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Warren Buffett presses ahead with his big bet on Japan, upping his stakes in 5 trading houses

George Glover   

Warren Buffett presses ahead with his big bet on Japan, upping his stakes in 5 trading houses
  • Berkshire Hathaway said Monday that it had poured more cash into Japan's five largest trading houses.
  • The holdings of Warren Buffett's conglomerate in the stocks now average over 8.5%.

Warren Buffett's Berkshire Hathaway has poured more money into Japan's top five trading houses, pressing ahead with its big bet on the Asian country where stocks are trading near three-decade highs.

Berkshire said in a news release that its stakes in the five stocks now averaged over 8.5% – up from the 7.4% figure it had disclosed in May.

Buffett's conglomerate, which mostly invests in the US, surprised many close followers when it reported 5% stakes in five Japanese trading houses – Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo – in August 2020.

But Japanese equities have surged since, with the country's flagship Nikkei 225 stock-market index up around 50% and hitting a 33-year high earlier this month.

The five Japanese companies owned by Berkshire are known as "sogo shosha" – or general trading houses – and tend to serve as intermediaries for a wide range of products including materials and food.

Buffett intends to hold the stocks for the long-term and eventually up his stakes to a maximum of 9.9%.

At Berkshire's annual meeting in May, the billionaire investor said the five Japanese companies were "ridiculously" cheap, had a long-term focus, and were big enough to have a material impact on the conglomerate's earnings.

Tokyo has also been pushing for the country's listed companies to return more money to investors, likely boosting their appeal to Buffett.

Read more: Warren Buffett's Japan bets have nearly tripled in value to north of $17 billion in under 3 years



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