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Warren Buffett: Why we don't invest in TSMC stock đ Charlie Munger: We will never buy into Taiwan đ€· Analytics Table
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About Warren Buffett: Why we don't invest in TSMC stock đ Charlie Munger: We will never buy into Taiwan đ€·
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WARREN BUFFETT: Taiwan Semiconductorâs one of the best managed companies and important companies in the world. And I think youâll be able to say the same thing five, or ten, or 20 years from now. I donât like its location. And Iâve reevaluated that. I mean, I donât think it should be any place but Taiwan, although they will be, obviously, opening up chip capacity in this country. And actually, one of our subsidiaries that we got in Alleghany is participating in their Arizona construction activities. But itâs a question of we would rather have the same kind of company. And thereâs nobody in the chip industry thatâs in their league, at least in my view. And the man that is a 91-year-old or so connected with it, that I think I played bridge with in Albuquerque, and theyâre marvelous people, marvelous company. But Iâd rather find marvelous people â and I wonât find it in the chip industry. But marvelous people and marvelous competitive position and everything, Iâd rather find it in the United States. I feel better about the capital that weâve got deployed in Japan than Taiwan. I wish it werenât so, but I think thatâs the reality. And Iâve reevaluated that in the light of certain things that were going on. Charlie? CHARLIE MUNGER: Well, tell them the story of the Japanese investment. That should be told again. Thatâs a nice story. WARREN BUFFETT: Well, it was pretty simple. I mean, back when I started other people were going through Playboy and I was going through Moodyâs, I mean, basically. And thereâs a movie out called âTurn Every Page,â which I saw again for the second time a couple of days ago, Lizzie Gottlieb. And I recommend everybody in this world watch that, because I turned every page in the past. And I did it for thousands and thousands of pages at Moodyâs, and I did it at the Department of Public Utilities in Boston. I did it in the insurance department. I just kept turning pages. Well, that goes on for a while. But now we need big ideas in order to find things. And what was your question, Charlie? CHARLIE MUNGER: Tell them about the Japanese. WARREN BUFFETT: Well, the Japanese thing was simple. I mean, Ben and I liked looking at companies. I mean, I like looking at figures about companies. And here were five very, very substantial companies, understandable companies. Most of them, maybe all of them weâd done business with in a dozen different ways. If you go a couple miles from where this place is, our last coal generating plant was built by one of the companies. So here they were. They were sitting as a group where they were earning, weâll say 14% on what we were going to pay to buy them. They were paying decent dividends. They were going to repurchase shares in some cases. They owned a whole bunch of businesses that we could understand as a group, although it didnât mean we had deep understanding on any. But weâd seen them operate and everything. There wasnât anything to it. And at the same time, we could take out the currency risk by financing in the end. And that was going to cost a half of 1%. Well, if you get 14% on one side and a half a percent on the other side, and youâve got money forever, and theyâre doing intelligent things, and theyâre sizable, so we just started buying them. I didnât even probably tell Greg until maybe six months after weâd gotten going. And then when we hit 5% in all of them, we announced on my birthday, 90th, that we owned over 5%. And recently went over for the first time to visit with them. And we were more than pleasantly surprised, delighted, with what we find there. And now we own 7.4% of them. We wonât go over 9.9% without their agreeing, and we sold another $164, whatever it is billion by the end. CHARLIE MUNGER: They wouldâve done it for us if we only had $5 billion or something. And it made $10 billion simply in that way. We would look like heroes. Now $10 billion just sort of disappears as if itâs a little dot in Berkshireâs reports. WARREN BUFFETT: But itâs fun. CHARLIE MUNGER: It is fun, and it is $10 billion. WARREN BUFFETT: And Charlie says it keeps (Laughter) me out of bars when I talk to him about it. And I probably talked to Charlie about those the year after I started. But who knows? I mean, I knew heâd like it, I mean, obviously. CHARLIE MUNGER: We tried to do every dollar. We would do â we could only do about $10 billion. WARREN BUFFETT: And an issue that we intended to be 56 billion of yen that we were issuing and selling turned out to be 164.4 or something like that. And everythingâs worked so well. And as Charlie says, you know, it doesnât move $500 billion of net worth that much. But this one, you know, will keep adding over the years to Berkshireâs value with this very widespread, probably $4 or $500 million a year. And, you know, weâll just keep looking for more opportunities. And Japan, Berkshire is the largest borrower, outside of corporate borrowers, outside of Japan that exists.
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