Currently, Warren Buffett’s move to significantly increase his stake in Japan’s five major trading companies has garnered significant attention in the market. According to regulatory filings, Buffett’s Berkshire Hathaway has substantially raised its holdings in Mitsui & Co., Mitsubishi Corporation, Sumitomo Corporation, Itochu Corporation, and Marubeni Corporation, with an overall average stake now approaching 10%.
Specifically, Berkshire’s stake in Mitsui & Co. has risen to 9.82%, Mitsubishi Corporation to 9.67%, Sumitomo Corporation to 9.29%, Itochu Corporation to 8.53%, and Marubeni Corporation to 9.30%. Notably, Berkshire’s holdings in Mitsui & Co. and Mitsubishi Corporation have now surpassed 10%, making it a major shareholder in both companies.
In his latest letter to shareholders, Buffett stated that these investments are intended to be held long-term for decades, and have the full support of the companies’ boards. The five trading companies have also agreed to relax the limit on Berkshire’s stake, allowing it to exceed 10%.
This news has driven up the stock prices of the relevant companies. As of the market close on September 22, shares of Mitsui & Co., Mitsubishi Corporation, Itochu Corporation, Marubeni Corporation, and Sumitomo Corporation all closed higher.
In this year’s shareholder letter, Buffett mentioned that most of the $24 billion in Japanese assets held by Berkshire are financed through yen-denominated debt, paying only $135 million in interest while receiving $812 million in dividends, generating a near $677 million “low-risk arbitrage” profit. Charlie Munger has praised this as a “nearly zero-risk, once-in-a-century opportunity.”
Analysts believe that Buffett’s continued investment not only reflects his confidence in Japan’s stock market but also injects strong momentum into Japan’s large trading companies.
