Warren Buffett Realizes $ 570 Million Gain on New Japanese Stocks in Just 2 Days
- Warren Buffett moves the markets with his decisions, while other investors follow his lead.
- The âBuffett effectâ is probably behind its conglomerate Berkshire Hathaway, which recorded a 9% gain on its latest investments in just two days.
- Buffett’s company revealed on Sunday night that it had made a 5% stake worth a combined $ 6 billion in Japan’s five largest trading companies.
- Their stock prices soared on Monday and Tuesday, generating a gain of $ 570 million for Berkshire.
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Warren Buffett is famous for moving the markets when he places a bet as other investors trust his judgment and rack up whatever he has bought. The “Buffett Effect” may have generated a gain of $ 570 million for its namesake in just two days.
The famous investor’s Berkshire Hathaway conglomerate revealed Sunday evening that it had acquired 5% of the shares in each of the five largest Japanese trading companies or “sogo shosha”: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.
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Japanese regulatory documents confirm that National Indemnity, one of Berkshire’s insurance subsidiaries, owns between 5.0% and 5.06% of the five companies. The positions were worth between $ 756 million (Sumitomo) and nearly $ 2 billion (Itochu) at Friday’s close.
News of Buffett’s backing pushed the stock prices of the five companies up 9.6% on average during Monday and Tuesday. The result is that the combined value of Berkshire’s holdings rose from the yen equivalent of $ 6.3 billion to $ 6.9 billion – a gain of 9%, or $ 570 million.
Buffett won’t be too excited about the immediate success, as he plans to hold all five positions for a long time. However, the explosion of enthusiasm suggests that other investors are also seeing value in the five stocks, validating their bet on them.
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