Warren Buffett’s $ 6 billion bet on Japan paid off
Warren Buffett shocked the Tokyo markets last August with a $ 6 billion ($ 8.2 billion) bet on the country’s five largest trading houses.
A year later, his investments are paying off. In the midst of soaring commodity prices, the collective value of Berkshire Hathaway’s holdings in the five “sogo shosha” has increased by approximately $ 2 billion. This gain of more than 30 percent exceeded the 21 percent increase in the benchmark Topix index and does not take into account dividend income.
Although his stakes in resource-rich companies have been successful, the man sometimes known in Japanese media as the “god of investment” has not sparked a wave of international supporters. Instead, many investors remain marginalized by the uncertainty surrounding the pandemic and political leadership.
“It bought at a good time,” said Hideaki Kuribara, analyst for Tokai Tokyo Securities Co. “I expect it to stay for a long time, and over a long period of time, these investments can be successful. is exactly what you expect from him.
The five companies – Itochu, Marubeni, Mitsubishi, Mitsui & Co. and Sumitomo – appear on paper to be an unusual fit with Buffett’s “buy what you know” philosophy. But with the investments just days after Shinzo Abe announced he would step down as prime minister – sparking the first change in leadership in more than seven years – many were hoping the Buffett brand would spark renewed foreign interest in them. Japanese markets.
At the time, Japan was resisting the pandemic better than most economies, and Yoshihide Suga would soon take office as prime minister with near record popularity.
Initially, stocks rallied after Buffett’s silver came in, with the Nikkei hitting 30,000 in February for the first time in 31 years. Since that peak, however, Japan’s benchmark has steadily declined.
On the one hand, COVID-19 cases have jumped as the country’s vaccination campaign lags behind the United States and Europe. Meanwhile, Suga’s ratings have dropped to record highs as he heads into the general election, with the Tokyo Olympics doing little to boost his image.