The Primary Reason Why Warren Buffett Acquired Stakes In Japanese Companies

A key takeaway from the 2007 annual shareholders meeting emphasizes the need for ‘diversifying’ in the long-term

Image: The Street

But the question still remains. Why Japan?

Isn’t the Asian giant still impacted by small amounts of deflation?

By early 1990, the P/E ratio of the overall Japanese market was close to 60 times its trailing 12-month earnings and it was roughly 4 times more expensive to buy an apartment in Tokyo than it was in California.

The large-cap stocks yielded a return of 22.43% from 1970 to 1989 whereby a $100,000 investment from 1970 would have returned $5.7 million in 1989.

Image: Gilly on Unsplash



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