Warren Buffett Expands Focus to Japan

Warren Buffett's Berkshire Hathaway has recently increased its investments in Japan, demonstrating a shift in focus for the renowned investor. Brian Boyle of The Daily Upside writes, "This week, Warren Buffett’s Berkshire Hathaway increased its stake in Japan’s five top trading houses while issuing yen bonds for the first time in months." This move indicates a significant change in investment strategy for Buffett, who has typically focused on American companies.

Buffett, known for his famous saying, "Be fearful when others are greedy and greedy when others are fearful," has not been as active in the US banking sector during the recent financial crisis. Instead, he has been increasing his investments in Japanese trading houses. Boyle reports that "Berkshire disclosed it had acquired roughly 5% in each of the nation’s top five trading houses: Mitsubishi Corp., Mitsui & Co., Sumitomo Corp., Itochu, and Marubeni" in August 2020. Now, Berkshire has raised its stakes to around 7.4% for each company.

Issuing yen bonds for the first time in months, Berkshire Hathaway becomes "the first major international debt issuer during the new Bank of Japan Governor Kazuo Ueda’s reign," according to Boyle. This move suggests that Buffett's interest in Japan is far from over. Buffett himself confirmed this in an interview with Nikkei Asia, saying that the five trading houses are "a cross-section of not only Japan but of the world" and that there are "a few" other Japanese companies he’s always considering investing in.

While increasing investments in Japan, Berkshire Hathaway has also strategically divested from Taiwan. The company reduced its holdings in chipmaker TSMC from $4 billion last summer to just $617 million by the end of the year. Buffett cited geopolitical tensions as a "consideration" for the move, something he's never had to worry about with his investments in American companies like Dairy Queen.

Buffett's increased focus on Japan marks a notable departure from his usual investment strategies. As Boyle writes, it is a "curiously timed, yet notable, straying interest abroad for Omaha’s folksy oracle." This shift could signal a new era for Berkshire Hathaway and its investment approach.

In summary, Warren Buffett's Berkshire Hathaway has increased its stake in Japan's top five trading houses and issued yen bonds for the first time in months. This move represents a significant change in investment strategy for Buffett, who is typically known for his focus on American companies. While expanding investments in Japan, Berkshire Hathaway has also strategically divested from Taiwan, reducing its holdings in chipmaker TSMC. Buffett's shift towards Japanese investments signals a new era for Berkshire Hathaway and its investment approach.