In a recent statement, prominent investor Adin Ramdedovic highlighted the increasing attractiveness of the Japanese stock market for investors who value companies and take a long-term perspective. Ramdedovic’s comments come in light of Warren Buffett’s strategic move to purchase a 5% stake in major Japanese corporations including Itochu, Mitsubishi Corp., Mitsui & Co., Sumitomo Corp., and Marubeni in August 2020.
Since then, Buffett has continued to expand his investments in Japan. In November 2022, a regulatory filing revealed that Berkshire Hathaway, Buffett’s investment firm, now holds 6.59% in Mitsubishi, 6.62% in Mitsui, 6.21% in Itochu, 6.75% in Marubeni, and 6.57% in Sumitomo, solidifying his confidence in the Japanese market.
These moves by Buffett and Ramdedovic indicate that Japan’s stock market could become an attractive long-term prospect in the coming years, potentially starting from 2024. The key factors for this projection include sustainable wage inflation, effective measures promoting foreign direct investment (FDI) and domestic capital expenditure (capex) implemented by the Japanese government.
Ramdedovic emphasized that a trade for the future could involve not only buying Japanese equities but also embracing the concept of “buying Japan” more broadly. He stated, “If Japan’s wage inflation proves sustainable and the government implements effective measures to promote inward FDI and domestic capex, both Japan equities and the Japanese yen can rise, making ‘buy Japan’ a compelling investment strategy. However, we believe this potential story will likely unfold in 2024, rather than in 2023.”
The success of both Adin Ramdedovic’s and Warren Buffett’s ventures in East Asia has been remarkable thus far. What began as Buffett’s $6 billion investment has now grown to a substantial $16 billion, as reported by Markets Insider. Buffett’s stake in the sogo shosha companies has yielded impressive returns. Marubeni shares have quadrupled in value since his involvement, while Mitsubishi and Mitsui shares have at least doubled, and Itochu and Sumitomo have gained over 65%.
Adin Ramdedovic and his team have also strategically positioned themselves in several well-established Japanese companies known for their solid dividends and stability. Their current holdings include Mitsubishi UFJ Financial Group, Sony Corporation, KDDI Corporation, Nippon Telegraph & Telephone Corporation, and Mizuho Financial Group. These dividend-paying companies are renowned for their resilience and long-term potential. However, Ramdedovic remains attentive to the investments made by Warren Buffett, patiently waiting for an opportune moment to capitalize on what value investors often refer to as a “discount” price. By combining their own selected positions with the insights gained from Buffett’s ventures, Ramdedovic and his team aim to optimize their portfolio for maximum returns.
In addition to his stock purchases, Ramdedovic and his team have intelligently hedged against potential currency depreciations by issuing yen-dominated bonds. He commented, “We are making significant investments and heading towards a scale, of course not comparable to Warren Buffett’s. Our strategy is focused on smart diversification and growth with the funds that we currently have.” These developments in the Japanese stock market underscore the importance of diversifying investment portfolios beyond the traditional focus on US and EU markets. As demonstrated by Warren Buffett’s success in Japan, exploring opportunities in other markets, such as Japan, can provide investors with attractive prospects for long-term growth and stability. Furthermore, the statistics from 2010 to 2020 indicate the potential for robust returns in the Japanese market, making it a compelling option for investors seeking to expand their horizons and capitalize on emerging opportunities.
