Big In Japan? - Berkshire's 2019– Bet On Japan Inc
It was August 31, 2020. U.S. value investor and businessman Warren Buffett’s insurance conglomerate Berkshire Hathaway $BRK.A $BRK.B sent out a press release. The heading may have surprised U.S.-focused Berkshire-watchers:
“Berkshire Hathaway acquires 5% passive stakes in each of five leading Japanese trading companies”
Berkshire had acquired stakes in Itochu $ITOCY, Marubeni $MARUY, Mitsubishi $MSBHF, Mitsui $MITSY, and Sumitomo $SSUMY. Via regular share purchases on the Tokyo Stock Exchange over “approximately” 12 months.
As businesses, $BRKA's Japanese trading houses are very exposed to the physical trading of commodities and goods. They are cyclical. They were already recovering from a cyclical commodities bear market of the mid-2010s before Buffett stepped in.
Notice how the ROE% follows commodities?
What about the price $BRKA paid?
Not surprising to the value investing community, Buffett can still wait for opportunistic discounts. Sogo Shoshas got there after the 2010s commodities bear market.
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I remember when Buffett made this investment! Nice piece--thanks for sharing it. Do you do much other investing abroad/in Japan?