Warren Buffett’s decision to invest billions of dollars in Japan was, according to his business partner, “a no-brainer” and felt like a divine gift.
“It was awfully easy money,” said Charlie Munger, Buffett’s long-time confidant and vice-chair of Berkshire Hathaway (BRKA), in an interview with the Acquired podcast released this week. “It was like having God open a chest and pour money into it.”
In the summer of 2020, Berkshire revealed that it had acquired stakes of about 5% in each of Japan’s top five trading companies. At that time, the American industrial and insurance conglomerate invested $6.7 billion while informing shareholders that it could hold and potentially increase these holdings over the long term.
This year, with Japan’s stock markets soaring to 33-year highs, Berkshire disclosed that it had actually doubled down, increasing its stakes in each company to an average of over 8.5%. The American conglomerate still has room to maneuver, as it had previously stated that it might eventually raise its stakes in each company to 9.9%.
Japan’s Nikkei and Topix indexes have each surged more than 20% so far this year.
The companies supported by Berkshire – Itochu, Marubeni, Mitsubishi Corporation, Mitsui & Co., and Sumitomo – are known as “sogo shosha” or general trading companies in Japan. They play a crucial role in the country’s economy, participating in a wide range of industries, including energy, technology, and manufacturing.