Berkshire Hathaway backs Japan trading houses for the long haul

In a Squawk Box segment posted by CNBC on May 5th, Warren Buffett and Greg Abel reaffirm Berkshire's commitment to Japan’s top trading firms (otherwise known as Sogo Shosha).

Despite tariff concerns and profit headwinds, Berkshire still sees long-term value.

Key Takeaways

• Warren Buffett and Greg Abel reaffirm their long-term commitment to Japan’s top five trading houses, signaling they could hold the investments “for 50 years or forever.”

• Despite tariff-related uncertainty and mixed FY26 profit forecasts, Berkshire Hathaway remains unfazed by market volatility.

• Sumitomo, Marubeni, and Itochu have each introduced massive buffers - up to 40 billion yen - to shield earnings from global economic turbulence.

• Even with profit declines expected at Mitsubishi and Mitsui, the trading firms remain cash-rich and are rolling out substantial buybacks and dividend payouts.

• Berkshire's use of low-cost yen-denominated bonds has been a strategic advantage, taking full benefit of Japan's ultra-low-interest rate environment.

• The trading houses remain significantly undervalued compared to U.S. counterparts according to Berkshire.

• Analysts are watching closely for potential increases in Berkshire’s stakes - or possible expansions into other undervalued Japanese firms.