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- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 5
No big surprise, but another preliminary prospectus for a Yen note offering from Berkshire -
https://www.sec.gov/Archives/edgar/data/1067983/00...(link opens SEC filing, preliminary prospectus doesn't contain the important numbers like size, etc.)
I haven't checked to see what is maturing soon, so this could just be 'maintenance.'
No. of Recommendations: 7
Here is the final Yen bond offering -
https://www.sec.gov/Archives/edgar/data/1067983/00...side note - JPY at multi-decade low against the dollar. May have more to do with China than Japan per se but there is a demand for USD in Asia and JPY is still a low cost borrow to transform capital into something else
No. of Recommendations: 2
No. of Recommendations: 3
Don't you just love it when you sell a bunch of 1% Yen bonds and the JPY plunges by 1.33% the next day?
Yes, every time I issue a few billion Usd worth of Japanese bonds, I feel great.
But seriously, what’s happening here? Berkshire did a similar bond issue 2 years ago, January 2022, to finance the Japanese trading house investments. Now we bought more Japanese bonds? Or is this just an update of the previous deal? It seems like the bonds mentioned today have the same terms as the ones sold in 2022. So I’m not sure this is anything new.
As for currency moves, I believe they would affect both the value of the bonds issued and the cash received for them, so that may be a wash.
No. of Recommendations: 7
But seriously, what’s happening here? Berkshire did a similar bond issue 2 years ago, January 2022, to finance the Japanese trading house investments. Now we bought more Japanese bonds? Or is this just an update of the previous deal? It seems like the bonds mentioned today have the same terms as the ones sold in 2022. So I’m not sure this is anything new.
As for currency moves, I believe they would affect both the value of the bonds issued and the cash received for them, so that may be a wash.
Sounds confusing. These bonds are being sold, not bought. This is the "float" with natural built-in currency hedge to finance the purchase of the 5 Japanese stocks. When the currency falls, Berkshire recognizes a gain on the shrinking of the liability in USD terms. This would be somewhat offset by the currency loss on the JPY-denominated stocks but those companies are truly global and earn money in many currencies.
Berkshire has issued Yen bonds consistently for several years. 2022, 2023 and 2024. Some of the issuances are just rolling over maturing debt but the market demand has been very strong (Berkshire is the largest foreign corporate issuer in the Japanese bond market) so Berkshire has upsized several bond issues to meet the demand.
The Yen has been super weak. My wife just informed me 30 seconds ago that we are heading to Japan for a vacation in the fall. Can't wait!
No. of Recommendations: 10
One more thing to note, National Indemnity owns the 5 Japanese "sogo shosha" stocks but has never shown much Japanese currency on their balance sheets and doesn't have accounts listed at any Japanese banks so I believe Berkshire converts the Yen bond proceeds into Dollars and only back into Yen as buy orders clear with Berkshire's go-to broker Wallachbeth Capital. Or, I should say, Warren's preferred broker lately. Ted Weschler tends to trade through a woman-owned broker dealer named Glen Eagle Wealth.
That way, the cash proceeds from the bonds can earn t-bill interest in dollars while the slow pace of buying unfolds.
No. of Recommendations: 23
My wife just informed me 30 seconds ago that we are heading to Japan for a vacation in the fall....
Indeed, sensible. I'm looking out the window at mount Fuji right now.
(it's not really successful because of the clouds, but as with so much in Japan, it's really more about the intent!)
Things do seem pretty affordable, certainly compared to the last time I was here.
Jim
No. of Recommendations: 4
A while back someone here linked to the Acquired podcast interview with Charlie Munger. In it, Munger said deals like the Japanese trading houses come along a couple times a century. I confess I don't understand the details, but when a guy who has been making deals for damn near a century says something is the deal of a century it is time to listen up.
He also said the trading house deals were incredibly difficult and you needed a guy as smart as Warren Buffett to pull it off. So there's that.
No. of Recommendations: 0
(OT, mostly to Jim but the group might be interested in/if his reply)
Hi, Jim:
I'm guessing your travel to Japan may not be coincidental that Monaco currently has ongoing the electric version of Formula 1 racing.
I was unaware until recently that this was even a thing:
https://www.fiaformulae.com/en/calendar/2023-24/r8...My question: as a local, how does it compare with the regular F1 in terms of crowds, local enthusiasm, economic boost? How niche-y is it? It's hard to tell from the available video
Thank you, and I hope the fog clears -
--sutton
whose impression of the online videos is that of the slot cars we had as kids
