Finance

Buffett hikes stakes in five Japanese trading houses to almost 10% each

Published

23 hours ago

March 17, 2025

Business Finance News

Warren Buffett speaks during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, on May 4, 2024.

CNBC

Warren Buffett’s love for Japanese stocks grows fonder even as he increasingly sells U.S. equities.

The 94-year-old investor’s Berkshire Hathaway holding company raised its holdings in five Japanese trading houses — Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo — by more than 1 percentage point each, to stakes ranging from 8.5% to 9.8%, according to a regulatory filing.

The “Oracle of Omaha” said in his 2024 annual letter that Berkshire is committed to its Japanese investments for the long term and has reached an agreement with the companies to go beyond an initial 10% ceiling.

All five are the biggest “sogo shosha,” or trading houses, in Japan that invest across diverse sectors domestically and abroad — “in a manner somewhat similar to Berkshire itself,” Buffett said. Berkshire first bought into the companies in the summer of 2019.

Part of the investment strategy involves Buffett hedging currency risk by selling Japanese debt and then pocketing the difference between dividends from the investments and the bond coupon payments he has to make to service the debt.

At the end of 2024, the market value of Berkshire’s Japanese holdings came to $23.5 billion, at an aggregate cost of $13.8 billion. The investor praised the companies’ managements, relationships with their investors and their capital deployment strategies.

Buffett first unveiled the Japanese positionsd on his 90th birthday in August 2020 after making regular purchases on the Tokyo Stock Exchange, saying he was “confounded” by the opportunity and was attracted to the trading houses’ dividend growth.

In 2023, Buffett even paid a visit to Japan with his designated successor Greg Abel and met with the heads of the Japanese firms. He said he’d like Berkshire to own the companies forever.

The student of famed investor Benjamin Graham has been aggressively selling U.S. stocks and growing his record cash pile to $334 billion. Berkshire sold more than $134 billion worth of stocks in 2024, largely by shrinking the size of Berkshire’s two largest equity holdings — Apple and Bank of America.

Finance

Slower economic growth is likely ahead with risk of a recession rising, according to the CNBC Fed Survey

Published

1 hour ago

March 18, 2025

Business Finance News

Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee in the Hart Senate Office Building on Capitol Hill on February 11, 2025 in Washington, DC.

Chip Somodevilla | Getty Images News | Getty Images

Respondents to the March CNBC Fed Survey have raised the risk of recession to the highest level in six months, cut their growth forecast for 2025 and raised their inflation outlook.

Much of the change appears to stem from concern over fiscal policies from the Trump administration, especially tariffs, which are now seen by them as the top threat to the US economy, replacing inflation. The outlook for the S&P 500 declined for the first time since September.

The 32 survey respondents, who include fund managers, strategists and analysts, raised the probability of recession to 36% from 23% in January. The January number had dropped to a three-year low and looked to have reflected initial optimism following the election of President Trump. But like many consumer and business surveys, the recession probability now shows considerable concern about the outlook.

“We’ve had an abundance of discussions with investors who are increasingly concerned the Trump agenda has gone off the rails due to trade policy,” said Barry Knapp of Ironsides Macroeconomics. “Consequently, the economic risks of something more insidious than a soft patch are growing.”

“The degree of policy volatility is unprecedented,” said John Donaldson, director of fixed income at Haverford Trust.

The average GDP forecast for 2025 declined to 1.7% from 2.4%, a sharp markdown that ended consecutive increases in the three prior surveys dating back to September. GDP is forecast to bounced back to 2.1% in 2026, in line with prior forecasts.

“The risks to consumers’ spending are skewed to the downside,” said Neil Dutta, head of economic research at Renaissance Macro Research. “Alongside a frozen housing market and less spending across state and local governments, there is meaningful downside to current estimates of 2025 GDP.”

Fed rate cut outlook

Most continue to believe the Fed will cut rates at least twice and won’t hike rates, even if faced with persistently higher prices and weaker growth. Three-quarters forecast two or more quarter-point cuts this year. Part of the reason is that two-thirds believe that tariffs will result in one-time price hikes rather than a broader outbreak of inflation. But the policy uncertainty has created a wider range of views on the Fed than normal with 19% believing the Fed won’t cut at all.

Still, higher tariffs and weaker growth are a dilemma for the Fed.

“Powell is really stuck here because of the tariff overhang,” said Peter Boockvar, chief investment officer, Bleakley Financial Group. “If he gets more worried about growth because of them and cuts rates as unemployment rises but then Trump removes all the tariffs, he’s jumped the gun.”

More than 70% of respondents believe tariffs are bad for inflation, jobs and growth. 34% say tariffs will decrease US manufacturing with 22% saying they will result in no change. Thirty-seven percent of respondents believe tariffs will end up in greater manufacturing output. More than 70% believe the DOGE effort to reduce government employment is bad for growth and jobs but will be modestly deflationary.

“A global trade war, haphazard DOGE cuts to government jobs and funding, aggressive immigrant deportations, and dysfunction in DC threaten to push what was an exceptionally performing economy into recession,” said Mark Zandi, chief economist, Moody’s Analytics.

Finance

Study shows how long Social Security, $1.5M nest egg would last in 50 states

Published

16 hours ago

March 17, 2025

Business Finance News

Ramsey Solutions financial expert George Kamel weighs in on Americans working past retirement age and provides advice for investors.

Retirement nest eggs and Social Security benefits are key sources of funds for many Americans as they live out their golden years in the state of their choosing.

A recently-released study from GOBankingRates looked at the financial runway that retirees would have in each state with Social Security benefits and $1.5 million socked away for retirement, finding West Virginia offered the most years before living costs would deplete their retirement savings.

The Mountain State ranked No. 1 with $1.5 million in retirement savings expected to sustain retirees there for a whopping 54 years while facing about $27,800 in living costs each year after Social Security benefits, according to the study.

The Social Security Administration (SSA) allows Americans to access their Social Security retirement benefits early starting at age 62, though payments “will be reduced a small percentage for each month before your full retirement age” if they do that, according to the SSA. One’s “full retirement age” depends on when a person was born.

SOCIAL SECURITY PAYMENTS TO INCREASE FOR PUBLIC PENSION RECIPIENTS

GOBankingRates said it used data from a slew of sources, including the Bureau of Labor Statistics, the SSA and Missouri Economic Research and Information Center, to determine its rankings of how states stack up in terms of the amount of time that Social Security and $1.5 million in retirement would last retirees residing in them.

Overall, the study indicated that those two sources of funds would provide different amounts of years of “financial security” for retirees in states across the country. States’ cost of living after Social Security ranged from $27,803 to $87,770 per year, it found.

401(K) BALANCES HIT SECOND HIGHEST ON RECORD: FIDELITY

GoBankingRates found the number of years that $1.5 million and Social Security would sustain retirees in each state was:

West Virginia: 54 years ($27,803 post-Social Security cost of living per year)

Charleston is the capital and largest city of the U.S. state of West Virginia. Slightly processed using HDR technique (iStock / iStock)

Kansas: 52 years ($28,945 post-Social Security cost of living per year)

Mississippi: 51 years ($29,426 post-Social Security cost of living per year)

Oklahoma: 51 years ($29,666 post-Social Security cost of living per year)

Alabama: 50 years ($30,207 post-Social Security cost of living per year)

Missouri: 50 years ($30,327 post-Social Security cost of living per year)

Arkansas: 49 years ($30,237 post-Social Security cost of living per year)

Tennessee: 49 years ($30,928 post-Social Security cost of living per year)

Iowa: 48 years ($31,168 post-Social Security cost of living per year)

Indiana: 47 years ($31,709 post-Social Security cost of living per year)

Aerial view of Indianapolis downtown with Statehouse in Indiana (iStock / iStock)

Georgia: 47 years ($31,829 post-Social Security cost of living per year)

North Dakota: 47 years ($32,190 post-Social Security cost of living per year)

Michigan: 46 years ($32,310 post-Social Security cost of living per year)

South Dakota: 46 years ($32,310 post-Social Security cost of living per year)

Texas: 46 years ($32,490 post-Social Security cost of living per year)

Nebraska: 46 years ($32,610 post-Social Security cost of living per year)

Kentucky: 46 years ($32,670 post-Social Security cost of living per year)

New Mexico: 46 years ($32,670 post-Social Security cost of living per year)

Louisiana: 45 years ($33,031 post-Social Security cost of living per year)

An aerial view of downtown Baton Rouge from the State Capitol building, looking towards the Mississippi bridge and river. (iStock / iStock)

Montana: 45 years ($33,331 post-Social Security cost of living per year)

Ohio: 44 years ($33,827 post-Social Security cost of living per year)

Pennsylvania: 44 years ($33,872 post-Social Security cost of living per year)

South Carolina: 44 years ($34,052 post-Social Security cost of living per year)

Minnesota: 44 years ($34,113 post-Social Security cost of living per year)

Wyoming: 44 years ($34,173 post-Social Security cost of living per year)

Illinois: 44 years ($34,233 post-Social Security cost of living per year)

North Carolina: 42 years ($35,495 post-Social Security cost of living per year)

Downtown Raleigh, North Carolina, USA Drone Skyline Aerial. (iStock / iStock)

Maryland: 41 years ($36,276 post-Social Security cost of living per year)

Wisconsin: 41 years ($36,516 post-Social Security cost of living per year)

Nevada: 41 years ($26,997 post-Social Security cost of living per year)

Delaware: 40 years ($37,057 post-Social Security cost of living per year)

Virginia: 40 years ($37,237 post-Social Security cost of living per year)

Idaho: 39 years ($38,379 post-Social Security cost of living per year)

Florida: 39 years ($38,379 post-Social Security cost of living per year)

WalletHub published a report on Monday that found the best U.S. states to retire in 2022. Florida was at the top of the list. Tallahassee, Florida, is pictured. (iStock)