No. of Recommendations: 6
Cnbc. Congrats to all the investors who have been on the brk message boards for decades. “” After seven straight days of gains that propelled Berkshire Hathaway's Class A shares 6.8% higher, the stock closed today at a fresh all-time high of $582,300 per share.
Over the past five years, they have increased by almost 92% vs. the S&P's 83.5% gain, excluding dividends. (Including dividends, the S&P was up around 107% for the five years ending December 31, 2023.)“”
No. of Recommendations: 1
Barrons, Abby Cohen, " What is your other idea?
Cohen: If I were looking to invest in one other market outside the U.S., I would look to Japan. I said that last year, as well, when I recommended Toyota Motor and Daikin Industries, both of which still look interesting. Partly, this has to do with Japan’s final move toward reflation. The Japanese economy is doing somewhat better. Stocks are still attractive from a valuation perspective. I am proposing two Japanese REITs [real estate investment trusts].
A few years ago I recommended Prologis, a logistics REIT in the U.S. Nippon Prologis REIT is a related company, trading in Tokyo. It is expected to generate a total return of about 25% this year, although if Japanese interest rates rise too much, too fast, that would be a problem. The company has long-term contracts with its customers, which has served it well. If costs go up because of rising rates, it won’t have the flexibility to raise prices. But projected total returns range from 18%-28%, depending on the interest-rate scenario.
Is this pick more of a play on Japan, or specific trends within the Japanese market?
Cohen: Both. We are seeing inflows of foreign capital into Japan. Also, the Japanese economy favors logistics providers. And, this REIT’s returns, as well as those of my next stock, are higher than REITs elsewhere in the world.
The second company is Japan Hotel REIT Investment. It, too, is expected to have a total return in the high-20% range over the next 12 months. Last year, its price fell 11%. Japan Hotel will benefit from several things happening in Japan. Consumers are out spending money and traveling. Japanese hotels are doing better. Japan Hotel REIT is focused on individuals, families, and business travelers who can afford to spend. If the Japanese economy sours and people stop spending, that would be an issue. The REIT is expected to yield 5.7% in calendar 2024.""
No. of Recommendations: 12
Over the past five years, they have increased by almost 92% vs. the S&P's 83.5% gain, excluding dividends. (Including dividends, the S&P was up around 107% for the five years ending December 31, 2023.)“”
Sounds about right.
There are few things in the world that have done better than the S&P 500 in the last few years, because of a few well known teracaps that have done very well.
As noted, Berkshire didn't.
However, Berkshire has outdone the total return of the average S&P 500 firm, as tracked by RSP.
CAGR 13.71% to 11.74%
I'm sanguine. The 13.71% is a pretty remarkable number, even if some other things did better.
Jim
