Prominent tech investor Chamath Palihapitiya expressed admiration for Warren Buffett, calling the “Omaha Omaha” after analyzing his latest bet on Japan. The Prophet” is the greatest of all time. Buffett, 92, recently increased his stake in five Japanese trading companies (Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo) to more than 8.5%. Palihapitiya said these companies roughly resemble a conglomerate structure like Berkshire Hathaway, and thus make good investments because they are steady dividend payers and earnings growers. Palihapitiya tweeted: “He found a group of companies with very low volatility, predictable earnings growth, good dividend yields and, for the most part, buybacks. But Social Capital’s Palihapitiya said what makes the deal so good is that Buffett was able to hedge his currency risk by selling Japanese bonds, and then invest the difference between dividends and the bond coupon payments he pays. In the bag. “He issued Japanese bonds at very low rates, used the proceeds to buy stocks, and then used the dividends he got from owning those stocks to pay the coupons!” Palihapitiya said. “What’s left is an almost less risky bet that he borrowed trillions of yen for free to buy companies worth billions and growing earnings in the mid-teens.” It is now one of the largest overseas issuers of yen-denominated bonds to finance stock purchases. Buffett first bought the shares in August 2020 on his 90th birthday via a regular purchase on the Tokyo Stock Exchange, saying he was “baffled” by the opportunity and attracted by their dividend growth. Earlier this year, Buffett, 92, visited Japan and met with the heads of these Japanese companies. Berkshire said it intends to hold the Japanese investment as a long-term position, but Buffett has pledged to buy no more than a 9.9% stake in any of the five companies unless specifically approved by each company’s board of directors. Palihapitiya said Buffett becomes desensitized to currency fluctuations over a 10- to 20-year holding period while locking in earnings growth and the spread he maintains between dividends and coupons. Similar to Berkshire, Japanese trading companies, also known as sogo shosha, are conglomerates involved in a wide range of products and services, including energy, machinery, chemicals, food, finance and banking. Palihapitiya said the only reason such a deal could fail is Japan’s struggling economy, but said even then Buffett was unlikely to be a loser because the conglomerates’ businesses are so closely linked to the rest of the world. “It’s inspiring to see people taking such smart action on a massive scale,” Palihapitiya said.