Yahoo Financeยท2025-09-21 17:27Core Insights - Warren Buffett has invested over $400 million in two major Japanese trading houses, Mitsubishi and Mitsui, indicating a strategic focus on large, stable companies capable of absorbing significant capital [1][8][10] - The current investment landscape presents challenges for Buffett, as stock prices have risen faster than financial results, leading to high valuations, particularly in the S&P 500 [2][3] Investment Strategy - Buffett's investment strategy is centered around long-term holdings in companies with strong management and solid balance sheets, which aligns with his historical preference for maintaining investments indefinitely [6][11] - The recent investments in Mitsubishi and Mitsui are seen as opportunities to capitalize on attractive valuations, with Mitsubishi trading below 1.5 times book value and Mitsui even lower at around 1.25 times [10][12] Company Characteristics - The five major Japanese trading houses, including Mitsubishi and Mitsui, are characterized by their diversified operations across various industries, strong financial health, and a conservative approach to returning capital to shareholders [11][12] - These companies typically reinvest a significant portion of their earnings into business growth rather than issuing new shares or paying high dividends, making them appealing to Buffett [12][13] Future Outlook - Buffett anticipates that his successor, Greg Abel, will continue to work productively with these trading houses, suggesting a long-term partnership and potential for further investments [13] - Berkshire Hathaway has received permission to exceed the 10% ownership threshold in these companies, indicating a willingness to deepen its investment positions as opportunities arise [13]