Buffett’s Affection for Japan Likely to Grow Even Further with $8 Billion Paper Gain

Welcome to Extreme Investor Network, where we provide you with unique insights and valuable information to help you navigate the world of investing. Today, we are discussing Warren Buffett’s latest moves in Japan through his company, Berkshire Hathaway.

Warren Buffett, also known as the Oracle of Omaha, has a longstanding love for the land of the rising sun. Berkshire Hathaway recently priced 263.3 billion Japanese yen of bonds worth $1.7 billion, marking one of its biggest yen bond sales. This move allows Berkshire to hedge against currency risks when making investments in Japan.

In 2019, Berkshire used the proceeds from Japanese debt sales to acquire stakes in five local trading houses – Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. As of the end of 2023, Berkshire had made unrealized gains of more than $8 billion on these investments. Buffett has pledged not to increase his stakes in these companies beyond 9.9% without specific approval from each company’s board of directors.

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The recent bond sale has sparked speculation that Buffett may be looking to make new investments in Japan. The seven-tranche bond deal offers coupons ranging from 0.974% to 2.498%, providing Berkshire with additional income from dividends paid by the Japanese trading companies.

Chamath Palihapitiya, from Social Capital, has expressed admiration for Buffett’s strategic moves in Japan, calling him “the greatest of all time.” Buffett’s interest in the Japanese market was ignited by the dividend growth and opportunities he saw in the trading houses. He has even visited Japan with his designated successor, Greg Abel, to meet with the heads of the Japanese firms.

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