Buffett spies opportunity in quake-rocked Japan

Japan, the world’s third-largest economy, has been battling to bring an overheating nuclear plant under control after it was battered by the March 11 earthquake and tsunami that rattled global markets and prompted massive intervention in currency markets by the Group of Seven industrial nations.

“It will take some time to rebuild, but it will not change the economic future of Japan,” Mr Buffett said yesterday on a visit to a South Korean factory run by a company owned by one of his funds. “If I owned Japanese stocks, I would certainly not be selling them.

“Frequently, something out of the blue like this, an extraordinary event, really creates a buying opportunity. I have seen that happen in the United States, I have seen that happen around the world. I don’t think Japan will be an exception,” said the 80-year-old investor, dubbed the ‘Sage of Omaha’ for his successful long-term investment strategy.

Mr Buffett heads Berkshire Hathaway Inc, which has substantial insurance and utility investments globally.

Japan’s Nikkei share average rose 2.7 per cent on Friday, buoyed by the G7 support, but still ended the week down around 10 per cent, with some £216bn wiped off share values – the market’s biggest weekly slide since the global financial crisis in 2008.

Japanese markets were closed yesterday.

Mr Buffett said Berkshire Hathaway, which at the year-end was sitting on $38bn of cash equivalent and last week bought US speciality chemicals maker Lubrizol for $9bn, was looking for more large-scale acquisitions anywhere in the world.

“The United States is most likely where we will do something,” he said.

Mr Buffett will have yet more money to invest after Goldman Sachs buys back $5bn of its preferred stock from Berkshire Hathaway, which the fund bought at the height of the global financial crisis.

Mr Buffett, who was ranked the world’s third-richest man by Forbes this year, said he was also looking to buy entire businesses and large-cap shares in South Korea, where Berkshire is already a leading shareholder in the steelmaker POSCO.

He said geopolitical risks associated with North Korea had not curbed his interest in South Korea, which is Asia’s fourth-largest economy.

Berkshire also owns a stake in Chinese car and battery maker BYD.

Mr Buffett did not disclose any holdings in Japan yesterday, and Berkshire Hathaway’s annual report did not show any major investments there.