I advise you not to be like Masayoshi Son.
In the financial world, only two types of people can leave their mark in history. One type is those who have made a fortune, and the other is those who have lost a fortune. What the public enjoys most is the third scenario: watching those who have made a fortune lose their money at an even faster pace.
In December 2022, the Guinness World Records website updated a new record. Just a few months earlier, Elon Musk, who was still at the top of the Forbes list, became the new "person who has lost the most money in history" after losing $165 billion. This world record was first included in 2000. At that time, the dot - com bubble burst, and Masayoshi Son, who had been the world's richest man for three days, lost $58.6 billion. Since then, he had held the title for 22 years.
In fact, Masayoshi Son is basically like Schrödinger's cat. His life mainly consists of two states: losing a fortune and making a fortune. The problem is that no one knows whether he is currently losing or making money.
He could lose $58.6 billion in a single bubble burst, but he could also stage a comeback with just one investment in Alibaba. In the fiscal year 2020, he set the highest annual net profit in Japanese corporate history. Then, due to the failed IPO of WeWork, he refreshed the record for the largest single - quarter loss. He sold his stake in NVIDIA just before its take - off. His peers thought that there would be no place for Son in the AI era, but the IPO of ARM helped him earn back tens of billions of dollars.
Just as Su Shi was resilient in the officialdom despite repeated demotions, Masayoshi Son is resilient in investments despite repeated losses.
Compared with the Omaha investors who believe that "the first principle of investment is not to lose money", East Asians are more robust. They play the game where the bigger the waves, the more valuable the fish. Even if the unicorns collapse, they won't be defeated.
In January this year, he publicly entered Trump's Star Gate Project. In this project with a total investment of up to $500 billion, SoftBank, as the main investor, bought Son a position as the chairman.
Perhaps worried that winning wouldn't be exciting enough, Son then increased his bet, claiming that he would invest $1 trillion to introduce advanced manufacturing and turn Arizona into the "Silicon Valley of the United States".
Taking too big steps not only led to a misalignment in administrative levels but also forced him to borrow money from the bank.
On the path to AGI, Masayoshi Son, holding a non - magical crystal ball in his right hand and a debt leverage that could make him the world's biggest debtor again in his left hand, finally managed to squeeze onto the biggest gambling table.
But Mar - a - Lago lacked some humanistic care. It only told him that the decision had been made for him to be the big "cash cow" but didn't remind him that a person's fate, of course, depends on both personal efforts and external circumstances.
At this moment, if Masayoshi Son looked around the gambling table, he would find that the technology industry is no longer what it was in his youth. His fate is similar to that of the Chinese national football team: whether he can succeed or not is not in his own hands.
The Top - Tier Purchasing Agent Rules the World
As the most famous investor in Japanese society over the past three decades, Masayoshi Son has often appeared on the list of Japan's richest people, taking turns with Tadashi Yanai, the president of Uniqlo.
Japanese media have condensed Son's career into five key nodes: the rise of personal computers, the rise and fall of the dot - com bubble, the rise of China, the global financial crisis, and the emergence of artificial intelligence. Summarized in six characters: Born at the right time, lived a good life.
For example, compared with Warren Buffett, who also lived through these era - defining waves, Masayoshi Son, born in 1957, had a more efficient return on his "birth lottery".
In the 1970s, integrated circuits moved from the laboratory to the industrial world on a large scale, and the semiconductor industry was booming. Son, a young and energetic man in his twenties, was pursuing a double major in economics and computer science at the University of California, Berkeley.
Meanwhile, Buffett was entering his forties, a time of mid - life reflection. Transistors were too trendy for him, and he waited 40 years for a good investment opportunity. He didn't make a move until 2011 and was then "harvested" by IBM.
Another example is that compared with other Japanese financial professionals of the same era, Son happened to catch the golden age of the Japanese economy and advanced industries in his youth.
In the early 1980s, the Japanese electronics industry far surpassed that of the United States and dominated the world. In the DRAM market alone, Japan occupied more than half of the global market share with its high yield and low cost. The game industry was also booming, with a crazy output of products. American companies were so angry that they went to Capitol Hill to accuse Nintendo of being a modern Trojan horse that helped Japan severely damage the US economy.
This is similar to how Mark Zuckerberg wants to elevate the TikTok issue to the level of a Sino - US cyber arms race. If there are similarities, it's purely a tribute.
Masayoshi Son, born at the right time, seized the opportunity. He bought cheap and already - obsolete video games in Japan and imported them to the United States to sell as advanced products. To reduce the logistics time from three months to three days, he gave up cheap sea freight and chose faster air freight [1]. The "time difference" he saved was enough for him to complete his primitive capital accumulation before graduating from college.
From this perspective, Japanese students going to the United States to study economics and computer science in the late 1970s had a very high starting point. Son also had all the advantages: He was born at the right time and place, chose in - demand majors for his studies, and selected the right products for his purchasing agent business.
However, the path to success often has a time limit. Copying too slowly is equivalent to copying wrong.
Older Japanese people were still recovering from the frustration of Japan's defeat in World War II in their youth, while younger Japanese people were dealing with the despair of the bursting of the economic bubble in their youth.
Even if he was just a few years younger, his money - making method would have been cut off by the humiliating "US - Japan Semiconductor Agreement" in 1986 and become a dead end due to the 100% import tariff on Japanese electronic products.
In 1987, a US congressman angrily smashed a Toshiba radio.
Masayoshi Son, who happened to live in a win - win period, sold US technology to Japanese companies and Japanese products to US consumers. He accumulated the capital for his future business through several successful "personal purchasing agent" deals.
Before God closed all the doors and windows, he had packed his belongings and returned to Japan to found SoftBank.
In the 1990s, Japan was overtaken by the United States during the turbulent balance - sheet recession, especially in the technology field. On the other side of the Pacific, chips were getting smaller and PCs were selling more. Companies like Toshiba, Mitsubishi, and NEC, the pride of the Japanese electronics industry in the 1980s, became mere onlookers in the global technology industry during the long - term stagnation.
But for Masayoshi Son, who was leading and who was lagging behind was secondary. The key was that as long as there was a "time difference" in industrial development between countries, it was a window period for him to engage in purchasing agent arbitrage.
In the 1980s, when Japan was leading the United States, he bought Japanese products and sold them in the US market. In the 1990s, when the United States was leading Japan, he bought US products and sold them in the Japanese market.
At the end of 1995, Masayoshi Son took a fancy to Yahoo, which had just been founded, and invested $2 million in it. In March of the following year, he made another investment of $100 million, becoming a major shareholder with a stake of over 30%. In April, Yahoo completed its IPO, catching the early train of the dot - com wave and once creating nearly a 100 - fold return for Son.
Meanwhile, SoftBank introduced Yahoo Japan, with SoftBank holding a 51% stake and Yahoo holding 35%. Considering that after the dot - com bubble burst, Yahoo lost 98% of its value, while Yahoo Japan only halved in value, it can be said that to some extent, the risk was diversified.
During the ups and downs in Silicon Valley at the end of the century, Masayoshi Son stumbled several times. If Yahoo's roller - coaster ride could be blamed on the bad environment, the performance of Kingston can better illustrate Son's personal style.
In August 1996, Masayoshi Son spent $1.5 billion to buy an 80% stake in Kingston, a memory manufacturer, from its founders, John Tu and David Sun. At the Christmas party at the end of that year, the two bosses suddenly informed 500 employees that they would give out $100 million as a token of gratitude.
Generous bosses usually have good luck.
In 1998, the memory market saw a decline in both volume and price. Masayoshi Son thought there was no future for this industry and resolutely sold the company back to Tu and Sun for $450 million in 1999.
The two made a profit of $1 billion from Son. Just after they got Kingston back, the memory market recovered during the "anti - involution" cycle of production capacity clearance, price recovery, and technology iteration.
In this battle, Masayoshi Son hardly lived up to his double major at Berkeley. It seemed that he neither learned economics well nor understood computers.
Memory, a cyclical stock in the information age
Masayoshi Son was probably fed up with the cyclical stocks in the information age, which could never make him the richest man. Just when people began to doubt that he wouldn't have another comeback, he achieved the most famous turnaround in SoftBank's history by investing in a company that almost no one could understand at that time.
Instead of just building production capacity in areas with cheaper labor like other Japanese companies, he invested his capital in people who could represent the future.
Courage Trumps Education
If being born in Japan in 1957 set a decent lower limit for Masayoshi Son's life, compared with the other 1.72 million Japanese born in the same year, Son created a ceiling that was one in a million.
This upper limit was determined by Son's courage.
After the burst of the dot - com bubble in 1999, Masayoshi Son became the person who had lost the most money in human history. While most people would just lie flat after suffering heavy losses, Son didn't. He sold off all the assets that he thought had no future (including selling Kingston at a low price) in one go. Then, after a six - minute meeting, he decided to invest $20 million in Alibaba.
According to the usual standards in the venture - capital circle, at the end of the century, Jack Ma was neither from the elite circles of Tsinghua or Peking University nor a well - connected person born with a silver spoon in his mouth. He lacked a successful entrepreneurial record and a strong technical background.
But Masayoshi Son didn't care about these things. He chose to believe in the "light".
He later recalled in an interview: "When I met Jack Ma, he didn't have a business plan or any income, but his eyes were shining. I could see that he had charisma and leadership skills [3]."
This statement coincided with Jack Ma's later recollection.
In 2008, Alibaba had achieved commercial success and was among the top ten private - enterprise taxpayers in Hangzhou. That year, Mr. Ma, who had become a benchmark figure in the Chinese Internet industry, recalled: "He asked me how much money I needed. I said I hadn't thought about asking for money. Son even advised me to ask for it and taught me how to spend money quickly. Some people don't believe in love at first sight. Maybe that was it [4]."
By 2014, when Alibaba successfully listed on the New York Stock Exchange and the market finally recognized its value, SoftBank's investment had increased by about 2900 times.
It can be seen that there are mainly two types of legal "alpha": one is when everyone wants to make a move, you have the strongest technology and the fastest speed; the other is when everyone is afraid to make a move, you have the greatest courage and the best vision.
Masayoshi Son became the richest man in Japan not only because he was the first person in Japan to believe in Jack Ma. He was also the first person to believe in Steve Jobs.
As early as the summer of 2005, he realized that Steve Jobs would create a revolutionary mobile phone. He made several trips to California to negotiate the sales rights of the yet - to - be - released iPhone in the Japanese market.
Steve Jobs finally verbally agreed to give him the exclusive agency rights in Japan - "Masa, you're really crazy. We haven't talked to anyone else, but you're the first one to come to me. I'll give it to you [2]."
If Jobs dared to promise, Son dared to place a big bet. In March 2006, Masayoshi Son spent $15.5 billion to acquire the Japanese subsidiary of Vodafone, a telecommunications giant, and renamed it SoftBank Mobile.
At this time, it was still more than two years before the release of the first true mobile - Internet phone, the iPhone 3G, and Apple was far from establishing its "only Apple can do" industry status.
On June 4, 2008, Jobs kept his promise. Before the official release of the iPhone 3G, SoftBank, thanks to Son's early negotiations and low - price strategy, defeated NTT DOCOMO, the dominant player in the Japanese telecommunications industry, and became the exclusive distributor of the iPhone in Japan.
Actually, after the 2008 financial crisis broke out, Soft