Warren Buffett's Berkshire Hathaway now has $11 billion riding on 5 Japanese stocks, as it continues a record spending spree

© REUTERS/Rick Wilking Warren Buffett. REUTERS/Rick Wilking

  • Warren Buffett’s Berkshire Hathaway ramped up its bets on five Japanese stocks.
  • Berkshire grew its stakes to over 6%, helping to lift the holdings’ combined value to $11 billion.
  • Buffett and his team have poured a record $66 billion into stocks this year, or a net $49 billion.

Warren Buffett’s Berkshire Hathaway has bolstered its stakes in Japan’s five largest trading houses, continuing a historic spending spree that shows few signs of stopping.

The famed investor’s company revealed 5% stakes worth a combined $6 billion in Itochu, Marubeni, Mitsui, Mitsubishi, and Sumitomo in August 2020. It has now bolstered those positions to between 6.2% and 6.8%, Tokyo Stock Exchange filings revealed on Monday.

Berkshire’s enlarged stakes in the Japanese quintet are valued at around $11 billion. The increase in worth reflects the recent purchases, and the five stocks rising by an average of 99% since Berkshire first disclosed its positions in August 2020. However, the yen has fallen by more than 20% against the dollar over the same period, tempering the gain in dollar terms.

Following the news, Berkshire filed a preliminary prospectus for a yen-denominated bond offering. It has issued yen debt in the past to hedge against the currency weakening against the greenback, which would reduce the dollar value of its investments in Japan.

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The five businesses, known as the “sogo shosha,” are sprawling holding companies with operations ranging from mining and energy to finance and real estate. Notably, their interests in oil and natural-gas projects have benefited from the surge in energy prices this year fueled by Russia’s invasion of Ukraine.

Berkshire’s Japanese purchases mark only the latest outlay in a big year of buying. It plowed an unprecedented $66 billion into stocks in the first three quarters of this year, and only sold $16 billion worth, making it a net buyer of nearly $49 billion of equities. It has also repurchased over $5 billion of stock, and handed Buffett’s appointed successor, Greg Abel, $870 million for his 1% stake in BHE in the second quarter.

Buffett has mostly stuck to domestic investments throughout his career — Berkshire’s biggest holdings include Apple and Coca-Cola, and it owns scores of American businesses including See’s Candies and Geico. That may be starting to change, as Berkshire continues to ramp up its Japan bets, and recently built a $4 billion stake in TSMC, a Taiwanese chip manufacturer.

On the other hand, Berkshire has sold about $900 million of shares in Chinese electric-vehicle maker BYD since July, after not touching its wager on the Tesla rival since 2008.

Read more: 100 years of stock-market history show the sell-off is likely only half done, says a 30-year market vet who called the downturn. Here are 3 criteria to watch to know when the worst is over.

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