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Warren Buffett goes window shopping overseas
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CBC News-
The world’s most famous value investor is bargain hunting, and he likes what he sees in undervalued assets in two of the world’s largest economies.
Berkshire Hathaway chairman Warren Buffett is making his first ever visit to Japan at the moment, fuelling speculation that the octogenarian value investor is bargain hunting.
Buffett was originally scheduled to make the trip to the world’s third largest individual economy in the spring. But days before Buffett was scheduled to arrive, the Japanese eastern seaboard was hit by a massive 9.0 earthquake and tsunami that crippled the economy on March 11.
Buffett flew via helicopter to Iwaki on Monday, a hard-hit industrial region only 40 kilometres from the Fukushima Daiichi nuclear plant.
Among other photo opportunities organized by his Japanese handlers to inspire morale, Buffett visited the local Tungaloy car plant, in which Berkshire took a 70 per cent ownership stake in 2008. Tungaloy used to be part of the Toshiba manufacturing conglomerate until it sold its interest to Buffett.
He told reporters he was looking for more opportunities in the country, as the devastating quake had not changed his view that Japan’s fundamentals make it an attractive place to invest and do business.
"Frequently, something out of the blue like this, an extraordinary event, really creates a buying opportunity," he told Reuters. "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."
While trolling for buys in Japan, Buffett was also asked for his thoughts on another one of the world’s largest economies – the European Union’s.
Buffett bought a significant stake in British grocer Tesco, the world’s third-largest retailer, earlier this year. He said at the right price, he would consider increasing his stake. Buffett is frequently thought to be a potential funding provider for cash-strapped European banks, but he said Monday the debt concerns make him unlikely to want to get involved in the continent's financial sector.
While declining to name names, he did say there were about a dozen European firms the company would consider investing in at the moment
Analysts invited to AGM
Separately, Berkshire also announced it will allow three research analysts to join in the questioning at the company's annual meeting next year, the first time it has made such a concession.
Dubbed "Woodstock for capitalists," the company’s annual general meeting draws tens of thousands of people to Omaha, Nebraska every May.
Typically analysts are not invited as Buffett prefers to deal with ordinary investors. But “we're trying to broaden the conversation,” he told the Wall Street Journal in an interview. The three insurance industry analysts include Jay Gelb of Barclays Capital, Cliff Gallant of Keefe, Bruyette & Woods and Gary Ransom of Dowling & Partners, according to the paper.
The concession is likely an olive branch from the company to Wall Street, as Berkshire executives feel their company is undervalued based on its assets. Berkshire’s B shares are trading at $74 on the New York Stock Exchange Monday. Adjusted for a major 50:1 stock split in early 2010, that’s barely higher than the level they were at five years ago.
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