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Key Takeaways
- Warren Buffett's Berkshire Hathaway has raised its stakes in five Japanese trading houses, according to reports.
- Buffett said in his annual letter of shareholders that the firm was likely to buy more shares from Japanese conglomerates.
- Berkshire Hathaway ended 2024 with over $330 billion in cash and cash equivalents. This is about twice the amount of cash it had at the end the previous year.
Berkshire Hathaway’s (BRK.A/BRK.B), owned by Warren Buffett, has reportedly increased its stakes in Japan’s five largest trading houses.
Berkshire on Monday disclosed it had increased its stakes in the five trading houses—Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo—by between 1 percentage point and 1.7 percentage points, giving the firm stakes ranging from 8.5% to 9.8%, according to The Wall Street Journal.
Buffett said that in his letter to shareholders from three weeks prior, he was likely going to buy more stock of the firms. He praised the management of both firms for their prudent use of cash, and modest executive compensation, according to American standards.
Buffett agreed in his shareholder letter that he would not buy more than 10% each of the companies when he started buying stocks in 2019. He revealed recently that the firms agreed to relax this restriction, allowing Berkshire to add to its holdings in addition to the purchases announced Monday.
Berkshire Cash Reserves doubled in the last year
Buffett was a net seller for the past year. Berkshire’s cash totaled $334.2billion at the end last year, according to the latest annual report, which is more than double its size from the previous year. Buffett said in his annual letter, that despite Berkshire’s reduction in its tradable securities, the “substantial” majority of Berkshire investor’s money is still in equity.
Buffett’s stock sale has sparked alarm among some investors who are wary of soaring prices. Those concerns have run headlong into President Trump’s tariff policies in recent weeks, causing the S&P 500 to fall into its first correction since 2023 last week. The uncertainty around tariffs and their effects has partially undermined the narrative of “U.S. exceptionalism” that had driven the American Stock Market’s outsized gains over the last two year.
Japanese stocks have traded sideways since 2023, after a rally in 2023. The Nikkei 225 Index is down about 6% in the past year, while the S&P 500 has—even with its recent pullback—advanced nearly 10%.
