"Warren Buffett invests $6 billion in Japan's five biggest trading houses"

[Lucius]

After Warren Buffett surprised the business world by investing in a gold mining company (by buying a stock worth $565 million), this did not seem to be an isolated case, because as much as $6.3 billion is invested in "Japan’s five biggest trading houses".

Warren Buffett has invested $6bn in Japan’s five biggest trading houses, giant conglomerates involved in everything from importing food and textiles to the technology and manufacturing industries, as he looks to diversify beyond the US.  The surprise move by Buffett, who has just turned 90, means he is one of the biggest shareholders in Mitsubishi Corp, Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp.

Buffett’s investment company, Berkshire Hathaway, has taken a 5% stake in each of the “sogo shosha”, or general trading companies, that play a vital role in the Japanese economy and are increasingly becoming global players.

It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market. In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.


Please use the quote option appropriately -> [TIPS] to avoid pyramid quotes

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[Coyster]

and in what he will invest outside the US market.

I would have said BTC, but it is out of the picture for Warren Buffet as he considers Bitcoin a speculative asset and he doesn't understand it. But what makes the news big is that companies/corporations and billionaire individuals are investing outside the U.S/fiat economy, and even if Buffet's Berkshire Hathaway will not invest any of their assets in Bitcoin now, other firms will, when they consider moving a bit out of the U.S economy and that's good for BTC. MicroStrategy has been one of those corporations that have diversified their assets into Bitcoin this year already, with a few others. With how things are going with the pandemic, economic plunge, inflation, recession, and how companies want to invest in anti-inflationary assets, Bitcoin could have a year like never before in 2021.

[NotATether]

This basically means he's hedging on Japan's industrial sector but he is skeptical of investing on Nikkei 225 itself. It makes sense for a guy like Buffett, because Nikkei 225 closed at one of it's lowest points almost 6 months ago on March 20th, at 16553 points. The index today is close to it's all time high that it hit several times over the last few months. He's not going to invest in something that has reached peak maturity and is poised to dip.

It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market. In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.

Well, if he was planning on selling his US stocks he would liquidate a large majority of his portfolio. His top 10 stocks by share numbers are all US companies so it looks like he'll just hold onto them during the recession. It makes no sense to sell them while they're at their lowest results.

[stompix]

It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market. In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.

Why would that be obvious?

Just two months ago he poured 10 billion, nearly twice as much to buy US-based companies.
Warren Buffett finally opens his wallet during the pandemic, with nearly $10 billion purchase

Then 2.1 billions in Bank of America :
https://markets.businessinsider.com/news/stocks/warren-buffett-bank-of-america-buying-years-pay-off-experts-2020-8-1029477087

If he would have been pessimistic about the US economy he would have dumped stocks, just as he did in previous years with IBM or General Electric.

[The Sceptical Chymist]

I would have said BTC, but it is out of the picture for Warren Buffet as he considers Bitcoin a speculative asset and he doesn't understand it.

I wouldn't say Buffett doesn't understand bitcoin completely--the man is extremely intelligent, and even if he doesn't understand exactly how bitcoin works, I'm pretty sure he knows what it is, and aside from that he's a value investor who invests in businesses (usually in the form of stocks) that are undervalued.  Bitcoin and anything crypto-related just doesn't fit his style, and I can't fault him for not wanting to break away from what he's been doing for decades.

MicroStrategy has been one of those corporations that have diversified their assets into Bitcoin this year already, with a few others.

Yeah, that's an interesting situation with MSTR and I wouldn't have predicted any big company would have purchased that much bitcoin to keep as their cash reserve.  They're really taking a risk by doing that, but their shareholders obviously don't seem to mind since MSTR's stock price has been headed upwards.  On the other hand, if there were any objections by shareholders, that could come up as an issue at their next annual meeting.

To me personally it's kind of depressing to see Warren Buffett moving money into Japan.  More often than not, he knows exactly what he's doing, and by making such large investments in those Japanese trading houses, he's demonstrating that he thinks things are going to be better over there than in the US--and probably for the long-term, since that's also how he tends to invest.  I'll be keeping my fingers crossed that the US situation doesn't deteriorate to the point where it can't be fixed.

[Upgrade00]

It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market. In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.

Warren Buffet has shown many times to have very strict investment policies which would be more of a major factor in his decision to diversify as opposed to his personal assessment of the U.S economy, in which he still holds major investments, and holds the idea that you should: 'never bet against America'
Also, world economies are more connected and synchronized now than ever before, sort of a global community. So, a global pandemic would most likely affect every country economically regardless of how well they handle the health crisis. Japan has not been left out of the economic effects of covid-19 as it is going through one of its worst economic situation;

The Japanese economy has shrunk at its fastest rate on record as it battles the coronavirus pandemic.

The world’s third largest economy saw gross domestic product fall 7.8% in April-June from the previous quarter, or 27.8% on an annualised basis.

[dothebeats]

This basically means he's hedging on Japan's industrial sector but he is skeptical of investing on Nikkei 225 itself. It makes sense for a guy like Buffett, because Nikkei 225 closed at one of it's lowest points almost 6 months ago on March 20th, at 16553 points. The index today is close to it's all time high that it hit several times over the last few months. He's not going to invest in something that has reached peak maturity and is poised to dip.

Fair enough. He's just applying the typical investor adage "buy low, sell high" and with the current state of Nikkei 225 doing some crazy rebounds since the drop in March and low activity in April, it makes sense to just skip it out since the boat has already left and is nearing its destination. As for the trading houses though, I'm clueless on what he's thinking on investing a hefty $6bn on that facet of Japan's economy.

It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market. In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.

He still owns a lot of stocks in US companies and has even bought out some for his own reasons or whatever. Also, the US market plunging deeper and deeper means that he could buy some of these potential money makers with a huge discount without a sweat, so in the end he'd still buy some more on the US market and just try to diversify his investments outside of the US to cut losses should his gamble on the West don't work pretty well.

[exstasie]

It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market. In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.

It's common sense, really. There is so much more upside in foreign equities right now. The stimulus and QE have kept a floor under the market, but ultimately American investors need to contend with a grave GDP contraction, stagnant corporate earnings, high unemployment, and bad growth prospects in the mid-term. The outlook is so much worse than elsewhere in the world.

Not only that, but both foreign developed and emerging markets have significantly under-performed compared to the US markets since the 2009 recovery. There is now much better value and growth potential in foreign markets.

Why It Might Be Time to Invest in Non-U.S. Stocks

As a matter of fact, things were already looking that way before the pandemic: Wall Street bets international stocks will top US equities in 2020 after a decade-long slump

[Darker45]

It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market. In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.

Why would that be obvious?

Just two months ago he poured 10 billion, nearly twice as much to buy US-based companies.
Warren Buffett finally opens his wallet during the pandemic, with nearly $10 billion purchase

Then 2.1 billions in Bank of America :
https://markets.businessinsider.com/news/stocks/warren-buffett-bank-of-america-buying-years-pay-off-experts-2020-8-1029477087

If he would have been pessimistic about the US economy he would have dumped stocks, just as he did in previous years with IBM or General Electric.

And so this is all just a matter of not putting all your eggs in one basket, of being less dependent on US-based companies. If both countries' economic performances are indeed a factor in Buffet's decision, it might be that Japan's economy right now is a little bit more stable than the US' and that the long term outlook of Japan's market is particularly bullish.

Well, while this appears a big move, Warren is actually no stranger to the Land of the Rising Sun's market, Berkshire Hathaway being the owner of billions of USD in Japanese government bonds.^[1]

[1] https://www.forbes.com/sites/robisbitts2/2020/09/01/warren-buffett-is-buying-japan--why-you-should-consider-it-too/#134d1cd962c6

[sunsilk]

and in what he will invest outside the US market.

I would have said BTC, but it is out of the picture for Warren Buffet as he considers Bitcoin a speculative asset and he doesn't understand it.

It's close to impossible that we'll see Warren Buffett investing to bitcoin or even at least stake a portion of his BH on it.

In any case, bad news for the US market, which has the worst results (in the last quarter) in the last 73 years.

Meanwhile, the president has tweeted this as election approaches.

https://twitter.com/realDonaldTrump/status/1301249968091455488

[(o)(o)ilikeboobs(o)(o)]

He seems to be paying more attention to economies other than the US.
The Japanese have a culture that uses more of the domestic goods and they have the best selling culture in the world. It can be said that Japan can self-supply goods instead of having to import them regularly from abroad, so trade in Japan develops by itself. Another part is that Japan has a very well developed and controlled economy. I believe that Buffet was right to choose this market to invest in.

[Lucius]

I would have said BTC, but it is out of the picture for Warren Buffet as he considers Bitcoin a speculative asset and he doesn't understand it.

I personally do not expect WB to ever buy BTC, but it would not be strange for him to invest in a crypto company if he estimated that it would be a good business opportunity - the world is changing and profit is profit regardless of whether it is created by investing in stocks or Bitcoin.

Well, if he was planning on selling his US stocks he would liquidate a large majority of his portfolio. His top 10 stocks by share numbers are all US companies so it looks like he'll just hold onto them during the recession. It makes no sense to sell them while they're at their lowest results.

WB obviously has a lot of confidence in some American companies like Apple which makes up as much as 44.18% of his total portfolio, and if I'm not mistaken, he started investing in Apple first time in 2016. I wonder what would happen if China said "Apple is no more welcome here" - it's unlikely to happen given that the number of workers working for Apple in China is around 5 million - but given that the US is doing a lot of damage to Chinese companies, the question is how long the Chinese can remain in a position not to defend themselves.

If he would have been pessimistic about the US economy he would have dumped stocks, just as he did in previous years with IBM or General Electric.

True, I have to admit that I didn’t know about his investments in the USA recently, so I get these $6+ billion as a significant amount which it actually isn’t for him.

Meanwhile, the president has tweeted this as election approaches.
https://twitter.com/realDonaldTrump/status/1301249968091455488

Donald J. Trump
@realDonaldTrump
The Dow Jones Industrial just closed above 29,000! You are so lucky to have me as your President
With Joe Hiden’ it would crash
😧

Nothing unexpected when it comes to Trump, but there are definitely interesting comments below the tweet that actually show what the average American thinks - the rich get richer even more, and the poor are hoping for the next stimulus check.

[tbterryboy]

Finally we are seeing Warren Buffett branching out, it took him 90 years to be able to see other things differently but he has started doing it finally. First of all this all started when he decided that he wanted to buy shares of Apple stocks, he never really went into tech related business before and thinking how he is close friends with Bill Gates it was a shock that he bought Apple shares but he did. After that this year he has changed so much, buying gold, buying stuff he doesn't buy, and now branching out to other nations.

Japan is a great place to buy shares from because they are working to sick, it is a cultural thing, so if you buy shares from a company that is doing well, they will continue to do well until they die, failing is not an option, I have read about boss' committing suicide when they realize they are bankrupting, that is how much they care about their work.

[stompix]

First of all this all started when he decided that he wanted to buy shares of Apple stocks, he never really went into tech related business before and thinking how he is close friends with Bill Gates it was a shock that he bought Apple shares but he did.

Oh really? What about IBM?
He bought shares in the company starting from 2011, he also bought 2.1 billions worth of Oracle stocks before.

True, I have to admit that I didn’t know about his investments in the USA recently, so I get these $6+ billion as a significant amount which it actually isn’t for him.

Seems like the move makes a lot of sense now that I started looking at some articles about his investments.
He issued yen based bonds before the pandemic, almost a year ago, and also he has tons of money, currently, over 100 billion to start purchasing things. But, the most important clue why he did that is probably other.
Remember how I said he bought a gas transport company for 10 billion, by that time I had no idea about this and how it could be related:

Some have speculated that the move is in line with Berkshire Hathaway’s recent move to increase LNG assets as the price of liquefied natural gas has increased 40% in recent months. In July, it acquired the gas transmission and storage business of Dominion Energy.
The trading houses all have LNG assets around the world. Indeed, Mitsubishi was the first in the world to transport LNG from Alaska to Tokyo back in the 1960s.

You don't invest in gas, oil or electricity if you're not betting on economic recovery and growth in manufacturing and demand, so probably in his mind, he's more bullish than Trump    But in the end, even if he thinks so, it doesn't mean he will be right, I think we're giving him way too much credit sometimes.

[hugeblack]

this did not seem to be an isolated case, because as much as $6.3 billion is invested in "Japan’s five biggest trading houses".
It is now more than obvious what the WB thinks about the US economy and it is only a question of what he will sell next, and in what he will invest outside the US market.

What is the difference between investing in commercial homes in Japan and investing in US companies' shares? Is not Japan a strong ally of the United States, and its economy will be affected mainly by the economy of the United States?
The worst thing we can expect is an economic shock in the near term in the US market, especially after the excellent numbers of some stocks, and therefore he is investing in Japan and has not moved away much to the European Union or other countries.

You will not understand what is happening until it has occurred, and in most cases the image that the media has presented does not seem real.

[suzanne5223]

Buffet is a smart investor and his invests in Japan was not all about what he thinks about the US economy worse situation cause Japan has economy issue before the pandemic but Buffet actually sees Japan economy as an opportunity for him to make money cause Japan domestic product experienced 7.8% fall due to lack of funds as at May and the country was now analyst to do better in the coming months despite the recession.
This is the reason why he pumps his money in the top four trading companies.

[sunsilk]

Meanwhile, the president has tweeted this as election approaches.
https://twitter.com/realDonaldTrump/status/1301249968091455488

Donald J. Trump
@realDonaldTrump
The Dow Jones Industrial just closed above 29,000! You are so lucky to have me as your President
With Joe Hiden’ it would crash
😧

Nothing unexpected when it comes to Trump, but there are definitely interesting comments below the tweet that actually show what the average American thinks - the rich get richer even more, and the poor are hoping for the next stimulus check.

Truth. Those comments below show what were the sentiments of the people and what they're going through right now. The funny part that I've read on those comments were about the emoji's. 

Buffet is a smart investor and his invests in Japan was not all about what he thinks about the US economy worse situation cause Japan has economy issue before the pandemic but Buffet actually sees Japan economy as an opportunity for him to make money cause Japan domestic product experienced 7.8% fall due to lack of funds as at May and the country was now analyst to do better in the coming months despite the recession.
This is the reason why he pumps his money in the top four trading companies.

What he did is just like what Japan's Softbank do with the US companies and investments that they're part of. They see both end to end investment opportunities which they think that needs funding and will make them money. Although, from what I've read from Softbank, they have a failed investment with a/some startups.

[Lucius]

stompix, you've connected some things well, but I didn't doubt that WB was doing something without careful planning - but not only him but a large number of experts he hires to give him advice on what to invest in. First investing in gas transport company and now in Japan trading houses which have LNG assets is very clever move, but as you say yourself, the WB also has failed investments that are rarely talked about.

What is the difference between investing in commercial homes in Japan and investing in US companies' shares? Is not Japan a strong ally of the United

WB did not invest in commercial homes, but in "Japan’s five biggest trading houses", that's a pretty big difference. Japan has indeed been a major ally of the United States since the time it was forced to do so with two atomic bombs, and today there are about 50 000 U.S. troops stationed to make sure Japan doesn't change its mind - and what's even stranger is that Japan pays 75% all the costs caused by those military forces.

The Japanese government paid ¥217 billion (US$2.0 billion) in 2007 as annual host-nation support called Omoiyari Yosan (思いやり予算, sympathy budget or compassion budget). As of the 2011 budget, such payment was no longer to be referred to as omoiyari yosan or "sympathy budget". Japan compensates 75 percent of U.S. basing costs — $4.4 billion.

fiulpro, your post is deleted because youobviously have a problem with using the quote option - it is completely unnecessary to quote the entire OP to respond to a post.

[erikoy]

Sure this guy has lot of money. I do not know why he still want more when there is enough already to live even the next, next generations of his family. He is sccessful enough and prove already that he is good at investment. However, I thought of this guy do not know how to give. As I do a quick search, he actually donated his billions of $.  You can see in this link below, https://www.nytimes.com/2020/07/08/business/dealbook/warren-buffett-donations.html
Anyway, hope to see him more reaching out the poorest among the poorest of people in this world to start a living like creating livelihood for them.

[AicecreaME]

I think Warren is just using diversification method for his hard earned money. This man is really smart and really knows how to make his money work for him. He invests on something profitable and has a reputable name and value.

Warren is being cautious on where to invest as it is known that US had some kind of economic decline during the early times of this pandemic. Maybe he thinks that Japan has stable economy and will have economic growth more than any other countries economy that’s why he decided to entrust his money to invest in Japan’s trading houses.

This is a brilliant technique. Having multiple stream of income and different investments so that if ever unfortunate events happen to one, there are another to support him.