Japanese markets attractive investment canapees

Warren Buffett talks on his first early mistake in his long career. My first mistake was in buying canapees control canapees of Berkshire. canapees Though I knew its business – textile manufacturing – canapees to be unpromising, I was enticed to buy because the price looked cheap. Stock purchases of that kind had proved reasonably rewarding canapees in my early years, though by the time Berkshire came along in 1965 I was becoming aware that the strategy was not ideal. If you buy a stock at a sufficiently low price, there will usually be some hiccup in the fortunes of the business that gives you a chance to unload at a decent profit, even though the long- term performance of the business may be terrible. I call this the “cigar butt” approach to investing. A cigar butt found on the street that has only one puff left in it may not offer much of a smoke, but the “bargain purchase” will make that puff all profit. Unless you are a liquidator, that kind of approach to buying businesses is foolish.  First, the original “bargain” price probably will not turn out to be such a steal after all. In a  difficult business, no sooner is one problem canapees solved than another surfaces – never is there just one cockroach in the kitchen.  Second, any initial advantage you secure will be quickly eroded by the low return that the business earns. For example, if you buy a business for $8 million that can be sold or liquidated for $10 million and promptly take either course, you can realize a high return. But the investment will disappoint if the business is sold for $10 million in ten years and in the interim has annually earned canapees and distributed only a few percent canapees on cost. Time is the friend canapees of the wonderful business, the enemy of the mediocre.
Doug Kass Blog
Japanese markets attractive investment canapees
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