Mitsubishi Corporation: The Ultimate Conglomerate Play

I. Introduction & Episode Thesis

Picture Warren Buffett in August 2020, sitting in his Omaha office, announcing to the world that Berkshire Hathaway had quietly accumulated $6 billion worth of Japanese trading houses. The Oracle of Omaha, famous for his "invest in what you understand" mantra, had just placed one of his largest foreign bets on businesses so complex that most Western analysts couldn't even properly categorize them. "I was confounded," Buffett would later admit about discovering these opportunities. What he saw in companies like Mitsubishi Corporation wasn't just undervaluation—it was a business model so uniquely Japanese, so historically resilient, that it had survived and thrived through 150 years of wars, economic bubbles, and technological revolutions. The 94-year-old investor first unveiled the Japanese positions on his 90th birthday in August 2020, saying he was "confounded" by the opportunity and was attracted to the trading houses' dividend growth. Here was the world's most famous value investor, admitting that even he struggled to comprehend how such massive, profitable companies could trade at such bargain valuations. The trading houses had an earnings yield of perhaps 14%, with dividends that would grow—a combination that would make any value investor salivate.

The paradox runs deeper than mere numbers. How did a company that traces its origins to 1870—born from the ashes of Japan's feudal system, dismantled by American occupiers, and rebuilt from scratch—become not just a survivor but a global powerhouse generating over $100 billion in annual revenues? How did an organization so complex that it defies conventional categorization (Is it a trading company? An investment house? A resource conglomerate? The answer: all of the above) attract the attention of an investor famous for his simplicity principle? The story truly begins in 1918, when Koyata Iwasaki spun off the international trading business from Mitsubishi & Co., Ltd, the holding company of the Mitsubishi Group at the time. This wasn't just a corporate restructuring—it was the birth of what would become Japan's most powerful trading company. Koyata coped with Mitsubishi's growing size and diversity by spinning off business divisions as separate companies. The mining, shipbuilding, banking, trading, and real estate divisions became joint-stock companies under the umbrella of the holding company.

This episode is the story of how a company born from samurai heritage survived atomic bombs, military occupation, and complete corporate dissolution—only to emerge stronger each time. It's about how a trading house model so foreign to Western capitalism that it defies easy categorization became a blueprint for global conglomerate management. It's about the transformation from resource dependency to digital innovation, culminating in that moment when Buffett first unveiled the Japanese positions on his 90th birthday in August 2020 after making regular purchases on the Tokyo Stock Exchange, saying he was "confounded" by the opportunity and was attracted to the trading houses' dividend growth.

Today, at the end of 2024, the market value of Berkshire's Japanese holdings came to $23.5 billion, at an aggregate cost of $13.8 billion. The Oracle's confoundment has turned into conviction. Our journey through Mitsubishi Corporation's 150-year saga will reveal why this company—part trader, part investor, part industrial powerhouse—represents not just a unique business model, but perhaps the ultimate test case for patient capital in an impatient world.

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II. Origins: The Iwasaki Dynasty & Birth of a Zaibatsu (1870–1945)

The rain was coming down in sheets on the Osaka waterfront in 1870 when a 36-year-old former samurai named Yataro Iwasaki stood before a ramshackle collection of warehouses and ships that would become the foundation of one of the world's greatest business empires. Iwasaki was originally employed by the Tosa clan of modern-day Kōchi Prefecture, who posted him to Nagasaki in the 1860s. During this time, Iwasaki became close to Sakamoto Ryōma, a major figure in the Meiji Restoration that had just ended centuries of feudal rule. The Japan that Iwasaki inherited was a nation desperately trying to modernize, to catch up with Western powers that had forced it open at gunpoint just 17 years earlier. In March 1870, Iwasaki became president of the Tsukumo Trading Company, a shipping company founded on behalf of the Yamauchi clan, and leased the trading rights. The company started with just three steamships chartered from the Tosa clan. In 1873, the company changed its name to Mitsubishi, a compound of mitsu ("three") and hishi (literally, "water chestnut", often used in Japanese to denote a rhombus or diamond). The emblem—those three diamonds that would become one of the world's most recognizable corporate logos—was a brilliant piece of symbolic politics, combining the Iwasaki family crest with the oak leaves of the ruling Yamauchi family.

What Iwasaki understood, perhaps better than any of his contemporaries, was that Japan's survival as an independent nation depended on its ability to compete with Western powers economically. From 1874 to 1875, Iwasaki was contracted by the Japanese government to transport Japanese soldiers and war materials. The Japanese government purchased a number of ships for the Japanese Expedition of 1874 to Taiwan against the Paiwan Aborigines in southeast Taiwan, and these ships were later given to Mitsubishi after the expedition was finished in 1875. This created strong links between Mitsubishi and the Japanese government that ensured the new company's success. In return, Mitsubishi supported the new Japanese government and transported troops who defeated the Satsuma Rebellion in 1877.

The genius of Iwasaki's strategy was vertical integration before anyone had a name for it. Under Iwasaki's leadership in the late 1800s, Mitsubishi diversified its business into insurance (Tokio Marine Insurance Company and Meiji Life Insurance Company), mining (Takashima Coal Mine) and shipbuilding. He purchased coal mines to fuel his ships, built shipyards to maintain them, founded insurance companies to protect his cargo, and created banks to finance it all. By 1877, Mitsubishi controlled 80% of Japanese maritime traffic—a monopoly so complete that competitors accused Iwasaki of forcing customers to use Mitsubishi warehouses and insurance if they wanted to ship on Mitsubishi vessels.

Iwasaki died of stomach cancer on 7 February 1885, aged 50, and was succeeded as the head of the family business first by his brother, Iwasaki Yanosuke, and later his son, Hisaya. But the foundation he laid would prove remarkably durable. Yanosuke continued the diversification, purchasing more mines and, in a move that would define Tokyo's geography for the next century, buying 80 acres of swampy marshland next to the Imperial Palace for approximately $1 million—land that would become the Marunouchi business district, still the crown jewel of Japanese commercial real estate.

The transformation from family business to modern corporation accelerated under Koyata Iwasaki, who assumed the presidency in 1916. Koyata coped with Mitsubishi's growing size and diversity by spinning off business divisions as separate companies. The mining, shipbuilding, banking, trading, and real estate divisions became joint-stock companies under the umbrella of the holding company. Between 1917 and 1921, Mitsubishi Bank, Mitsubishi Electric, and Mitsubishi Heavy Industries were all established as independent entities. Most crucially for our story, in 1918, the group's international trading business was spun off to form Mitsubishi Shoji Kaisha.

Koyata represented a new generation of Japanese business leader—Cambridge-educated, internationally minded, fluent in English. Koyata also gained an introduction at Cambridge to idealistic British concepts of social reform, which later influenced his approach to management. A unique mix of British idealism and Japanese national consciousness defined Koyata's management. One of his legacies is the three corporate principles--modeled after Koyata's instructions--that still steer management at the Mitsubishi companies: corporate responsibility to society, integrity and fairness, and global understanding through business.

But Koyata's internationalism would be tested by the rising militarism of the 1930s. As Japan lurched toward war, Mitsubishi Heavy Industries became the arsenal of the empire, producing the Zero fighter planes that would terrorize the Pacific, the battleships that would challenge American naval supremacy, and the industrial machinery that would fuel Japan's expansion across Asia. The trading arm, Mitsubishi Shoji, became the procurement engine for the war machine, sourcing raw materials from across the Japanese empire.

Yet even as Japan descended into xenophobic nationalism, Koyata maintained his international perspective. "We count many British and Americans among our business partners," he reminded Mitsubishi executives shortly after the outbreak of hostilities. "They are our friends who have undertaken projects together with us and who have shared interests with us. Should peace come again, they should again become good and faithful friends." These words, spoken at the height of wartime hysteria, would prove prophetic—though Koyata himself would not live to see the peace he envisioned.

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III. Dissolution & Rebirth: The Post-War Phoenix (1945–1954)

August 15, 1945. Emperor Hirohito's voice, thin and reedy, crackled over Japanese radios announcing the unthinkable: Japan had surrendered. For Mitsubishi, as for all of Japan's zaibatsu, this meant not just defeat but dissolution. General Douglas MacArthur arrived in Tokyo with a mandate to dismantle the industrial conglomerates that had powered Japan's war machine. The occupation authorities viewed the zaibatsu as the economic backbone of Japanese militarism—structures so powerful they had to be destroyed to ensure Japan could never wage war again. The company was originally spun off from Mitsubishi & Co., Ltd, the holding company of the Mitsubishi Group at the time, in 1918 by Koyata Iwasaki. It was later split into three smaller trading companies by order of the Allied Occupation Forces, as major zaibatsu, including Mitsubishi, were deemed the backbone of Japan's pre-war economy. These companies re-merged in 1954, once again assuming the name Mitsubishi Corporation.

The dissolution order came swiftly. On October 20, 1945, only two months following Japan's surrender to the Allied Forces, Japan was dealt a further economic hardship when the Allied Command ordered the disbanding of all zaibatsu, the nation's industrial and financial business conglomerates. Following the end of WWII, the Allied Forces in Japan demanded the dissolution of the zaibatsu that had held so much power in the prewar period, ending Mitsubishi's leadership by four generations of the Iwasaki family. In September 1946 the company disbanded its headquarters, and its network of affiliates and subsidiaries were all relaunched as independent companies.

Koyata Iwasaki, the fourth and final president of the unified Mitsubishi, initially resisted. On his deathbed, Koyata Iwasaki staunchly defended his actions, asserting that he had done his utmost for his country and had nothing to be ashamed of. Despite his resistance, he could not defy the tide of the times. But resistance was futile. Mitsubishi eventually dissolved in 1947, and under restrictive rules imposed by the occupation authorities, the employees of the Mitsubishi Shoji trading arm rebranded into 100 separate companies.

Imagine the chaos: thousands of employees suddenly working for companies that couldn't even use the Mitsubishi name. GHQ orders strictly prohibited the use of the Mitsubishi trade name or logo, as well as interlocking directorships with affiliated companies. Former colleagues were legally barred from coordinating business. The three-diamond logo, once a symbol of industrial might, became contraband.

Yet beneath the surface, the bonds forged over decades remained intact. Former Mitsubishi employees kept in touch through informal networks, meeting in tea houses and restaurants, maintaining relationships that transcended corporate boundaries. They shared information, coordinated bids, and preserved the institutional knowledge that would prove invaluable when the political winds shifted.

The turning point came with the Cold War. Complete dissolution of the zaibatsu was never achieved, mostly because the U.S. government rescinded the orders in an effort to reindustrialize Japan as a bulwark against communism in Asia. By 1950, with Communist forces advancing in Korea and China, American priorities had shifted from dismantling Japan's industrial base to rebuilding it as a capitalist fortress in Asia.

The San Francisco Peace Treaty came into effect in 1952 and brought about a repeal of the ban on using zaibatsu trade names and logos. Despite the harsh business environment, the companies shared a common vision and sometimes cooperated with each other to develop their businesses. As part of this, they began holding regular get-together luncheons for the group presidents in 1952, which were named "Mitsuibishi Kinyokai" in 1954.

The phoenix was ready to rise. In 1954, the various fragments of the old Mitsubishi Shoji came together again. It wasn't a simple reversal—the new Mitsubishi Corporation was fundamentally different from its pre-war incarnation. No longer controlled by a single family, no longer part of a vertically integrated zaibatsu, it emerged as something new: a sogo shosha, a general trading company that would serve not just the Mitsubishi group but all of Japanese industry.

The employees who had scattered in 1947 returned with new skills, new connections, and new perspectives gained from their years in exile. They brought with them the relationships they had cultivated, the markets they had developed, and most importantly, the shared experience of survival. The dissolution that was meant to destroy Mitsubishi had instead created a more resilient, more networked, more adaptable organization.

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IV. The Trading House Model & Global Expansion (1960s–1990s)

Standing in the Mitsubishi Corporation headquarters in Tokyo's Marunouchi district in 1968, President Fujino Chujiro faced a map of the world covered in red pins—each representing a potential investment opportunity. That year would mark a watershed: Mitsubishi's first direct investment in a liquefied natural gas field in Brunei. It was a $30 million bet that would transform not just Mitsubishi but the entire concept of what a trading company could be. Mitsubishi's operations began shifting away from the mere importing and exporting of goods in the 1960s. Starting with an investment in a liquefied natural gas field in Brunei in 1968, Mitsubishi rapidly moved towards investing directly in projects and companies overseas. In 1968, Shell approached Mitsubishi Shoji about joint investment in LNG development in Brunei. It was an extremely weighty decision as the amount of investment required for participation in the massive project was $125 million, a figure which far exceeded Mitsubishi Shoji's capital at the time. If the project failed, the fallout would be so great that "it could bring down Mitsubishi Shoji three times over".

The sogo shosha model that emerged in the 1960s was fundamentally different from anything in Western capitalism. These weren't just trading companies—they were intelligence networks, investment banks, logistics providers, and risk managers rolled into one. A sogo shosha would handle everything from arranging the financing for a copper mine in Chile to shipping the ore to Japan, hedging the currency risk, insuring the cargo, and finding buyers for the refined metal. They were, in essence, the circulatory system of the Japanese economy.

In 1971, Mitsubishi Shoji adopted the English name of Mitsubishi Corporation (MC), signaling its global ambitions. By then, the company had already established what would become its signature approach: patient capital, deep relationships, and an almost obsessive focus on information gathering. Every Mitsubishi employee stationed abroad was expected to file regular reports not just on business opportunities but on political developments, social trends, even weather patterns. This intelligence network would prove invaluable as Japan's economy exploded through the 1970s and 1980s.

The numbers tell the story of explosive growth. By 1960, Mitsubishi had fifty-one overseas offices. By the 1980s, that number had grown to over 200, spanning every continent and virtually every major economy. The company wasn't just trading anymore—it was investing. Iron ore mines in Australia, copper deposits in Chile, oil fields in the Middle East, manufacturing plants in Southeast Asia. Each investment wasn't made in isolation but as part of an intricate web of relationships that connected Japanese manufacturers with global resources.

The keiretsu system that emerged after the war created a unique competitive advantage. Unlike the pre-war zaibatsu with their rigid hierarchical control, the keiretsu operated through cross-shareholdings and mutual obligation. Mitsubishi Corporation might own 3% of Mitsubishi Heavy Industries, which owned 2% of Mitsubishi Bank, which owned 4% of Mitsubishi Corporation. These circular shareholdings created patient capital—shareholders who cared more about long-term relationships than quarterly earnings.

This structure enabled Mitsubishi to make investments that would have been impossible for a Western company answerable to Wall Street. When developing a copper mine required a 20-year commitment before seeing returns, Mitsubishi could make that bet. When a steel mill needed guaranteed iron ore supplies for decades, Mitsubishi could provide them. The company became the ultimate middleman, but one with skin in the game at every level of the value chain.

The trading house model reached its apotheosis in the bubble economy of the late 1980s. Mitsubishi Corporation was everywhere—financing real estate deals in Manhattan, building petrochemical plants in Saudi Arabia, developing retail chains in Thailand. The company had evolved from Iwasaki's shipping company into something unprecedented: a private corporation with the scope and reach of a small nation-state.

But this wasn't just about size. The sogo shosha model represented a fundamentally different approach to capitalism. Where American companies focused on core competencies and outsourcing, Mitsubishi embraced complexity. Where Western firms sought to minimize risk through specialization, Mitsubishi managed risk through diversification and information. The company had become, in essence, a privately-run ministry of trade, coordinating the flow of resources into Japan and finished goods out.

The relationships built during this period would prove crucial when the bubble burst. Unlike pure financial plays that evaporated with the stock market crash, Mitsubishi's investments in real assets—mines, ships, pipelines—continued to generate cash flow. The intelligence network that had identified opportunities in the boom would prove equally valuable in navigating the bust. The stage was set for the next act: the commodity supercycle that would transform Mitsubishi from a Japanese trading house into a global resource giant.

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V. The Commodity Supercycle & Resource Dominance (2000–2011)

The boardroom at Mitsubishi Corporation's Tokyo headquarters was electric with tension in early 2001. President Minoru Makihara was proposing the unthinkable: a 50-50 joint venture with BHP Billiton for Australian coal assets that would require Mitsubishi to invest billions at a time when coal was trading at historic lows. "This is our moonshot," Makihara told his board. "We're not just buying coal mines—we're buying the next century of Asian industrialization. "The most recent commodity supercycle started in 1996 and peaked in 2011, driven by raw material demand from rapid industrialization taking place in markets like Brazil, India, Russia and especially, China. The most recent one started in 1996 and peaked in 2011, driven by raw material demand from rapid industrialization taking place in markets like Brazil, India, Russia and especially, China. China's infrastructure spending increased from $200 billion annually in 2000 to over $1 trillion by 2010. China's infrastructure spending increased from $200 billion annually in 2000 to over $1 trillion by 2010. The country's steel production grew from 130 million tons in 2000 to 820 million tons by 2014—more than the rest of the world combined.

Mitsubishi had positioned itself perfectly for this moment. The 2001 establishment of BHP Billiton Mitsubishi Alliance (BMA) as a 50:50 joint venture with BHP Billiton gave Mitsubishi control of some of the world's best coking coal assets just as China's steel industry was about to explode. The timing seemed prescient in retrospect, but at the time, coal prices were so depressed that many questioned why Mitsubishi would tie up so much capital in a dying industry. The numbers validated Makihara's vision spectacularly. In 2014, Mitsubishi opened a $3.4 billion coking coal mine in Caval Ridge, Queensland, Australia, through its 50% shareholding in the BHP Mitsubishi Alliance. Caval Ridge is a new open cut mine located in the northern Bowen Basin in Central Queensland, and has the capacity to produce 5.5 million tonnes per annum of high-quality metallurgical coal. The mine also has a mine-life of about 60 years and retains potential for further expansion.

But coal was just one piece of Mitsubishi's resource empire. The company had quietly assembled one of the world's most valuable portfolios of natural resource assets. Copper mines in Chile that supplied the wire for China's electrical grid. Iron ore deposits in Australia that fed blast furnaces from Shanghai to Stuttgart. And perhaps most strategically, a dominant position in liquefied natural gas that would prove crucial as the world sought cleaner alternatives to coal.

Energy became the largest by far, accounting for almost half of the company's consolidated net income in the first half of the fiscal year 2015. The transformation was complete: Mitsubishi Corporation had evolved from a trading company that moved commodities to an owner-operator of the assets that produced them. The sogo shosha model had morphed into something unprecedented—a private company with the resource base of a small nation.

The profits during this period were staggering. Coal prices rose from $40 per ton in 2000 to over $300 per ton at the 2011 peak. Iron ore went from $12 to $187. Oil surged past $100 per barrel. For Mitsubishi, with its massive positions in all these commodities, it was like owning a money-printing press. Annual profits soared to record levels, with the resources division alone generating returns that dwarfed the company's entire market capitalization from just a decade earlier.

Yet even at the peak, there were warning signs. China's growth was slowing. The country had poured more concrete between 2011 and 2013 than the United States had used in the entire 20th century—a pace that simply couldn't continue. Alternative energy sources were becoming competitive with fossil fuels. Environmental concerns were mounting. The commodity supercycle that had driven Mitsubishi's transformation was about to end, and when it did, the reversal would be brutal.

The executives gathering in Mitsubishi's boardroom in late 2011 couldn't have imagined what was coming. They were sitting atop one of the world's great commodity empires at the peak of the greatest resource boom in history. The idea that within five years the company would post its first loss since World War II would have seemed absurd. But the seeds of that crisis were already planted. The commodity supercycle was ending, and Mitsubishi Corporation would need to reinvent itself once again.

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VI. The Great Reckoning: First Loss Since WWII (2015–2016)

The conference room on the 20th floor of Mitsubishi Corporation's Marunouchi headquarters was silent except for the rustling of papers. It was March 2016, and CEO Ken Kobayashi was about to announce the unthinkable: Mitsubishi Corporation would report its first annual loss since World War II. The numbers on the screen were stark—a net loss of ¥149.4 billion ($1.5 billion) for the fiscal year ending March 31, 2016. For a company that had survived atomic bombs and corporate dissolution, posting a loss felt like an existential crisis. Mitsubishi saw its first postwar net loss in the fiscal year ended March 2016, amid a slowdown in the Chinese economy and a slump in the commodity markets, causing Mitsubishi to lose its #1 position to Itochu. Tokyo-based Mitsubishi reported a net loss in the year ended March 31 after racking up ¥426 billion ($4.24 billion) in impairment charges and other losses primarily on its commodity assets.

The collapse had been swift and brutal. Oil prices had plummeted from over $100 per barrel to under $30. Iron ore crashed from $187 to $40. Coal, which had powered Mitsubishi's profits for a decade, saw prices fall by 75%. The company's Australian coal operations, once cash-generating machines, were suddenly losing money on every ton produced. Copper mines that had been valued at billions were now worth a fraction of their book value. CEO transition and crisis management under Takehiko Kakiuchi came at the crucial moment. Before I became CEO in 2016, Mitsubishi Corporation recorded its first loss since its founding. As a result, I believed we needed to transform our portfolio into one that will never again result in a loss, by investing in more secure industries, as we have done with our food industry businesses, alongside our core businesses, such as energy, that are more subject to disruption.

Kakiuchi, who had joined Mitsubishi Corporation in 1979 as a recent Kyoto University graduate, brought a different perspective to the crisis. His formative experience had come at 32, while on assignment in Australia trying to revive a failing livestock feed business. Rather than taking short flights between Sydney and Brisbane, he and his colleague chose to make the 1,000-kilometer, ten-hour journey by car—building the trust necessary to succeed through shared hardship. Now, as CEO, he would need that same patient relationship-building to transform a 150-year-old company.

The three-year transformation plan that Kakiuchi unveiled was radical in its simplicity. He enhanced collaboration across his senior management team, moved to cap the proportion of commodity assets in the company's portfolio that are subject to price fluctuations, and built up the firm's investments in digital technology and consumer markets. The company aims to invest ¥1.5 trillion in its non-resources businesses, which are already worth ¥4.4 trillion, according to Masu. The company will invest ¥500 billion in resources over the next three years, and ensure that energy and commodities assets remain at the current ¥3 trillion level.

"We can't post a second net loss," CFO Kazuyuki Masu said bluntly. "We are balancing our portfolio so that if the prices of resources fall again, we won't be seeing red. To put it simply, we aren't going to boost our current balance of resources assets" over the next three years. If we invest in something, we have to sell something" from the resources business.

The transformation wasn't just about changing the asset mix—it was about fundamentally rethinking what kind of company Mitsubishi Corporation wanted to be. The sogo shosha model that had served it so well for decades was being stress-tested by a world where commodity prices could swing 50% in a matter of months, where China's growth was slowing, and where digital disruption threatened traditional trading relationships.

Yet even in crisis, Mitsubishi's fundamental strengths remained. The company's intelligence network, built over decades, still provided unparalleled market insight. Its relationships—with suppliers, customers, governments—remained strong. Most importantly, its balance sheet, despite the loss, remained robust enough to fund transformation rather than just survival.

The 2016 loss would prove to be not an ending but a beginning—the catalyst for a transformation that would position Mitsubishi Corporation for its next chapter. The company that had survived the Meiji Restoration, World War II, and corporate dissolution was about to prove it could survive something perhaps even more challenging: reinventing itself in the 21st century.

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VII. Strategic Pivot: From Resources to Everything (2016–2020)

The conference room at Mitsubishi Corporation's Singapore office buzzed with an energy that hadn't been felt in years. It was 2018, and the team was finalizing the acquisition of a controlling stake in Olam International's food distribution business—not a coal mine, not an oil field, but a company that moved cashews from Africa to Asia and coffee from Brazil to Europe. For a company that had built its modern fortune on fossil fuels, investing billions in nuts and beans felt like heresy. Yet this was exactly the point.

The company is aiming to shore up profits by moving away from resources and into areas such as real estate procurement and automobile sales. The transformation Kakiuchi had promised wasn't just talk—it was a fundamental reimagining of what a sogo shosha could be in the 21st century. The company aims to invest ¥1.5 trillion in its non-resources businesses, which are already worth ¥4.4 trillion. The company will invest ¥500 billion in resources over the next three years, and ensure that energy and commodities assets remain at the current ¥3 trillion level.

The shift manifested in unexpected ways. In convenience stores across Japan, Mitsubishi's stake in Lawson—which it had increased to over 50%—was being leveraged as a laboratory for digital transformation. Each of Lawson's 14,000 stores became a data collection point, tracking consumer preferences in real-time, testing new payment systems, experimenting with automated inventory management. This wasn't the commodity trading of old; it was using physical retail as a platform for digital innovation.

The food and consumer businesses expansion was particularly strategic. Unlike commodities, food demand doesn't disappear during recessions—people still need to eat. Mitsubishi systematically built positions across the entire food value chain: salmon farming in Norway, flour milling in Asia, beverage distribution in America. Each investment was chosen not for its individual return but for how it fit into a global network that could move food from where it was produced to where it was needed, capturing value at every step.

In real estate, Mitsubishi leveraged its ownership of prime Marunouchi properties—that swampland Yanosuke Iwasaki had bought for $1 million in 1890 was now worth tens of billions—to become a major player in urban development across Asia. But this wasn't just about building office towers. Mitsubishi was creating smart cities, integrating energy management, transportation, and digital infrastructure into cohesive urban ecosystems.

The digital transformation (DX strategy) was perhaps the most radical shift. Mitsubishi created MC Digital, a subsidiary focused entirely on digital innovation, and began investing in everything from blockchain for supply chain management to AI for commodity price prediction. The company that had once relied on fax machines and face-to-face relationships was building algorithmic trading systems and automated logistics platforms.

But the real genius of the transformation was how Mitsubishi used its traditional strengths to accelerate new businesses. When investing in renewable energy, it leveraged relationships with governments built over decades of resource development. When expanding in food distribution, it used its global logistics network originally built for moving coal and iron ore. The company wasn't abandoning its past—it was building on it.

Infrastructure and urban development initiatives became a particular focus. Mitsubishi won contracts to build and operate airports in Mongolia, water treatment facilities in the Philippines, and power grids in Africa. These weren't just construction projects—they were 20 or 30-year concessions where Mitsubishi would build, operate, and profit from essential infrastructure. It was the patient capital approach applied to a new sector.

The automotive sector, where Mitsubishi held a 20% stake in Mitsubishi Motors, became a testing ground for mobility transformation. Rather than just selling cars, Mitsubishi began investing in car-sharing platforms, electric vehicle charging networks, and autonomous driving technology. The company that had once shipped cars around the world was now reimagining what transportation itself could be.

By 2019, the transformation was showing results. Non-resource businesses accounted for over 60% of Mitsubishi's profits, up from less than 40% just three years earlier. The company's stock price, which had languished after the 2016 loss, began recovering. More importantly, profit volatility decreased dramatically—the wild swings tied to commodity prices were being smoothed by stable cash flows from consumer businesses.

Yet Kakiuchi knew the transformation was incomplete. Speaking to investors in late 2019, he acknowledged the challenge: "Saying our goal is to simply maintain each business is the same as admitting failure. The issue is whether we have the imagination to see the future, by building on where we are now." The company needed something to validate its new direction, to prove to skeptics that a 150-year-old trading house could successfully reinvent itself.

That validation would come from the most unexpected source: an elderly investor from Omaha who had spent his career avoiding exactly the kind of complexity that Mitsubishi represented. Warren Buffett was about to shock the investment world, and in doing so, transform how the world saw Japanese trading houses. The strategic pivot from resources to everything was about to receive the ultimate endorsement.

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VIII. The Buffett Validation & Second Act (2020–Present)

August 30, 2020. Warren Buffett's 90th birthday. While most nonagenarians might celebrate with cake and family, the Oracle of Omaha gave himself—and Mitsubishi Corporation—a different kind of gift. Berkshire first bought into the companies in the summer of 2019. Buffett first unveiled the Japanese positions on his 90th birthday in August 2020 after making regular purchases on the Tokyo Stock Exchange, saying he was "confounded" by the opportunity and was attracted to the trading houses' dividend growth. The announcement sent shockwaves through global markets: Berkshire Hathaway had quietly accumulated over 5% stakes in all five major Japanese trading houses, including Mitsubishi Corporation.

Berkshire Hathaway raised its holdings in five Japanese trading houses — Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo — by more than 1 percentage point each, to stakes ranging from 8.5% to 9.8%. The progression was methodical and deliberate. What started as a $6 billion investment had grown substantially. At the end of 2024, the market value of Berkshire's Japanese holdings came to $23.5 billion, at an aggregate cost of $13.8 billion.

Why Buffett saw value where others saw complexity became clearer over time. "I was confounded by the fact that we could buy into these companies," Buffett told CNBC's Becky Quick on "Squawk Box" in an interview from Tokyo on Wednesday. They had in effect "an earnings yield maybe 14% or something like that, but dividends would grow." For an investor famous for his simplicity principle, the appeal wasn't in understanding every business line but in recognizing undervaluation at a fundamental level.

Marubeni trades at 9.03 times earnings and 1.13 times book. Mitsubishi is at 10.3 times earnings and 1.16 times book, Mitsui at 8.6 times earnings and 1.1 times book, and Sumitomo is at 10.6 times earnings and 0.9 times book. By way of comparison, even after this year's tumble, the S&P 500 fetches 23 times earnings and 4.8 times book. The valuation gap was staggering—quality businesses trading at less than half the multiples of their Western counterparts.

In 2023, Buffett even paid a visit to Japan with his designated successor, Greg Abel, and met with the heads of the Japanese firms. He said he'd like Berkshire to own the companies forever. This wasn't a trade—it was a long-term commitment to businesses Buffett believed were fundamentally undervalued and well-managed.

The renewable energy pivot that Mitsubishi had begun years earlier suddenly looked prescient. In November, 2019, Mitsubishi Corporation stated that it will buy Eneco, a company that focuses on renewable energy, in a deal valuing the Dutch energy firm at $4.52 billion. The Eneco acquisition gave Mitsubishi instant scale in European renewable energy, with wind farms, solar installations, and district heating systems serving millions of customers. Current performance and market position validated everything. Mitsubishi Corporation saw its net profit surge by over 25% to hit 1.2 trillion yen, proving that the transformation wasn't just defensive—it was creating real value. The company's revenue reached nearly 20 trillion yen, but more importantly, the quality of earnings had improved dramatically. Non-resource businesses now generated stable, predictable cash flows that smoothed out commodity volatility.

The energy transition story was particularly compelling. Beyond Eneco, Mitsubishi was investing in offshore wind projects in Japan and Europe, solar farms in the Middle East, and hydrogen infrastructure that could define the next generation of clean energy. The company that had powered Japan's industrialization with coal was positioning itself to power the world's decarbonization.

Digital transformation accelerated through the pandemic. MC Digital evolved from an experiment to a core competency, with AI-powered supply chain optimization saving millions in logistics costs and predictive analytics improving commodity trading returns. The company's venture capital arm was investing in everything from vertical farming to quantum computing, building options on technologies that might not mature for decades.

The current CEO, Katsuya Nakanishi, who took over from Kakiuchi in 2022, inherited a company fundamentally transformed. The resource dependency that had nearly destroyed Mitsubishi in 2016 was now balanced by a portfolio spanning food, retail, infrastructure, and renewable energy. The company's stock price reflected this transformation, reaching multi-year highs as investors recognized the value Buffett had seen years earlier.

Yet challenges remain. Geopolitical tensions, particularly between China and the West, threaten global supply chains that Mitsubishi has spent decades building. The energy transition, while an opportunity, also poses risks to traditional fossil fuel assets that still generate significant cash flow. Competition from tech companies entering physical supply chains challenges the traditional trading house model.

But Mitsubishi's response to these challenges shows how much the company has evolved. Rather than doubling down on any single strategy, it's building optionality—investing in multiple technologies, maintaining relationships across geopolitical divides, using its patient capital advantage to make bets that won't pay off for years or decades. The company that nearly collapsed from overconcentration in commodities has learned the value of true diversification.

The Buffett investment represents more than just financial validation—it's recognition that the sogo shosha model, properly executed, offers something unique in global capitalism. Where Western companies chase quarterly earnings, Mitsubishi thinks in decades. Where Silicon Valley disrupts, Mitsubishi builds lasting infrastructure. Where private equity strips assets, Mitsubishi creates ecosystems.

As we enter 2025, Mitsubishi Corporation stands at an inflection point. The company has successfully navigated its transformation from resource dependency to diversified conglomerate. It has the Buffett seal of approval, a strengthened balance sheet, and a portfolio positioned for both the energy transition and digital revolution. The question now isn't whether Mitsubishi can survive—it's what the company will become in its next 150 years.

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IX. Business Model Deep Dive & Playbook

To understand how Mitsubishi Corporation actually makes money, imagine a spider at the center of an impossibly complex web. Each strand represents a flow of goods, information, or capital. The spider doesn't just sit there waiting—it actively vibrates the strands, sensing opportunities, directing resources, capturing value at every intersection. This is the sogo shosha model, and after 150 years of evolution, Mitsubishi has perfected it into something that defies conventional business categorization.

How sogo shosha actually make money starts with a fundamental misunderstanding most Western observers have: they think of trading companies as middlemen who buy low and sell high. This is like describing Amazon as a bookstore. Yes, Mitsubishi trades commodities, but that's merely the visible tip of a massive iceberg. The real value creation happens through four interconnected mechanisms that amplify each other.

First, there's the trading margin—but not as you'd expect. When Mitsubishi moves copper from Chile to China, it doesn't just clip a ticket. It finances the mine's expansion, provides logistics from pit to port, hedges currency risk, arranges shipping, manages inventory, and often owns a piece of both the mine and the smelter. Each activity generates a return, and controlling the entire chain means Mitsubishi captures value that would normally be distributed among dozens of companies.

Second, investment returns from the assets themselves. In 2001, we expanded our stake in the Australian metallurgical coal business to 50% and established a new company, BHP Billiton Mitsubishi Alliance (now BHP Mitsubishi Alliance, or BMA), as a 50:50 joint venture with BHP Billiton (now BHP), the world's largest resource company. These aren't passive investments—Mitsubishi actively manages operations, improves efficiency, and uses its global network to maximize value.

Third, the intelligence premium. These achievements can be attributed to our success in building strong relationships of trust with all stakeholders, including users, gas-producing countries, and business partners. In addition, access to high-quality information through the networks that we have built helps us to conceive and realize new business projects. Information arbitrage—knowing that a steel mill in Korea needs coal before competitors do, understanding that a drought in Brazil will spike food prices—translates directly into trading profits.

Fourth, and most importantly, ecosystem value creation. When Mitsubishi invests in a copper mine, it doesn't just sell the copper. It finances the trucks (through its partnership with Mitsubishi Motors), insures the operations (through Tokio Marine), ships the ore (through NYK Line relationships), and might even develop the town where workers live. Each element supports the others, creating a virtuous cycle where Mitsubishi profits from the entire ecosystem, not just individual transactions.

The intelligence network advantage cannot be overstated. Mitsubishi employs over 80,000 people across 90 countries, but they're not just employees—they're sensors in a global information-gathering network. Every salesperson, every joint venture partner, every government relationship feeds information back to Tokyo. This isn't corporate espionage; it's systematic information aggregation that allows Mitsubishi to see patterns before they become trends.

A metals trader in Santiago notices that copper production is slowing. A food specialist in São Paulo reports unexpected rainfall affecting soybean harvests. An infrastructure manager in Jakarta hears about a new port development. Each piece of information seems minor, but when aggregated and analyzed by teams in Tokyo, patterns emerge that inform billion-dollar investment decisions.

Capital allocation across 10 business groups follows a portfolio approach that would make any private equity firm envious. Global Environmental & Infrastructure Business Group: Handles transportation, water, electricity, and industrial projects. Its infrastructure projects include airports in Mandalay and Ulaanbataar, urban railways in Cairo, Doha and Dubai, and power projects under the Diamond Generating and Diamond Transmission names. In 2015, Mitsubishi announced a strategic alliance with Turkey's Çalık Enerji to boost its infrastructure business in Turkey and Northern Africa. Industrial Finance, Logistics and Development Group: Engages in asset management, asset financing, real estate and logistics. Energy Business Group: Handles trading and investment in crude oil, liquefied natural gas, liquefied petroleum gas, shale gas, biofuel, and other energy commodities in various countries. Metals Group: Develops concessions and trades in coal, iron ore, nickel, chrome, copper, aluminum, uranium and platinum.

Each group operates semi-autonomously but with crucial coordination. When the infrastructure group wins a contract to build a port, the metals group might supply the steel, the energy group provides the power, and the logistics group handles operations. This internal ecosystem creates competitive advantages that standalone companies can't match.

Risk management in volatile commodity markets is where Mitsubishi's sophistication truly shows. The company doesn't just hedge financial risk—it hedges operational, political, and technological risk simultaneously. When investing in a coal mine, Mitsubishi might simultaneously invest in renewable energy that could replace coal, ensuring it profits regardless of which technology wins. It's not betting on outcomes; it's betting on volatility itself.

The patient capital approach differentiates Mitsubishi from Western competitors. This virtuous cycle is a key strength for MC and is one of the factors that have enabled us to build a deep presence across the entire LNG supply chain. Where private equity demands returns in 3-5 years, Mitsubishi thinks in 20-30 year cycles. This patience allows investments in infrastructure that won't generate returns for a decade, in technologies that might never work, in relationships that take generations to mature.

Consider the Brunei LNG project. It was an extremely weighty decision as the amount of investment required for participation in the massive project was $125 million, a figure which far exceeded Mitsubishi Shoji's capital at the time. If the project failed, the fallout would be so great that "it could bring down Mitsubishi Shoji three times over". Yet Mitsubishi made the investment in 1969, and it's still generating returns over 50 years later.

The conglomerate management lessons are particularly relevant in an era when American companies are unbundling and specializing. Mitsubishi proves that conglomerate structures can work—if managed correctly. The key is what Mitsubishi calls "autonomy with collaboration." Each business unit has operational independence but strategic coordination. They compete for capital internally but collaborate on projects externally.

This structure allows for cross-subsidization during downturns. When commodity prices crashed in 2015, profits from food and retail businesses kept the company afloat. When COVID hit retail in 2020, recovering commodity prices provided cushion. It's portfolio theory applied to operating businesses, and it works because Mitsubishi has the discipline to cut losers and double down on winners.

The cultural element—often overlooked by Western analysts—is crucial. Mitsubishi employees often spend entire careers at the company, creating institutional knowledge that transcends individual transactions. The concept of "nemawashi"—behind-the-scenes consensus building—means major decisions have buy-in across the organization before they're officially made. This slows decision-making but ensures execution excellence.

The model isn't without weaknesses. Complexity creates opacity that markets punish with a conglomerate discount. The consensus-driven culture can miss fast-moving opportunities. The web of cross-shareholdings and joint ventures makes it difficult to exit bad investments. The dependence on global trade makes Mitsubishi vulnerable to protectionism and deglobalization.

But these weaknesses are also strengths in different contexts. Complexity creates barriers to entry that protect margins. Consensus-building creates stability that enables long-term planning. Cross-shareholdings create aligned incentives that reduce agency costs. Global exposure creates diversification that smooths volatility.

The playbook for building a modern sogo shosha—if anyone were crazy enough to try—would require: - Patient capital measured in decades, not quarters - A network of relationships that transcends transactional business - Information systems that aggregate micro-data into macro-insights - Risk management that hedges everything except the economic cycle itself - Cultural cohesion that survives generational transitions - The discipline to say no to most opportunities while having the courage to bet big on the few that matter

It's a model that probably can't be replicated from scratch in today's impatient, transparent, specialized business environment. But for Mitsubishi, built over 150 years of evolution, it creates a competitive moat that even Warren Buffett—the ultimate moat investor—found irresistible.

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X. Bear vs. Bull Case & Future Trajectory

The debate over Mitsubishi Corporation's future splits even seasoned investors into two camps, each armed with compelling evidence. The bulls see a transformed company with Warren Buffett's backing, perfectly positioned for the energy transition. The bears see an old-economy conglomerate still dangerously exposed to commodity cycles and geopolitical risks. Both are right—and that's precisely what makes Mitsubishi such a fascinating investment case.

The Bull Case: A Transformation Validated

The bulls start with the Buffett effect. At the end of 2024, the market value of Berkshire's Japanese holdings came to $23.5 billion, at an aggregate cost of $13.8 billion. When the world's greatest investor continues increasing his stake, planning to own these companies "forever," it sends a powerful signal. Buffett doesn't just bring capital—he brings credibility that attracts other institutional investors who previously dismissed Japanese trading houses as uninvestable.

The financial performance supports the optimism. Mitsubishi Corporation saw its net profit surge by over 25% to hit 1.2 trillion yen, demonstrating that the business model isn't just surviving but thriving. More importantly, the quality of earnings has improved dramatically, with non-resource businesses now generating over 60% of profits compared to less than 40% during the commodity supercycle.

The energy transition represents a generational opportunity where Mitsubishi's unique positioning could prove invaluable. The company owns both fossil fuel assets that generate current cash flow and renewable energy investments that represent the future. This "bridge" position allows Mitsubishi to fund green investments with brown cash flows, a luxury pure-play renewable companies don't have. The Eneco acquisition gives Mitsubishi immediate scale in European renewables, while investments in hydrogen and ammonia could position it at the forefront of next-generation clean energy.

Undervaluation versus Western peers remains stark. Marubeni trades at 9.03 times earnings and 1.13 times book. Mitsubishi is at 10.3 times earnings and 1.16 times book, Mitsui at 8.6 times earnings and 1.1 times book, and Sumitomo is at 10.6 times earnings and 0.9 times book. Comparable Western companies trade at twice these multiples despite having less diversified revenue streams and weaker balance sheets.

The corporate governance revolution in Japan adds another catalyst. The Tokyo Stock Exchange's push for companies to trade above book value, combined with increasing shareholder activism, is forcing Japanese companies to improve capital allocation. Mitsubishi has been ahead of this curve, with consistent buybacks and dividend increases that reward shareholders while maintaining investment capacity.

The Bear Case: Structural Challenges Remain

The bears counter with a sobering reality: commodity cycle dependency remains despite all the transformation talk. Energy and metals still account for roughly 40% of profits, and these businesses face structural headwinds. The commodity supercycle that drove profits from 2000-2011 was a once-in-a-generation event tied to China's industrialization. With China's growth slowing and potentially entering structural decline, what will drive the next commodity boom?

Geopolitical risks loom larger than ever. Mitsubishi's business model depends on globalization and free trade, both under assault from rising nationalism and protectionism. The company has significant exposure to China, which accounts for a major portion of commodity demand, while also being aligned with Western interests through partnerships and ownership structures. As U.S.-China tensions escalate, Mitsubishi finds itself caught in the middle, potentially losing access to markets regardless of which side it chooses.

The Russia exposure, while reduced, highlights ongoing challenges. Mitsubishi had significant investments in Russian LNG projects, including Sakhalin-2, which became politically toxic after the Ukraine invasion. While the company has managed to maintain operations, the situation demonstrates how quickly geopolitical shifts can strand assets and destroy value.

The complexity discount appears permanent. Markets have consistently valued conglomerates below the sum of their parts, and Mitsubishi's structure is particularly opaque. With operations spanning 90 countries across dozens of industries, true understanding of the business requires expertise that most investors simply don't possess. This complexity creates an information asymmetry that markets punish with lower valuations.

Japanese demographic challenges cast a long shadow. Japan's shrinking and aging population means declining domestic demand for everything from cars to convenience stores. While Mitsubishi has expanded internationally, it still generates significant revenues from Japan, and the domestic market's structural decline will be a persistent headwind.

The energy transition, while an opportunity, also poses existential risks to core businesses. Mitsubishi's coal and LNG assets could become stranded as the world decarbonizes faster than expected. The company's pivot to renewables is expensive and faces competition from specialized players with deeper expertise. There's a real risk of being too late to renewables while being too early to exit fossil fuels.

The Next Decade: Critical Decisions

The future trajectory will be determined by several critical factors that even Mitsubishi's management can't fully control.

Critical minerals for EVs and renewables represent both opportunity and challenge. Mitsubishi's existing positions in copper, nickel, and lithium could prove incredibly valuable as demand for battery materials explodes. But competition for these resources is fierce, with Chinese companies having locked up much of the supply chain. Mitsubishi must balance the opportunity against the risk of overpaying for assets at the peak of a hype cycle.

Digital transformation opportunities abound, but execution remains uncertain. Mitsubishi's investments in AI, blockchain, and IoT could transform its trading operations, creating efficiencies that weren't possible in the analog era. But the company's traditional culture and consensus-driven decision-making could prove incompatible with the speed of digital innovation. Can a 150-year-old company truly become a tech company?

Southeast Asian growth markets offer perhaps the clearest opportunity. As manufacturing shifts from China to Vietnam, Indonesia, and India, Mitsubishi's established presence in these markets becomes increasingly valuable. The company's patient capital approach aligns well with infrastructure development needs in emerging Asia. But these markets also carry political risk, corruption challenges, and infrastructure deficits that could delay returns.

The decarbonization imperative will force difficult choices. Mitsubishi must balance maintaining cash flow from fossil fuel assets with investing in renewables that might not generate comparable returns for decades. Too aggressive a shift risks destroying near-term value; too conservative an approach risks missing the energy transition entirely.

The Verdict: Embracing Complexity

The truth is that both bulls and bears are partially right. Mitsubishi Corporation is simultaneously a transformed company and one still grappling with structural challenges. It's both perfectly positioned for the energy transition and dangerously exposed to stranded assets. It's both undervalued and difficult to value.

This complexity isn't a bug—it's a feature. In a world of increasing uncertainty, Mitsubishi's diversification provides options value that focused companies lack. When COVID shut down global trade, Mitsubishi's domestic convenience stores thrived. When commodity prices crashed, food businesses provided stability. When China slows, Southeast Asia accelerates.

The next decade will likely see Mitsubishi continue its transformation, but not in a linear fashion. There will be setbacks—perhaps another commodity crash, maybe a geopolitical crisis that strands assets. But there will also be breakthroughs—a hydrogen economy that Mitsubishi helps build, critical mineral positions that become invaluable, digital transformations that unlock hidden value.

For investors, Mitsubishi Corporation represents a bet not on any single outcome but on adaptation itself. It's a wager that a company which has survived and thrived through 150 years of disruption has the DNA to navigate whatever comes next. Warren Buffett, who has seen more business cycles than almost anyone alive, has made that bet. The question for other investors isn't whether Mitsubishi is perfect—it clearly isn't. The question is whether its unique combination of patience, relationships, and adaptability creates value that transcends traditional analysis.

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XI. Epilogue: What Would We Do?

Standing in the same Marunouchi district where Yanosuke Iwasaki bought swampland in 1890, now home to gleaming towers worth hundreds of billions, you can't help but marvel at the audacity of long-term thinking. The transformation paradox facing Mitsubishi Corporation today—can you truly change a 150-year-old company?—isn't just a business question. It's a philosophical challenge about the nature of organizational identity and evolution.

The evidence suggests you can transform such a company, but not in the way most people expect. Mitsubishi hasn't abandoned its past so much as it has reinterpreted it for new contexts. The company that once moved coal from Australia to Japan now moves data through digital networks. The relationships built through centuries of trade now facilitate renewable energy partnerships. The patient capital that funded mines now funds technology startups. It's not transformation through replacement but through evolution.

If we were running Mitsubishi Corporation today, the strategy wouldn't be to choose between old and new economy, between commodities and technology, between East and West. It would be to embrace the paradox—to be simultaneously both and neither, to maintain optionality in an uncertain world. This isn't indecision; it's strategic flexibility in an era where the only certainty is change.

The first priority would be to accelerate the digital transformation, not to become a tech company but to use technology to amplify traditional strengths. Imagine combining Mitsubishi's global intelligence network with artificial intelligence, creating prediction capabilities that no pure-play tech company could match. The company's 80,000 employees become sensors feeding a global neural network that identifies opportunities faster and more accurately than any competitor.

Second, we'd double down on the energy transition, but not through wholesale abandonment of fossil fuels. Instead, we'd use cash flows from traditional energy to fund massive bets on hydrogen, ammonia, and other future fuels. Mitsubishi's LNG infrastructure could be repurposed for hydrogen transport. Its relationships with energy-intensive industries position it perfectly to facilitate their decarbonization. This isn't greenwashing—it's using existing capabilities to accelerate the transition.

Third, we'd leverage the Buffett effect more aggressively. He said he'd like Berkshire to own the companies forever. Having the world's most respected investor as a permanent shareholder is an asset most companies would kill for. This endorsement should be used to attract other patient capital, to negotiate better terms with partners, and to build credibility in new markets. Buffett's investment isn't just money—it's a seal of approval that should be monetized.

The geographic strategy would recognize that the U.S.-China decoupling is likely permanent, requiring Mitsubishi to build parallel supply chains that can serve both blocs without being hostage to either. This is expensive and inefficient, but it's also a competitive advantage for one of the few companies with the scale and relationships to pull it off. Mitsubishi's neutrality—neither fully Western nor fully Chinese—becomes an asset in a fragmented world.

On capital allocation, we'd embrace the conglomerate structure rather than apologize for it. In an era of increasing specialization, being a generalist becomes a differentiator. While others optimize for efficiency, Mitsubishi should optimize for resilience. This means maintaining businesses that might not maximize returns but provide strategic options—keeping a toe in coal while building renewable energy leadership, maintaining commodity trading while building digital platforms.

The human capital challenge is perhaps most critical. Mitsubishi needs to maintain its culture of lifetime employment and deep relationships while attracting digital natives who think in code rather than contracts. This isn't about choosing one over the other but creating a hybrid culture where 30-year veterans work alongside 25-year-old data scientists, each respecting what the other brings.

What it means for Japanese corporate governance extends beyond Mitsubishi. The company's transformation, validated by Buffett's investment, provides a template for other Japanese conglomerates. It shows that patient capital and long-term thinking—often criticized as Japanese weaknesses—can be strengths when properly deployed. It demonstrates that complex cross-shareholdings, while reducing efficiency, can create stability that enables transformation.

The Buffett effect on Japanese corporate governance is already visible. His investment has legitimized Japanese trading houses for global investors, leading to increased foreign ownership and pressure for better capital allocation. But unlike typical activist investors who demand immediate changes, Buffett's patient approach aligns with Japanese corporate culture while still driving improvement. It's reform through evolution rather than revolution.

Final reflections on building century-spanning businesses reveal an uncomfortable truth: most of what we consider good management—quarterly earnings focus, strategic clarity, operational efficiency—might actually prevent long-term survival. Mitsubishi has survived not despite its complexity but because of it. Its inefficiencies create redundancies that ensure survival. Its consensus culture slows decision-making but ensures buy-in. Its patient capital accepts lower returns but enables longer horizons.

The lesson isn't that every company should become a conglomerate or that efficiency doesn't matter. It's that survival over centuries requires different principles than maximizing next quarter's earnings. It requires the humility to know that your current business model will eventually become obsolete. It requires the patience to invest in options that might never pay off. It requires the wisdom to value relationships over transactions, capabilities over assets, and adaptation over optimization.

Can you truly change a 150-year-old company? Mitsubishi Corporation suggests you can, but only by respecting what made it survive 150 years in the first place. The company entering its next chapter isn't the same one Yataro Iwasaki founded in 1870, but it carries his DNA—the entrepreneurial spirit, the long-term thinking, the relationship focus, the controlled boldness.

As global capitalism faces challenges from climate change, technological disruption, and geopolitical fragmentation, Mitsubishi's model offers an alternative to the Silicon Valley disruption narrative. Instead of moving fast and breaking things, it moves deliberately and builds things meant to last. Instead of winner-take-all competition, it creates ecosystems where multiple players can thrive. Instead of pursuing unicorn valuations, it builds real businesses that generate cash for decades.

The ultimate judgment on Mitsubishi Corporation won't come from next quarter's earnings or even next year's stock price. It will come from whether the company exists and thrives in 2170, 300 years after its founding. Based on its history of adaptation, transformation, and survival, betting against Mitsubishi reaching that milestone would be unwise. The company that survived the Meiji Restoration, World War II, corporate dissolution, and commodity collapse has proven one thing above all: it endures.

Warren Buffett, who thinks in decades while others think in quarters, recognized this quality. His investment in Mitsubishi Corporation isn't just a financial transaction—it's a vote of confidence in a different model of capitalism, one that values permanence over performance, relationships over returns, and evolution over revolution. In a world obsessed with disruption, Mitsubishi Corporation offers something radically different: continuity. And in the end, that might be the most valuable asset of all.