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Warren Buffett Japan Visit: Billionaire Puts Spotlight On Investments

Warren Buffett Japan Trip

Posted: 11/21/11 01:08 AM ET

IWAKI, Japan (Reuters / November 20) - Octogenarian billionaire investor Warren Buffett arrived on his first visit to Japan on Monday, fanning speculation about his possible investments in the country's battered stock market.

Buffett, dubbed the 'Oracle of Omaha' for his long track record as a value investor, will hold a press briefing at 4.15 p.m. (2:15 a.m. EST) after touring a factory near the Fukushima Daiichi nuclear power plant crippled by the earthquake and tsunami in March.

That disaster came just days before Buffett had been due to make his maiden visit to Japan. At the time, the head of Berkshire Hathaway Inc said the earthquake was one of those extraordinary events that created buying opportunities. In May, he said he would be "delighted" to invest in Japan.

Buffett arrived by helicopter at Iwaki City in northeast Japan, some 40 km from the Fukushima nuclear plant, and was greeted by some 400 staff at cutting tool maker Tungaloy Corp, a unit of an Israeli firm in which Berkshire Hathaway holds an 80 percent stake. He is due to open a new plant later.

Posing for photographs outside the new factory with staff, holding a sign saying, "Never give up, Fukushima," Buffett said he felt "very welcomed."

Tungaloy, once part of conglomerate Toshiba Corp, supplies automakers with superhard tools used to cut, groove and turn engine parts.

JAPAN STRUGGLES

A swift recovery in Japanese manufacturers' supply chains and output helped the world's No. 3 economy rebound from a post-quake recession and grow by 1.5 percent in the third quarter.

But a strong yen, cooling demand in key export markets and disruptions from widespread flooding in Thailand -- a major production base for Japanese firms -- have clouded the outlook, and Japanese stocks are down about 18 percent this year -- their worst performance since 2008.

Japan's exports fell 3.7 percent in the year to October, the fastest pace in five months, signaling more weakness ahead as the strong yen and sputtering global growth drag on the recuperating economy.

IBM STAKE

Known for avoiding companies he doesn't understand -- including those in the technology sector -- Buffett surprised markets this month when he revealed Berkshire spent nearly $11 billion to build up a 5.5 percent stake in IBM.

Buffett said he was convinced by IBM's long-term road map and by its entrenched position with major businesses -- part of the durable competitive advantage he looks for when investing.

Buffett's name also crops up regularly when there's talk of a large European bank needing to raise capital, particularly in the current environment of writedowns on sovereign debt.

But, in keeping with his philosophy, he told CNBC last week he would need to understand European banks better before investing, and he has not yet seen an investment opportunity there in which he wants to take part.

Early this month, Berkshire Hathaway reported a smaller third-quarter profit after losing more than $2 billion on derivatives related to stock market performance.

During the quarter, Berkshire funded the purchase of chemical maker Lubrizol and a $5 billion investment in Bank of America Corp.

(Writing by Tomasz Janowski, Editing by Ian Geoghegan)

Copyright 2011 Thomson Reuters. Click for Restrictions.

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Filed by Chris Gentilviso  |