REUTERS/Jim Young
- Warren Buffett has scored a $1.4 billion gain on five Japanese stocks.
- Berkshire Hathaway revealed 5% stakes in the trading houses last August.
- The stocks have surged 23% since then.
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Warren Buffett’s Berkshire Hathaway has scored a $1.4 billion gain on its surprise investment in five Japanese trading houses.
The famed investor’s conglomerate disclosed 5% stakes in Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo at the end of August. Berkshire said it purchased the shares during the preceding 12 months.
The five stocks have rallied an average of 23% since then, boosting the combined value of Berkshire’s stakes from below $6.4 billion to nearly $7.7 billion in under six months.
However, the quintet of Japanese stocks has trailed the Nikkei 225. The benchmark index has jumped by about a third since the end of August, and surged past 30,000 on Tuesday for the first time since 1990.
Buffett's Japanese bets are unusual, as the investor has mostly preferred American companies such as Apple, American Express, Bank of America, and Coca-Cola throughout his career.
He was likely attracted by the trading companies' depressed valuations, their similarities to Berkshire, and the potential for joint ventures. He may also see them as hedges against inflation and a weaker dollar, and probably jumped at the chance to tap his company's vast cash reserves.