Another Buffett Prediction, Japan Edition

As I write,  the Nikkei 225 index closed down 6.4% to 7,162.90, its lowest since October 1982, a 26-year low.  Japan's great bull market which peaked in 1990 has completely retraced itself.

Which means it's time for another reckless Warren Buffett prediction:  I wouldn't be surprised to see him do something big in Japan.  Japan is an enormous economy.  Its stock market returned 5.0% in real terms during the 20th century, a century that included not only the 1990s collapse of the Nikkei but also the utter devastation of World War II. 

Japanese long bonds yield below 2%.  Earnings yields are higher than they've been in ages.  Any equity holder (either of a public or private company) who can figure out a way to borrow money will do well.

Disclosure: Long Berkshire Hathaway

Comments

[DonSuper:]

well, actually he already did this year an acquisition through ISCAR...a 1B dollar approx. purchase of a cutting tools Japanese company...

I agree that in the stock market there are some very well run companies that do look very cheap...I have been looking at Honda, though I think all automakers will continue to suffer, even if Honda might win market share...

2008 Oct 27 11:36 AM

[User 265729:]

Warren..

I hear American Omaha burgers are popular in Japan...

What are you waiting for? Your firm must have enough for you to set up a stand in downtown Tokyo somewhere...

2008 Oct 27 10:32 PM

[Mowog:]

There's much concern here in Japan about how the Nikkei has sunk below 7000 and the yen has skyrocketed against the dollar. Don't forget Japan's large national debt, crumbling national health system (some public hospitals have begun to close) and national pension system. Japanese live forever, have few if any children, and are not going to allow mass immigration. There's money being made here, but the overall future isn't looking all that bright.

2008 Oct 28 08:36 AM

[Nick Gogerty:]

Iscar is Israeli not Japanese.

2008 Oct 28 09:18 AM

[davcnslt:]

I agree that Japan is not neccessarily a no-brainer here with systemic issues galore. However, a major concerted effort by policymakers in the forex could tilt in their favor for a bounce. Event then it would be short-lived. I don't see Buffet making a move on it. I rather syuspect he is licking some wounds.

2008 Oct 28 09:57 AM

[notsosmart:]

still really a closed society.how this will affect the future & their finances i dont know.might be worth thinking about.

2008 Oct 28 11:15 AM

[DownOnMyLuck:]

I've never seen Buffet make any predictions. However, he has been declared wrong, senile, and insignificant many times. Most recently at the time of the dot-com boom. Last time I looked, Buffet was still on top and hasen't been replaced by anyone who has written him off. He's in a league of his own and doesn't need the approval on minor leaguers.

2008 Oct 28 12:09 PM