Warren Buffett Is Massively Redeploying Capital Outside The United States

As the American stock market experiences a turbulent period, Warren Buffett, dubbed the Oracle of Omaha, has made a strategic withdrawal from certain American assets to bolster his positions in Japan.

Buffett’s Strategic Exodus from the American Market

Warren Buffett, through his holding company Berkshire Hathaway, has undergone a major restructuring of his portfolio at the end of 2024. Indeed, the American billionaire sold 117 million shares of Bank of America, representing about $5.5 billion, as part of a broader strategy of disengagement from the American market, a move similar to the sale of 49% of his Apple shares.

This decision has helped raise Berkshire Hathaway’s cash to a record level of $334 billion.

This move seems particularly wise in light of the recent performances of the American market. The S&P 500 has indeed lost up to $5.5 trillion in market capitalization since the beginning of the year, thereby confirming the legendary insight of the 94-year-old investor.

This strategic reorientation fits into a broader trend for Berkshire Hathaway, which has become a net seller of American assets. The company thus seems to anticipate a period of uncertainty for the American economy, preferring to secure its positions and explore new opportunities internationally.

Japan as a New Preferred Investment Terrain

Recently published regulatory documents reveal that Berkshire Hathaway has significantly increased its stakes in five major Japanese trading houses:

• Mitsui: from 8.09% to 9.82%.
• Mitsubishi: from 8.31% to 9.3%.
• Marubeni: from 8.23% to 9.29%.
• Sumitomo: from 8.23% to 9.29%.
• Itochu: from 7.47% to 8.53%.

In his annual letter to shareholders, Warren Buffett explains this strategy by highlighting the similarities between these Japanese conglomerates and Berkshire Hathaway:

Each of these large companies, in turn, holds stakes in a wide range of businesses, many of which are based in Japan, while others operate worldwide.

This approach allows Buffett to diversify his investments globally while remaining true to his investment philosophy.

These acquisitions are not recent, as Berkshire Hathaway began accumulating shares in these Japanese companies back in 2019. However, the recent acceleration of these investments reflects a strengthened confidence in the Japanese economy, at a time when geopolitical and economic tensions are escalating among the major world powers.

True to his long-term investment philosophy, Buffett stated that he has no intention of parting with these stakes in the near future, even specifying that “ Berkshire’s stake in the five companies should increase somewhat ” in the coming years.

In summary, this repositioning towards Japan makes perfect sense in light of Buffett’s recent statements. In his annual letter, the Oracle of Omaha warned of a possible American economic collapse, pointing to Washington’s budgetary excesses.