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Aren’t the Japanese conglomerates perpetually underperforming businesses that get away with it because Japanese shareholders are toothless?
by rgmerk 3y ago
Aren’t the Japanese conglomerates perpetually underperforming businesses that get away with it because Japanese shareholders are toothless?
- bobthepanda 3y agoYes, because due to unorthodox monetary policy the Bank of Japan is the largest shareholder in the country. https://www.bloomberg.com/news/articles/2020-12-06/boj-becomes-biggest-japan-stock-owner-with-434-billion-hoard https://www.bloomberg.com/news/articles/2020-12-06/boj-becom...
- simula67 3y agoBerkshire Hathway is also a conglomerate, but it does perform fairly well.
- SOVIETIC-BOSS88 3y agoBH is extremely delegated. Bufett is not in the business of managimg Fruit of the Loom for example.
- rTX5CMRXIfFG 3y agoBut it is a holdings company, and their business model is to make returns on equity (and possibly loaning out capital to their subsidiaries) instead of directly managing their subsidiaries' operations and generating revenue.
- Projectiboga 3y agoSome sizable part of their total equity is in Apple.
- Eisenstein 3y agoSiemens is German and 3M is very much US.
- deleted 3y ago[deleted]
- rob74 3y agoSiemens also spun out so many of its divisions over the last years that I'm no longer sure what's part of Siemens anymore... EDIT: here's a list - https://en.wikipedia.org/wiki/Siemens#Former_operations https://en.wikipedia.org/wiki/Siemens#Former_operations
- xattt 3y ago> perpetually underperforming businesses Is this a bad or good thing for sustainability?
- Borealid 3y agoYou're suggesting the answer by asking the question, but yes, companies that consistently deliver moderate performance (are less extractive and don't maximize gains) would generally be better for the world as a whole than highly optimized, fragile corporations that deliver maximal returns by chewing up everything in their path. They'd even, in the longer run, be better for their own shareholders and their descendants.
- MrGilbert 3y agoThey might even help in closing (or reducing) the gap between the rich and the middle class. But, as there are no incentives for such behavior in society any longer, I doubt we will see widespread adoption until it is inevitable.
- xattt 3y agoThank you for reply. I truly couldn’t tell whether underperformance was a threat to the longevity of a company.
- bobthepanda 3y agoThe question then becomes, are they moderately performant? Japan’s bubble resulted in deflation because a bunch of zombie firms spent decades paying down balance sheet debts rather than resolving things quickly through bankruptcy. And the Japanese keiretsu structure mostly disadvantages businesses outside of the massive conglomerates, particularly small and medium enterprises.