Warren Buffett’s decision to invest billions of dollars in Japan has paid off.

 

 Warren Buffett’s decision to invest billions of dollars in Japan has paid off.

    In the summer of 2020, Buffett’s investment conglomerate Berkshire Hathaway bought stakes of about 5% in each of Japan’s top five trading companies.

    Berkshire invested $6.7 billion and told shareholders it could increase those holdings in the long run. This year, it doubled down as Japan’s Nikkei and Topix indexes rose over 20%. Berkshire’s stakes in each company now average 8.5%.

    The firms backed by Berkshire include Itochu, Marubeni, Mitsubishi, Mitsui & Co., and Sumitomo. They deal in various industries, including energy, tech, and manufacturing. The stocks are up over 30% this year, with Marubeni shares rising by 62%. Marubeni has more than tripled in price since Buffett’s investment.

    According to Buffett’s partner, Charlie Munger, Berkshire was able to pull off its biggest bet outside the U.S. because of Japan’s historically low-interest rates.

    That meant Buffett’s investment conglomerate could borrow cheaply ten years in advance and use the funds to buy stocks with 5% dividends. “These companies were really old and had all these cheap copper mines and rubber plantations, so you could borrow [easily],” the 99-year-old billionaire said in a recent interview.