Please ensure Javascript is enabled for purposes of website accessibility
The World’s Best Stocks

April 13, 2023

Download PDF

Portfolio Changes: None

Warren Buffett’s Play on Japan

It can pay to pay attention to what investment legends are doing to cope in these turbulent times.

Warren Buffett still has a knack for seeking value and a history of going to Japan to find it in times of volatility. Overall, Japan’s Topix index trades at 13.3 times expected earnings, according to S&P Global Market Intelligence. That compares with 18.9 times for the S&P 500.

Since at least 2020, his Berkshire Hathaway has been building ownership positions as high as 6% in some of Japan’s storied trading companies. The five largest trading companies – known as “sogo shosha” – are giant conglomerates that import and export everything from energy to food to electronics. They also invest in all sorts of sectors from mining to retail.

The leading trading companies are Itochu, Marubeni, Mitsui, Mitsubishi, and Sumitomo. Some of these conglomerates are well over 100 years old and, on average, they currently trade around their book value and at six times their earnings.

Nikkei also reported that Berkshire Hathaway may issue another yen-denominated bond, signaling that it may increase its investments in Japan. I also plan on researching and adding some Japanese stocks to the Explorer portfolio in the coming months.

The Explorer’s recommendation of Denmark’s Novo Nordisk (NVO), used to treat obesity, is working well and reportedly patients are successfully shedding 30 pounds or more in a relatively short period of time. According to the Centers for Disease Control and Prevention (CDC), 42% of American adults – and 1 in 6 American children – are significantly overweight.

Obesity shortens lives. It is linked to more than 60 chronic diseases. Keep in mind, the percentage of American adults who are obese has nearly doubled over the last 60 years, increasing from 22% to 42%.

So NVO is a great stock to own right now.

Weekly Explorer Stock News

Below is a brief update on each Explorer stock. Any changes in ratings will be highlighted. This section is all you need to read each week and will be followed by a new recommendation every other week.

Butterfly Network (BFLY) shares had another good week, rising from 2.2 to 2.6 despite pulling back from a high of 2.8 yesterday. Last week it announced regulatory approval for an AI-enabled powerful ultrasound product. Hold a Half.

BYD (BYDDY) shares added a point to reach 55 this week. Warren Buffett called BYD “extraordinary” and chip manufacturer Taiwan Semiconductor a “fabulous enterprise” despite trimming positions in both firms. In addition to being a leading electric vehicle (EV) maker, BYD is also a key EV battery maker with about 25% of the Chinese market and a growing presence overseas. Buy a Half.

ChargePoint (CHPT) shares lost some ground in their first week as an Explorer recommendation. The price of ChargePoint’s stock is about a quarter of where the stock peaked about two years ago on EV euphoria. Now we get a second chance at this leading EV infrastructure company with more reasonable expectations. Buy a Half.

Corteva (CTVA) shares had another modest up week and the company has grown its net income at a significant annual rate of 40% in the last five years. The company offers a steady dividend but also reinvests a high portion of its profits into its business. This high-quality conservative stock is a bit expensive. Hold a Half.

Kimberly-Clark de México (KCDMY) shares were up a bit this week on no news. Founded in 1925, this is the Mexican subsidiary of Kimberly Clark (KMB), founded as a paper company in Neenah, Wisconsin in 1872. This is a play on Mexico’s manufacturing costs now being about 25% lower than China’s. Buy a Half.

Kraken Robotics (KRKNF) shares increased marginally this week. Kraken is a small company that designs, manufactures software-centric sensors, batteries, and underwater robotic systems for unmanned underwater vehicles used in military and commercial applications. The company expects to post a profit in the coming year and remains a buy for aggressive investors. Buy a Half.

Novo Nordisk (NVO) shares added five points this week after inking a nearly $2.7 billion deal with privately held Aspect Biosystems that boosts its efforts in diabetes and obesity treatment. Its popular drug Ozempic is approved for type 2 diabetes, but people have been taking the drug for losing weight because of its effectiveness. Hold a Half.

Polestar (PSNY) shares were up this week after the company delivered approximately 12,000 vehicles in the first quarter of 2023, up nearly 26% year-on-year. This was despite it not being the best week for EV-related stocks (see Tesla). Polestar has high expectations that overall sales volume will increase by 60% this year to 80,000 units. Buy a Half.

Explorer ETF/Fund Positions

WisdomTree Emerging Markets High Dividend Fund (DEM) offers a high dividend yield and some of the highest quality emerging market stocks. Buy a Half.

WisdomTree China ex-State-Owned Enterprises Fund (CXSE) is a smart ETF play and way to gain China exposure without any state-owned enterprises (SOEs). Buy a Half.

Explorer Stocks Summary

Brief company overviews that will not change week to week.

Butterfly Network (BFLY): Butterfly’s breakthrough software can be tied into a medical network to provide instantaneous images and improve both the speed and quality of healthcare. This is so much better than scheduling a test in a week and then having the patient come back and must pay for another appointment.

However, if your doctor has the Butterfly iQ+ in their pocket, he (or she) just connects it to an iPhone, it scans your body and has a digital image right in front of him. Plus, while an MRI machine can cost more than a million bucks, the Butterfly iQ+ costs a little over $2,000. Since it also requires a subscription service, it’s a steady source of recurring revenue for the company. The top 100 hospitals in the country already use Butterfly iQ devices.

BYD (BYDDY): In 2022, China auto giant BYD (for Build Your Dreams) switched to producing only all-electric battery vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). BYD sold more than 1.85 million electric cars in 2022, including hybrids. In both 2021 and 2022, BYD more than tripled sales from the previous year. Most of BYD’s sales are still in China but it has a big international expansion underway, including the U.S., Europe, and Asia markets.

The company also manufactures and supplies EV batteries, including to Tesla, and makes its own chips. This is vertical integration that would make Henry Ford proud. BYD is in a strong position to be one of, if not the leader of the EV revolution in terms of size, scale, and growth.

ChargePoint (CHPT) is an industry leader in EV charging. ChargePoint operates in both North America and Europe, with more than 225,000 charging points on its networks. ChargePoint has more than 5,000 fleet and commercial customers worldwide. The company has a 70% market share in the level 2 charging market in North America, giving it a powerful advantage over even its closest competitor.

ChargePoint has posted seven quarters in a row of increasing revenue with full-year revenue for fiscal ’23 with a year-over-year gain of 94%. We need to accept the company’s heavy investments in growth, profits will appear as the company monetizes and leverages its charging network.

Corteva (CTVA) uses emerging technology to help farmers improve crop yields and boost output. Stocks like Corteva are recession-resistant and outperforming the market on a relative basis. In terms of partnerships, a year ago it signed a $5.2 billion collaboration with French drug giant Sanofi (SNY). It has expanded a Bristol-Myers Squibb (BMY) collaboration to include drug targets in both immunology and oncology. This is on top of a design partnership with the French drug giant, Germany’s Bayer, and Japan’s Sumitomo Dainippon.

Kimberly-Clark de México (KCDMY) was founded in 1925 and is based in Mexico City, Mexico. Its parent, Kimberly Clark (KMB), was founded as a paper company in Neenah, Wisconsin in 1872. According to consultant Alix Partners, Mexico has surpassed China as the lowest cost country in the world for companies looking to manufacture products for North American markets. Mexico’s wages are now about 25% lower than in China and, coupled with lower taxes and tariffs, this all adds up to a competitive edge.

Kraken Robotics (KRKNF) is probably the most speculative of Explorer stocks, but it is a well-run company and a prime takeover candidate in the growth defense sector, coupled with a strong management team. Based in Newfoundland, Kraken Robotics is a marine technology company providing ultra-high resolution, software-centric sensors, and underwater robotic systems.

Novo Nordisk (NVO) specializes in treatments for diabetes, hemophilia, and obesity. The company supplies half of the world’s insulin, and its diabetes care products are used by over 34 million people today. Novo highlights that more than 750 million people are currently living with obesity and that this is up a multiple of 3X since 1975. In summary, based on sizable and growing demand for this weight-loss drug, this well managed, highly profitable company with an excellent growth profile and potential to develop new products has limited risk.

Polestar (PSNY) is a Swedish premium electric vehicle manufacturer. Founded by Volvo and Zhejiang Geely Holding Group in 2017, Polestar enjoys technological and engineering synergies with Volvo. By the end of this year, the company plans that its cars will be available in 30 markets. Polestar cars are currently manufactured in China, with 2024 manufacturing planned in America. Polestar has an edge on much of the competition for two reasons. It has an “asset light” strategy through access to world class owner/partner Volvo’s factories. For 2023, Polestar anticipates global volumes to increase by nearly 60% to approximately 80,000 cars.

Explorer ETF/Fund Positions

WisdomTree Emerging Markets High Dividend Fund (DEM) offers a high dividend yield and some of the highest quality emerging market stocks. This ETF gives broad exposure with an emphasis on income and value.

WisdomTree China ex-State-Owned Enterprises Fund (CXSE) is a smart ETF play and way to gain China exposure without any state-owned enterprises (SOEs).


Price Bought

Date Bought

Price on 4/5/23



Butterfly Network (BFLY)





Hold a Half






Buy a Half

ChargePoint (CHPT)





Buy a Half

Corteva (CTVA)





Hold a Half

Kimberly-Clark de México (KCDMY)





Buy a Half

Kraken Robotics (KRKNF)





Buy a Half

Novo Nordisk (NVO)





Hold a Half

Polestar (PSNY)





Buy a Half

WisdomTree China ex-State-Owned Enterprises Fund (CXSE)





Buy a Half

WisdomTree Emerging Markets High Dividend Fund (DEM)





Buy a Half

Carl Delfeld is a member of the Cabot investment team, and chief analyst of Cabot Explorer.