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Legendary emerging markets investor Mark Mobius thinks Warren Buffett has plans for something big.
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Buffett increased his stakes in major Japanese trading companies, which could play a role in a subsequent deal.
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“I think you have a bigger fish to fry. I think he has plans for something else,” Mobius told CNBC.
Warren Buffett’s decision to invest more money in five major Japanese companies may be the prelude to something bigger, billionaire investor Mark Mobius has said.
On Tuesday, Buffett’s Berkshire Hathaway increased its stake in Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo to 7.4%.
In an interview on CNBC later that day, Mobius speculated that Buffett probably has something else up his sleeve.
“I think he has a bigger fish to fry. I think he has plans for something else. And he already mentioned that he’s planning a big deal, that he may need the help of these Japanese trading companies,” Mobius said.
In his own appearance on CNBC Wednesday morning, Buffett didn’t reveal a bigger master plan, instead saying Japanese stocks looked like a good investment.
“I just thought they were big companies. They were companies that generally understood what they were doing,” he said. “And they were selling at what I thought was a ridiculous price, particularly the price compared to current interest rates at the time.”
Mobius also theorized that Berkshire Hathaway’s sale of yen bonds may also have to do with Buffett’s stock market game. But Buffett said this was to protect his company from currency risk.
Buffett and Greg Abel, his planned successor, are open to potential opportunities and have encouraged Japanese companies to reach out.
“He’ll answer the phone on the first ring,” Abel said of Buffett. “And we will never run out of money. You can call us at any time.”
For its part, Mobius acknowledged that Japanese stocks have an attractive price-earnings ratio and pay dividends.
But it seems that they have already peaked and he would not buy them.
“Frankly, I would not be involved in buying these companies. The return on capital is not high,” Mobius said. “I think the prices have gone up too much.”
Read the original article on Business Insider