Warren Buffett’s Brilliant Yield Farming Trade. 1- Warren Buffett’s original “yield farming” trade. 2- That we have to invest a relatively larger sum in convincing ideas. Dividend delights, in JAPAN. 🎌 In Japan, he found a group of companies that had very low volatility, predictably growing earnings, had a good dividend yield, and in most cases were buying back their shares. Yield farming begins. He issued Japanese debt at very low interest rates, used the proceeds to buy the shares, and then used the dividends he then received from owning those shares (which are higher than the interest rates he originally paid for borrowing). ) to pay for the voucher! The beauty of it is that he did it for billions of dollars. He assumed it was a risk-free trade (by his own estimates). And when he found that out, he went full throttle. (Figuratively speaking: “He Bet the Farm”). He’s been doing this job for 10 years… 10 long years! Borrows in yen, uses the dividend to pay the interest, and just keeps holding these stocks that are growing in the mid-teens and doing buybacks every year. ~~ What’s special about these great investors is that they act boldly and in a big way. They really think they are original thinkers and then they bet a lot too. ~~ I remember an interview with famous investor Ramesh Damani where he said his only investing mistake was that he didn’t buy as much as RJ did when they came up with ideas and that made all the difference in afterwards their net worth made all these years. ~~ Conclusion: We are learning well what yield farming is. More importantly, when we come across compelling ideas, we invest accordingly. Also, original thinking brings big returns. We must learn to think about new trends, ideas, etc. ourselves.
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