Warren Buffett goes bargain hunting in Japan’s sogo shoshas
Warren Buffett has gone bargain hunting as the Berkshire Hathaway (NYSE: BRK.A) stock trailing the S&P 500 index this year. The 92-year-old Oracle of Omaha landed in Japan on Tuesday morning where he will remain for about 3 days.
In his trip, he will meet with the heads of the five sogo shoshas that he first invested in in 2020. At the time, he bought stocks in Mitsubishi, Mitsui, Itochu, Marubeni, and Sumitomo. These are giant trading companies that buy natural resources internationally and ship them to resource-scarce Japan.
According to CNBC, Buffett will meet with leaders of these companies in alphabetical order. The goal is for him to understand the businesses as he decides whether to invest in them. In a statement, he said that he was committed to invest more in these companies.
Before his trip to Japan, it was reported that Berkshire Hathaway had hired Bank of America and Mizuho Securities to underwrite its yen-dominated bonds. The new bond sale comes a few months after the company raised 115 billion yen in bonds. It now holds over 1 trillion of Japanese bonds.
Warren Buffet’s investments in Japan have done well since he made his investment in 2020. As shown below, the five stocks have jumped by more than 40% since then.
Marubeni stock has jumped by 120% since 2020 while Mitsui has risen by over 100%. Similarly, Itochu shares have risen by 80% while Sumitomo and Mitsui have risen by 40% and 60%, respectively.
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However, for Warren Buffett, an American, these gains have faced the headwind of the weaker Japanese yen. The Japanese yen has fallen by over 26% since 2020. This means that the returns have been hit by currency conversions.