Who Exactly Are These Five 'Sogo Shosha'?

Warren Buffett invested in five major Japanese "Sogo Shosha" (general trading companies). They are:

• Mitsubishi Corporation: Japan's largest general trading company, part of the Mitsubishi Group.
• Mitsui & Co.: A historic trading house affiliated with the Mitsui Group.
• Itochu Corporation: Originally focused on textiles, now diversified into multiple sectors.
• Sumitomo Corporation: Part of the Sumitomo Group, strong in resources and trade.
• Marubeni Corporation: Known for grain and energy trading.

These companies are core players in Japan's economic system. Buffett invested in them through Berkshire Hathaway, viewing them as stable with long-term value.

In the simplest terms, what do they do?

Simply put, these "Sogo Shosha" act like "super intermediaries" and "jacks-of-all-trades" in global trade. They don't just sell things; they handle a whole range of activities:

• Buying and Selling: They source raw materials (like oil, metals, grain) globally and sell them to manufacturers or consumers. Imagine them as "super sellers" on a national scale.
• Investment and Project Management: Beyond trade, they invest in mines, factories, and infrastructure projects. For example, they might manage building a power plant, handling everything from mining to selling electricity.
• Logistics and Supply Chain: They handle transportation, warehousing, and ensuring goods move smoothly from point A to point B.
• Financial Services: They provide loans, insurance, and even risk management to help businesses navigate market fluctuations.
• Diversified Operations: They touch almost everything – from food, energy, and chemicals to technology, healthcare, and even environmental projects. They act like the "universal glue" connecting Japanese businesses to the world.

In short, they are vital parts of Japan's "economic engine," helping the resource-scarce nation maintain competitiveness through smart trade and investment. Buffett values them for their stable cash flow, broad business scope, and resilience, seeing them as reliable, perpetual money-making machines.