Buffett says Berkshire will continue to increase investments in Japan’s trade houses

Berkshire Hathaway is committed to its Japanese investments in the long run and has reached an agreement with companies to own the original 10% ceiling, Warren Buffett said in his annual letter to shareholders, published on Saturday.

“From the very beginning, we also agreed to keep Berkshire’s shares under 10% of each company’s shares. But when we approached this limit, the five companies agreed to moderately relax the ceiling,” Buffett said. “Over time, you will probably see that Berkshire’s ownership of all five increases to some extent.”

Japanese names in Berkshire’s portfolio are Idoche., Married., Mitsubishi., Mitsui and SumitomoS All five are the largest “Sogo Shosha” or commercial houses in Japan, which invest in different sectors in the country and abroad – “in a way similar to Berkshire himself,” said Buffet. Berkshir bought for the first time at companies in July 2019.

At the end of 2024, the market value of Japanese shows in Berkshire came to $ 23.5 billion, with total costs being $ 13.8 billion. The investor pointed out the management of the companies, the relationship with their investors, and their capital strategies.

Buffette has sold Japanese debt to financing Berkshire’s shares in Japanese companies. The issuance of yen -denominated bonds also allows Buffett to reduce the risks associated with the currency. Berkshire reported $ 2.3 billion in profits after taxes in its Japanese bonds, of which $ 850 million has been from 2024 only because of the dollar, which estimated about 11% compared to the 2024 yen.

“We like the current mathematics of our balanced strategy,” Buffett said. He added that the designated heir “Greg (Abel) and I have no look at the future currency courses, so I am looking for a position that brings the neutrality of the currency.”

Oracle of Omaha predicts that annual dividend income from its share in the five Japanese commercial houses will come to about $ 812 million.

“I expect that Greg and his potential heirs will take this Japanese position for many decades and that Berkshire will find other ways to work productively with the five companies in the future,” Buffett said.

To be sure, the five Japanese commercial houses have fought in the last year. Itochu and Marubeni decrease by over 8% every time, while Mitsubishi dropped by 26%. Mitsui and Sumitomo lost 16% and 10% respectively during this period.