Four-year doubling, Buffett bets over 30 billion US dollars on Japanese stocks!

Buffett is boldly betting on the Japanese market. The latest data shows that Berkshire Hathaway's holdings in Japan's five major trading companies have surpassed the $30 billion mark in recent weeks, and Buffett is still buying more. This figure has skyrocketed by 392% to $31 billion from the $6.3 billion total value disclosed on Buffett's 90th birthday on August 30, 2020, when he first revealed about a 5% stake. Reportedly, during this period, Berkshire has continuously increased its holdings, with the stock prices of these five companies rising between 227% and 551%. Continued increase in holdings, breaking the 10% upper limit Berkshire is steadily increasing its influence in key Japanese trading companies. According to a news release by Mitsubishi Corporation on Thursday, Berkshire's National Insurance Company now holds 292,044,900 shares, accounting for 10.1% of the shares. Based on Friday's closing price, this stake is valued at about $7.1 billion. Data shows that Berkshire's buying action is ongoing. In March of this year, its stake in Mitsubishi was still at 9.7%, and this disclosure means that the stake has increased by 2.3%. About two weeks ago, Mitsubishi Corporation announced that it had become aware that Berkshire's stake exceeded 10%, but the exact number of shares held was not disclosed at that time. A similar situation has also occurred with Mitsubishi Corp. Reuters and other media reported at the end of August that Mitsubishi Corp. confirmed Berkshire's stake had increased from 9.7% in March to 10.2%. For the other three companies - ITOCHU, Marubeni, and Sumitomo - although there is no recent disclosure of holdings since March, it is widely expected in the market that Berkshire's stake may also be close or exceed 10%. From $6.3 billion to $31 billion, holdings quadrupled This investment success can be deemed a model. Buffett disclosed his investment in these five Japanese trading companies on August 30, 2020, his 90th birthday when Berkshire already held about 5% of the shares and had been building up the positions for 12 months. At that time, the total value of these five investments was around $6.3 billion. Today, the total value of this investment portfolio has reached $31 billion, achieving a 392% growth. This return is composed of two parts: Berkshire's continuous buying over the past few years; and the strong performance of the stock prices of the invested companies, with price gains ranging between 227% and 551%. Buffett's investment logic and long-term commitment Buffett's choice of Japanese trading companies is clear and straightforward. In an interview with CNBC's Becky Quick in 2023, he explained that he was attracted to these stocks in 2020 because "their prices seemed ridiculously low to me, especially considering the interest rates at that time." Initially, Buffett had 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 shareholder letter in February of this year, Buffett wrote, "As we approach this limit, the five companies have agreed to relax the restrictions." This change has opened up space for Berkshire's long-term holding strategy. Buffett further confirmed to shareholders that Berkshire plans to hold these shares for "50 years or forever." This article is translated from "Wall Street Seen" by Long Yue; GMTEight Editor: Yan Wencai.