Buffett ups Japan bet

Ben Kwok April 12, 2023 11:49

Who doesn’t like to travel to Japan?

What a surprise to see that 92-year-old Warren Buffett was among the visitors in the cherry blossoming season this year along with hundreds of thousands of Hong Kong people over the happy Easter period.

For sure, he is not going there for sashimi or sushi, but he seems to have an appetite for Japanese stocks.

Yesterday the famous billionaire investor known for value investing disclosed he had again boosted his stake in Japan’s top five trading houses – Itochu, Marubeni, Mitsuibishi, Mitsui and Sumitomo – which altogether became the largest overseas investment of his flagship Berkshire Hathaway.

In August 2020, Buffett first disclosed his investments in these five companies after spending about US$6 billion for a five per cent stake. Regulatory filings last November revealed that Buffett had raised his bets to more than 6 percent by then.

These stocks basically doubled since Buffett’s initial investment. Visiting the bosses of these five trading houses in April, Buffett told Nikkei that he wanted even more.

"We don't think it's impossible that we will partner with them at some point in the future in a specific deal," Buffett said. "We would love if any of the five would come to us ever and say, 'We're thinking of doing something very big or we're about to buy something and we would like a partner or whatever.'"

Berkshire seemed to enjoy relatively good success in its Asian investments.

Twenty years ago, Buffett first invested in PetroChina for US$488 million and cashed out US$4 billion in five years. Since last August, he also began to cash out his stake in BYD, the world’s largest electrical vehicle maker which he acquired for US$232 million, or about HK$8 per share in 2008.

BYD yesterday closed at HK$227.8, up 27 times from Buffett’s cost of investment .

While Buffett typically prefers a long-term investment horizon, he is not always sticking to the same pattern, as exemplified in the TSMC transaction. Buffett amassed a US$4 billion stake in Taiwan’s No.1 stock in terms of market capitalisation during the third quarter of 2022 but quickly sold down 86 per cent a few months later for a quick profit.

Now, is Buffett looking for a second bite of the cherry? Or does he merely want to have a taste of the best place to go to in spring?

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Ben Kwok

EJ Insight writer