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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