's shareholders' meeting.
Question 1: Buffett continues to increase positions in the five major trading houses, is it one of the factors to stimulate the strength of Japanese stocks?
We believe that Buffett continues to increase positions in the five major trading houses, to a certain extent, is one of the factors that stimulate the strength of Japanese stocks. Buffett continued to increase his positions in five major trading houses, attracting global investors to pay more attention to the Japanese stock market, and Japanese stocks received a gradual increase in the allocation of transnational funds. Of course, the logic behind Buffett's long-term shareholding in the big five is that they can be regarded as representative companies of the "daily special valuation". "Japanese Special valuation" generally refers to those Japanese listed companies that are undervalued, have high dividends and are constantly improving governance efficiency. In the new anti-globalization investment paradigm, global funds are more inclined to allocate assets with high certainty. "Daily special valuation" represents that the company has stable profitability and can give investors more confidence in the corporate governance structure. Under the new investment paradigm, daily special valuation is the trend of the times.
Question 2: Buffett previously revealed that he plans to hold these investments for 10 to 20 years. Why does Buffett continue to be bullish on Japan?
First of all, Buffett's long-term investment strategy is consistent with his investment philosophy, that is, to find companies with good management, stable cash flow and reasonable valuation to invest and hold these investments to achieve long-term growth. The above can be summarized as value investment and long-term holding. This reflects Buffett's long-term optimism about the Japanese economy, which is also a sign that the Japanese economy has taken a turn for the better after the epidemic. The second is to take into account regulatory and governance factors. In some important respects, the five major Japanese companies in which he invests follow shareholder-friendly policies that are far superior to American practices.
In recent years, the Japanese government and the Tokyo Stock Exchange have promoted a series of corporate governance reforms to improve the transparency and governance level of listed companies. These reforms are designed to attract foreign investors and enhance the vitality of the market. For example, the restructuring of the Tokyo Stock Exchange, raising listing standards, actively carrying out corporate governance and improving corporate profits have all made the Japanese stock market more attractive to foreign investors.
Buffett has revealed some reasons for choosing to invest in Japanese stocks-these five companies meet some of his stock selection criteria: high dividend yield and high free cash flow, these companies usually have strong cash flow and prudent financial management, and are able to maintain stable returns in different market environments, while large integrated trading houses and other enterprises in Japan usually diversify their business. It covers a wide range of areas from trade to manufacturing to financial services. This diversified business model can maintain profitability under different market conditions and reduce investment risk. This is also in line with what we have been saying, the current global capital in the new investment paradigm in the pursuit of deterministic premium.
Question 3: on the evening of February 24, Buffett released an annual letter to shareholders, saying that Berkshire continues to passively hold shares in the five largest Japanese trading houses for a long time, and that each company operates in a highly diversified way, somewhat similar to Berkshire's own way of doing business. What are the operating characteristics of the five major trading houses in Japan?
The five major trading houses have a long history of operation, which can be traced back to the 19th century. In the past, the focus of the five major trading houses was mainly in the area of trade, but now it is more focused on the area of investment. The commonness of the five major trading houses lies in diversification, high dividends, high free cash flow and prudent issuance of new shares. The business scope of the five companies is very extensive. Through the diversified development strategy of layout in different industries, the company can effectively disperse business risks and achieve stable income growth in different industries and markets.
Moreover, the business of the five major trading houses has deeply penetrated into the upper and lower reaches of the industrial chain, basically covering the whole industrial chain from raw material procurement to product sales, which enables them to grasp more market dynamics and enhance market competitiveness. and through the integration of resources in different aspects of the business, we can achieve the effect of reducing cost and increasing efficiency. The five major trading houses represented by Mitsubishi Corporation play an important role in Japanese society, monopolizing nearly 99% of the large production enterprises and trading companies in Japan, and relying on their respective consortia to monopolize the global mineral and oil resources industry chain. These consortia, which are a combination of industrial capital, commercial capital and financial capital, are large monopoly holding companies supported by the Japanese government after the Meiji Restoration and World War II.
The similarity of the business scope of the five major trading houses is very high, but the advantageous industries and operating characteristics are slightly different. Mitsubishi Corporation and Mitsui products have the most prominent advantages in the energy / resources industry; Sumitomo Corporation has outstanding advantages in media, real estate and other industries; Itochu Corporation has outstanding advantages in food, finance, information and other industries; Marubeni has outstanding advantages in electric power, grain, oil and grain industries.
Question 4: what is the beauty of Buffett's investment in five major business houses?Onlinecasinofreespinsnodeposit? Why is it difficult for ordinary people to copy homework?
Buying five major trading houses is also the embodiment of Buffett's value investment philosophy, which is to find companies with good management, stable cash flow and reasonable valuation to invest, and hold these investments to achieve long-term growth. These firms are not only the core force of their parent groups in the global economy, but also enjoy a high reputation in the international market for their global network and diversified business.
But for ordinary people, it is hard to do: (1) Berkshire Hathaway buys Japanese stocks by issuing Japanese bonds, keeping the cost of capital below 1%. And under the background that Japanese inflation is expected to rise in the future, borrow Japanese yen bonds and buy anti-inflation assets (stocks, real estate, etc.). It's hard to imitate as an individual investor.
(2)巴菲特的“捡烟蒂”法则即寻找被低估的公司。这样一来，股价涨到公允价值可以大赚一笔，即使不涨而破产清算也能赚钱。日本五大商社，以其被低估的市值、高额的分红、对经营质量的重视、持续满足消费者的稳定需求、拥有独特的商业模式以及正在加强的治理和改革能力而著称，是“日特估”的典型代表，也是全球投资的大势所趋。巴菲特的持续加仓，会进一步吸引全球投资者对日本股市关注度上升，日股得到跨国资金的逐步增配。
本文转载自微信公众号“戴康（金麒麟分析师）的策略世界”，作者：戴康