So Let's get on with what you’re interested in.
And like I say, in go all over.
So, I don’t know exactly how we gotta have this, butlet's start with a hand here someplace or other.
There we go, for the first one...yeah, right here.
Q： Your thoughts about Japan?
W: My thoughts about Japan? I am not a macro guy.
Now I said to myself Berkshire Hathaway can borrow money for 10 years at one percent.
I say gee, I took Graham’s class 45 years ago and I have been working hard at this thing all mylife.
Maybe I can earn more than 1% annually. I really work hard at it.
One percent. It doesn’t seem impossible, doesn’t it?
So I wouldn’t want to get involved in currency risk, so it would have to be Yen-denominated.
I would have to be in Japanese Real Estate or Japanese companies or something of the sort andall I have to do is to beat 1%.
That is all the money is going to cost me and I can get it for 10 years.
So far I haven’t found anything. It is kind of interesting.
The Japanese companies earn very low returns on equity,
and they have a bunch of businesses that earn 4%, 5%, 6% on equity
and it is very hard to earn a lot as an investor when the business you are in doesn’t earn verymuch money.
Now some people do it in fact.
I've got a friend, Walter Schloss, who worked at Graham at the same time I did.
And it was the first way I went to stocks to buy stocks selling way below working capital. A verycheap, quantitative stocks.
I call it the “cigar butt” approach to investing.
You walk down the street, you look around for a cigar butt someplace.
And you finally see one and it is soggy 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 butt stock. I mean you get one free puff on it and then you throw it awayand walk down the street and try another one.
I mean it is not elegant, but it works.
If you are looking for a free puff,it works.
Those are low return businesses.