Buffett makes $2 billion effortlessly! The "Stock God" holds five major trading companies with a return on investment rising to 200%

On Monday, the Nikkei 225 Index surged over 2,000 points, breaking through the 56,000-point mark for the first time in history — this also pushed the market value of Berkshire Hathaway’s Japanese assets, namely the five major trading companies, to over $41 billion.

Since 2019, Warren Buffett, who has stepped down as Berkshire Hathaway’s CEO, has made a series of large bets on Japanese stocks. On Monday, the Tokyo stock market soared, boosting the share prices of related stocks, with a single-day unrealized gain of nearly $2 billion. According to details released in Berkshire’s financial report, the investment cost was about $13.8 billion, meaning this investment has nearly doubled in value.

Today, this “Omaha Prophet’s” bet on Japan has become one of the most profitable chapters in his legendary investment career.

On Monday, the Japanese yen appreciated 0.8% against the US dollar, breaking below the 156 level. Since the yen is crucial for arbitrage trading (investors borrow yen to buy high-risk assets), the market will closely watch the yen’s movement. Meanwhile, the benchmark Japanese ETF listed in the US has increased by 10% year-to-date.

Citigroup predicts that the Nikkei 225 Index could rise to 57,000 points, and the TOPIX index could reach 3,800 points.

Led by Bruce Kirk, Goldman Sachs’ Japan research team stated that recent foreign and retail investor purchases of Japanese stocks have continued, and a strong earnings season has further boosted market enthusiasm, with 51% of companies exceeding market expectations.

Market expectations are that Japan will continue its low-interest-rate easing policy, which has historically benefited large export-oriented corporate groups. At the same time, policies aimed at maintaining the yen’s competitiveness are effectively protecting the valuation of Berkshire Hathaway’s core companies in its international investment portfolio.

It is worth noting that Berkshire’s investment in Japan itself is an arbitrage trade: Buffett borrows yen at an interest rate of about 1% to buy related stocks, which have a dividend yield of around 4%. The five major trading companies he invested in are diversified conglomerates operating across energy, metals, food, and other sectors, with substantial dollar income in their revenue, further enhancing their performance during the ongoing yen depreciation phase.

During the shareholder meeting last May, Buffett stated that investing in Japan is a long-term commitment. He revealed that he does not plan to sell these stocks over the next 50 years, and the history of the five major trading companies’ operations is very impressive. “They have different customs. They have different ways of doing business — and this is true around the world — we have no intention of trying to change what they do in any way because they are very successful,” Buffett continued. “We will not sell any stocks, and that will not change in decades. Investing in Japan fits our appetite perfectly.”