Billionaire investor Warren Buffet is visiting Japan for the first time in more than a decade, and his thoughts are on his largeand growinginvestments in the East Asian nation.
In August 2020, Buffets global conglomerate Berkshire Hathaway revealed it had acquired just over 5% of each of the countrys top five trading houses: Itochu, Mitsubishi Corp., Mitsui & Co., Sumitomo Corp. and Marubeni.
By November 2022, Berkshire Hathaway had increased that again, by around 1% in each of the businesses, according to Reuters. A regulatory filing showed the house now owns 6.59% in Mitsubishi Corp, 6.62% in Mitsui & Co Ltd, 6.21% in Itochu Corp, 6.75% in Marubeni Corp and 6.57% in Sumitomo Corp.
It seems that Buffet is looking to increase those stakes again, telling Nikkei Asia in Tokyo he was really proud of the investments, which are valued at around $11 billion.
The nonagenarian added hes be meeting with the companies this week to really just have a discussion around their businesses and emphasize our support.
He added: At the moment, we only own the five trading companies. There are always a few Im thinking about. Other investments in Japanese companies arent out of the question, he hinted, saying investments in the region are always a matter of consideration.
The share price of all five of Buffets current concerns have spiked since he expressed his support in the assets.
Fellow conglomerates
Buffett, who is worth $110 billion according to Bloombergs Billionaires Index, has also put pressure on the companies to come to him first for any additional support: We dont think its impossible that we will partner with them at some point in the future in a specific deal.
We would love if any of the five would come to us ever and say, Were thinking of doing something very big or were about to buy something and we would like a partner or whatever.'
The Japanese trading houses, which are themselves investment companies like Berkshire, have diverse portfolios that range from health care to minerals to foodapparently one of the reasons they caught the eye of the Coca Cola investor.
We feel that these five companies are a cross section of not only Japan but of the world, Buffett explained to Nikkei in Tokyo. They are really so much similar to Berkshire. They own a lot of different things.
Across the globe companies like thesecalled sogo shoshaare often viewed as too complicated to invest in. Itoshu, for example, invests and trades in food, apparel and retail. Marubeni in food, pulp and power, Mitsui in energy, metals and health care.
Berkshire has a similarly wide-spanning portfolio, its top stocks include Apple Inc, Bank of America Corp., Chevron Corp., Coca-Cola Co. and American Express Co.
In favor of stock buybacks
The Kraft Heinz investor is a vocal advocate of share buybacks. In Berkshire Hathaways annual letter he said critics of such schemes are economically illiterate, insisting the activity resulted in better returns for all shareholders.
When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive), the Oracle of Omaha explained.
The math isnt complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices, he added. Gains from value-accretive repurchases, it should be emphasized, benefit all ownersin every respect.
Speaking on his five Japanese interests, Buffet said this week: If they are repurchasing their shares, we generally regard that as a plus. We like the idea of the number of shares going down.
Conveniently for the billionaire, sogo shosha have proved theyre open to the practice. In 2019 the Mitsubishi Estate announced plans to buy back up to 100 billion yen ($913 million) of its shares in its first ever stock repurchase, while the former real estate subsidiary of MitsuiMitsui Fudosan Coannounced a similar scheme the year before.
Overseas interest
Buffet has long been a supporter of international investment but revealed in the Nikkei interview geopolitical tensions can get in the way.
He said that such tensions had been a factor in Berkshire Hathaways distancing itself from from Taiwan Semiconductor Manufacturing Co after having bought more than $4 billion in shares in the worlds biggest chipmaker between July and September 2022.
By the end of 2022, it had slashed its holdings by 85%down to $617 million.
Buffet described the business as well-managed, adding geo-political tensions were a consideration in the divestment but said ultimately his fund had better places to spend their money.
With increasing ties to Japan, its clear Buffett wont be put off his habit of spending overseas. His 2019 annual letter for Berkshire Hathaway made his point clear: It is beyond arrogance for American businesses or individuals to boast that they have done it alone. Americans will be both more prosperous and safer if all nations thrive. At Berkshire, we hope to invest significant sums across borders.
