Buffett Could Turn To Japan For Next Big Investment

Billionaire investor Warren Buffett is looking to make “a big investment” in Japan, after claiming earlier in the year that the March 11 earthquake and tsunami disaster had created a “buying opportunity” for long-term value investments in the country.

Billionaire investor Warren Buffett is looking to make “a big investment” in Japan, after claiming earlier in the year that the March 11 earthquake and tsunami disaster had created a “buying opportunity” for long-term value investments in the country.

Speaking at a tour of a factory owned by his investment firm Berkshire Hathaway in the disaster hit Tohoku region – roughly 40 kilometres from the crippled Fukushima nuclear plant – Buffett claimed to be unfazed by the aftermath of the March 2011 disasters or by the recent corporate scandal that has engulfed Japanese optics and imaging company Olympus Corporation.

[quote]“We’re looking for companies that have some kind of sustainable competitive advantage,” said Buffett, as quoted by the Washington Post. “The fact that Olympus happens here or Enron happens in the US doesn’t affect our attitudes at all.”[/quote] 

Buffett added that “the tsunami didn’t change Japanese people and Japanese businesses,” while reiterating his view that the fundamental strengths of the Japanese economy remained robust despite the devastating natural disaster and the corporate scandal.

This is Buffett’s first ever trip to Japan, one which had originally been delayed after the country was struck by the record earthquake. According to Bloomberg, Buffett currently has $8-10 billion to spend on his investment, though he has no specific merger or acquisition plans at the moment. Japanese corporations though are hoping that his visit could spark a potential investment in the nation.

[quote]“The fact that a renowned investor like Mr. Buffett is actually coming all the way to Japan and to the very place that became the center of the disaster means a lot and may shine a light,” said Shuhei Abe, president of Tokyo-based Sparx Group Co, Asia’s second-biggest hedge fund. “There are expectations that Mr. Buffett may invest more in Japan.”[/quote]

“Buffett’s investment is beautiful,” said Yutaka Kobayashi, president of Star Mica Asset Management Co., a boutique Japanese private bank. “Looking at the way he invests in this current market, it may well be a good time to be buying. His style of long-term investment makes sense under the current market climate. 

In the past three years, Buffett has personally visited nations including South Korea, China, India, Italy, Germany, Spain and Switzerland on scouting missions for Berkshire as the company looks to expand its international portfolio. Among Berkshire’s Asian investments include stakes in Chinese carmaker BYD Co as well in South Korean steel firm Posco, the world’s third- largest steelmaker. Recently, Berkshire announced a plan to enter India’s insurance market by selling motor coverage as a corporate agent of Bajaj Allianz General Insurance.