巴菲特眼中的出海投资:Foreign Investments(上)

What's your opinion on investing in foreignstocks?


 We have a number of businesses that derive very significant percentages of their revenue frominternational operations. Coca-Cola earns 80% or more from their internationaloperations; Gillette will earn two thirds or more from internationaloperations, so we get a lot from outside the United States. It's a slightadvantage to us having U.S.-domiciled companies. For instance, we get bettertreatment on the dividends if they are domestically based because of the waythe U.S. tax laws go. But if Coca-Cola were domiciled in Amsterdam or ifGillette was in London, we would still be attracted to them to virtually thesame degree we are now. We look at businesses domiciled outside thiscountry--many don't meet our size requirements, but that's true here, too--butwe have nothing against buying companies that are domiciled outside the UnitedStates. We will keep looking; we need to look everywhere with the kind of moneywe have today available for investment. Charlie?


 [CM: Again, we have a wonderful way of playing the rapid development ofcompanies outside the United States. So far, we haven't seen anything that hasattracted us as being better. If you can sell Coca-Cola, do you really want toget into steel in Malaysia or something?]


 Some things travel very well, and somethings don't. Gillette travels, Disney travels, McDonald's travels, Coketravels; See's candy doesn't travel as well. It mightif you spent 50 years working on it, but it's not an easy thing to travel.Actually, candy bars themselves don't travel very well; if you look at thetop-selling candy bars in France or in England or in Japan, you don't find thesimilarity you find in terms of the best-selling soft drinks or movies or fastfood hamburgers or razor blades.


[CM: Except Snickers! (laughter) For somereason, Snickers.


Charlie's got a lot of experience. You maywant to invest where we invest, but you don't want to eat where we eat.(laughter)


Source: BRK Annual Meeting 1997

Time: May 1997




[Comments on investing in Europe]


One disadvantage to buying a stock in theUK is that you have to report your holding once you reach the 3% level. So, fora stock with a $5 billion market cap, we’d have to report[and likely run the stock up] once we’d acquired only $150million. But in the past, we’ve owned Guinness, which is now owned by Diageo, so this is not anoverwhelming disadvantage. We’d be very comfortable owning many UK companies.


Incidentally, contrary to what’s beenreported, we do not have to report a 5% position within 10 days [referring toreports in The Wall Street Journal and elsewhere that Berkshire would have tofile on its recently disclosed purchase of Anheuser-Buschstock if it held more than 5% of the shares outstanding].


[CM: Recently we’ve preferred the currencies of socialized Europe over the U.S. dollar. A queeroccurrence...]


I remember when I’d come backfrom Europe and couldn’t wait to convert my euros back to dollars.


Europe isn’t doing as badly asyou might think. Its growth rate is lower than ours, but our population isexpanding a lot faster, so on a per capital basis, thegap is not as wide as you’d think.


Source: BRK Annual Meeting 2005 TilsonNotes

Time: 2005



What are your requirements for investmentsoutside the U.S.?


We rule out anymarkets that aren’t big enough. We need to make investments in thehundreds-of-million-dollar-size range, so that rules out a lot of markets.Transparencymatters; the accounting doesn’’t matter somuch to us. As long as we are able to value what’’s underneath of it,we’’ll invest. Remember though, that somethinglike 53% of all the value of the public companies inthe world is here in the U.S., so we are a big piece of the pie.


Source: BRK Annual Meeting 1999

Time: 1999




[RE: Declining U.S.Dollar]


We think the dollar, over time, unlesspolicies change in a major way, will likely declinesomewhat more against most major currencies. At one time, we backed this upwith $22 billion in foreign currencies, but then the carry made that anexpensive way to express that belief, so now we buy into companies that earn alot in foreign currencies. It’s a factor, but not a 50% factor, in what webuy.


We’re followingpolicies in this country that will lead to a decline in the dollar – thefundamental forces are fairly strong.


We own one currency position right now thatwill surprise you – we’ll tell you about it next year.


Munger: The inflation factor at Costco iszero. It’s perfectly amazing how well we’ve done so far.


Buffett: Look at oil going from $30 to $60and the euro from 83 cents [per dollar] to $1.35, so the price of oil forEuropeans has gone up very little – 25% vs. 100% forus. It’s easy to anchor on your own currency.


You’ll have to thinkmore about currency than you have. Around the world, others think aboutcurrencies, but the average American hasn’t had to.


Source: BRK Annual Meeting 2007 TilsonNotes

Time: 2007



When looking at other countries Mr.Buffett, do you look at the country’s overall financialstatus or do you look at the financials of that specific company in a foreigncountry? You mentioned investing in Korean companies – do you everlook at the state of the country you are investing in?


We care about the country where the companyis run. There is a disadvantage being outside of the US. A few years ago wewere looking to invest in either PetroChina or Yukos in Russia. We ended uppicking PetroChina because the political situation was more stable. It turnedout to be a good decision. I care about the country and the geopoliticalenvironment I am investing in.The whole company was selling for $35 billion. Itwas selling for one-fourth of the price of Exxon, but was making profits equalto 80% of Exxon. I was reading the annual report one day and in it I saw amessage from the Chairman saying that the company would pay out 45% of itsprofits as dividends. This was much more than any company like this, and Iliked the reserves. If it were a US company, it would sell for $85 billion;it’s a good,solid company. I don’t understand the Chinese culture like I understand the US culture.However it said right in their annual report that they will payout 45% of theirearnings as dividends, basically they say if they make money they will pay itout. I invested $450 million and its now worth $3.5 billion. I decided I’d rather bein China than Russia.I liked the investment climate better in China. In July,the owner of Yukos, Mikhail Khodorkovsky (at that time, the richest man inRussia) had breakfast with me and was asking for my consultation if they shouldexpand into New York and if this was too onerous considering the SECregulations. Four months later, Mikhail Khodorkovsky was in prison. Putin puthim in. He took on Putin and lost. His decision on geopolitical thinking waswrong and now the company is finished. PetroChina was the superior investmentchoice. 45% was a crazy amount of dividends to offer but China kept its word. Iam never quite as happy as I am in the US, because the laws are more uncertainelsewhere, but the point is to buy things cheap. Russia is just a badgeopolitical environment. On the other hand, China has kept their word onpaying the dividends. In fact, when the dividends check comes in, it iscalculated out 10 or so decimals, these guys keep theirword. I don’t know the tax laws in China, but you can buy a good business cheap.At Berkshire Hathaway, you have to spend hundreds ofmillions of dollars to move the needle. We have a problem of finding thingsworth investing in.

我们当然很在意一个公司所在的国家和地区,在美国之外的市场有一些劣势,几年前我们想在中石油或者俄罗斯的Yukos石油投资,我们最终选择了中石油因为中国的政治环境更加稳定,最后这也证明是一个正确的决策,这就是我关心我所投资的国家和地缘政治的原因。整个公司以350亿美元的价格出售,这是Exxon市值的1/4,但所带来的利润是Exxon的80% ,我曾经读过他们的年报然后有一天我发现他们的董事长说公司愿意付出利润的45%来作为股利,这可比一般公司出手大方,我也喜欢这一点,如果这是一个美国的公司可能就以850亿美元直接卖了。这是一个优秀且稳定的公司,我并不像了解美国文化般了解中国文化。不过他的年报上说要把利润的45%作为股利,基本上这就代表着“挣多少花多少”,所以我投资了4.5亿美元然后现在已经增值到了35亿美元,所以相比俄罗斯我更愿意在中国投资。我更喜欢中国的投资环境,Yukos的老板,Mikhail Khodorkovsky(当时俄罗斯最富有的人)跟我吃了个早餐询问我他们是否应该把业务拓展到纽约以及美国证交所的税务政策是否太过严苛。结果四个月之后他就吃牢饭去了,还是普京亲自授意的,搭上普京然后玩完,看来他的地缘政治玩的不太溜,搞得现在公司也完蛋了。中石油就变成了投资首选,45%的收益作为股利确实挺牛的,但他们说话算数。不过还是美国的投资环境最舒坦,因为它的法律法规不像其他地区那样有很多模棱两可的地方,重点是买入的时候比较便宜。而俄罗斯坏就坏在它的政治环境上,中国在支付股息上说话算数而且数目很精确,这些人确实守信用。我不了解中国的税务法规,我只知道在中国买入一个好生意确实很便宜。但在Berkshire Hathaway则不然,想看到些微成效就得付出好几百万美元,所以很难找到值得投资他们的理由。

Source: Student Visit 2007


Time: January 2007



1/8th of world is inIndia. Why aren’t you investing inIndia?


WB: That is a good question. We haveconnections there. In insurance, there are distinct restrictions at what we cando in India. As of yesterday, I agreed next March togo to India, because of what our Iscar business isdoing there. India will grow, and Iscar belongs in every industrial country inworld. We have good sized operation there. We don’t rule out India.Posco – they have big plans for India.


CM: One trouble that India presents is thatthe government is causing paralysis, endless due process.Planning, approvals, zoning ishard. Wise founder of modern Singapore said that China will grow fasterthan India because government causes less paralysis. Countries are different,and while we kind of admire the democracy that causes the paralysis, westill don’t admire the paralysis.


WB: Countries learn much from each other,and many have learned from USA. Maybe they can steal some ideas, and improve onus. We ought to figure out a lot of ways to do business in those countries. Mypreference is insurance which I understand. Both China and India do limit usright now, of what we can own and how much. Why put my managerial talent towork on something where we only own 20% vs 100%? But we remain interestedbecause people in China and India will live better 20 yrs from now.


Source: BRK Annual Meeting 2010 BoodellNotes

Time: 2010



How large is the universe of companieswhose intrinsic value you know? Why invest in South Korea or China?


WB: Our immediate decision is whether wecan figure it out. We are thought to be rude sometimes, when really we are justbeing polite in not wasting someone’s time. We know veryearly in a conversation whether what someone is talking about is actionable. Wedon’t worry about stuff we miss. We know there are many things that wewon’t know enough about when we finish thinking about it, so we throw itout. We make a decision in five minutes. We know about a lot of industries, andthere are some things we don’t understand. We like to expand our universe of knowledge. If we can’t make adecision in five minutes, we can’t learn enough in five months. If we get a call,with a business for sale or I am reading a paper or 10-K [annual company SEC filing], wewill move right then if there’s a big difference between price and value.


CM: We can make a lot of decisions about alot of things very fast and very easily, and we are unusualin that. The reason is that there is such an enormous amount of things wedon’t look at. If you don’t do star- tups, you blot a lot of complexity out of your life. Whatwe found out is that there are still a lot of things to look at and that areavailable, even if we filter out all those things.


WB: There are a lot of giveaways in thefirst sentence or two. We waste a lot of time, but we waste it on things wewant to waste it on.


Source: BRK Annual Meeting 2008 BoodellNotes

Time: 2008



Investing in Brazil?


Our problem with many markets is that wehave to put out a lot of money because we’re so big. We haveto invest hundreds of millions of dollars, which really narrows the companiesand countries we can look at. In the case of PetroChina, the biggest company inthe world’s most populous country, we were only able to invest $400 million.


In Brazil, there’s a greatbeer company a friend ran and we should have invested in it. He’s a greatmanager. Brazil wouldn’t be off limits, but we would have to be able to invest a lot ofmoney in a good business we can understand at a good price. And it would haveto be cheaper than a comparable U.S. company, to compensate for the extra riskand our relative lack of knowledge about the market.


Source: BRK Annual Meeting 2006 TilsonNotes

Time: 2006



Investing in Russia?


In 1998, via our ownership in SalomonBrothers, we were in the oil business and drilled for oil in Siberia. They werehappy to have us drill, but when it came time to take the oil out, it washarder. Given that experience, [we won’t be rushing back toinvest in Russia].


About three years ago, I had breakfast inSun Valley with Mikhail Khodorkovsky [the former CEO of Yukos], who wasconsidering a listing on the New York Stock Exchange. He’s now injail and Yukos is in bankruptcy with tax claims. It’s a littlehard to develop a lot of confidence that [Russia] has changed vis-a-vis itsviews toward capital, especially outside investors and capital.

大约三年前,我跟Yukos的前任CEO Mikhail Khodorkovsky吃了个早点,他说他想在美国证交所上市,但是他现在进去了,因他偷税漏税导致破产,对俄罗斯这个市场建立信心总是很难,因为他们在当面锣对面鼓检查资产问题的时候总会出现各种问题,尤其是涉及到海外投资的时候。

[CM: [This reminds me of a story thatends:] “If they ever do find any oil, that old man will steal it.” I’m afraid wehave the same problem today in many countries with oil.]


Charlie, didn’t we have thelivelihood of our guys threatened [in Russia]? We sent guys to get the[oil-drilling] equipment and they were told that not only would they not getthe equipment, but if they tried, the guys wouldn’t get out either. Itwasn’t that long ago.


Source: BRK Annual Meeting 2006 TilsonNotes

Time: 2006