Buffett's shareholders' meeting, known as the “Spring Festival Gala for the investment community,” will open this week, and investors from around the world will gather in Omaha.
After Munger's death at the end of last year, the song became a hit at the shareholders' meeting. Buffett, 93, will be alone in receiving questions from analysts, shareholders, media, etc.
On this occasion, let's review one of stock god Buffett's most successful investments in recent years — Japanese stocks.
Judging from the point of time, after Buffett expressed his opinion that he was bullish and increase his holdings in Japanese stocks in April of last year, the “Buffett effect” clearly boosted sentiment, and the Nikkei Index experienced a round of accelerated increases in May and June.
At the beginning of this year, the Japanese stock market entered a big bull market.$Nikkei 225 (.N225.JP)$Not only did it break the 1989 record high, but it also rushed to 40,000 points many times. Buffett is also considered one of the influencing factors.
Berkshire, a subsidiary of stock god Buffett, announced in August 2020 that it would spend 6 billion US dollars to invest in five major Japanese trading companies, including$ITOCHU (8001.JP)$,$Marubeni (8002.JP)$,$Mitsubishi (8058.JP)$,$Mitsui (8031.JP)$and$Sumitomo (8053.JP)$. Buffett's shareholding ratio in the top five Japanese trading companies has continued to increase since 2020, and now this ratio has risen to 9%.
At present, this investment has entered the “harvest period”. Buffett revealed that Berkshire's investment costs for these five companies now total 1.6 trillion yen. By the end of 2023, the value of its holdings in these companies was 2.9 trillion yen. Berkshire's year-end unrealized US dollar income was 61%, reaching 8 billion US dollars.
Munger also praised this as a smart move with low risk and high return, describing it as a rare opportunity in 100 years and a godsend.
Also, on April 19, Buffett's Berkshire once again attracted widespread attention in the market. This time, they issued a large number of yen bonds, raising a total of 263.3 billion yen, making it the largest yen deal for overseas issuers since the Bank of Japan abolished the negative interest rate system.
Analysts believe that Berkshire is issuing Japanese yen bonds this time in order to lock in the current low interest rate of the yen and continue to increase Japanese stocks with the yen. At the same time, issuing bonds can also avoid the risk of foreign exchange fluctuations and increase the efficiency of capital use.
Investors should note, however, that the Nikkei 225 Index has dropped 7% from the historical high of 41087.75 points set at the end of last month, and is infinitely close to entering the 10% technical correction zone.
However, there are also market opinions that high interest rates in the US mean that the exchange rate of the yen against the US dollar has fallen by about 10% this year. Despite the risk of intervention by the Japanese authorities, judging from the long-term trend, the yen may remain weak. This will undoubtedly be a big advantage for Japanese stocks, which have a close inverse relationship with the yen exchange rate.
Therefore, investors at this Buffett shareholders' meeting need to keep a close eye on the stock market's views on the next trend in Japanese stocks and whether they will reveal whether they will continue to increase their positions with the five major trading companies.
Want to know more about Buffett's investment code? clicksAgency trackingOr check out the stock holders' positions in the picture below!
Editor/Somer