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Warren Buffett consistently demonstrates a knack for spotting undervalued companies and making calculated, often surprising moves.
One of his more recent ventures took an unexpected turn to the Far East, with stakes in five Japanese companies ballooning to $17 billion in less than three years.
In August 2020, Buffett’s Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) veered away from its familiar U.S.-based investments to snap up 5% stakes in the following companies:
Itochu Corp (OTC:ITOCF)
Marubeni Corp (OTC:MARUF)
Mitsubishi Corp (OTC:MSBHF)
Mitsui & Co Ltd (OTC:MITSY)
Sumitomo Corp (OTC:SSUMF)
Being dubbed the “Oracle of Omaha” is no small feat, and the Japanese investments illustrate why he holds the title.
Since those initial investments, he's added more to the positions, to the tune of 7.4%. With the Japanese stocks soaring to multi-decade highs, the $6 billion investment is now worth $17 billion, a gain of about 183%, placing Berkshire’s Japanese holdings amongst its largest positions.
Read also: If You Invested $1,000 In Berkshire Hathaway When Warren Buffett Became The World’s Richest Person, Here’s How Much You’d Have Today
By the end of 2021, only nine of Berkshire’s top 15 holdings were over the $4 billion mark — now, three of its Japanese holdings sit above that line, according to Business Insider.
Buffett isn’t one to make moves without a calculated strategy. In Berkshire’s annual meeting in May, he pointed out that the companies were “ridiculously” undervalued, deeply ingrained in industries familiar to Berkshire, and large enough to make a significant impact on Berkshire’s earnings.
But what does Buffett’s Far East venture mean for the everyday investor? There are opportunities to follow in Buffett’s footsteps by investing in Japanese equities through exchange-traded funds.
Two notable options are the iShares MSCI Japan ETF (NYSE:EWJ) and the WisdomTree Japan Hedged Equity Fund (NYSE:DXJ) The former is vulnerable to fluctuations in the value of the Japanese yen versus the dollar, while the latter hedges against such currency swings, providing a safer bet for U.S.-based investors.
Read Next: Japanese Stocks Rallied Five Weeks In A Row After Warren Buffett’s Bet, Outperforming A Nearly Flat S&P 500
Photo: Shutterstock
Posted In: BRK-A BRK-B DXJ EWJ ITOCF MARUF MITSY MSBHF SSUMF
