Warren Buffett "Additional Investment in Japanese Stocks"... Trading Company Shares 'Profitable'

Expansion of 7% Stake by Top 5 Trading Companies
Also Interested as Business Partners
Considering Additional Investment in Japanese Stocks

'Investment genius' Warren Buffett revealed that he has further increased his stakes in Japan's five major trading companies through his investment firm Berkshire Hathaway. Buffett also expressed a positive stance on the Japanese stock market, indicating his willingness to make additional investments in other Japanese stocks.

Visiting Japan for the second time since 2011, Warren Buffett stated in an interview with Nihon Keizai Shimbun on the 11th, "I have raised my shareholding ratio in the five major trading companies (Mitsubishi, Mitsui, Itochu, Marubeni, Sumitomo) to 7.4%." According to a disclosure Buffett submitted to the Japanese financial regulatory authorities, he also increased his holdings in these five companies last year, raising his stakes from the previous 5% range to the 6% range.

[Image source=Yonhap News]

Buffett is known to have earned significant profits by investing in Japan's five major trading companies since 2020. With the surge in raw material prices caused by the Russia-Ukraine war, these companies, which have invested in global raw material projects, recorded unprecedented profits. In particular, the stock prices of Mitsubishi and Mitsui rose by 126% and 105%, respectively, over three years since Buffett began investing in 2020.

The reason Buffett made investments in these companies is that Japanese trading stocks fit well with his investment criteria, which favor undervalued blue-chip stocks. These companies are evaluated as having high dividend yields and high price-to-book ratios.

In the interview, Buffett said, "I was very proud to hold shares in these companies," and predicted that, excluding the U.S. market, the stocks of Japan's five major trading companies would constitute the largest portion of his future investments.

He also expressed a desire to discuss business with these companies beyond just holding shares. Buffett emphasized, "Berkshire Hathaway and these companies are engaged in very similar businesses, making it easy to understand them," and added, "The five major Japanese trading companies are well-versed in global affairs, and I believe it is not impossible to build relationships with them as future business partners."

Furthermore, he indicated his intention to make additional investments in Japanese stocks beyond the five major trading companies. In the interview, Buffett said, "Currently, I only hold stocks in the five major trading companies, but I always have the next investment target in mind," and added that he would pursue additional investments if he determines the price is appropriate.

Masayuki Kubota, senior strategist at Rakuten Securities in Japan, explained to Nihon Keizai, "A commonality between Berkshire Hathaway and Japan's five major trading companies is actively investing in all global companies available at low prices and promptly withdrawing when performance is poor," and added, "There are many ultra-undervalued stocks in Japan, such as financial stocks, that Buffett prefers."

This content was produced with the assistance of AI translation services.