Warren Buffett told Nikkei on Tuesday that Berkshire Hathaway (BRKa.N) had increased its holdings in legendary Japanese trading companies.
Since his investment business revealed 5% interests in Itochu (8001.T), Marubeni (8002.T), Sumitomo Corp (8053.T), Mitsubishi Corp (8058.T), and Mitsui & Co (8031.T) in August 2020, he has progressively increased his exposure in the nation, taking advantage of ultra-low interest rates.
Berkshire holds approximately $8 billion in Japanese bonds with 1% coupons, according to Refinitiv.
The nonagenarian’s fears of falling into Japan’s “value trap” were unfounded. Once the IT bubble burst and global interest rates rose, investors returned to Buffett’s staid firms. Since Buffett declared his investment, Berkshire-backed trading houses, which trade commodities, retail, and healthcare, have returned 127% in local currency compared to 25% by Topix Index components.
Buffett is open to pursuing agreements with the trading firms and investing more in Japan since they are Berkshire-like investors. He may be planning a fresh yen bond offering. The equity markets are full of battered corporations. Hedge funds and activist investors hammering Japan Inc may watch Buffett.
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