Warren Buffett’s Japanese assets top $31 billion as Berkshire Hathaway keeps buying

Warren Buffett’s Japanese investments have crossed $30 billion, and Berkshire Hathaway keeps adding more.

The Oracle of Omaha’s long game with Japan’s five powerful trading companies (Mitsui, Mitsubishi, Itochu, Marubeni, Sumitomo) has turned into one of his largest foreign equity plays, as the total value of those stock holdings has rallied by 392% since he first went public with them in Q3 of 2020 on Warren’s 90th birthday.

Back then, Berkshire’s positions were worth around $6.3 billion. Today, they sit at roughly $31 billion, thanks to both continued buying and stock gains ranging between 227% and 551%.

Berkshire had been quietly building these stakes for a year before Warren made them public. At first, he said Berkshire held about 5% in each of the five companies.

But recent filings show that two of those holdings have now gone above 10%, suggesting he has continued to buy despite earlier promises to stay below that level.

Some of the additional purchases may not even have been disclosed yet, meaning Berkshire’s real exposure to Japan could be higher than what’s known.

Berkshire boosts its stakes in Mitsui and Mitsubishi

This week, Mitsui & Co. confirmed in a statement that Berkshire’s insurance arm, National Indemnity, owned 292,044,900 shares as of September 30, equal to about 10.1% of the company. At Friday’s close, those shares were worth nearly $7.1 billion, making Berkshire Mitsui’s largest shareholder.

The number is up from 285,401,400 shares, or a 9.7% stake, reported back in March. Mitsui said Berkshire had earlier informed it that voting rights had exceeded 10%, but this filing was the first to reveal the exact amount.

Two weeks earlier, Mitsubishi also confirmed that Berkshire’s holding had climbed to 10.2%, up from 9.7% in March. The three other companies (Itochu, Marubeni, and Sumitomo) haven’t issued updates since spring, but market analysts expect those stakes could also have quietly increased.

Warren had initially agreed not to raise Berkshire’s ownership above 10% without approval from each firm. But in his February 2024 annual letter to shareholders, he wrote, “As we approached this limit, the five companies agreed to moderately relax the ceiling.” He added, “Over time, you will likely see Berkshire’s ownership of all five increase somewhat.” That opened the door for him to expand beyond the original cap.

Occidental struggles while Berkshire’s Japan bet soars

Warren said in 2023 that he bought into these Japanese firms in 2020 because “they were selling at what I thought was a ridiculous price, particularly the price compared to the interest rates prevailing at that time.” He later told shareholders Berkshire plans to keep them for “50 years or forever.”

But while Berkshire’s Japan holdings have performed, its Occidental Petroleum investment hasn’t.Warren began buying Occidental shares in 2022, building a 26% stake now worth around $12 billion.

The company’s CEO, Vicki Hollub, 65, has led the firm since April 2016, but the stock has fallen from $76 to $45, producing a negative 20% total return, including dividends.

Over the same period, the Energy Select Sector SPDR, led by Exxon Mobil and Chevron, has gained over 90%, while competitors like Diamondback Energy and EOG Resources have doubled.

At Berkshire’s 2023 annual meeting, Warren called Hollub an “extraordinary manager.” Still, Barron’s estimates Berkshire’s average cost per Occidental share in the low $50s, leaving him in the red.

He’s long preached about keeping strong balance sheets at both Berkshire and its investments (like Apple, Coca-Cola, and American Express) but with Occidental, he broke that rule. And now, he’s paying the price. So are Occidental’s other shareholders.

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