"The 'Oracle of Omaha' Warren Buffett has once again increased his bets in Japan.
Recently, the Chinese market has been filled with joy, with foreign capital rushing in, fearing they might miss out on this huge piece of the pie.
However, Buffett has gone 'against the grain,' not only not entering the Chinese market but also selling his shares in American banks and investing heavily in Japan.
What signal does Buffett's bet on Japan send? Why does the 'Oracle' want to keep a respectful distance from the Chinese market?
Buffett has sold again, this time it's shares in American banks.
According to the latest information from the U.S. Securities and Exchange Commission, within three trading days from September 30 to October 2, Buffett's Berkshire Hathaway sold more than 8.54 million shares of American banks, amounting to approximately $337.9 million.
Less than a week ago, Berkshire had just sold 11.67 million shares of American banks, cashing out $406.7 million. If we start counting from July, Buffett has already cashed out nearly $7 billion from American banks.
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As of October 2, Berkshire still holds 794 million shares of American banks, with the shareholding ratio dropping to 10.2%, which is already close to the 'regulatory proximity point' of 10%."That is to say, once Berkshire Hathaway's shareholding drops below 10%, it only needs to disclose its transactions once every quarter, instead of the current requirement to do so every two working days.
By that time, Buffett is likely to continue to quietly reduce his stake in Bank of America.
In fact, this speculation is not baseless, as Buffett has been selling Bank of America shares for three consecutive months, and has successively cleared out shares of several banks in recent years, including U.S. Bancorp, Wells Fargo, and BNY Mellon, among others.
What to buy after selling bank stocks?
Buffett has once again set his sights on the Japanese market, and this time he may be focusing on Japanese financial and shipping stocks.
A few days ago, Berkshire Hathaway issued a yen-denominated bond in the global market, once again investing in the Japanese stock market with borrowed yen.
Four years ago, when Buffett bought shares of Japan's five major trading houses, he used the same tactic:
Selling U.S. dollar assets, coupled with borrowed yen, a large amount of funds were poured into the Japanese stock market together, perfectly achieving the maximization of benefits with one stone killing two birds.
Now that Berkshire Hathaway is issuing yen bonds again, there are reports that insurance companies and shipping companies have performed exceptionally well since August, which aligns with Buffett's value investment strategy and may become the new target of the "Oracle of Omaha."What signal?
Many people may not understand: Why does Buffett want to bet on Japan? Is it because he has a long-term optimistic view of the Japanese stock market?
In fact, behind this is Buffett's very distinct investment philosophy.
Firstly, Buffett rarely invests in the short term.
For Buffett, seeking victory in stability is the way to go for a long time, not pursuing short-term profits, continuously adjusting and optimizing his investment portfolio, and pursuing long-term benefits have always been the strengths of the stock god.
Secondly, Buffett would be more inclined to invest in inflationary markets.
For example, buying the five major Japanese trading companies before.
You know, although Buffett has repeatedly expressed his optimism about the Japanese market after investing in Japan, in fact, before that, Buffett had not invested in Japan for 20 years, and only after Japan showed signs of inflation did Buffett's attention turn there.
Why does Buffett want to bet on Japan?The reason is not complicated; inflation often implies a devaluation of the local currency, and when Buffett invested in Japan, almost all the yen was borrowed. Due to the uniqueness of the yen, the cost of borrowing is virtually zero, and as the yen becomes increasingly worthless, Buffett can not only reap profits from his investments but also make a substantial amount on currency exchange.
Therefore, the rekindling of inflation in Japan aligns well with Buffett's concept of long-term investment, and it is a game he is adept at playing, which is why he has not chosen the same path as other international financial institutions like Morgan Stanley.
Lastly, it is worth mentioning that Buffett's purchase of insurance and shipping companies actually sends a deeper signal. Coupled with recent news of OPEC increasing production and rising oil prices, it indicates that the capital market's expectations for the global economy are still quite positive, and a new upward cycle may have already begun.
Why not invest in China?
Buffett plans to increase investment in the Japanese market, and another voice has emerged online: With A-shares currently in high demand, why doesn't Buffett come to A-shares? If the stock market god really places a bet, then the wave of A-shares will surely be pushed to the extreme. However, to be frank, this possibility is indeed slim.On one hand, as we mentioned earlier, Buffett is more adept at long-term investments. Although short-term trading might yield windfall profits, it does not align with Buffett's style.
Compared to the currently booming Chinese A-shares market, the Japanese market is more in line with Buffett's investment logic.
On the other hand, Buffett has never purchased A-shares. When he invested in BYD, it was through Hong Kong stocks.
Therefore, even the "God of Stocks" is not familiar with the A-shares market, and unfamiliarity implies risk, which is precisely the most important factor that Buffett considers in his investments.
In contrast, the Japanese market, in terms of financial policies and market rules, is more similar to the Western markets that Buffett is familiar with. With a wealth of investment experience and data support, the investment risk can be significantly reduced.
To put it bluntly, after years of navigating the global stock market, Buffett's conservative investment philosophy has been deeply ingrained. Thus, despite foreign capital rushing into the Chinese market, Buffett will not take risks lightly. He pursues victory through stability.