Shares of Japanese trading firms in which Warren Buffett invests hit record highs this week after announcing earnings and buybacks。

On Wednesday, Mitsubishi Corp (Mitsubishi Corp.) shares surged 6% to a record high after the company announced plans to buy back $2.2 billion worth of shares and announced a better-than-expected profit target for the fiscal year to March 2024.。Its peer Sumitomo Corp (Sumitomo Corp.) and Itochu Corp (Itochu Corp.) also climbed to record levels as they reported better-than-expected earnings。

In August 2020, Buffett, the "stock god" who has always focused on value investing, set his sights on Japan's five largest trading companies, and then let his investment company Berkshire Hathaway (Berkshire Hathaway) invest more than $6 billion to build positions.。The five major trading companies are: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.。

A month ago, Buffett revealed in an interview that he had increased his holdings in Japan's five largest trading houses to 7.4% and said it was Berkshire Hathaway's largest investment outside the U.S.。

In Japan, a trading company is a large multinational company that integrates trade, industry, finance and information, and these five companies are the five largest trading companies in Japan, a consortium of which controls nearly 99% of Japan's large manufacturing and trading companies.。

The five companies have also invested heavily in the world's oil, gas and mineral resources, playing the role of industry organizers, and are also present in overseas operations.。It is understood that the trade volume of Japan's six major integrated trading houses accounts for 43% of Japan's foreign exports and 62% of its total imports.。It can be said that these five companies have mastered the lifeblood of various industries in Japan.。

As commodity prices soared, the shares of all five companies rose sharply.。Marubeni shares more than tripled, Mitsui and Mitsubishi more than doubled, while Itochu and Sumitomo rose around 70 per cent and 80 per cent, respectively.。

The rise in the share prices of these Japanese companies has brought huge book gains to the famous value investor Buffett.。According to media reports, Buffett has earned an estimated $4.5 billion from his position in Japanese trading companies since 2020.。

But recently with fears of a recession looming, although not as severe as some investors fear, companies closely related to commodities are expecting a decline in earnings in the current period。However, the shares of these companies are also relatively cheap, with Mitsubishi Corporation and Sumitomo Corporation still trading below book value.。

In response, Tokai Tokyo Securities Co. (Tokai Tokyo Securities Co..) analyst Hideaki Kuribara (Hideaki Kuribara) said: "Trading company earnings are basically on the rise.。Over the past decade, trading companies have been working to strengthen their non-resource sectors to increase and stabilize their earnings, and are now delivering results.。"

Buffett said Berkshire will continue to invest in Japanese trading companies for "10, 20 years."。He believes that the stock market in the next three to five years is not important, but one thing is certain is that in 20 or 50 years, Japan and the United States will be stronger than they are now, and Japan may become the largest investment destination outside the United States.。