Warren Buffett has finally answered a question that has long intrigued investors: What sparked his interest in five Japanese trading houses in 2020, a bet that is now worth more than $25 billion?
The answer was hiding in plain sight: ¡°I was just going through a little handbook that probably had two or three thousand Japanese companies in it,¡± he told investors at the annual general meeting in Omaha, Nebraska, earlier this month, shortly before announcing his resignation as head of Berkshire Hathaway. ¡°There were these five trading companies selling at ridiculously low prices. So I spent about a year acquiring them.¡±
It¡¯s the same screening methodology the typical Japanese retail trader uses. The ¡°little handbook¡± is the ¡°Kaisha Shikiho,¡± the ¡°bible of Japanese equities,¡± indispensable for the country¡¯s stock-pickers. Released quarterly for ?2,800 (around $20), the Shikiho is a thick, dictionary-sized guide listing facts and figures on every one of the country¡¯s nearly 4,000 listed companies.
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