Warren Buffet Celebrating his 90th birthday by buying shares of the five leading trading companies in Japan, 5% stake in each which worth $6.5 billion in total. Those companies are Sumitomo Corp., Itochu Corp., Marubeni Corp., Mitsui&Co., and Mitsubishi Corp. Bill Man analyzed that $6.5 billion is not a huge investment for a company like Berkshire-Hathaway. Interesting point appeared when Buffett has started to look outside the U.S. market; he bought a *German Company and he also invested in China and Brazil. Now he invested in trading companies in Japan, known as sogo shosha, those that import everything from energy and metals to food and textiles into resource-scarce Japan. They have join venture all over the world. Bill Man continued that since Shinzo Abe became a Prime Minister, Japan stocks have always been outperformed. He thinks American investors have dramatically too low exposure to the market outside the U.S. and they should somehow look outside. Japanese market is an interesting choice as their market is relatively inexpensive. (* Berkshire-Hathaway acquired German family-owned Company Detlev Louis Motorrad-Vertriebs in February 2015)
Economic Legacy of Shinzo Abe: Abe is the longest serving PM. His term will end in September 2021 and he is stepping down due to health reason. It is yet to determine who is going to be the next. Bill Man explained that Abe believes the power of Japanese. He targeted Japan up to 2% of inflation and he has broken the Japanese culture of cross-holding. Most impressive thing he did was sweeping program of a structure reform by making sure there are much higher component of females workers in Japanese industries. Bill Man said Abe leads Japan to the right direction even though it has been difficult.
Stock split: Apple split 4 for 1 and Tesla split 5 for 1 on the same day. Bill Man said this action sent the wrong message to a lot of investors. He added that stock split should not matter. To scale in should matter more.
“Supergirl” is a soup-company in Washington, D.C., owned and ran by Sarah, who is speaking with an interviewer in this podcast. The company exists from 2008, and everything changed after Covid outbreak. Now Sarah has to figure out how to make hundreds of thousands gallons of soup each week while keeping her employees from contracting the virus.
Sarah hired an expert to help her understand the pandemic. Also, she spent tons of money buying masks, shields, thermometers and other stuff to make sure everything in the workplace was safe. She gave her employee bonuses, so they would not work anywhere else and this way she could limit their exposure. Wearing masks is making her employees really uncomfortable, but they are doing what’s needed.
However, this wasn’t enough. Sarah realized that she needed to test all of her employees on a weekly basis. The doctor comes every Thursday and tests all of the work staff. It’s a routine now. The problem is the waiting. You have to wait for the results. At first, Sarah waited for 2-3 days. Then in July they had to wait for almost 3 weeks. . The pressure to the staff was rising when waiting so long for the results.
There was an incident with one of her employees. His family got sick, but he didn’t at first. Thankfully, he stayed home for the safety reasons and they waited for the results of testing Because of Sarah’s excellent precautions no one tested positive except that gentlemen, whose family member got sick ,and he is healthy and back to work now.
Sarah is trying to keep her team’s trust and prevent an outbreak, and it just costs pretty much. She estimates that she spent 10,000 dollars on PPE(Personal Protective Equipment). And each week she pays the doctor for the testing. It’s unknown if the government or health insurance will cover the costs for testing asymptomatic people, so Sarah is risking a devastating bill.
Big companies have advantages and they can pay for testing themselves, while small-businesses don’t have that kind of money, which makes Sarah much helpless. She doesn’t understand why government doesn’t offer at least some guidance on how to run small-business companies during pandemic. Businesses are asking government to take some action.