In four years, quadrupling, Buffett bets over $30 billion on Japanese stocks!

Buffett is boldly betting on the Japanese market.

Latest data shows that Berkshire Hathaway's holdings in Japan's five major trading companies have surpassed $30 billion in recent weeks, and Buffett continues to buy more.

This figure has surged 392% to the current $31 billion compared to the total value of $6.3 billion when Buffett first disclosed his approximately 5% stake on his 90th birthday on August 30, 2020. Reports indicate that during this period, Berkshire has been continuously increasing its holdings, while the stock prices of these five companies have risen between 227% and 551%.

Continuous Increase, Breaking the 10% Limit

Berkshire is steadily increasing its influence in Japan's key trading companies.

According to a press release from Mitsui & Co. on Thursday, Berkshire's National Indemnity Company now holds 292,044,900 shares, representing a 10.1% stake. Based on Friday's closing price, this portion of shares is valued at approximately $7.1 billion.

Data shows that Berkshire's buying actions are ongoing. In March of this year, its stake in Mitsui was still at 9.7%, and this disclosure indicates an increase of 2.3%. About two weeks ago, Mitsui announced that it had been informed of Berkshire's stake exceeding 10%, but the exact number of shares was not disclosed at that time.

The same situation has occurred with Mitsubishi Corporation. According to reports from Reuters and other media in late August, Mitsubishi confirmed that Berkshire's stake has increased from 9.7% in March to 10.2%.

For the other three companies—Itochu, Marubeni, and Sumitomo—there has been no new disclosure of shareholding information since March, but the market generally expects that Berkshire's stake may also be close to or exceed 10%.

From $6.3 Billion to $31 Billion, Holdings Quadrupled

The success of this investment is exemplary. On August 30, 2020, on his 90th birthday, Buffett first disclosed his investments in these five Japanese trading companies, at which time Berkshire held approximately 5% of the shares and had built the position over 12 months. At that time, the total value of these five investments was about $6.3 billion.

Today, the total value of this investment portfolio has reached $31 billion, achieving a 392% increase.

This return consists of two parts: first, Berkshire's continuous buying over the past few years; second, the strong performance of the invested companies' stock prices, which have risen between 227% and 551%.

Buffett's Investment Logic and Long-Term Commitment

Buffett's logic for choosing Japanese trading companies is clear and direct. In a 2023 interview with CNBC's Becky Quick, he explained that he was attracted to these stocks in 2020 because "their prices seemed ridiculously low to me, especially considering the interest rate levels at the time." Initially, Buffett promised these five companies that he would not increase his stake above 10% without permission.

However, as the investment value became apparent, the situation changed. In his annual letter to shareholders in February this year, Buffett wrote, "As we approached this limit, the five companies agreed to moderately relax the restrictions."

This change opened up space for Berkshire's long-term holding strategy. Buffett added in the letter, "Over time, you may see Berkshire increase its holdings in all five companies."

He further confirmed to shareholders that Berkshire plans to hold these shares for "50 years or forever."

Risk Warning and Disclaimer

The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at your own risk