Alms held up: Venezuela


Hello and welcome to the intelligence on economist radio. I'm your host. Jason Palmer every weekday. We provide a fresh perspective on the events shaping your world. Every year since nineteen sixty five genial gentlemen from Nebraska has put his thoughts into a long letter tomorrow. He'll put out another one and hundreds of thousands of people can't wait to see it. Our correspondents and editors weigh in on Warren Buffett's wisdom. And there's tremendous growth in genre of Japanese literature books written by and for the elderly, but as lives grow longer, the young too are getting a peek at what lies ahead. First up though. Tomorrow is the deadline set by one Guido widely viewed as the interim president of Venezuela for humanitarian aid to be delivered to the impoverished country. Then his way has been facing rampant, hyper inflation and shortages of food and medicine after years of misrule by President Nicolas Maduro who still clings to power. Mr. muddle won the presidency again last year in elections that were widely viewed as fraudulent now Venezuela's opposition and more than fifty countries recognize Mr. Widodo as the president. He's been organizing stockpiles of food and medicine in Colombia, and Brazil and will be traveling to the Colombian border from Caracas to meet the deliveries. He's also called for volunteers to come to the border and help distribute it more. No single thin guarantee. Ah mister Modesto says he'll block any aid deliveries yesterday. He closed the border between Venezuela and Brazil and has threatened to close the border also with Colombia. Nicholas maduro. The president basically deny is that there's a humanitarian crisis going on in Venezuela part of the pace that the opposition is making is we're the guys who can relieve these shortages and begin to feed you properly and begin to provide medicines in the hospitals. So we'll any of Mr. guidos humanitarian aid make it into the country. Brooke Unger is our America's editor what is Mr. Guido planning this weekend. He said February twenty third is the day when all the say that's piling up in Columbia and other countries around. Venezuela will begin to move into Venezuela. To relieve the humanitarian crisis there and the big question is going to be can you make that happen? And what will the government do to stop it? Where's this aid coming from a lot of it's coming from the US? They're awesome European countries that are contributing aid to this effort. So it's coming from quite a number of places. But yeah, mainly from outside the region, and why this deadline what's special about the twenty third Guido and a rally. Week or so ago said, you know, kind of name the twenty third is being the day when this would begin to happen. So it's kind of self imposed deadline, but they needed to start at some point. And you know, obviously in addition to being a day when hopes that aid begins to flow into Venezuela. You know, there's there's a lot of politics and symbolism surrounding this day. So he not only wants food medicine to get the people, but he wants the world to sort of rally around the idea that, you know, his interim government is going to is going to provide support for for Hungary Venezuelans so about that crucial. Question of Ken, Mr. Guido, get this eight through do you think he can what is what's the plan? What he does have what he's trying to have is he's signed up hundreds of thousands of volunteers who were supposedly going to try and begin to bring this aid from the border with Colombia into something like twelve cities inside Venezuela. And how that actually is going to play out will be very interesting to see, you know, we don't know exactly what his tactics are going to be you know, one thing to to point out is that the the border between. Colombia and Venezuela was pretty porous you know, you could have all in tears crossing the border on guarded points. And attempting to bring aid in that way. There's also speculation that you know, they might be airdrops of aid from from US planes a could come in that way or by or by boat. So, you know, we don't know exactly what Ruthie eight is going to take. And what we really don't know is what the reaction of Venezuela's armed forces are going is going to be what might they do it. Why can they be seem to stop aid coming in the government portrays this essentially as sort of invasion of Venezuela? I mean, they they regard the delivery of American aid as being kind of a cover for an attempt to in American attempt to topple the government in American invasion of swords. And you know, they would see stopping the aid as being away of defending their sovereignty. President Trump has come out clearly in support of Guido. Except president widens generous offer of amnesty deliver your life in peace with your families, and your countrymen what's America's interest in this whole question. Don't Trump has taken a very firm and consistent line against the Madero regime, which is not entirely consistent with his line on other repressive dictators in the rest of the world their various explanations for that. I mean, one reason may be that they're quite a lot of Americans Venezuelan and Cuban origin in Florida, which is an important swing state. And so, you know, it it it Trump wants to appear to be on the side of those people who are who are certainly against the Venezuelan regime. You know, it's also true that, you know, some prominent Republicans in particular Marco Rubio, who's from Florida has kind of made it his his 'cause right? What about the effect that might have been in in the country? It could it be that the Venezuelan people like meddling American administration even less than they like the situation. They've got. There's a big risk here at the moment, the US and the opposition in Venezuela are kind of working hand in glove, and the opposition of gone along with very very tough American sanctions, which the hope is that the sanctions are going to dislodge the regime by denying the cash basically needs to survive, but you know, in doing that it's also going to worsen the the plight of the Venezuelan people. So you have this rather ironic situation where in order to push the regime out the opposition to starting with measures that that will hurt their own people. You know at the moment, there's an alliance there. But it certainly, you know, it's certainly true that if the US follows through with its threat to begin to use military force to push the regime out, then the the the equation could change. I I think it's very important that this process and Venezuela be seen as you know, Venezuelans getting rid of victory will regime rather than as Americans coming in. And imposing a government that suits them will this work for. I do you think that? He he will be able to sort of assume power in in full or will Mr. Madero hang on in the long run. I think that's very very difficult to say it's clear that the pillars of support for this regime are crumbling. They've lost public support. They've lost international support except for a few few isolated countries. Like Russia and Turkey, even China is is kind of wavering. They're running out of cash, but unless you you begin to see real signs of defection within the armed forces. You know, this regime can this regime can go on. And there's no further indication that support for him within this sort of the higher echelons of the military is is crumbling at the moment. There's no such indication. You had the the defense minister saying a couple of days ago that the coalition arranged against the government would have to topple it over his dead body. The the army high command seems to be pretty solidly with Madero. So there's no real indication except for a few isolated cases of defense. Action that the army is going to desert the gene, right, Brooke. Thank you very much for your time. Thank you. Warren Buffett is a legendary investor. He's nicknamed the sage of Omaha every year. He writes a letter addressed to shareholders in his firm. Berkshire Hathaway this year's is out tomorrow. It's hotly anticipated by lots of people unconnected to the company as well in part because he's renowned for his folksy wisdom. Do your own work and make your own judgment be fearful when others agreed be greedy. When others fearful you only find out who's living naked hiking out if a horse of been making investment decision. We wouldn't have the automobile. These mentors carry a lot of weight giving Mr. buffet achievements. In the words of some of the business and finance guru's here at the economists. He's the greatest living investor. Annualized return is case twenty percent, which is double the performance of the market. Huzzah kind of unique status because he's a he's a folk hero in America in this fairly regular houses spends. I think something like a hundred thousand dollars a year. No more even though his network has to be something like seventy or eighty billion dollars couches all of his investment advice in very easy to understand folksy ways. And this makes him popular every man compared with the sort of Wall Street investors that public is. But if you're not a shareholder in Berkshire Hathaway, why read Mr. buffets annual letter at all I'll be reading because everyone else is reading the letter. That's how it works in markets. It's like a funny investment column. It's quite entertaining. And as for the letters content. Every year the something either witticism or an incisive remark that gives investors very useful insight about what they should be doing Philip Coggan rights are bottled column about management. He's been very good pointing out the times when he thinks that the market is overvalued all that there is financial excess in the system know, he was seen in the late nineties as dinosaur for not getting tech stocks. But he was right. There was a bubble going on at the time. And he was proved to be right subsequently. There's this sort of magic mythology around buffet. So you know, what Buffett says, maybe maybe I can follow that and get a little bit of the action. Andrew Palmer is our executive editor. They're all literally funds the Tron type the buffet magic and turn that into investing techniques. What constitutes the buffet? Magic emerges across the body of the shareholder letters, which Mr. buffet has been writing since nineteen sixty five I think there are three sort of common threads that run three fifty plus years of letters that he's been writing. I is domestic business that you call on the he likes simple businesses with clear strategies and business opportunities. For would is our Wall Street correspondent the second common. Thread is how to tweet your employees and the management of companies. I think they haven't had a single CEO leave the forty companies that they own in the past twenty five years. He looks for strong managers who are motivated by the integrity and the energy. And the third thing is his whole investment thesis, which is that you should also invest in companies when they look undervalued buffet says is that people rush to buy things at the point when everyone thinks that doing really really, well, then they rushed to sell things at the point when everyone is panicking, and you should basically flip that. So you know, if you see a great company and its prices being whacked by it, and when he buys he holds. So he says his favourite holding period is forever. Pick businesses that have a kind of motor around them, which can defend themselves against new rivals. Pick those which have a very strong franchise and very high earnings because we keep reinvesting the earnings then over the long run, you will grow buffet famously spends an enormous amount of his time sitting in a very nondescript office in Omaha reading, and he reads, obscure, magazines, he looks deeply into figures looks into account. Patrick fouls. Oversees all of our business and finance coverage. Or he doesn't do is rely that mulch on third party sort of external assessments of high to understand the world. The consultants the bankers the analysts his view is most of this complete rubbish. And the you need to look directly at the facts yourself and try and reach a common sense judgment about them. These principles of investment aside. The letters also reveal the narrative Mr. buffet has constructed about himself and his partner, Charlie Munger. There is no doubt that they are the heroes of the story from every paragraph. There is something about just how wonderful they are. Henry tricks rights are Shumpert or call him about business. And then there are there are the classic villains. Which are like the deal makers, the investment bankers, the big chief executives whatever, and he always portrays them as being these guys with big hungry mouths dying to be fed by the markets. The interesting thing about buffet is the he projects a story by himself that doesn't exactly much what has actually taken place. So his investment stall has changed significantly. It used to be principally about taking small stakes in listed businesses and running an insurance company will happen will recently is he's engaged in huge takeovers of big industrial companies and his letters. I think project a degree of continuity that hasn't actually happened in real life. And they don't in the latest age really grapple with the big issue about berkshire-hathaway. It's resorted to doing these huge acquisitions it's not really clear that they've been particularly successful. And that's why berkshires performance relative to the stock market's actually flagged in recent years. And what can we expect to see when this year's letter comes out tomorrow? What people will be looking for. I think is three things. One is the traditional buffet offering which is lessons about investing commonsense. Rules of thumb. The second thing is people will look for information about the portfolio. He runs known berkshire-hathaway is one of the world's ten most valuable businesses loss. -ly people be looking for information about when the show ends because Mr. buffet is really very elderly and the question of succession, and who takes over the management of this big companies becoming ever more important. The company is. Really something that he controls. It's his personal stall that dictates have allocates resources on hundreds of billions of dollars of other people's money tied up in it. But whatever happens to Berkshire Hathaway Mr. buffet is no longer at its helm. One thing is for sure. He has an enviable amount of wealth over the long run. It's a phenomenal performance of compounding shareholder value. I only wish my dad your dad had bought is a few Berkshire Hathaway shares when he started because then we would be making this broad customer. Yeltsin the Bahamas rather than from a dank little office in the middle of London. Someone somewhere will object to the word dank. With the Oscars coming up on Sunday. Attention is focusing on diversity in film in this week's episode of the economist asks and macelroy questioned the actor chew tell issue for on who's responsible for change with some great directors of the lost decades. Thinking Toby's estate, Steve McQueen, spite Leone inside man, how much power do you think directors have to change the status quo on they stepping up to it? I think directors have a lot of power and have an have a lot of influence and convey much of lead the conversation in several ways. But I think it's about how films have produced the nature of the audiences that are being invited to come to the to the productions and and to see the foams all the TV shows all the plays the diversity of those audiences as well. And whether that's something that is actively encouraged to whether it's not particularly encouraged to hear the full interview. Download the economy. I asks available wherever you listen. Sarah Burke is our Tokyo bureau chief she's noticed a change in her local bookstores. Of my job. Parents care involves looking at Japan's age population. I mean, it's really at the forefront of aging twenty eight percent of the population are over sixty-five already. And that is projected to rise. So I spent a lot of times looking at different ways that we can talk about this bit from pensions to health care to the most of lighter things like elderly literature. Elderly literature of what do you mean by that four by both? So what we've noticed recently in the last couple of years is there a lot more books by quite owed authors and aimed at older readers. So we're talking about people in the seventies eighties nineties. I mean, there's a whole Giora hair could our Hon literature, which is by those who are around one hundred years old, you know, the best thing booking twenty seventeen sold. One million copies was by ninety five year old also ako site to about age nine team. So great about it. So she sort of rights, this quite humorous essay about what it's like being old and sort of the challenges of it. But also some of the sort of funny aspects of it, and so what about the author's, which the demographic writing these books? Besides old. I mean, the other thing that's very striking is the women almost entirely women. So the essay I mentioned about what so great about being aged ninety. That's by ninety five. Women and obviously women hit do have a longer life expectancy and live longer. But they also say this research buddy that it shows that the Japanese a passionate and interested in this sort of life of strong women, which is interesting because Japan is not a place that isn't necessarily the most gender equal country in the world. And so what kind of themes do these books? Take on before they used to talk about things dementia nursing and the gap with generations sort of classic trends. But now you're seeing a lot more things talking about sort of the elderly way of life. How live how to find meaning in life. Once you're in your sort of old age and you recommend a direct reflection. Then of the fact that people are living longer living longer, but not only are they living longer. They're living healthier. So people retire sixty sixty five and they might live today T five nineties so that gives them a good few decades of of of life left. And how has that intern changed the the the industry the publishers these books they amount that people are spending on here is declining. But that's less pronounced for those over sixty sixty five so they're still reading and these books also finding popularity with younger readers. So it's not actually just the old who are buying and reading them, you know, one of the reasons it seems to be resonating with younger people. I mean, a is very notes when you walk around. Even in the cities that there are more people. So as a case of sort of trying to understand what's happening to Japan and its demographics. But they're also some themes that come out in these books like loneliness, for example, that not just experienced by the oh, they're also experienced by younger people here as in other countries. Sara, thanks for your time and happy for the reading and in due course, maybe writing thank you very much. That's all for this episode of the intelligence, you can subscribe to the economist at economist dot com slash radio. Offer twelve shoes for twelve dollars or twelve pounds. See back here on Monday.

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