Thread by @SStapczynski

Warren Buffet bets billions on Japan's trading houses

Berkshire Hathaway announced that it has acquired a 5% stake in each of the top traders -- Itochu, Mitsubishi, Mitsui, Marubeni and Sumitomo. That's worth ~$6.5 billion

Berkshire accumulated the stakes over the last year

Buffett: “The five major trading companies have many joint ventures throughout the world and are likely to have more of these partnerships. I hope that in the future there may be opportunities of mutual benefit.”

Trading house stocks are popping after announcement. Here is Itochu, which rose as much as 5% today

This bit is also interesting:

➡️ Depending on price, Berkshire Hathaway may increase its holdings up to a maximum of 9.9% in any of the five investments.

At 9.9%, they would become the top stakeholder at any of the all of the top trading houses (except Marubeni)

For the LNG fans:

Berkshire recently purchased a controlling stake in the Cove Point LNG project in Maryland

Sumitomo Corp is the major LNG buyers from that project

#Synergy

Warren *BUFFETT*

Our story here with a few more details and background: bloomberg.com/news/articles/…

Why did Buffett invest in Japan’s traders? One explanation here:

While Buffett has offered few details on what attracted him to trading houses, this 1977 letter to stockholders may reveal clues. There, he laid out the 4 business qualities that Berkshire values

This article sees how the traders stack up to them

bloomberg.com/news/articles/…

Stock price for Japan's trading companies extend gains on Tuesday

Sumitomo: +5%
Mitsubishi: +4.6%
Marubeni: +4.5%
Mitsui: +3.9%
Itochu: +2.7%

#BuffettBump