Core Insights - Berkshire Hathaway's investment in five Japanese trading houses has surpassed $30 billion, with Warren Buffett continuing to increase his holdings [1][2] - The value of these positions has risen from approximately $6.3 billion in August 2020 to $31.0 billion, marking a 392% increase [2] - Buffett has publicly acknowledged that two of the stakes have exceeded 10%, with Mitsui being one of them, where Berkshire owns 292,044,900 shares valued at around $7.1 billion [3][4] Investment Details - Berkshire's stake in Mitsui is now 10.1%, an increase from 9.7% reported in March [4] - Mitsubishi reported a similar increase in Berkshire's holding to 10.2% from 9.7% [5] - There is speculation that the stakes in the other three companies—Itochu, Marubeni, and Sumitomo—may also have surpassed 10% [5] Strategic Outlook - Buffett indicated that the five companies agreed to relax the ceiling on ownership, allowing for potential increases in stakes over time [6] - Buffett's initial attraction to these stocks was due to their perceived undervaluation compared to prevailing interest rates [7] - Berkshire plans to hold these Japanese stocks for the long term, potentially "50 years or forever" [7]

Core Viewpoint - Berkshire Hathaway has increased its investments in Japan, particularly in Mitsubishi Corp. and Mitsui & Co., leading to a rise in shares across the sector [1][3]. Group 1: Investment Details - A Berkshire unit raised its voting rights stake in Mitsubishi to 10.23%, up from 9.74% in March [2]. - Mitsui confirmed that Berkshire also increased its holding, although it remains below 10% [2]. - As of March, Berkshire owned 9.82% of Mitsui shares [2]. Group 2: Market Reaction - Shares in Japanese trading houses experienced a rally following the announcement of Berkshire's increased stakes [3]. - Analysts noted that Berkshire's continued ownership has drawn renewed attention to Japan's trading firms, which are becoming more proactive in returning value to shareholders [5]. Group 3: Strategic Context - Warren Buffett has been gradually building positions in Japan's five largest trading firms since 2020, which include Mitsubishi, Mitsui, Marubeni, Itochu, and Sumitomo [4]. - These conglomerates operate across various industries, including oil and gas production and convenience stores [4]. Group 4: Regulatory Changes - Berkshire initially aimed to keep its holdings below 10%, but Japanese companies have agreed to "moderately" relax this limit [6]. Group 5: Economic Indicators - Japan's GDP grew by 0.3% sequentially in Q2 of 2025, surpassing market expectations of 0.1% and marking the fifth consecutive quarterly expansion [7]. Group 6: ETF Performance - Japan-focused ETFs have outperformed the SPDR S&P 500 ETF over the past month, indicating strong market interest [8]. - Despite recent gains, Japanese stocks remain attractively valued compared to U.S. stocks, with various ETFs showing lower P/E ratios than the S&P 500 [9].

Group 1 - Warren Buffett is passing the CEO position of Berkshire Hathaway to Greg Abel in January 2026, who currently leads Berkshire Hathaway Energy and serves as vice chair of non-insurance operations [1] - Abel has expressed interest in increasing Berkshire's stake in five Japanese trading companies by 5x [2] - The five Japanese companies of interest are Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo, all of which are soga shosha, or trading houses, operating across multiple industries [4][5] Group 2 - These Japanese companies offer attractive dividends, with all except Itochu having yields over 3%, while Itochu's yield is 2.2% [5] - The market capitalizations of these companies vary, with Mitsubishi being the largest at approximately $80 billion, followed by Itochu at $74 billion, Mitsui at $60 billion, and Marubeni and Sumitomo at around $31 billion to $32 billion [6] - Buffett and Abel were drawn to these stocks due to their attractive valuations, with Buffett noting they traded at "ridiculously low prices" [8] Group 3 - Abel envisions holding positions in these companies "for 50 years or forever" and would prefer to increase Berkshire's investment from $20 billion to $100 billion [9] - Berkshire Hathaway has limitations on increasing its stakes in these Japanese stocks, initially agreeing to keep holdings below 10% of each company's outstanding shares, although this ceiling has been moderately increased [10] - Other investors can still consider these stocks as good picks due to their attractive valuations, with Sumitomo having a trailing-12-month price-to-earnings ratio of 8.12 [11] Group 4 - The Japanese trading houses provide solid dividends, with Marubeni tripling its dividend payout over the last three years and Mitsui more than doubling its dividend during the same period [12] - Investing in these Japanese stocks offers diversification similar to an exchange-traded fund (ETF) that includes multiple sectors [12] - While aggressive growth investors may not find these stocks appealing, those seeking steady growth should consider them, especially given Buffett and Abel's long-term interest [13]