By George Glover

Warren Buffett's Berkshire Hathaway said Monday that it had added to its stakes in the five biggest Japanese trading houses. Investors should see the move as a sign that now might be a good time to go shopping outside the U.S. stock market.

Berkshire raised its holdings in Itochu, Sumitomo, Marubeni, Mitsubishi, and Mitsui, regulatory filings on Monday showed, upping its stakes to between 8.5% and 9.8%.

Buffett started snapping up stock in the five trading houses in July 2019, and the Oracle of Omaha said in a letter to shareholders last month that Berkshire would likely add to its positions in the Japanese companies.

Berkshire upping its Japan bet could suggest that Buffett thinks there's value to be found abroad.

U.S. stocks have tumbled over the past month amid worries that President Donald Trump's tariffs will trigger a flare-up in inflation and drag down growth, but they still don't look cheap: The benchmark S&P 500 is trading at about 20 times projected earnings for the next 12 months. The tech-heavy Nasdaq Composite fetches 25 times, while Tokyo's Nikkei 225 index goes for about 17 times, suggesting it's priced at a discount to its American peers.

Ironically, the U.S. selloff has boosted the value of Buffett's life's work, growing Berkshire, with investors pivoting away from tech stocks and into safer assets. While "Magnificent Seven" members like Nvidia and Tesla have plummeted, Berkshire shares are up 14% already this year, boosting the company's total market capitalization to about $1.1 trillion.

Write to George Glover at george.glover@dowjones.com

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March 17, 2025 05:43 ET (09:43 GMT)

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