Warren Buffett’s Berkshire Hathaway has increased its stakes in five major Japanese trading houses to nearly 10% each. The 94-year-old investor’s holding company raised its holdings in Mitsubishi Corp., Mitsui & Co., Itochu Corp., Marubeni Corp., and Sumitomo Corp. by more than one percentage point each, now ranging from 8.5% to 9.8%.
Buffett indicated in his 2024 annual letter that Berkshire is committed to its Japanese investments for the long haul. The five firms are Japan’s largest “sogo shosha,” or trading companies, which operate across various sectors both domestically and internationally. As part of his investment strategy, Buffett has been hedging currency risk by selling Japanese debt.
By the end of 2024, the market value of Berkshire’s Japanese holdings reached $23.5 billion, with an aggregate investment cost of $13.8 billion.
Buffett’s Japanese stakes strategy
Buffett has praised the managements of these Japanese firms for their investor relationships and capital deployment strategies.
In 2023, Buffett, along with his designated successor Greg Abel, visited Japan and met with the leaders of these trading houses. He indicated a desire for Berkshire to maintain ownership of these companies indefinitely. Meanwhile, Buffett has been aggressively reducing Berkshire’s American stock portfolio, amassing a record cash pile of $334 billion.
In 2024 alone, Berkshire sold over $134 billion worth of stocks, primarily by cutting back on its two largest U.S. equity positions. This strategic shift underscores Buffett’s global investment perspective and ongoing recalibration of Berkshire’s vast portfolio. The move reflects the billionaire investor’s growing affinity for Japanese equities even as he reduces his exposure to U.S. stocks.
Image Credits: Photo by Timo Volz on Unsplash
