Warren Buffett Berkshire Has Been Selling US Stocks. Where It’s Buying Now

Warren Buffett’s Berkshire Hathaway (BRK.B) is doubling down on Japan. In a regulatory filing released Monday, the 94-year-old investing legend revealed that Berkshire had increased its stakes in Japan’s five largest trading houses—Itochu ($ITOCY), Marubeni ($MARUY), Mitsubishi ($MBI), Mitsui ($MITSY), and Sumitomo ($SSUMY)—by over 1 percentage point each. Buffett’s firm now holds between 8.5% and 9.8% of each company.

This move comes as Buffett continues to scale back his U.S. equity exposure. Berkshire sold more than $134 billion worth of stocks in 2024, including trimming its massive positions in Apple ($AAPL) and Bank of America ($BAC). Buffett is sitting on a record cash pile of $334 billion, making investors wonder where the “Oracle of Omaha” will deploy capital next. (More: Warren Buffett Berkshire now hold a record $334 BILLION in cash, What does he know that we don’t?)

A Long-Term Commitment to Japan

In his 2024 annual shareholder letter, Buffett reiterated his commitment to these Japanese investments, confirming Berkshire’s agreement with the trading houses to exceed the previous 10% ceiling on ownership. Buffett first began purchasing stakes in these companies in 2019 and made his positions public in August 2020 on his 90th birthday.

The five trading firms, collectively known as “sogo shosha,” are diversified conglomerates that invest across a wide array of sectors both in Japan and internationally. Buffett himself has compared their business models to Berkshire Hathaway’s own. These companies have attracted Buffett with their strong dividend growth, prudent capital allocation, and shareholder-friendly management practices.

Currency Hedging: A Strategic Move

Part of Buffett’s strategy in Japan includes hedging currency risks. Berkshire has sold Japanese debt and used the proceeds to fund these equity positions, profiting from the spread between the dividends collected from the trading houses and the coupon payments owed on the debt. At the end of 2024, the combined market value of Berkshire’s holdings in these Japanese firms totalled $23.5 billion, compared to their initial aggregate cost of $13.8 billion.

Buffett’s Japan Trip and Future Outlook

In 2023, Buffett visited Japan alongside his designated successor, Greg Abel, meeting with executives from the five trading houses. During that visit, Buffett expressed his desire for Berkshire Hathaway to be long-term partners and shareholders, stating he’d like to own the companies “forever.”

Buffett’s growing focus on Japan underscores his search for value beyond U.S. borders. With U.S. equities appearing overvalued in his view, Buffett has found Japan’s trading houses to offer stable returns and attractive dividends. His disciplined, Graham-inspired value investing approach continues to guide his moves—even after more than seven decades in the investing world.

Conclusion

As Berkshire Hathaway cuts back its U.S. holdings, investors should pay close attention to Buffett’s increasing interest in Japan. His latest moves suggest he sees opportunity abroad, especially in companies like Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo.

With stakes now approaching 10%, and Buffett signaling a willingness to go beyond that, the Oracle of Omaha’s bet on Japan is bigger than ever.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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