I think his point was that the yen denominated dividend income is more than the yen denominated interest cost ... but he translated those figures into USD because that's the reporting currency for Berkshire. It's not really a carry trade in the "Mrs. Watanabe" sense.
I want to point out that Buffett’s Japanese loan is long term fixed (i think decades?) at less than 1%. It’s like a mortgage for house except a lot cheaper. This is very different from the margin loan from IBKR where you could get margin call anytime 24hr/day. Buffett will never get margin call and his cost of borrowing yen will never go up and he’s not doing a carry trade because he’s buying Japanese stocks not high yielding US stocks
I don't know if those all truly are the top highest divi yielding stocks but certainly interesting how PGR wrongfully gets picked up by chat as number 2 (0.14% yield last I checked). Good read this though .
I was surprised to see them on here, but didn't think to look further into it! I think they paid out a special, and chatgpt must be annualizing the special?
In addition to Sleepy Dragon's very relevant comment, there are other differences between your high-dividend-yielding margined trade and Buffett's investment. (1) He's never going to get a margin call, because it's a long-term fixed-rate loan. But even if he violated covenants of that loan and had to pay it back at short notice, Berkshire has hundreds of billions of cash lying around, unlike most margined investors. (2) Buffett loves these Japanese companies and expects them to grow earnings and dividends and appreciate in value over time. The stocks you've listed (MO, PGR, etc.) are chosen purely because they are high yielding, and most will have high yields for reasons that are likely to be not good. So I think the differences between the two "trades" are greater than the similarities, and you should reconsider wanting to tear your hair out.
I think his point was that the yen denominated dividend income is more than the yen denominated interest cost ... but he translated those figures into USD because that's the reporting currency for Berkshire. It's not really a carry trade in the "Mrs. Watanabe" sense.
I want to point out that Buffett’s Japanese loan is long term fixed (i think decades?) at less than 1%. It’s like a mortgage for house except a lot cheaper. This is very different from the margin loan from IBKR where you could get margin call anytime 24hr/day. Buffett will never get margin call and his cost of borrowing yen will never go up and he’s not doing a carry trade because he’s buying Japanese stocks not high yielding US stocks
BRK sold debt in Japan as they bot the JPY equities thereby hedging the currency and getting very cheap leverage
I don't know if those all truly are the top highest divi yielding stocks but certainly interesting how PGR wrongfully gets picked up by chat as number 2 (0.14% yield last I checked). Good read this though .
I was surprised to see them on here, but didn't think to look further into it! I think they paid out a special, and chatgpt must be annualizing the special?
Yes looks like a $4.10 special divi paid out on Jan 10th!
In addition to Sleepy Dragon's very relevant comment, there are other differences between your high-dividend-yielding margined trade and Buffett's investment. (1) He's never going to get a margin call, because it's a long-term fixed-rate loan. But even if he violated covenants of that loan and had to pay it back at short notice, Berkshire has hundreds of billions of cash lying around, unlike most margined investors. (2) Buffett loves these Japanese companies and expects them to grow earnings and dividends and appreciate in value over time. The stocks you've listed (MO, PGR, etc.) are chosen purely because they are high yielding, and most will have high yields for reasons that are likely to be not good. So I think the differences between the two "trades" are greater than the similarities, and you should reconsider wanting to tear your hair out.