The 1980s saw Japan’s economy rise to prominence. It took a few decades after their defeat in World War II.
Then, around the time of the 1987 Crash, the music slowed for Japan.
Warren Buffett’s Berkshire Hathaway made news this week when they disclosed their latest investment. The giant conglomerate now owns about 5% of the outstanding shares of 5 Japanese trading companies. Or, as they call them in Japan, sogo shosha. Berkshire also owns nearly $6B worth of Japanese government bonds. So, Buffett is no stranger to the Land of the Rising Sun. These businesses are behemoth importers, and they service manufacturers. They are the business pipelines that enable growth in the Japanese economy, and by association, throughout Southeast Asia. However, “growth” is a term to be used loosely when it comes to the Japanese market. For someone who started his career at a Japanese Bank in NYC way back in 1986, I must assume that most of today’s investors do not see Japan as an investment center the way we did back then. The 1980s saw Japan’s economy rise to prominence. It took a few decades after their defeat in World War II. But by the 80s, everyone… I mean everyone…wanted to do business with the Japanese. Then, around the time of the 1987 Crash, the music slowed for Japan. Then it stopped. And it has not restarted in over 3 decades. The 4-story chart below tells one consistent story. That Japan has been an unexciting economic story.
