My thoughts about Japan. I am not a macro guy. Now, I say to myself but where could I had to borrow money for 10 years at 1% in Japan now. 1%, and I say to myself “Gee, I took to him surprise 45 years ago and I have been working hard at this thing all my life. Maybe I can earn more than 1%. I think I worked at it. 1% of it. It does not seem to impossible, does it.
So, I did not want to get involve in currency risk. So, I have to do in something that was then dominant us. So, I forget it I have to be in Japanese real estate or Japanese business or something on sort and be. And all I have to do is beat 1% of that. That is all the money is going to cost me. I can get it for 10 years. So far I am in front of anything.
(Audience Laughing)
It is got an interesting, Japanese companies are very well returns in equity and they have a bunch of businesses that are in 4, 5 or 6% in equity, and it is very hard to earn a lot as an investor. When the business you are in does not earn very much money.
Some people do it. In fact, I got a friend Warren Swash who worked with grandma at the same time I did and it was the first way I went out stock. To buy stocks sell way below working capital. Very cheap quantity of stocks.
I call it a cigar button approach to investing. You walk down the street and you look around for a cigar butts some place and you find it you see one and it is saggy and kind of repulsive. But there is one puff left in it.
So, you pick it up and the puff is free. I mean, it is a cigar but stock. I mean, you got one free puff out on it and then you throw it away and you walk down the street and find another one. I mean, it is not elegant but
(Audience Laughing)
But you know, if you are looking for a food puff, it works. Those are lowly turn businesses. But time is the friend of the wonderful business. It is the enemy of the lousy business. Here in the lousy business for a long time. You are going to get a lousy result even if buy it cheap.
If you are in a wonderful business role on time. Even if you pay a little to much go in. you are going to get a wonderful result if you stay in a long time. I find very wonderful businesses in Japan and at present now.
They may change the culture in some ways. So, that the management gets more stock or responsible where there returns are higher but at the present time, you will find a very lot of low return businesses, and that was true even when the Japanese economy was booming.
I mean, it is amazing, they had a incredible market without incredible companies. They were incredible in terms of doing a lot of business. But they were incredible in terms of returns of the equity they have achieved. And that is why they call up with them. So, we have so far done nothing there but as long as money is 1%. I will keep looking that thing I will do.
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